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Biden routes campaign cash to family, their firms

- The Washington Times - Wednesday, October 15, 2008

Democratic vice-presidential candidate Sen. Joseph R. Biden Jr. has paid more than $2 million in campaign cash to his family members, their businesses and employers over the years, a practice that watchdogs criticize as rife with potential conflicts of interest.

The money largely flowed from the coffers of Mr. Biden's failed presidential campaign during the past two years to a company that employs his sister and longtime campaign manager, Valerie Biden Owens, according to campaign disclosure filings.

The senator from Delaware also directed campaign legal work to a Washington lobbying and law firm founded by his son R. Hunter Biden, the disclosures show.

Putting family members and their companies on the political payroll is legal if the work is legitimate and charged at market rates, according to the Federal Election Commission. Still, public watchdog groups have long criticized such arrangements.

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"Even though legal within restraints, it's not something I view as completely ethical," said Craig Holman, legislative director for Public Citizen, a campaign finance watchdog organization. "Any candidate ought to shy away from that."

Aides to Mr. Biden said all of the payments he has made to family members or their employers were aboveboard.

"While no Biden family members are being paid by the Obama-Biden campaign, one of Joe Biden´s greatest political strengths and secret weapon has always been his sister Valerie, starting with her role managing his David-versus-Goliath upset Senate victory in 1972," said Biden spokesman David Wade.

"Valerie is a well-known and highly regarded political operative in Democratic politics in Delaware and nationally, and her firm has worked on top races from Michigan to Texas. End of story," Mr. Wade said.

Mr. Biden is hardly alone among members of Congress whose campaigns hold close ties to family. FEC records also show that Republican presidential candidate Sen. John McCain's political action committee, Straight Talk America, paid more than $15,000 in 2006 to his wife, Cindy.

McCain campaign spokesman Brian Rogers said the payment reimbursed Mrs. McCain for catering expenses she had covered in connection with an election night party.

The majority of Biden campaign money tied to family - $1.8 million - was for media consulting bills to Joe Slade White & Co., where Mrs. Owens is a top executive. The firm did not return telephone and e-mail messages.

Such payments usually include a large portion of "pass through" money, where the consulting company gets campaign cash then uses it to produce and buy political ads. Still, the consulting company usually keeps a portion of the money, Mr. Holman said.

"It's a lot of money either way," he said.

Other Biden campaign expenditures over the years included more than $50,000 in salary payments to Mr. Biden's sister. And the Washington lobbying and law firm of Oldaker, Biden & Belair, which Hunter Biden co-founded, has received more than $150,000 combined from Mr. Biden's presidential campaign fund and his political action committee, Unite Our States.

Dubbed "the rainmaker" by the nonpartisan Center for Public Integrity, William Oldaker is a registered lobbyist and a former FEC general counsel who has worked on numerous other political campaigns.

Obama aides say Hunter Biden never profited from any fees that the campaign paid to the firm.

"Bill Oldaker was Senator Biden´s counsel for his Senate races, not Hunter Biden. Hunter Biden didn´t make a dime from the firm's representation of Senator Biden because the firm´s partners share expenses but don´t share revenue unless they work on the representation," Mr. Wade said.

"In the case of Bill Oldaker´s election law practice, none of the revenue is shared with Hunter Biden. Bill represented Senator Biden´s Senate campaigns since before Hunter was old enough to vote."

The District-based Citizens for Responsibility and Ethics in Washington earlier this year issued a report that found 16 senators, including Mr. Biden and Mr. McCain, had paid one or more family members fees or salaries. The group's report, made public in February, analyzed campaign filings covering the 2002, 2004 and 2006 election cycles. It named 87 senators from all 50 states: 42 Democrats, 43 Republicans and two independents.

The CREW report listed Mr. Biden among the top five senators by salaries and fees paid to family members, saying he paid his sister and niece more than $50,000. It also listed Mr. Biden among the top five senators by payments to a family business or employer, with more than $40,000 paid to his son's firm.

The watchdog group also found that other Biden campaign cash paid reimbursement expenses for his sister, his wife, two of his sons, his brother and the senator.

The CREW report did not include payments from Mr. Biden's presidential campaign. But a review by The Washington Times of FEC campaign records as well and data compiled CQ MoneyLine and the Center for Responsive Politics - groups that track the flow of money in politics - found more than $1.8 million to Joe Slade White & Co. and more than $100,000 to Oldaker, Biden & Belair.

CREW also noted that at least 33 federal lobbyists, including, at the time, Hunter Biden, were registered with the federal government. Hunter Biden recently dropped his lobbying clients amid scrutiny about whether his work undermined Sen. Barack Obama's anti-lobbyist rhetoric on the campaign trail. Mr. Obama refuses money from federal lobbyists, saying they're a corrosive force in Washington.

Elected officials can hire family members for their campaigns at fair market value rates, but they are not allowed to convert campaign donations to "personal use" or hire family for their official congressional offices. Some observers say having family members on the campaign payroll blurs the lines of what's permissible.

"Technically, it's legal, but frankly, it doesn't pass the smell test," said Bruce Buchanan, a professor of government and presidential politics at the University of Texas at Austin. "That's why all the public interest groups flag it and report it. It feeds the public perception that politicians are ethically challenged."