Nancy Pelosi used political donations to pay husband’s firm

By Carol Eisenberg

October 2, 2008 at 12:56pm

Nancy Pelosi’s political action committee has paid close to $100,000 to her husband’s San Francisco firm over the past nine years for rent, utilities and accounting services, according to federal election records.

The payments by the House Speaker’s “PAC to the Future” to Paul Pelosi’s firm, Financial Leasing Services Inc. (FLS), were first reported yesterday by the Washington Times.

While it is illegal for members of Congress to hire family members onto their official staffs, it is legal to hire relatives to work on a campaign or PAC as long as they are paid at fair market value. An analysis last year by the liberal Citizens for Responsibility and Ethics in Washington found that 72 members of Congress used campaign committees or PACs to purchase services from a family member between 2001 and 2006.

Still, the disclosures about Pelosi’s PAC are embarrassing for the House Speaker because she had supported legislation last year that would have banned such practices.

The legislation passed the House on a voice vote, but did not get out of Senate committee. It was proposed after the scandals surrounding jailed former lobbyist Jack Abramoff, which included disclosures that former House Majority Leader Tom DeLay of Texas and Rep. John T. Doolittle of California, both Republicans, had their wives on their campaign and PAC payrolls.

In Pelosi’s case, her leadership PAC paid her husband’s firm $99,000 over the course of its nine-year existence. The committee raises and disburses funds to Democrats running for Congress. The payments increased after Paul Pelosi took over as the committee’s treasurer early last year, after the death of longtime treasurer Leo T. McCarthy, a former Democratic lieutenant governor of California.

Since then, Paul Pelosi has charged the PAC $24,000 a year for accounting services. All told during the two-year 2008 election cycle, his firm received $54,000 from the committee for accounting, space and utilities, according to the Center for Responsive Politics.

Nancy Pelosi’s office told the Washington Times that the payments to her husband’s firm were legal, and that she was compensating him at fair market value for both accounting services and rent.

Ethics watchdogs said the arrangement nonetheless sent the wrong message.

“The reality is that under the current system, PACs are rife with self-dealing transactions,” Meredith McGehee, policy director at the nonpartisan Campaign Legal Center, told the paper. “The laws and regulations could and should be strengthened.

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