A principal campaign committee may use campaign funds to pay a campaign consultant’s legal fees and expenses described in the advisory opinion request because the payment is for a lawful purpose that would not constitute personal use.
Chuck Fleischmann is the U.S. Representative from the Third District of Tennessee. Chuck Fleischmann for Congress, Inc. (the Committee) is Representative Fleischmann’s principal campaign committee. In the 2010 primary election, Representative Fleischmann won the Republican Party nomination for the Third District of Tennessee over his opponent, Robin Smith.
During the 2010 campaign, John Saltsman, Jr. was a consultant employed by S&S Strategies LLC. Through S&S Strategies LLC, Mr. Saltsman provided campaign advice to then-candidate Fleischmann. Mr. Saltsman has been sued by Mark Winslow, a former campaign staffer for then-candidate Robin Smith, for tortuous interference with a contractual relationship and defamation. Mr. Winslow’s complaint alleges that Mr. Saltsman helped create attack ads directed at Ms. Smith and “improperly obtained” and disseminated to the press a confidential employment agreement between Mr. Winslow and his former employer, the Tennessee Republican Party. The complaint also alleges that then-candidate Fleishmann used the employment agreement to attack then-candidate Smith and that Mr. Saltsman made defamatory statements about Mr. Winslow. The complaint alleges Ms. Smith was defeated in large part due to Mr. Saltsman’s actions.
The Committee has asked the Commission if it may use campaign funds to pay Mr. Saltsman’s legal fees and expenses that arise from Mr. Winslow’s civil suit.
The Federal Election Campaign Act (the Act) identifies six categories of permissible uses of campaign funds, including: (1) payments for expenses in connection with the candidate’s campaign for federal office; (2) payments for ordinary and necessary expenses incurred in connection with the duties of the individual as a federal officeholder; and (3) for any other lawful purpose not prohibited by 2 U.S.C. § 439a(b). 2 U.S.C. § 439a(a); 11 CFR 113.2(a)-(e). However, campaign funds may not be converted to “personal use.” 2 U.S.C. § 439a(b)(1); 11 CFR 113.2(e). Personal use is any use of campaign funds “to fulfill any commitment, obligation, or expense of a person that would exist irrespective of the candidate’s election campaign or individual’s duties as a holder of Federal office.” 2 U.S.C. § 439a(b)(2). The Act and Commission regulations provide a non-exhaustive list of items that would constitute personal use. See 11 CFR 113.1(g)(1)(i)(A-J). For items not on this list, the Commission determines on a case-by-case basis whether the expense is personal use. Commission regulations specifically provide that “legal expenses” are subject to a case-by-case determination. 11 CFR 113.1(g)(1)(ii)(A).
The Commission noted that in previous advisory opinions, it has concluded that the use of campaign funds for legal expenses did not constitute personal use when the legal proceedings involved allegations directly related to the candidate’s campaign or duties as a federal officeholder. See, e.g., AOs 2009-20, 2009-10, 2008-07, 2006-35, 2005-11 and 2003-17. The Commission specifically cited to 2009-20, where it approved the use of campaign funds for legal fees of persons other than the candidate. In that case, Representative Visclosky’s current and former congressional staff members received, or were expecting to receive, grand jury subpoenas related to a federal investigation of Representative Visclosky. The Commission concluded that the staffers’ legal expenses would not exist irrespective of the Congressman’s campaign or duties as a federal officeholder and could be paid using campaign funds.
In distinguishing the facts in AO 2009-20 from the facts here, the Commission pointed out that in 2009-20, although approving the use of campaign funds for the legal fees of persons other than the Congressman, the Congressman’s alleged activity was the subject of the federal investigation. In this case, the basis of the lawsuit is the alleged activity of Mr. Saltsman, not Representative Fleishmann. Nonetheless, the Commission concluded that the legal fees and expenses involve allegations directly relating to campaign activities engaged in by Mr. Saltsman in his role as a campaign consultant for Representative Fleischmann’s campaign. As a result, the lawsuit against Mr. Saltsman would not exist irrespective of Representative Fleischmann’s campaign.
The Commission concluded that, to the extent that the legal proceedings derive from allegations directly relating to campaign activity, the Committee may use campaign funds to pay the campaign consultant’s legal fees and expenses.
AO 2011-07: Date Issued: May 26, 2011; Length: 7 pages