Defending Nancy Pelosi

The Center for Competitive Politics welcomes former FEC Commissioner David Mason as an occasional contributor to the blog. His first post follows:

Put me down as opposed to most of House Speaker Nancy Pelosi’s political aims, but she deserves some defense from a front page ethics attack in today’s Washington Times

The Times reports dramatically that "Pelosi’s PAC pays bills for spouse’s firm", referring to $99,000 in payments over the past 9 years.  The problem is, there is no evidence, at least in the Times story or FEC reports, that the PAC is paying bills for Paul Pelosi’s apparently successful firm, FLS, much less that Paul Pelosi is "on the payroll" of the PAC as suggested in the story.

What FEC reports do show is a classic Catch-22 that Federal campaign finance law creates: Pelosi’s PAC cannot accept free rent from her husband’s business, but if she pays rent, as required by law, she’s accused of lining her family’s pockets.  The kerfuffle has nothing really to do with ethics, and no bearing on any important issue, but it gets front page treatment because the mere hint of corruption is politically powerful. 

Nancy Pelosi’s PAC is paying $2,000 per month in rent and the same amount for accounting services to FLS, a company owned by her husband, Paul.  The Times quotes some of the usual watchdogs condemning this as "self-dealing."  The problem is that if the PAC uses FLS offices and services and doesn’t pay fair market value the result is an illegal corporate contribution to the PAC.  In fact, PACs that fail to report rental payments for office space are likely to get an inquiring letter from the FEC asking for an explanation.

I’m not familiar with commercial real estate costs in San Francisco, and the Times story provides no illumination on this legally important point, but I suspect that $2,000 a month rent for office space is perfectly reasonable in that market.

I suppose Speaker Pelosi is partly at fault for buying into the "more ethical than thou" logic of progressive campaign finance rules.  She contributed to a climate that makes attacks such as this plausible by supporting legislation that would have mandated a political divorce by regulating family members’ involvement in campaigns.  Of course, if politicians’ families are such a corrupting force, perhaps we should go all the way, and just ban having them.

Campaign finance laws were supposed to restore public confidence in politicians.  That’s probably a hopeless aspiration.    But current laws all too often produce a damned if you do, damned if you don’t, bind with rules that have nothing to do with real corruption.  If the law can do no better than this, it has failed.

The Center for Competitive Politics is now the Institute for Free Speech.