Limos, loans, and how Congressional District 10 candidates spend donor money

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AUSTIN (KXAN) — Dozens of candidates will ask Texans for money as they run for election in 2020. Politicians of many stripes will send texts, emails and flyers asking you to donate to their campaigns.

But candidates can spend those donations on a range of items broader than many might realize.

Ethics experts tell KXAN that reporting can be lax, and the current situation at the FEC makes enforcement difficult — if a violation is found in the first place. Experts say if a whistleblower doesn’t report an issue, inappropriate campaign spending is likely to occur.

Campaign funds used to be specifically for running for re-election, but over the years, the list of what items are allowed has expanded to more charges used for political purposes: legal work, travel, meals, special events, etc.

KXAN spent the past few weeks looking at what the candidates in Congressional District 10 spent money on so far. The district stretches from Austin to the outskirts of Houston, and candidates include the Republican incumbent Congressman Michael McCaul and three democratic challengers: Dr. Pritesh Gandhi, Shannon Hutcheson, and Mike Siegel.

According to documents from the Federal Election Commission (FEC), incumbent Republican Michael McCaul charged high-end car service and limo company, Echelon Transportation, 19 times for more than $5,700 in the first three quarters of 2019. He’s spent more than $29,000 on the service in his campaigns for Congress before the 2020 cycle.

A campaign spokesman tells KXAN the Congressman uses the service when he travels too early or too late for staff to take him places. Many times it’s to and from Austin-Bergstrom International Airport. The spokesman says the Congressman uses campaign dollars so he doesn’t use taxpayer dollars. Congressmembers get yearly allowances for travel.

“As someone who’s running to replace Michael McCaul. If he’s spending money on limos instead of voter outreach. That’s actually to my benefit as a candidate, he’s wasting his money as far as I’m concerned,” said Mike Siegel, a democratic candidate for Congressional District 10.

Campaign documents for Siegel show he paid himself back $10,000 for a loan his family made to the campaign when they just began their race against McCaul.

According to his campaign finance filings with the FEC, Siegel used campaign donations to his campaign to donate $300 to the Texas Democratic Party and $1,875 to the Travis County Democratic Party. These are separate donations from the purchases the campaign makes to the party for voter information.

“Last cycle, the Travis County party knocked on thousands upon thousands of doors. So it’s just important that we chip in, even if it’s only a symbolic amount to show that we’re part of this collective movement,” said Siegel.

It’s important to know donating to other organizations is a common practice.

Congressman McCaul gave thousands of dollars of his campaign donations to outside groups: $1,500 to Texas Right to Life, $1,000 to the Travis County Republican Party, $500 to the Republican Women’s Club of Katy, $840 to the Bastrop Chamber of Commerce and $825 to the Greater Tomball Chamber of Commerce and many more organizations.

Rep. McCaul’s campaign manager Evan Albertson issued a statement saying: “Congressman McCaul is proud to support these pro-life organizations, women’s groups and local chambers of commerce. As one of the most effective members of Congress, Rep. McCaul understands the importance of these organizations and is running a strong grassroots campaign.”

FEC documents for the campaign of Democrat Dr. Pritesh Gandhi show a $4.32 charge to Amazon for a video rental. His campaign manager Kyle Buda tells KXAN, “that was an accidental purchase that was immediately reimbursed with the advisement of our campaign compliance team.”

It’s unlikely any of these examples would get a candidate in trouble with the FEC.

“It’s hard to draw a line because unless you have a lot more details sometimes you don’t know what’s underlying that expenditure,” said Buck Wood, longtime ethics and campaign finance expert.

The FEC often enforces the rules based on complaints, according to Wood, so possible violations or charges in the gray area will have to be much larger to get their attention. Nothing found in Congressional District 10 is inappropriate in the eyes of the FEC.

“The FEC works almost entirely off of whistleblowers,” said Wood.

Because the FEC currently does not have a quorum, most enforcement actions will not occur even if a violation is found, according to a press release from the FEC.

“While the Commission cannot take action on many legal matters, staff continues to litigate ongoing court cases, process new enforcement complaints and responses, and investigate matters previously authorized by the Commission,” staff wrote in the September release.

Wood adds it’s mostly up to donors themselves to make sure they approve of what candidates spend their money on.

In the FEC paperwork for Hutcheson, Siegel, Gandhi, and Rep. McCaul, candidates will itemize and mark “in-kind” charges. That means the items were paid for by the candidates themselves, but since it could be seen as a campaign expense by a candidate for Congress, their compliance lawyers usually tell them to report the items to the FEC. Examples are hundreds of dollars in Zach Theater tickets and flowers for Hutcheson and event fees for Everytown for Gun Safety for Dr. Gandhi.

In those reports, Rep. Michael McCaul has spent the most. He’s also raised the most. He’s spent $452,171. He’s raised $1,209,923. Dr. Gandhi has raised $527,967 and spent $209,989. Shannon Hutcheson has raised $534,515 and spent $151,665. Mike Siegel has raised $355,691 and spent $207,532

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