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  1. #1
    Super Moderator Newmexican's Avatar
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    20 Oct 2013

    On Sunday, a 60 Minutes investigative report by veteran CBS reporter Steve Kroft and Government Accountability Institute (GAI) President and Breitbart News Senior Editor-at-Large Peter Schweizer revealed how leadership PAC loopholes allow members of Congress to convert campaign cash into lavish lifestyle upgrades for themselves and their family members.

    “It's another example, unfortunately, where the rules that apply to the rest of us, don't really apply to the members of Congress,” said Schweizer on 60 Minutes.

    The report, which contained selected material from Schweizer’s forthcoming book Extortion: How Politicians Extract Your Money, Buy Votes, and Line Their Own Pockets, revealed embarrassing and outlandish instances of cronyism and self-enrichment by members of Congress. Despite the fact that funds from leadership PACs are supposed to go to help elect fellow members of one’s own political party, lax campaign laws allow lawmakers to turn their leadership PACs into private slush funds to fund just about anything.

    Rep. Rob Andrews (D-NJ), for example, tapped his wife, a lawyer and an associate law dean at Rutgers School of Law-Camden, to be a PAC compliance officer for his leadership PAC. She approved the use of donor dollars to fly her, Rep. Andrews, and their two daughters to Edinburgh, Scotland for a wedding at a posh resort. Andrews’s leadership PAC paid $16,575 in airfare.
    His campaign committee picked up the rest of the tab, which was slightly under $14,000. Schweizer says Andrews’s leadership PAC even paid for the wedding gift, which was china from Bloomingdale’s. Andrews and his wife even merged a campaign event with their daughter’s graduation party, allowing them to combine the costs of the two events, even though the PAC did not pick up the entire bill.

    When Kroft confronted the Democratic New Jersey congressman, Andrews said, “I think we should take a look at having clearer rules at what they can and cannot be spent for. I'd be for that.” Andrews claimed he could not speak more on the matter because of a pending House Ethics investigation, even though Kroft said the committee told him they were fine with Andrews speaking about the matter.

    Rep. Gregory Meeks (D-NY) attempted to use $6,230 in campaign funds to pay for a personal trainer. Meeks’s staff claimed using campaign money for a fitness instructor is a legitimate expense, because gym visits alleviate stress from Meeks’s “official duties.” The investigation also revealed that Meeks has used $35,000 from his leadership PAC on NFL games.

    Sen. Saxby Chambliss’s (R-GA) leadership PAC dropped $107,752 at the Breakers resort in Palm Beach during the 2012 election cycle. That is over three times as much money as he gave the National Republican Senatorial Committee to get fellow Republicans elected. One year, Chambliss spent nearly one-third of his entire leadership PAC funds on golf, limos, and at least one private jet ride. His leadership PAC also picked up a $26,814 dinner tab at Ruth’s Chris Steakhouse and $10,344 at Pebble Beach.

    The 60 Minutes special also revealed how members of Congress exploit a self-loan loophole that allows politicians to loan their own campaigns money at high interest rates and then let the loans linger to generate hundreds of thousands of dollars in passive streams of profit for themselves.

    Rep. Grace Napolitano (D-CA) has bagged at least $294,245 since 1998 by loaning her congressional campaign money at interest rates up to 18%—a scheme that effectively funneled campaign contributor donations into her personal bank account. After numerous attempts to interview Napolitano, Kroft finally confronted her outside a Hispanic Caucus meeting.

    “She told us that as a woman and a minority, banks wouldn’t lend her money, so she had to withdraw $150,000 from an investment account to lend it to her campaign,” said Kroft.

    Kroft then questioned why she would charge 18% interest. “That’s what the Mafia gets,” he exclaimed.

    “It isn’t like I’ve really profited,” said Napolitano. “I still live in the same house. I drive a small car. I am not a billionaire, or a millionaire, for that matter.”

    The 60 Minutes report also revealed that members of Congress are permitted to use leadership PAC money to hire their own family members. As Kroft and Schweizer point out, most corporations have nepotism laws that prevent the hiring of family members. And while congressional rules bar family members from serving on a congressman’s official staff, lawmakers are free to hire family to serve on their campaigns.

    Former Rep. Ron Paul (R-TX) put his daughter, grandson, daughter’s mother-in-law, grandson-in-law, granddaughter, and another relative—six family members in total—on his campaign payroll. The Paul progeny received a combined $304,599.

    Kroft also confronted retiring Rep. Rodney Alexander (R-LA) about actions Schweizer reports on in Extortion. Alexander paid his two daughters over $130,000 in combined expenses for working on his campaign, which he won with an overwhelming 78% of the vote. Kroft asked Alexander what his daughters did.
    “They do everything that others do for other campaigns,” said Alexander. “Somebody has to do that work. I kept it with someone I can trust. If one can’t trust their daughter, then who can they trust?”

    Kroft and Schweizer agreed that leadership PACs are hotbeds of cronyism and self-enrichment.

    “The abuse is substantial and pretty widespread,” said Kroft.
    Schweizer agreed and said that is precisely how the Establishment likes it.

    “We hear a lot about how there's so much partisan fighting in Washington,” said Schweizer. “Here's a great example of bipartisanship. Both sides like this current system.”

    Sunday's 60 Minutes report is just the tip of the iceberg. According to Schweizer's publisher, next week's Tuesday release of Extortion will include never-before-released documents and revelations on several top Democrats, Republicans, President Barack Obama, and Attorney General Eric Holder.

  2. #2
    Senior Member HAPPY2BME's Avatar
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  3. #3
    Senior Member HAPPY2BME's Avatar
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    Most members of Congress are millionaires

    The richest lawmaker: Rep, Darrell Issa, R-Calif., who oversees the House Oversight and Government Reform Committee and made a fortune in his car- alarms business. The center calculates his average net worth at $464 million.
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  4. #4
    Senior Member HAPPY2BME's Avatar
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    Feb 2005
    BEYOND INSIDER TRADING: Here's How Members Of Congress Get Rich Off Earmarks

    House Minority Leader Nancy Pelosi (D-CA)

    For years, Pelosi has pushed for federal transportation earmarks to build and extend a lightrail project in her affluent San Francisco district, securing more than $890 million for the project between 2004 and 2011. Interestingly, Pelosi and her husband own an office building, valued between $1 million and $5 million, located at a prime distance from one of the planned lightrail stops. If the project is completed, the Pelosis could see the property value increase by as much as 150%, according to Schweizer.
    In 2006, Pelosi also managed to get a $20 million earmark for waterfront redevelopment just blocks away from the same office building. In another instance, she got $12 million for a beautification project abutting another property owned by the Pelosis.
    Pelosi's real estate portfolio has also gotten a boost from her friends in Congress. In 2010, Rep. Bernie Thompson (D-MI) got a $800,000 earmark to upgrade the Napa Valley airport. Pelosi, who helped Thompson get his position as chair of the Homeland Security Committee, owns or has stake in multiple properties that would benefit from the project.

    Senate Majority Leader Harry Reid (D-NV)


    In 2005, Reid sponsored a $18 million earmark to build a bridge connecting Laughlin, Nev., with Bullhead City, Ariz. — an expenditure Arizona's senators denounced as unnecessary pork. Incidentally, the bridge was located just a few miles from a 160-acre land parcel owned by Reid. According to Schweizer, local authorities predicted the bridge would "undoubtedly" increase surrounding land values.
    Schweizer writes that Reid has also leveraged his position in the Senate to persuade local officials. In 1998, for example, Reid bought an undeveloped residential tract for about $400,000, which he later sold to a partner, obtaining a joint stake in the limited liability company that owned the land. The company aggressively petitioned the county to rezone the land as commercial property, at the same time the county was lobbying Reid's office for earmarks.
    Needless to say, county commissioners granted the rezoning, and Reid and his partner sold the land to a mall developer for $1.6 million. Reid himself walked away with $1.1 million.

    Former House Speaker Dennis Hastert (R-IL)


    As Speaker of the House, Hastert increased his net worth by more than $2 million by using a road-building earmark to increase the value of land he purchased in Illinois.
    In 2005, Hastert purchased (or had a hand in purchasing) 264 acres near the site of the proposed "Prairie Parkway," and the site of a planned real estate development. Months after the purchases in early 2005, he placed a $207 million earmark into the federal highway bill to fund the parkway. He sold 69 acres months later for $4.9 million — and netted between $2 million and $10 million in a year.
    Hastert retired in 2007 after conceding House leadership to the Democrats in 2007.

    Sen. Judd Gregg (R-NH)


    As former chairman of the powerful Senate Budget Committee, Gregg earmarked around $66 million to turn New Hampshire's Pease Airforce Base into a business park, developed by Gregg's brother. The Senator himself invested between $240,000 and $1 million in the development, and collected between $240,000 and $650,000 on his investment.
    Gregg retired from the Senate in 2010 and is now a senior advisor to Goldman Sachs.

    Rep. Ken Calvert (R-CA)


    Yet another politician who used earmarks to benefit himself financially. Calvert and a business partner paid $550,000 for a parcel of land near March Air Reserve Base in California in 2005, not long before he got a $1.5 million earmark to support commercial development around the base. Less than a year later he was able to sell the land for $985,000.
    In another instance, his real estate firm brokered the purchase of a property near a proposed highway interchange. Calvert got an earmark to build the interchange, and his firm brokered the sale of the property at a profit. His company received a commission on both sides of the deal.
    The House Ethics Committee signed off on the earmarks, saying the earmarks benefitted others besides for Calvert — but he made hundreds of thousands from the deals.

    Rep. Carolyn Maloney (D-NY)


    Maloney has been a strong supporter of plans to build the Second Avenue Subway in New York City — securing at least $641 million in federal earmarks for the projects.
    But Maloney also stands to gain personally from the project, owning a building at 409 East 92nd Street that is currently priced between $5 million and $25 million. The building is just blocks away from a station a station entrance at 94th street and Second Avenue — which is almost certain to raise the value of her property.

    Rep. Maurice Hinchey (D-NY)


    According to Schweizer, Hinchey managed to increase his wealth by 800% between 2004 and 2008 — mostly as a result of a land deal in his upstate New York hometown.
    Hinchey pushed for a $800,000 earmark for infrastructure improvements in the village of Saugerties, NY. Hinchey owned two properties that made up "a quarter of the land" benefited by the project, Schweitzer writes, and the value of his land increased five-fold — from between $30,000 and $100,000 to between $250,000 and $500,000.
    Update 4:39 11/28/11 : Hinchey's contacted us, and disputed Schweizer's claims.
    According to Alex Wade, Director of Special Projects for the Village of Saugerties "The fact is, we requested these funds from the state to repair 100 year old sewer lines before the Partition Street Project was even initiated. Furthermore, the developer of that project has always planned to build new lines directly into the existing pump station, which is adjacent to the property. The grant Congressman Hinchey secured was for upgrading 100 year old infrastructure - period, end of story. There isn't even any room for argument here - these reporters and bloggers just got it wrong.

    But these land deals are only the beginning.

    Here's how members of Congress gamed the financial crisis to make big bucks in the stock market >
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