Herman Cain And Mitt Romney Used Campaign Funds To Enrich Themselves And Their Associates
WASHINGTON -- Over the past several months, businessman Herman Cain has spent tens of thousands of dollars in campaign cash on his own books and pamphlets, multiple outlets reported on Tuesday. The money -- which went to Cain's company T.H.E New Voice -- represented a significant percentage of the total funds raised by his campaign.
Cain's use of his presidential campaign as a means of personal enrichment has already attracted the attention of watchdog groups, which find his behavior troubling. David Donnelly, national campaigns director of the Public Campaign Action Fund, argued that it could represent a Federal Election Commission violation, since Cain would personally profit by driving his book up the bestseller list.
But the move is still not particularly surprising. Cain may be the most flagrant abuser of the practice -- his schedule contains a relatively equal mix of campaign events and stops on his book tour -- but he is hardly the only one. In late September, the Washington Post reported that fellow Republican presidential candidate Newt Gingrich was intertwining his campaign activities with promotional stops for his and his wife's books.
Senator Scott Brown (R-Mass.), like Cain, petitioned the Federal Election Commission to determine whether or not he could use campaign funds to purchase "up to several thousand copies of the book to be used solely in campaign related activities." Tim Pawlenty, upon dropping out of the presidential race, tried to parlay his time on the campaign trail into a gig on Fox News. He was turned down.
If campaigns have the potential to become vehicles for candidates to advance themselves financially, far more often they serve as veritable bank accounts for associates or friends of those candidates. Take, for instance, the latest financial disclosure reports for Mitt Romney's presidential campaign. From July 1 to Sept. 30, the former Massachusetts governor paid more than $2.15 million in fees to SJZ LLC, a financial consulting firm that manages the campaign’s fundraising efforts nationwide.
SJZ LLC was founded by Spencer Zwick, the national finance director for Romney's 2008 campaign and Romney's son Tagg's current business partner at the private equity firm Solamere Capital. That's on top of the more than $666,000 the campaign paid SJZ LLC in the second quarter of the campaign, and the nearly $1 million it received from Romney's Free and Strong America political action committee. (It's worth noting that SJZ has done political work for other campaigns in the past. Between March 2009 and January 2011, for example, it was paid $1.4 million by Meg Whitman's failed gubernatorial campaign in California.)
Zwick wasn't the only Solamere official to be on the receiving end of Romney's presidential campaign funds. John Miller, who is Romney's National Finance Co-Chairman and an operating partner at Solamere, is also the Chief Executive Officer of JR Miller Enterprises, an official at the company confirmed. A JR Miller Enterprises affiliate, JRM-C Management, received a $12,391 check from the Romney presidential campaign to pay for air travel on August 19, 2011.
In other words: According to the flight manifest, Miller likely rented out his corporate jet for a flight from Utah, where Romney was fundraising at the time, to San Diego where Romney is renovating an oceanfront home.
That Romney would turn to close associates and his son's business partners for campaign assistance or a trip on a private jet is not unprecedented. President Obama acted similarly when he paid millions of dollars to David Axelrod's political consulting firm during the 2008 campaign.
But, as they were back then, questions have been raised about both the type of relationship resulting from these expenditures and whether it is ethical for candidates to use donor money in this manner.
"It is not illegal, but it sure doesn't smell right when it comes to politics," said Bob Edgar, chief executive of Common Cause, a national nonprofit advocacy group that first raised concerns about Romney's Solamere connections to the Boston Globe.
"They themselves have become wealthy by using Romney's political activities over the past few years," Edgar said. "I think the general public would question: a. what is this all about, and b. How much is Spencer Zwick making off of Romney, both with the equity firm but also continuing to help him in the development area?"
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First Posted: 10/18/11 01:30 PM ET Updated: 12/18/11 05:12 AM ET