Senators keep funds in family

Continued mix of campaign and personal business draws criticism.

It has been almost a year since the Texas Legislature made it illegal for lawmakers to use political funds to rent property from themselves or their spouses, but some legislators still keep campaign business in the family.

State Sen. Eliot Shapleigh, D-El Paso, has campaign space in an office building that his wife owns, and records show that he makes payments to her company for computer usage and paper.

Harry Cabluck/ASSOCIATED PRESS (enlarge photo) Rep. Rob Eissler

Sen. John Carona, R-Dallas, meanwhile, has reimbursed from campaign funds nearly $600,000 to two of his companies for various services, including rent, in recent years. He does not pay rent anymore but still advertises the address and a phone number at his Dallas management company, Associa, as his campaign contact information, records indicate.

Neither Shapleigh nor Carona reported a donation of office space on their recent campaign reports.

"If the space has value, which it clearly does, and it's donated to the officeholder or the campaign, it needs to be reported," said Fred Lewis, an Austin-based political activist who favors stricter campaign finance laws. "That's as clear as can be."

Shapleigh said he saw nothing wrong with continuing to make payments to his wife's company for Internet service, computers and paper. Records show that he has paid the company, 701 N. St. Vrain Joint Venture, $2,423 since the law changed last year.

"I'm over there, and I'm responding to something that has to do with Senate activities," Shapleigh said. "I think we've followed the law."

Since 2000, Carona, who is chairman of the Senate Transportation and Homeland Security Committee, has reimbursed two of his companies $582,000 for services that include rent and corporate jet travel. Carona no longer charges his campaign for rent. However, the address given on his campaign Web site for his political headquarters is the same as Associa's.

Neither Carona nor Shapleigh reported the office space as an in-kind, or noncash, contribution on campaign reports.

"I don't do campaign work out of my business office," Carona said.

Controversy over mixing campaign spending with personal business prompted the Legislature to clamp down on perceived abuses in 2007. Though elected officials were prohibited years ago from using campaign money to buy real estate, many made payments to their spouses for the use of homes and offices. Critics said that allowed politicians to acquire second homes in Austin and benefit from fat campaign accounts.

Last year, the Legislature made it illegal for elected officials to rent property from companies they own or control.

Sens. Kim Brimer, R-Fort Worth, and Jane Nelson, R-Lewisville, stopped using campaign money to pay the rent for luxury condominiums listed in their spouses' names, records show. Each lawmaker had made more than $150,000 in rent payments and related expenses to their spouses since 2000, records indicate.

Nelson's husband and Brimer's wife have since sold the condos, which are near the Capitol. Spokesmen for both senators declined to give additional information.

Sen. Royce West, D-Dallas, adapted to the new law by moving his campaign office out of his Townview Professional Building. Until early last year, West rented space from his company, Skyview Development Corp.

Natalia Ashley, general counsel for the Texas Ethics Commission, said that if candidates for elective office, their spouses or their business entities give their campaigns "something of value" — money or not — the gift must be reported.

It is common for elected officials to put family members on the campaign payroll.

Texas House Speaker Tom Craddick, R-Midland, pays his daughter, Christi, thousands of dollars a month for consulting work, records show. The law allows payments to adult offspring and siblings, but payments to dependent children and spouses living in the same household are restricted.

Complaints were filed last year against two House members who paid their wives for accounting work. One of them, Rep. Rob Eissler, R-The Woodlands, said he had erred and has begun paying the money back, more than $50,000, out of personal funds.

"I found out it wasn't permissible," Eissler said. "When I found out it wasn't, I stopped."

After the complaint was filed against Rep. Carl Isett, R-Lubbock, he continued to make payments to his wife's company, Lubbock Bookkeeping Services. Isett told the American-Statesman in May that he saw nothing wrong with paying her company a total of $39,158 last year.

However, when contacted by The Associated Press last week, Isett's consultant, Todd Smith, said the lawmaker had decided to stop. "Carl just thought it was better to end the practice altogether so there wouldn't be any questions," Smith said.

Ethics watchdogs say laws prohibiting or restricting the mingling of campaign and family business exist to ensure that politicians don't divert money from donors and special interest groups into family bank accounts.

"Texas law is designed to prevent campaign contributions from being used to enrich the officeholders or their spouses," said Tom "Smitty" Smith, director of the Texas office of Public Citizen. "There are firewalls and clear standards that have been set."