By Gary Martin, San Antonio Express-News, July 13, 2007

13 Jul 2007 // Rep. Henry Cuellar, a Laredo Democrat, received $6,000 for allowing his campaign to use his law office over a two-year span — a reimbursement that is legal under federal election laws.
His law office also contributed $70,600 to the campaign, by furnishing office space, a vehicle and office equipment.

An ethics group wants to eliminate these types of cozy relationships between campaigns and candidates.

"It is certainly suspect, and it certainly is not OK," said Naomi Seligman Steiner with Citizens for Responsibility and Ethics in Washington, or CREW.

Cuellar did not return calls to his office, but said in a statement that the $6,000 reimbursement and $70,600 contribution are legal, and were duly noted in his Federal Election Commission reports.

"These payments have been verified with the FEC to be within the bounds of the regulations," Cuellar's statement read.

Ethics groups take a tougher stance.

"Just because it is legal doesn't mean it's right," said Seligman Steiner.

Cuellar is not alone.

Nineteen members of Congress, nine Democrats and 10 Republicans, used campaign committees or political action committees to pay a family business or entity, according to a CREW study, titled "Family Affair."

Even more questionable, the study said, is that 64 lawmakers — 26 Democrats and 38 Republicans — paid family members through their campaign committees or PACs.

Cuellar didn't hire relatives, but other Texas lawmakers did.

Texas lawmakers whose campaigns or PACs paid relatives for campaign work included: Joe Barton, R-Ennis; Louie Gohmert, R-Tyler; Ralph Hall, R-Rockwall; Randy Neugebauer, R-Lubbock; Ron Paul, R-Lake Jackson; and Silvestre Reyes, D-El Paso.

Cuellar's arrangement with his Laredo law firm and campaign is not a first.

The Federal Election Commission has issued several advisory opinions in recent years that permit a campaign to pay rent and utility costs to a candidate for office space he owns.

In 1997, Rep. Lamar Smith, R-San Antonio, sought an FEC opinion and later pulled the plug on an arrangement that saw his campaign pay rent on a two-story condominium in Alamo Heights that the congressman owned.

Smith later relocated his campaign office from his San Antonio residence to commercial office space.

House ethics laws and the Federal Election Campaign Act prohibit the conversion of campaign funds to personal use.

An FEC spokesman provided several opinions that show it is permissible for a candidate to lease his campaign office space, as long as it's at a fair market rate.

The CREW study, citing FEC records, showed that Cuellar's law firm at 1519 Washington St., Suite 200, in Laredo, contributed space, a vehicle and equipment that totaled $70,600 over a two-year period, from 2003 to 2004.

Cuellar later received a $6,000 reimbursement from his campaign for the law firm space.

Despite its legality, CREW maintains that Congress should amend the Federal Election Campaign Act to dispel the appearance of personal enrichment or self-dealing.

"We have no idea if he is paying himself fair market value, and the FEC does not investigate whether he is paying himself fair market value," Seligman Steiner said.

"If we had an FEC that actually did its work, this would raise red flags," she said. "Unfortunately, we have a toothless agency."

Some lawmakers want to raise the ethical bar, too.

Rep. Adam Schiff, D-Calif., has introduced legislation that would prohibit the payment of campaign PAC funds to relatives of lawmakers. It would also prohibit using campaign funds for an entity controlled by the office holder, a spouse or immediate family member.

The legislation is co-sponsored by House Speaker Nancy Pelosi, D-Calif., House Majority Leader Steny Hoyer, D-Md., and other House Democratic leaders.

Republican Reps. Mike Castle of Delaware and Todd Platts of Pennsylvania also back the bill.

Schiff, in introducing the bill, said the practice of paying family members or entities controlled by a lawmaker or his relatives "can breed corruption and invites abuse."

"Candidates run for federal office to serve the public, not to financially profit from the campaign," Schiff said.