Inside Report for Jan. 4, 2013

What is a legally acceptable use of campaign finance contributions?

Under state law, campaign contributions cannot be used, loaned or pledged for any personal expense unrelated to a political campaign, the holding of public office or party position.

But the Louisiana Board of Ethics — which is also the Supervisory Committee for Campaign Finance — has been struggling with the application of the law.

One case has landed in court as the accused violator has fought back.

The state 1st Circuit Court of Appeal is scheduled to hear arguments in a case involving campaign spending by East Baton Rouge Mayor-President Kip Holden.

A state district court has already rejected Ethics Board claims that Holden violated campaign finance laws by giving money for funeral costs, for students to travel abroad and to sponsor a Metro Council member’s daughter at the Congressional Youth Leadership Council.

“Day in and day out Mayor Holden takes action and makes decisions for the benefit, protection and/or aid of his constituents,” Judge Kay Bates wrote. “Why should the donation of excess campaign funds, and specifically the funds at issue, be any different?”

State ethics attorneys argue that the Holden campaign expenditures “were for personal reasons, not for reasons related to the holding of public office” and that campaign funds “are not charity funds or slush funds.”

The 1st Circuit is scheduled to take up the issue in the Holden case Jan. 11.

The court attention is coming at the same time the Ethics Board is in the process of drafting proposed guidelines tackling the thorny subject of what constitutes “personal use” of campaign funds.

The working draft includes a list of allowed expenditures, such as campaign advertising and bumper stickers, and a list of what’s banned outright, such as country club membership dues, personal residence mortgage payments and legal fees for criminal defense.

There’s another list of items for which there would be a “presumption” that the expenditures are for personal use. Candidates would have a chance to explain why they should be considered appropriate uses of campaign funds. Among the items are clothing, sporting event tickets, dues, fees or gratuities for civic, nonprofit or social organizations; and travel, lodging, food and drink unrelated to campaigns for public positions.

It’s clear that the Ethics Board is uncomfortable with some of the expenditures candidates and officeholders are making with campaign funds.

“If I had my way, I would make it (the law) a lot clearer,” said Scott Schneider, a New Orleans lawyer who is chairman of the ethics subcommittee working on proposed rules. “The goal here was to say, ‘You should not be able to use your campaign funds to subsidize your lifestyle.’ ”

The Ethics Board last year asked the Legislature to tackle the subject, but the most it got was a promise of a study resolution that never materialized.

Any rules the Ethics Board comes up with are subject to legislative oversight and approval.

Louisiana legislators have shown no propensity for wading into the subject.

“I think it’s hard to do a bright line,” said House and Governmental Affairs Committee Chairman Tim Burns, R-Mandeville.

Meanwhile, the Ethics Board waits on a court ruling for some guidance and mulls over what is meant by a law it is charged with enforcing.

Marsha Shuler covers ethics issues for The Advocate’s Capitol news bureau. Her email address is mshuler@theadvocate.com.