Legal Defense Funds


Earlier this week, the U.S. Supreme Court refused to hear an appeal by Rep. Jim McDermott of a ruling that he acted improperly by passing on to reporters a recording of a 1996 telephone call where Republican leaders talked strategy in regard to the ethics case pending against former House Speaker Newt Gingrich (R-Ga.). This week’s decision also leaves standing a previous court ruling saying that McDermott would have to pay $60,000 in damages and $800,000 in legal bills to now House Minority Leader John Boehner (R-Ohio), who had sued the Washington Democrat in 1998.

The question is, how is McDermott going to pay? CQ looked into whether he can use a legal-defense fund to help pay Boehner and it seems possible. It turns out that McDermott is one of six House members who maintain active legal defense funds, reporting contributions this year. CQ says that the rise in these separate accounts funds is a result of an increase in Justice Department and Federal Election Commission investigations. So far this year, McDermott has received more contributions to his defense fund than all other members of Congress, about $52,000, most coming from his Seattle district.

What do we know about these legal defense funds? Well, we know it’s a separate account that can be set up by a House member who can receive up to $5,000 from an individual in contributions per year. Lobbyists may not give to legal defense funds but House rules do allow corporate and union contributions to give to these funds. These accounts must disclose all contributions and expenses just as campaign committees and political action committees do. Both House and Senate legal expense funds file quarterly on paper only. Representatives file these paper documents with the Clerk of the House and if you live in DC you can go the office in the Capitol to see what money is being raised. You guessed it. These reports are not available online. The laws governing the disclosure of legal defense funds is House Rule XXV(5)(c)(3).

Yes, you read me right. Lawmakers are allowed to collect funds from individuals, corporations and labor unions to help them get out of legal difficulties, report them only quarterly and then effectively hide the reports in an obscure office to the Capitol building.

There’s a lot wrong with this picture. Legal defense fund reporting needs to come into the 21st century. Our friends at the Center for Responsive Politics, the pros at following the money, have highlighted similar funds in the past, such as the one held by former Rep. Tom DeLay (R-Texas). In 2000, then U.S. Sen. Robert Torricelli (D-N.J.) set up the New Jersey Legal Fund to cover legal fees generated attempting to fight off an investigation into alleged fund-raising improprieties during his 1996 campaign for Senate. CRP found that of the 105 donors to Torricelli’s fund, "many are familiar names in Democratic fund-raising circles, while others work for corporations that stand to benefit from legislation pending in the Senate, including pharmaceutical companies and interests involved in the debate over asbestos litigation." I’d be willing to bet that’s the same with every single fund. Currently CRP has nothing comprehensive or ongoing regarding these legal funds, and there is no database. .