Correction to This Article
This article on fundraising by Linda Chavez and her family incorrectly described the circumstances surrounding her withdrawal from consideration as labor secretary. She withdrew after news reports said that she housed an illegal immigrant.

In Fundraising's Murky Corners

By Matthew Mosk
Washington Post Staff Writer
Monday, August 13, 2007

Linda Chavez rose to prominence in the 1980s as a tart-tongued Reagan administration official and candidate for the Senate, eventually becoming a well-known Latina voice on social issues and President Bush's choice to lead the Labor Department. With her conservative celebrity came book deals, a syndicated column, regular appearances on the Fox News Channel -- and a striking but little-known success at political fundraising.

In the years since she was forced to pull her nomination as Bush's labor secretary after admitting payments to an illegal immigrant, Chavez and her immediate family members have used phone banks and direct-mail solicitations to raise tens of millions of dollars, founding several political action committees with bankable names: the Republican Issues Committee, the Latino Alliance, Stop Union Political Abuse and the Pro-Life Campaign Committee. Their solicitations promise direct action in the "fight to save unborn lives," a vigorous struggle against "big labor bosses" and a crippling of "liberal politics in the country."

That's not where the bulk of the money wound up being spent, however. Of the $24.5 million raised by the PACs from January 2003 to December 2006, $242,000 -- or 1 percent -- was passed on to politicians, according to a Washington Post analysis of federal election reports. The PACs spent even less -- $151,236 -- on independent political activity, such as mailing pamphlets.

Instead, most of the donations were channeled back into new fundraising efforts, and some were used to provide a modest but steady source of income for Chavez and four family members, who served as treasurers and consultants to the committees. Much of the remaining funds went to pay for expenses such as furniture, auto repairs and insurance, and rent for the Sterling office the groups share. Even Chavez's health insurance was paid for a time from political donations.

"I guess you could call it the family business," Chavez said in an interview.

There is nothing illegal about running political committees the way she and her family have done, and Chavez said that none of the money has been spent for personal items and that she has done nothing wrong.

Still, Chavez Inc. offers a revealing window into a largely unregulated corner of the world of political money, where few constraints exist on spending, candidates often benefit hardly at all and groups face little accountability from donors who remain largely unaware of where their money goes.

More than 2,700 "multi-candidate committees" such as those run by Chavez and her family members are registered with the Federal Election Commission, and unlike the more conventional committees used by candidates to fuel their campaigns, the multi-candidate groups face few rules governing how they can spend money. Only about a dozen are audited each year. And they face little of the public scrutiny that confronts candidate-run committees because no opponent scours their spending reports for irregularities.

"Nobody is looking at these," said Melanie Sloan of the group Citizens for Responsibility and Ethics in Washington. "It would be nice to know if other people are doing what Ms. Chavez is doing."

Even less information is publicly available about spending by politically oriented nonprofit foundations -- such as those established separately by Chavez and her family members. The four foundations collected $1.4 million from 2003 to 2006 and paid many Chavez family members a steady salary, according to tax records.

Chavez said the goal of her fundraising committees has been to advance her political agenda and nothing more. "I have never tried to enrich myself or my family and have consistently taken salaries from my organizations that were lower than the market, with very few benefits," she said.

But the spending by Chavez PACs appears to depart from standard practices by some other issue-oriented groups, according to lawyers and ethics experts. The National Rifle Association's political committee, for instance, spent nearly a third of the $11 million it raised in the 2006 cycle on political activities, including $1.2 million in direct donations to candidates.

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