Many Senate incumbents have been dipping into leftover campaign contributions as though they were "personal slush funds" and in some cases have violated Internal Revenue Service regulations by not reporting the receipts as personal income, according to an article in New Republic magazine.
The charges have raised bipartisan howls. Among the loudest protesters is Senate Majority Whip Alan Cranston (D-Calif.), said by the magazine to have a "slush fund" that is "the largest of its kind in the Senate."
Cranston, a former journalist, has sent an indignant three-page letter to New Republic editor-in-chief Martin Peretz assailing the article as "sloppy . . . sensational . . . inaccurate and misleading . . . " and saying, "It wouldn't have gotten past my desk editor at the International News Service in 1938."
The three authors, who write for the City Desk, a Washington bureau for city and regional magazines, said they spent a year examining campaign spending reports of all 100 Senate incumbents and conducting more than 90 interviews.
"In dozens of cases," they concluded, "Senate incumbents have ignored IRS regulations, violated federal election law and evaded standards for public disclosure and accountability. The tidal wave of money from political action committees has bloated the campaign treasuries of many Senate incumbents beyond any real need, creating reservoirs of ready cash that some have routinely used as a source of personal convenience and self-enrichment."
Over the last two years, authors Bill Hogan, Diane Kiesel and Alan Green reported, campaign funds have been used by incumbent senators to bring spouses "on taxpayer-financed junkets," to pay for family moving and living expenses, consulting fees for relatives, generous gifts and honoraria for Senate colleagues, contracts for firms in which employes and relatives have financial interests, country-club dues and auto-repair bills, and appliances, furniture and art for their Senate offices.
The report charged that in 1981 and 1982 Cranston transferred $66,000 in leftover campaign funds to a private checking account and used the money, among other things, "to pay for his wife's travel and lodging, the services of speech writers and a professional voice coach, as well as a wide variety of activities related to his fledgling presidential campaign."
According to the article, IRS rules say such transfers must be treated as money "diverted for the personal use of the officeholder," but Cranston never declared them as personal income on his tax returns.
Cranston denied improprieties and took exception to the "slush fund" label for his "unofficial office account." He said the dictionary defines a "slush fund" as "a fund for bribing public officials" and declared that "nothing in the story substantiates this indirect accusation of political corruption."
The original definition of slush fund, however, is "a fund established aboard ship from the sale of refuse fat, etc., and used to buy small luxuries."
Cranston said he set up the account "to enable my Senate office to use nongovernment funds for business expenses that might give the appearance of being political." His administrative assistant, Roy F. Greenaway, added that the checking account was controlled by Greenaway and other top aides.
In his letter, Cranston said he hired the speech coach last year "to help me improve my public speaking" and charged the $4,242 expense to his unofficial account because he did not want to use government funds.
According to a "summary" made public by Cranston's office last week, the account picked up more of the travel expenses for Cranston's wife, Norma, ($11,694) than of the senator's ($9,060) over the last three years. In an interview, Greenaway insisted that these expenditures were properly tax deductible as "ordinary and necessary" business expenses.
"The law says that if a man makes a business trip and takes his spouse with him and she has a role to play in the positive purposes of the trip," then her travel costs are deductible, Greenaway said.
The IRS has not had the opportunity to review the account. Cranston said he will invite the Senate Select Committee on Ethics and the IRS to audit the account.
According to the article, more than a dozen senators have channeled campaign contributions into similar accounts for which no public disclosure is required.
Others, such as Sen. John Glenn (D-Ohio), another presidential contender, spend from old campaign-committee accounts but often without itemizing substantial credit-card expenditures for the Federal Election Commission, the magazine said, "in violation of FEC disclosure regulations."
In 1981 and the first half of 1982, the magazine reported, the Senator John Glenn Committee raised $8,354 but spent $144,856, including $12,900 on Glenn's two-engine plane and $24,952 in unitemized credit-card expenditures.
Glenn's press secretary, Greg Schneiders, said the committee mistakenly thought that detailed credit-card itemizations "for travel and sustenance" were not required. "So technically the article was correct and, if the FEC asks for it, we will file an amended report," he said.
Under Senate rules, leftover campaign funds cannot be converted to "the personal use" of any member or former member, but that phrase has never been defined. Under a 1979 amendment to the Federal Election Campaign Act, any senator elected before Jan. 8, 1980, can spend such funds "for any purpose, including personal use," but those elected after that date may not.