Lori Trahan says dodgy campaign loans were a ‘grey area’. A campaign finance expert disagrees.

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Policy


The Massachusetts congresswoman said a six-figure loan came from her husband’s income, but they “never gave it much thought”.

Lori Trahan, then MP-elect for the 3rd District, at her home in Westford with her husband, David, on November 22, 2018. Suzanne Kreiter/The Boston Globe

Rep. Lori Trahan tries to calm questions about how she won her 3rd District Congressional seat.

In a Average message Wednesday afternoonthe Westford Democrat admitted for the first time that she loaned her 2018 campaign $300,000 from a joint checking account – funding an advertising blitz in the final weeks of the primary race – had originally been won by her husband.

Trahan called the move a “grey area” in federal campaign finance rules. Adav Noti, chief of staff at the Campaign Legal Center, a nonpartisan campaign finance watchdog, says the rules are pretty clear.

“There are a lot of gray areas,” Noti told Boston.com. “I wouldn’t say it’s one of them.”

The Federal Election Commission does not limit the amount candidates can spend on their own campaigns, but prohibits others — even spouses — from giving more than $2,800 to a single candidate.

Of them monitoring groupsincluding the Campaign Legal Center, filed complaints with the FEC earlier this year after Trahan’s six-figure campaign loan — a total of $371,000, including a $71,000 home equity loan — was summer reported by The Boston Globe in March. Dan Koh, former chief of staff to Boston Mayor Marty Walsh, who narrowly lost to Trahan in last year’s primary, also pointed to questions about those funds, as he weighs another race for the 46-year-old MP’s seat.

Trahan argued Wednesday that previous FEC rulings (which does not currently have a quorum to make such a decision) on similar complaints, including those involving personalities from Jane Fonda to Bob Dole, suggest that contribution limits do not apply to accounts shared by spouses.

For her part, Trahan wrote that she and her husband, David Trahan, “never gave it much thought,” as they had always considered their respective incomes to be shared and paid for living expenses both from her, his own and joint bank accounts.

“What I have won is our money and what he earned was our money,” she wrote. “We didn’t make the distinction.”

Trahan – who was passed by Koh by more than $2 million in the crowded primary race – said she decided to give her campaign a boost, loaning herself $50,000 on March 31, 2018 ; $50,000 on June 30, 2018; and $200,000 on August 22, 2018 – shortly after her husband, a successful homebuilder, deposited the same size sums of money he had earned into their joint checking account.

Noti, a former FEC lawyer, pointed out that political candidates can’t just “take somebody else’s money, call it their own, and give it to their campaign,” even if it came from of their spouse.

“If she really thought it was her money, they wouldn’t have needed that in-between step,” he said. “They would have just sent him straight to the campaign.”

According to the FEC, candidates are allowed to fund their campaign with “his share” of assets held jointly with a spouse, such as a bank account or stock. If the amount is not specified, the candidate’s share is “deemed to be half the value,” the agency’s website says. According to WorldTrahan and her husband’s joint accounts were not disclosed until December.

Trahan’s legal team believe they have a strong legal reputation.

Jonathan Berkon, a partner at Perkins Coie, a national law firm that Trahan’s campaign has hired, says the Supreme Court has repeatedly affirmed the right of candidates to make unlimited contributions to their own campaigns from “funds personal” — including “funds held in their spouse’s account.” name for their own campaigns, as long as they had the right to manage and dispose of the funds under state law.

According to Berkon, the Trahans entered into a prenuptial agreement that gave each spouse “an equal right to manage and dispose” of their property, as well as each other’s income.

“Under the agreement and state law, funds used by Congresswoman Trahan to loan money to her campaign were her ‘personal funds’ and could be used in the campaign,” Berkon said. in a statement to Boston.com.

Noti says prenuptial agreements fall under state law. But even if the campaign’s interpretation is correct, he’s “skeptical” it would get her off the hook for the FEC violations, given both the lack of initial disclosure (which Trahan says doesn’t was not deliberate) and the sequence of transferring the money to a common bank. account before lending it to the campaign, instead of sending it directly to the campaign.

“None of these actions are consistent with a good faith belief that it was really the candidate’s money,” he said.

In his Medium post, Trahan said they “didn’t give much thought to which bank account to use.” As two small business owners, the couple have structured their finances so that things like health care are paid from their account, their children’s school fees are paid from their account and “a variety of regular household expenses are paid from joint accounts”.

Trahan says they could have used other avenues of funding for the campaign loan, like pulling in the $274,000 she earned last year from Concire, the consulting and booking company she co-founded. . Trahan also suggested they could have even used a larger home equity loan.

“I could have done it differently,” Trahan wrote.

“I could have tapped into open lines of credit on our homes, like I did for the last $71,000 loan, for all the loans,” she continued. “We had $2 million in equity in our two homes and a $700,000 line of credit available. Or I could have saved more of my Concire earnings for the campaign and used Dave’s earnings to cover all household expenses. But I never gave it much thought, because we had never structured our finances that way. All of this – what I won, what Dave won – was our money, whether it’s in my account, Dave’s account, or a joint account.

Koh doesn’t buy the congresswoman’s claims of ambivalence. In a statement on Wednesday, the 34-year-old Andover coach accused Trahan of trying to cover up a campaign finance breach.

“Campaign finance laws exist to ensure that all candidates play by the same rules,” he said. “It is clear today that our congressman broke these laws during his campaign and then tried to cover it up. This is incredibly disappointing to voters in the district who deserve fair elections and transparency from their elected officials.

Trahan previously offered different explanations and repeatedly changed campaign finance reports after questions were initially raised about the loan.

Financial disclosure forms filed in the summer of 2018 suggested she didn’t have enough money to cover the $300,000 loan, which her campaign awarded in March to joint accounts with her husband and to Concire’s “additional income”.

“My decision to make a personal loan for my campaign has always been part of our strategy”, Trahan written in an April editorial. “When the time came, I used a combination of personal funds from joint checking accounts and a home equity loan to fund my campaign loan.”

When asked later that month by a NECN reporter if she could “categorically deny” that her husband had helped beyond the legal limit, Trahan said “yes”.

Trahan’s spokesman, Mark McDevitt, told Boston.com that the comments reflect the couple’s view that the income each of them would earn would be their marital property, as opposed to the income of one or more of them. the other.

“Massachusetts state law doesn’t distinguish between the two either,” he said. “So the MP simply rejects the idea that it was ‘David’s money’; it was their money.

Still, Noti said Wednesday’s average post represents a tacit acknowledgment that those past explanations may not have been 100% available. However, he said the most “problematic” aspect of the post was Trahan’s assertion that “there is no plausible argument that anything in the altered forms would have changed anyone’s vote.” .

“It’s not his decision,” Noti said. “A candidate can’t decide what is or isn’t relevant to voters and divulge what they think voters want to hear.”

Trahan, who has emphasized transparency in her 2018 campaign, went on to write on Wednesday that she regretted the “inadvertent omissions and errors in my initial materials” and that voters deserve “transparency and accuracy. candidates and elected officials.

His campaign recently reported nearly $167,000 in legal fees to Perkins Coie, which she wrote on Wednesday “will handle all campaign reporting issues going forward.” In the final paragraph of her post, Trahan said she remains proud of her 2018 campaign and accused Koh, who continues to consider another run, of inflating the issue.

“The confusion my former adversary has created about my family’s finances will not distract me from a much more pressing concern: securing the financial future of workers in our district,” Trahan wrote.

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