Mortgages, Mardi Gras and country clubs: Louisiana campaign funds could soon cover these expenses

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4 days ago

Gov. Jeff Landry is pushing an overhaul of the Louisiana Board of Ethics' investigation process while also facing ethics charges brought by the board. (Photo credit: Wes Muller/Louisiana Illuminator)
Louisiana politicians would be able to use money they raise to run for elected office on a much broader group of expenses, including their home mortgages, country club fees and gym memberships under legislation Gov. Jeff Landry is pushing.
Louisiana House Republican Caucus Chairman Rep. Mark Wright, R-Covington, is sponsoring a sprawling rewrite of Louisiana's campaign finance laws in House Bill 693. The 101-page legislation loosens dozens of restrictions placed on the people and political groups who raise and spend money on state and local elections.
The Louisiana Board of Ethics has for years prohibited elected officials and candidates from spending campaign and political action committee (PAC) money on property they own. Wright's bill would make that type of spending legal under certain circumstances. For example, a candidate or elected official could use their campaign and PAC money to help pay off a portion of their home mortgage, as long as part of the property was used for campaign purposes and the candidate charged his campaign 'fair market value,' under one provision of the legislation.
The bill was largely written by two private attorneys who work for Gov. Jeff Landry and represented him in multiple legal disputes he has with the ethics board. Most recently, lawyers Stephen Gelé and Charles Spies are working for Landry as the governor faces ethics charges for failing to disclose flights he took on a political donor's plane in 2021. But Wright's legislation would not affect the outcome of that case against Landry.
Gelé has described the massive rewrite of the state's campaign finance laws as an effort to 'modernize' Louisiana's practices and bring them more in line with federal campaign finance law.
'This campaign finance legislation respects fundamental constitutional rights, including freedom of speech and due process, and updates the statute providing clear rules governing current campaign practices, while still providing transparency and preventing the appearance of corruption,' Gelé said in a written statement to the Illuminator.
Wright said his legislation is also meant to address frustrations elected officials have with ethics board fines and investigations into their spending. 'There's a lot of people who don't like what they do or don't do,' Wright said. 'For whatever reason, people don't feel like they are getting a fair review.'
Legislators' ambivalence to the ethics board has been reflected in support for the bill. Wright's proposal easily cleared the Louisiana House of Representatives on a 77-16 vote, with a small group of Democrats in opposition. The Senate is now considering the bill, which needs approval from both chambers before June 12.
One of the state's preeminent government watchdog groups, the Public Affairs Research Council of Louisiana, warned the bill would open the door to at least the appearance of political corruption.
'Louisiana, historically, had serious corruption problems and the Board of Ethics was sort of created to look at that,' Steven Procopio, the organization's president, said in an interview. '[G]iven our history, it's very important that we not backslide.'
'It doesn't solve any problem for citizens. What it really solves is making things more convenient for public officials,' he added.
Wright's proposal is part of a wider effort to weaken the ethics board authority overall that concerns Procopio. There are two other bills in the Senate that would also make it harder for the board to enforce ethics law violations.
'I can't find a single reason why citizens would support this,' he said. What would be allowed Should it pass, Wright's legislation would explicitly let political candidates, elected officials and their PACs spend money on a long list of new services and expenses that aren't laid out in the current law. These proposed allowable expenses would include: *Paying lobbyists at the State Capitol and in Washington D.C.
* Paying for an elected official or candidate's spouse and children to accompany them to Washington Mardi Gras, a national political convention or any professional conference attended as an elected official.
*Covering any fines or penalties the ethics board has levied against a person for violating campaign finance or ethics laws.
* Paying for security measures such as cameras and fences to be installed in order to protect a candidate or elected official, including at their personal residence or office.
*Payments on a personal or business loan, including a home mortgage, on property owned by the candidate as long as the candidate is using a portion of that property for campaign purposes and is charging his campaign 'fair market' value. For example, this could include storing campaign signs in the garage of an elected official's house and then charging the campaign the market rate of a local storage locker.
*Paying dues, fees and gratuities to a social organization such as a country club, fitness center, Mardi Gras krewe or any other 'nonpolitical organization' as long as the membership 'facilitates' interaction with a constituent, another elected official or a former elected official.
The ethics board has explicitly not allowed some of these proposed campaign expenses under the current law for several years. For example, those who miss deadlines for submitting campaign finance reports cannot use their PAC or campaign account to pay the financial penalties the board imposes on them. It must come from their personal funds under current law. Wright's legislation would eliminate that restriction.
The ethics board has also generally interpreted a legal ban on using campaign and PAC money for 'personal use' to mean a candidate or elected official cannot use their political cash to help pay off loans on buildings, homes and other property they own. In 2007, the ethics board told former state Treasurer John Schroder his political campaign could not lease office space from a company he owned. Schroder, who was treasurer from 2017-24, was running for his first state elected office in the Louisiana of Representatives at the time. 'A candidate cannot do business with himself,' Gray Sexton, who served as general counsel to the state ethics board for 40 years, said about current ethics laws in an interview earlier this month.
Yet Wright's legislation would reverse that board opinion, allowing others like Schroder to lease out not only their commercial property to campaigns, but also their personal residences.
'This would allow market value transactions between the candidate and the campaign to go forward,' said Sexton, who now represents politicians who appear before the ethics board in his private law practice.
Eighteen years after seeking that opinion, Schroder said he agrees with the ruling the ethics board initially gave him.
'I think it just erodes public trust,' he said of politicians paying their personal businesses with campaign or PAC funds. 'The public just doesn't trust the politician or the political space today.'
Carnival costs
Wright's legislation would also definitively declare that elected officials can use their political money to cover membership dues for Mardi Gras krewes and the balls and parades they host. The ethics board has spent decades wrestling over whether expenses related to participating in Mardi Gras can be covered with campaign funds, and its response has often been muddled. Most of the board's public guidance about Mardi Gras is also nearly 30 years old.
In early 1998, the state ethics board told St. Tammany Parish officials they couldn't use campaign funds to 'join a local civic organization which holds meetings and functions culminating in a Mardi Gras parade.' Later that year, the board reiterated that same stance when asked for a similar opinion.
'Campaign funds may not be used to pay for membership dues and expenses related to an organization which holds a Mardi Gras parade,' the board wrote at the time. But in the months that followed, the board issued advisories allowing campaign funds to cover some Mardi Gras expenses.
In 1998 and 1999, the board said elected officials could use campaign money to purchase Mardi Gras parade throws bearing their name or likeness. Their election funds could also cover the costs of a candidate participating in a parade, as long as it wasn't krewe membership dues and the elected official wasn't covering their face on the parade route, which is common for many parades.
Should Wright's legislation pass, none of these restrictions would remain relevant because the new law would allow politicians to use their campaign and PAC money for krewe dues, as long as being a member of the krewe helped them interact with a constituent, another elected official or a former elected official. The bill also contains a provision to allow elected officials and candidates to spend even more freely on 'events related to the Mardi Gras celebration in Washington D.C.' Every year, thousands of politically connected Louisiana residents kick off carnival season at a four-day, rolling party and festival called Washington Mardi Gras. It features tblack-tie balls, business luncheons, panel discussions, political fundraisers and parties sponsored by business groups and lobbyists.
For years, elected officials have dipped into their campaign accounts to cover their expenses for this event. Elected officials spent a combined $594,000 from their campaign accounts in 2023 alone on Washington Mardi Gras, according to an Illuminator analysis. That came from 64 elected Louisiana officials, including 34 state lawmakers. It's not clear to what extent political funds have been used to cover spending on politician's spouses and children at Washington Mardi Gras, as Wright's legislation specifically allows. Elected officials' families often attend the event, but campaign finance reporting isn't precise enough to give the public those types of details about the expenses. The ethics board's investigations are also confidential, meaning if they are scrutinizing a particular person's Washington Mardi Gras spending, it wouldn't be known to the public. But lawmakers have been complaining for months that the ethics board has started looking into Washington Mardi Gras spending more generally.
'Washington Mardi Gras seems to be getting a lot of attention, and I don't know why,' said Rep. Beau Beaullieu, R-New Iberia, who is cosponsoring the legislation with Wright during a public hearing last year. PACs pay for posh events, destinations
One way Wright's legislation would accommodate all these proposed new political expenses is by setting up leadership PACs in Louisiana's campaign finance law.
At the federal level, a leadership PAC is typically one set up by a member of Congress to give money to other candidates running for office. Wright's bill would allow for a similar type of organization at the state level. Supporters said it will make it easier for state elected officials to support their colleagues and push their political agendas. Government watchdog groups have been highly critical of federal leadership PACs, describing the accounts as 'slush funds' that allow members of Congress to spend lavishly at vacation resorts and restaurants.
Two nonpartisan organizations that promote government accountability, Issue One and the Campaign Legal Center, found less than half of the money Congressional leadership PACs spent during 2019-20 went to their stated purpose of helping other candidates. Instead, members of Congress spent significant amounts on lavish resorts, country clubs and restaurants. The leadership PAC spending of Sen. Rand Paul, R-Kentucky, was held out as an example by the group. Paul spent $990,000 from his leadership PAC over 2019-20, but only 12% of those dollars went to other political candidates' campaigns. Meanwhile, he used the funds for $14,000 in hotel stays and $13,000 at restaurants. He also spent $2,300 on various golf courses and $820 for baseball tickets at Nationals Park in Washington, D.C. '[S]uch spending patterns give the impression that some politicians are simply raising money at one posh location to pay for the next fundraiser at the next fancy destination,' Issue One and the Campaign Legal Center wrote in a report issued in 2021. A former congressman, Landry is the person pushing most for the campaign finance law changes contained in Wright's bill. The governor also stands to benefit the most from more flexibility in political spending because he has far more money in his political accounts than any other state government official.