The House Ethics Committee concluded 2024 by releasing a memorandum updating its guidance for Members’ personal use of political campaign funds (“updated guidance”).  While the Federal Election Campaign Act (“FECA”) and Federal Election Commission (“FEC”) regulations prohibit the personal use of campaign funds, House Rule 26.6(b) imposes additional restrictions on the “personal use” of campaign funds by a Member, her or his family, and other persons. 

The updated guidance reminds Members that House Rules are separate from, and in addition to, FEC regulations on the personal use of campaign funds.  Both the Ethics Committee and the FEC have emphasized their separate and independent jurisdiction, meaning that Members, their families and associates who are subject to House rules must comply with both regimes.

Additionally, the Senate also has its own rule (Rule 38.2) prohibiting Senators’ personal use of campaign funds.

While the House Ethics rules and FEC regulations are compatible, they are not identical.  Here are some of the more important distinctions:

  • What funds are covered?  The FEC’s regulations on “personal use” of campaign funds are famously limited to a candidate’s campaign account.  The guidance makes clear that House Rules reach beyond a candidate’s principal federal campaign account to all “[c]ampaign funds under the Member’s control.”  In practice, this means that while FEC rules cover a candidate’s principal campaign committee, the House rules reach leadership PACs, state campaign accounts, and any other political committee “affiliated” with a Member. 
  • How are expenditures verified?  While the House Rules require campaign expenses to be both legitimate and verifiable, FECA imposes a more permissive standard for what records are sufficient to justify reported campaign expenses. The House Rules do not require that the records be maintained in a particular format, but must contain information including “date, time, and location,” “[t]he specific campaign, political, or official purpose of the expenditure,” the names of those present, the “purpose[] for any travel expenditures” and “[t]he specific politically-or officially-related activities in which the Member (or other participant) engaged, including a description of event or topics of discussion.”  The FEC, however, requires only the amount, date, name, and address of the payee and the purpose of the expenditure and back up records including a receipt or invoice from the payee or a canceled check, and the relevant credit card bill or receipt.  Though it may be useful to have more records if one needed to defend a challenge before the FEC, the House guidance is more specific about what records are expected to meet the “verification” requirement.
  • When are expenditures deemed legitimate?  Under House Rules, campaign expenditures must have a “bona fide campaign purpose.”  Expenditures which are not primarily for a campaign purpose, but which may incidentally benefit the campaign do not meet this standard.  When determining an expenditure’s primary purpose, the Ethics Committee will consider factors including the time dedicated to the expenditure’s purpose, the main reason for making the expenditure, and whether the expenditure would be made absent its primary purpose.  Under the FEC’s similar but distinct “irrespective test,”  an impermissible personal expense is an expenditure that would be made irrespective of the candidate’s campaign or duties as an officeholder. 
  • What expenses are not considered “personal use”?  In the past decade, the FEC has determined that certain costs that arise from a person’s status as a federal candidate or office holder may be paid with campaign funds and not considered “personal use.”  Approved expenses include (a) personal security of Members, including the cost of improving home security; (b) the cost of childcare and elder care needed to perform campaign duties; and (c) cybersecurity costs incurred because of a candidate or Member’s status as such.  However, these rulings interpret FECA and FEC regulations and do not bind the House Ethics Committee in interpreting the House Rules, including with respect to verification of expenses. For example, the updated guidance states that “Campaign funds may not be used to enhance an individual’s lifestyle, for personal enjoyment or entertainment, or to pay an individual’s personal obligations.”  Members must maintain records to verify expenses (as discussed above) “to document the primary purpose of each expenditure” and show that it is a legitimate—and not a personal—expense. 
  • What rules govern expenses relating to family members?  When making and recording expenses that benefit a Member’s family members, the House Rules require more of a Member than does the FEC.  The House Rules dictate that Members “should maintain” certain records, including a “written contract,” “[a] log of campaign work done by the family member including hours worked and services provided,” and “[t]he efforts made to establish fair market value for the transaction and receipts for those efforts.”  While these records could also prove useful in defending a case before the FEC (should one arise), the FEC’s regulations do not require political committees to maintain such detailed records. 
  • How long must records be kept?  Under the House rules, campaigns must keep records that “document the primary purpose of each campaign expense” for at least three Congresses (six years).  In contrast, FEC rules merely require that records be maintained for three years after the relevant report is filed with the FEC, though the five year statute of limitations may cause some to keep records longer. 

Anyone receiving an inquiry related to an investigation involving the use of campaign funds should ensure that they understand this House Ethics Committee guidance as well as all other applicable laws, regulations, and procedures.  If you have any questions concerning the material discussed in this post, please contact members of our Election & Political Law, White Collar, and Congressional Investigations practices. 

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Photo of Robert Lenhard Robert Lenhard

Robert Lenhard has helped guide decision makers in corporations, trade associations, and advocacy groups on complying with the laws regulating political activity for over 20 years. As a senior member of the firm’s Election and Political Law Practice Group, he provides compliance advice…

Robert Lenhard has helped guide decision makers in corporations, trade associations, and advocacy groups on complying with the laws regulating political activity for over 20 years. As a senior member of the firm’s Election and Political Law Practice Group, he provides compliance advice relating to federal and state campaign finance, lobbying, pay-to-play, and government ethics laws. As an advocate, counselor, and regulator, Mr. Lenhard brings a depth of experience on matters that involve legal as well as political risk.

Bob led Covington’s representation of the Biden for President campaign, the Super PAC supporting President Obama’s re-election, as well as several prominent professional sports leagues, pharmaceutical manufacturers, technology companies, advocacy groups, and trade associations.

Prior to joining the firm in 2008, Mr. Lenhard served as Chairman of the Federal Election Commission (FEC) in 2007 and Vice Chairman of the agency in 2006, during which time the agency handled over 10 major rulemakings, had among its most productive years in enforcement and audit, and adopted several reforms to the enforcement process. Mr. Lenhard also led the Presidential Transition Team that reviewed the FEC for the incoming Obama administration in 2008-2009.

Mr. Lenhard is frequently quoted in the press, has lectured at major law schools, and Before his service to the FEC, Mr. Lenhard provided legal advice to labor organizations active in the political process at the federal, state, and local levels. Mr. Lenhard also was involved in litigation in the Florida trial and appellate courts over the counting of absentee ballots in Seminole County, Florida in 2000.

Robert Lenhard is a member of the firm’s Election and Political Law Practice Group and advises corporations, trade associations, not-for-profit organizations, and high-net-worth individuals on compliance with federal and state campaign finance, lobbying, and government ethics laws.

Mr. Lenhard routinely assists clients in establishing and operating federal and state PACs, compliance programs associated with campaign finance and pay-to-play laws; advises advocacy groups and their donors; conducts compliance trainings and audits of federal and state lobbying and political programs; and counsels clients on compliance with congressional gift and travel rules. According to Chambers, sources report: “He is strategic and always sees the big picture. He is a great person who provides excellent non-legal counsel as well.”

Photo of Matthew Shapanka Matthew Shapanka

Matthew Shapanka practices at the intersection of law, policy, and politics. He advises clients before Congress, state legislatures, and government agencies, helping businesses to navigate complex legislative, regulatory, and investigations matters, mitigate their legal, political, and reputational risks, and capture business opportunities.

Drawing…

Matthew Shapanka practices at the intersection of law, policy, and politics. He advises clients before Congress, state legislatures, and government agencies, helping businesses to navigate complex legislative, regulatory, and investigations matters, mitigate their legal, political, and reputational risks, and capture business opportunities.

Drawing on more than 15 years of experience on Capitol Hill and in private practice, state government, and political campaigns, Matt develops and executes complex, multifaceted public policy initiatives for clients seeking actions by Congress, state legislatures, and federal and state government agencies. He regularly counsels and represents businesses in legislative and regulatory matters involving intellectual property, national security, regulation of critical and emerging technologies like artificial intelligence, connected and autonomous vehicles, and other tech policy issues. He also represents clients facing congressional investigations or inquiries across a range of committees and subject matters.

Matt rejoined Covington after serving as Chief Counsel for the U.S. Senate Committee on Rules and Administration, where he advised Chairwoman Amy Klobuchar (D-MN) on all legal, policy, and oversight matters before the Committee, particularly federal election and campaign finance law, Federal Election Commission nominations, and oversight of the legislative branch. Most significantly, Matt led the Committee’s staff work on the Electoral Count Reform Act – a landmark bipartisan law that updates the procedures for certifying and counting votes in presidential elections—and the Committee’s bipartisan joint investigation (with the Homeland Security Committee) into the security planning and response to the January 6th attack.

Both in Congress and at Covington, Matt has prepared dozens of corporate and nonprofit executives, academics, government officials, and presidential nominees for testimony at congressional committee hearings and depositions. He is a skilled legislative drafter who has composed dozens of bills and amendments introduced in Congress and state legislatures, including several that have been enacted into law across multiple policy areas. Matt also leads the firm’s state policy practice, advising clients on complex multistate legislative and regulatory matters and managing state-level advocacy efforts.

In addition to his policy work, Matt advises and represents clients on the full range of political law compliance and enforcement matters involving federal election, campaign finance, lobbying, and government ethics laws, the Securities and Exchange Commission’s “Pay-to-Play” rule, and the election and political laws of states and municipalities across the country.

Before law school, Matt served in the administration of former Governor Deval Patrick (D-MA) as a research analyst in the Massachusetts Recovery & Reinvestment Office, where he worked on policy, communications, and compliance matters for federal economic recovery funding awarded to the state. He has also staffed federal, state, and local political candidates in Massachusetts and New Hampshire.

Photo of Stephanie King Stephanie King

Stephanie King is an associate in the firm’s Washington, DC office. She is a member of the Congressional Investigations and Election and Political Law Practice Groups where she advises clients facing or preparing for congressional inquiries which present legal and public relations risks. …

Stephanie King is an associate in the firm’s Washington, DC office. She is a member of the Congressional Investigations and Election and Political Law Practice Groups where she advises clients facing or preparing for congressional inquiries which present legal and public relations risks. She also provides guidance on lobbying, campaign finance, and pay-to-play regulations.

Prior to law school, Stephanie was the Associate Director of Content Strategy for a digital communications firm, where she oversaw the strategic drafting and production of campaign advertisements and online messaging.