Possible campaign double dipping

Lawmakers’ expenses may have already been paid for

Tennessee lawmakers spent thousands of dollars in campaign donations in 2016 on expenses, including food and gas, that may already have been paid for by state taxpayers, according to an analysis by the USA TODAY NETWORK-Tennessee.

Dozens of lawmakers — including House and Senate leadership — received nearly $32,000 in daily legislative payments, or per diems, on days when they used campaign money to buy similar items. Lawmakers receive these per diems and mileage reimbursements in addition to their annual salaries.

“What you’re talking about is double dipping,” said former Rep. David Shepard, who served in the legislature for 16 years before retiring in 2016.

Shepard, D-Dickson, said he never used campaign funds to cover meals, gas or lodging during the session.

“When you decide to run for office, you know what the pay is, you know what the circumstances are,” said Shepard, when asked about using campaign funds on the same day per diems are collected.

The USA TODAY NETWORK-Tennessee reviewed all campaign finance reports filed in 2016 by all 131 current state lawmakers. The analysis found a majority of state representatives and senators also spent an additional $189,700 combined in campaign money on expenses that may have been paid for by state funds.

But lawmakers are not required to report specific dates and locations of smaller purchases that are typically less than $100. That makes it unclear how many of those expenses also may have been reimbursed by the state, providing the opportunity to obscure double dipping or other financial abuse.

In Tennessee there is no enforcement process for the legislature or the Tennessee Registry of Election Finance to ensure lawmakers aren’t double dipping. Lawmakers receive their per diems without presenting any proof of the expenses.

State law does not ban lawmakers from spending their per diems on specific expense, said Director of Legislative Administration Connie Ridley.

While the law Ridley references does not specifically say what members cannot spend their per diems on, it does repeatedly refer to using the money for meals, lodging, intra-city transportation and “incidentals.”

Earlier this year, an auditor with the Tennessee Registry of Election Finance had a definitive interpretation of how state lawmakers are supposed to spend their per diems.

After a six-month audit by state campaign finance officials, the auditor highlighted examples of possible illegal double dipping by former lawmaker Jeremy Durham and showed the Franklin Republican may have broken campaign finance law 690 times.

Auditors said Durham lacked documentation to show whether more than $7,000 he used in campaign funds to pay for expenses that may have been covered by per diems were legitimate.

Every lawmaker included in the USA TODAY NETWORK-Tennessee review may have such documentation, but the analysis found there is no effective state procedure to make sure legislators are not double dipping.

“There needs to be some way to review current practices and see if it’s a repeated problem or one or two people out there,” Gov. Bill Haslam said Tuesday.

“I tend to think when you have more than a couple of examples of something that feels like it needs to be reviewed, then it is time to take an overall look at how things are working.”

Food, gas, hotel expenses

Lawmakers receive an annual salary of $22,667, except the House and Senate speakers, who earn $68,001. They also are eligible to receive $1,000 a month to cover expenses in their home districts, including “telecommunications, office, secretarial and other assistance or incidental expenses,” according to state law.

Today, lawmakers who live more than 50 miles away from the state Capitol are eligible for a $220 per diem, while those who live within 50 miles receive $59 every day. In 2016, the period analyzed for this report, lawmakers who lived outside the 50-mile radius received a $204 daily payment.

“I think when we have per diems, we’re not supposed to use campaign money to pay for ourselves to go out to eat or to have hotel rooms, but we are allowed to pay for other people, so that’s what I would always try to do,” said former House majority leader and current state Rep. Gerald McCormick, explaining some of the $7,000 he spent in campaign funds for food on days he also received a per diem.

The campaign and state expenses analyzed by the USA TODAY NETWORKTennessee are among hundreds of thousands of dollars in donor money spent during 2016 on dinners, personal college courses, dry cleaning and hundreds of other items.

The analysis of hundreds of reports and thousands of expenditures found 55 lawmakers used more than $84,000 total in campaign funds to buy food, gas and similar items on the same days they received almost $31,800 total in per diem and mileage reimbursements from the legislature.

The possible per diem problems involve 32 Republicans and 10 Democrats in the House and 11 Republicans and two Democrats in the Senate.

Among the lawmakers to spend campaign money on the same day they received state per diems and reimbursements were Lt. Gov. Randy McNally, House Majority Leader Glen Casada, McCormick and former Lt. Gov. Ron Ramsey.

The analysis found examples of legislators with similar reimbursements as Durham, including:

» Rep. Mike Sparks, R-Smyrna, was reimbursed $1,075 by the state for a hotel in Chicago at a National Conference of State Legislatures conference in August. He paid the Hyatt Regency in Chicago $1,232.75 from his campaign account the same month.

» On May 9, Sen. Mike Bell, R-Riceville, charged $575 to his campaign account for a “Chicago conference.” In August, Bell received $2,692 from the state for the NCSL gathering in Chicago, including $575 for registration. He also used $323 from his campaign account on Aug. 15 for expenses on the trip.

» In July, Sen. Reggie Tate, D-Memphis, charged $450 to his campaign account for “travel” with Delta Airlines. That year, he took 10 out-of-state trips, and the state paid for airfare for six of them, including $406 in July for a trip to Lexington, Ky.

Bell said he had a “paperwork problem but not a money problem.” He also said he had bank records to show he did not pay for expenses on his trip using campaign donations, but he needed to amend his campaign finance report in light of the USA TODAY NETWORKTennessee’s findings.

Sparks and Tate did not respond to requests for comment through spokesmen.

House Speaker Beth Harwell spent $63 from her political action committee at Panera on March 16, 2016. That same week, she received $236, or $59 a day, in per diems from the state for the four days the legislature was in session, including that Wednesday.

A listing on the legislative per diem website states Harwell donates her per diems to charity.

Expenses reviewed show lawmakers spend hundreds of dollars spent on food, which could indicate some of them paid for an event, reception or dinner for multiple people. However, political fundraising is banned during the legislative session. When large events happen, they are typically frequented by other lawmakers, who would have been eligible for a per diem the same day.

This may be the case for Ramsey. His PAC, RAAMPAC, spent more than $14,000 combined on dinners during four nights of the legislative session on days when he also received his per diem. The Blountville Republican, who announced his retirement last year, said all of his expenses were appropriate.

The analysis also identified hundreds of dollars in state reimbursements for gas and fuel on days lawmakers charged their campaign accounts for similar expenses. For example: » Rep. Larry Miller, D-Memphis, received $193 in mileage reimbursements from the state the first week of February. On Feb. 2 he reported using $300 in campaign funds on gas.

» On Jan. 28, 2016, Rep. Judd Matheny, R-Tullahoma, spent $22 in campaign funds on gas. That week he received $70.50 in mileage from the state.

Miller and Matheny did not respond to requests for comment through spokesmen.

The Durham auditor said it was difficult to determine if all fuel purchases by the expelled lawmaker were allowable.

“An officeholder is allowed to use campaign funds for fuel used in the campaign as well as the fuel used for officeholder activities,” the audit states. “Since the officeholder is reimbursed mileage, by the State of Tennessee, for travel to and from his home to the Capitol for legislative business, these purchases are unallowable unless they exceed the reimbursed amount.”

Little scrutiny

The analysis illuminated gray areas and loopholes in Tennessee’s laws intended to regulate how lawmakers use taxpayer and campaign money.

Ridley acknowledged there is little scrutiny of the per diem payment process. Lawmakers are paid their per diems based on daily attendance during the legislative session, which accounts for the bulk of most members’ payments. Any requests for per diems when lawmakers are out of session must be approved by the House or Senate speakers. Ridley said her office looks for “compliance with the statute” when processing requests.

After the Durham audit, Harwell and McNally downplayed the potential of widespread abuse of campaign finances and legislative per diems. They also suggested it is up to campaign finance officials to monitor reimbursements and campaign expenses.

Casada said he believed there’s no widespread issue.

“I mean, out of 132 (lawmakers), could one? I guess in theory, yeah. But I just don’t think it’s common practice, I really don’t,” Casada said.

The registry, however, has 10 employees, one of whom is an auditor. They randomly audit 2 percent of candidacies in an election year.

Similar problems exist at the federal level, said Brendan Fischer, an attorney with the Campaign Legal Center, a Washington, D.C.-based nonprofit advocacy group.

“The Federal Election Commission would be in charge of receiving the finance reports that list how campaign funds were spent, and then the House or Senate ethics committees would be the repositories for reports of public funds or use of office funds for travel or other expenses,” Fischer said.

“It would probably require reporters … to match up those expenses.”

State officials may review campaign accounts if a complaint is received. However, these reviews frequently do not include subpoenaing bank records, measures the registry had to take to uncover some of the possibly illegal conduct by Durham.

In the past, lawmakers caught double dipping apologized and repaid the money, but there was no apparent punishment.

That’s a stark contrast to the former Knox County Schools nutrition director who faces two felony charges after officials say he received reimbursements for expenses already covered by outside funds.

Reach Dave Boucher at dboucher @tennessean.com or 615-259-8892 and on Twitter @Dave_Boucher1. Reach Joel Ebert at jebert@tennessean.com or 615772-1681 and on Twitter @joelebert29.