Among the many issues raised by constituents at the March 11 town hall by Rep. Duncan Hunter, R-Alpine, was his campaign’s payments to his wife, Margaret Hunter, for consulting work.
“She’s not being paid now,” Hunter told a constituent, Richard Nyles of Santee, who asked about her longtime employment as Hunter’s campaign manager. “But she was, and she was getting $3,000 a month.”
A first quarter Federal Election Commission report filed by Hunter’s campaign last week shows the most recent payment by the campaign to her was $3,000 on Feb. 27.
The report shows two other $3,000 payments to Margaret Hunter, on Jan. 3 and Jan. 24 — the amount she was typically paid monthly on an ongoing basis.
Hunter did not say at the town hall meeting when his campaign stopped paying Margaret Hunter or why. His office this week did not answer questions on the subject from U-T Watchdog.
It’s legal for campaigns to employ the candidates’ relatives, as long as they provide a bona fide service and are compensated at a fair market rate, according to the FEC’s 2014 campaign guide. The guide does not further define a bona fide service.
The FEC in 2001 issued what has been described as the first legal opinion specifically permitting the practice of campaigns employing candidates’ spouses. The advisory opinion responded to a request from then-Congressman Jesse Jackson Jr., a Democrat from Illinois. Jackson’s office had asked for advice on whether it was legal for his campaign to employ his wife, Sandi Jackson, as a consultant, and whether doing so would raise a conflict of interest.
The FEC considered Sandi Jackson’s work experience and qualifications and ruled that it was legal and permissible for the campaign to employ her, as long as her contract contained terms typically included in agreements between campaigns and consultants, she was paid a fair market rate and the campaign completed all the necessary paperwork and disclosures.
After the conviction, ethics experts said the FEC’s advisory opinion allowing Jesse Jackson Jr.s campaign to hire his wife undermined efforts to prevent personal use of campaign money.
“In essence, the FEC opinion allowed the Jacksons to legally transfer campaign funds into their personal accounts,” Melanie Sloan, then executive director of the Washington, D.C.-based group Citizens for Responsibility and Ethics in Washington, wrote in a March 2013 article for the publication Roll Call. “Once on that path, it probably wasn’t a big step for Rep. Jackson to authorize payments to Ms. Jackson for work she hadn’t done. Who would know and how would they get caught?”
Numerous federal candidates have defended the practice of hiring relatives to their campaigns, saying officeholders should be allowed to hire the people they trust most to help them run for office.
Hunter, who is under federal criminal investigation amid allegations of using campaign money for personal purposes, told The San Diego Union-Tribune in April 2016 that he and his wife were the only two holders of the campaign credit card. He said he would be the only cardholder going forward.
Federal law does not allow use of campaign funds for personal benefit, to protect against contributors such as defense contractors from having undue influence on someone like Hunter, who serves on the House Armed Services Committee.
Hunter told Politico last month that he didn’t make any of the mistaken, personal and inadequately supported charges for which he has repaid his campaign. The total repaid has come to $62,000 since the FEC and The San Diego Union-Tribune began questioning his campaign’s unusual spending in April 2016.
Almost all of the charges Hunter repaid occurred between Jan. 1, 2015 and April 2016, FEC reports show.
The charges Hunter has repaid include expenditures for oral surgery, his children’s private school tuition, a family trip to Italy, costs for his daughters’ Irish dance competition, a purchase from an Italian jewelry store, and — perhaps most notoriously — $600 in airline fees to fly one of Hunter’s children’s pet rabbit in the cabin of the airplane.
"I didn't make any of those charges. None. None of those expenditures," Hunter told Politico.
Hunter declined to tell Politico who did — or to answer a direct question about whether Margaret Hunter had made the charges, the publication reported.
"I'm not saying that. I'm saying that I didn't make any of those charges," Hunter told Politico. "That's for an investigation. I'm just telling you that I didn't make any of those expenditures."
According to the Union-Tribune’s review of spending reports filed with the FEC since Jan. 1, 2015, Hunter’s campaign has paid Margaret Hunter at least $78,000 in 26 payments of $3,000 apiece.
Hunter’s office has disclosed payments to his wife on FEC forms. But there have been lapses in Congressional forms he is required to file disclosing his financial interests. The campaign paid Margaret Hunter $8,000 in 2011 and $39,000 in 2014, FEC reports show, and those payments were omitted from his financial interest forms.
After the Citizens for Responsibility and Ethics in Washington and The San Diego Union-Tribune questioned the undisclosed income, Hunter’s congressional office sent a letter to the House Committee on Ethics, requesting amendments to several years of financial reports.
Margaret’s income from the campaign is in addition to Hunter’s approximately $174,000 taxpayer-funded annual salary.
According to Hunter’s most recent personal financial disclosure report on file with the U.S. House of Representatives, the congressman had no bank accounts or similar assets worth more than $1,000 as of Dec. 31, 2015. The disclosure report listed two mortgages on Hunter’s home in Alpine. Both were in 2009 from Navy Federal Credit Union. One was for between $15,001 and $50,000, the other for between $500,001 and $1 million.
According to county records, Hunter and his wife secured an additional loan on their home in Alpine shortly before Hunter repaid about $49,000 to his campaign ahead of the elections in November. Equity on their home helped secure $57,281 from Statewide Foreclosure Services. The man who brokered the loan was convicted of murder decades ago, and has known Hunter’s father for many years.
The deed of trust for the Nov. 2 loan listed Duncan and Margaret Hunter’s address not at their home, but at the Alpine home of Hunter’s parents.
The Hunters sold their home late last year and repaid all the loans it secured, according to property records on file with the County of San Diego. The records do not indicate a sale price. The property’s tax assessment on file as of December listed its value at $648,784.
There were no property records on file with the county Wednesday indicating the Hunters have purchased a new home. Hunter's office has not answered questions about where Hunter’s family is living.
The FEC addressed the issue of spousal employment by Congressional campaigns in a 2006 general counsel’s report. The report came in response to a complaint from Rep. Juan Vargas, D-San Diego, against Rep. Bob Filner, his opponent for election to Congress.
According to the report, Vargas’s complaint alleged that Filner’s campaign “had been ‘diverting’ campaign contributions to Filner’s wife’s ‘sham’ company, Campaign Resources, and, thus, to the Filner household.” The complaint asked, among other things, that the FEC investigate whether Jane Filner performed bona fide services to the campaign.
The report recommended no action against Filner’s campaign. Among the findings supporting the recommendation, the report said the campaign had provided specific examples of work Jane Filner’s company provided for the campaign, and “attached documents they claim are examples of work by Jane Filner.”