Waters family profiting from mailer biz

Rep. Maxine Waters has turned political endorsements into a family business, using federal election laws to charge California candidates and political causes to include their names as her personal picks on a sample ballot, or “slate mailer,” she sends to as many as 200,000 South Central Los Angeles voters, records show.

Some statewide candidates paid as much as $45,000 for their share of the costs to be included in the mailer, according to state and federal election records, and while it can be costly for the candidates, the mailer has proved profitable for Mrs. Waters’ daughter, Karen.

Karen Waters’ public relations firm, Progressive Connections, has been paid $354,500 since late 2004 to direct production and distribution of the mailer - about a third of the $1 million collected from the candidates and issue groups seeking to be included on the sample ballot, the records show.

The public relations firm was owed an additional $82,000 as of June 30 for her work on the mailer in the primary, according to Federal Election Commission (FEC) records. Her fees do not include expenses for printing and mailing, which are paid separately by the committee.

In 2004, Mrs. Waters - who is fighting charges by the House ethics committee that she improperly sought federal help for a bank in which her husband owned stock - obtained an opinion from the FEC allowing her to run the mailer operation through her federal political committee, Citizens for Waters.

The ruling permitted her to collect payments from state and local politicians for their share of the costs without having them capped by federal contribution limits. Her mailer is not part of the ethics complaint.

“The Waters slate mailer is but one of at least 81 currently registered slate mailers in California,” said a source authorized to speak for the Waters campaign. “The slate committee’s accountant and lawyer have consistently complied with the fair-share allocations as determined by the FEC.

“The fair-share allocations pay for graphics, postage, production, data collection and consulting fees,” the source said. “In fact, it has been widely researched and reported, even by this reporter, that the slate has always complied with the proper protocol and regulations. To suggest otherwise is irresponsible, and shows a fundamental misunderstanding of the purpose, function and execution of the slate mailers.”

Mrs. Waters, who has represented South Central Los Angeles in Congress for nearly 20 years, and before that as a state legislator for 14 years, has enormous influence with black voters in Los Angeles County and her endorsement “means something,” California political consultants said.

She is the most senior elected black official in California and her clout goes beyond her district, they said.

“People take it into the voter’s booth,” one political consultant said of the Waters mailer whose candidate paid to be in it. The sample ballot, with a photo of the congresswoman at the top, has check marks next to the candidates she supports and contains quotes from her endorsements.

Another consultant pointed out that Mrs. Waters “goes all out for you when you have her endorsement.” He said there was “no better person” to have a candidate take to the black churches before the election.

“It is a good endorsement to have in parts of Los Angeles County,” said Parke Skelton, a consultant to Dave Jones, who successfully won the Democratic primary for state insurance commissioner. Mr. Jones was endorsed by Mrs. Waters, and his campaign paid $25,000 to be included in the mailer.

Some consultants and watchdogs are troubled that Mrs. Waters’ campaign is charging candidates she endorses to be included in her mailer and said it borders on “pay-to-play” schemes, which have recently come under scrutiny by federal authorities.

“It is astonishing that politicians can cash in on their positions by selling their endorsements,” said Melanie Sloan, a former federal prosecutor who now heads the political watchdog group Citizens for Responsibility and Ethics in Washington (CREW).

“This further demonstrates that Rep. Waters abuses her position for the financial benefit of family members,” Ms. Sloan said. “She intervened with the Treasury Department on behalf of a bank in which her husband holds stock and she requires candidates seeking her endorsement to pay her daughter to be including on a mailing.”

Ms. Sloan said Americans have “long believed politicians’ votes are for sale.”

“Now we learn it’s not just their votes, but their endorsements as well,” she said. “This just confirms that at least some politicians really are bought and paid for.”

One political consultant who was troubled by Mrs. Waters’ mailer practice said, “Like it or not, it’s a reality when you’re running for office in L.A. or campaigning statewide. ” He asked not be identified because he works with candidates who want to be in the mailer.

Mr. Skelton, the consultant whose candidate paid to be included in the mailer, said he didn’t think the Waters endorsement and contribution were linked: “She makes a decision independently. Then you have the opportunity of participating in the slate mailer.”

If you decline to pay, he said, you are not listed in the mailer but you still have her endorsement.

Here is how the process works, according to numerous interviews by The Washington Times with consultants familiar with the mailer.

First, Mrs. Waters interviews candidates and makes her endorsements. Then her daughter calls the endorsed candidates and tells them how much they need to pay for their share of the costs of being in the mailer.

It was in 2004 when Mrs. Waters got a unanimous advisory opinion from the FEC saying she could run her mailer but would need to do so through her federal campaign committee. The FEC said the payments from the other politicians were not considered donations but rather reimbursements and not subject to federal contribution limits.

The ruling allowed her to take unlimited amounts from campaign committees of other candidates for their share of the costs of printing and sending the mailers. Without the ruling, the payments from the other campaigns would be limited.

Mrs. Waters had begun the mailer in 1992 as a separate, nonfederal local political committee known as L.A. Vote, collecting more than $2.2 million until 2004. State elections records show that L.A. Vote paid about $450,000 to Karen Waters’ Progressive Connections and $115,000 to Edward Waters, the congresswoman’s son.

She sought the FEC ruling in 2004 after passage of the McCain-Feingold bill, which barred federal officials from operating local nonfederal committees not subject to federal campaign limits.

According to federal and state election records, the Waters campaign collected $231,550 from more than two dozen candidates or ballot issue initiatives during the campaign for the Democratic primary in June. The payments ranged from $45,000 for San Francisco Mayor Gavin Newsom’s successful bid for lieutenant governor to $250 for candidates for the Democratic County Central Committee.

In addition to Mr. Newsom and Mr. Jones, the state insurance commission candidate, 17 candidates or campaigns paid $5,000 or more to be on the sample ballot, the records show. They include $25,000 payments from San Francisco District Attorney Kamala Harris, who won the attorney general nomination, and State Sen. Gloria Romero, who ran unsuccessfully for superintendent for public instruction.

Sen. Barbara Boxer, who leads her Republican challenger, Carly Fiorina, a former chief executive at Hewlett-Packard, by 4 percentage points in the latest polls, paid $5,000 to be included in the mailer.

Federal election campaign reports show that Karen Waters’ firm was paid $33,000 by the Waters political committee through June but was still owed $82,000 for her work in the primary. The records show the firm was paid $40,500 in 2005, $80,000 in 2006, $73,500 in 2007, $73,500 in 2008 and $54,000 in 2009.

The House ethics committee and the FEC say federal office holders can pay relatives from campaign funds for “bona fide” services but must pay reasonable or fair market rates.

Karen Waters did not return phone messages left at her office.

Mrs. Waters’ sample ballot is one of 81 mailers registered in California - run by politicians, consultants and interest groups - that charge fees to list selected candidates and initiatives. But, according to the Sunlight Foundation, a government watchdog organization, Mrs. Waters is the only member of Congress who reported raising money by using slate mailers.