Should Candidates for Federal Office be Prohibited From Spending Campaign Funds at Businesses They & Their Immediate Family Own? (H.R. 3686)

What is H.R. 3686?

(Updated October 7, 2019)

This bill — the Campaign Spending Integrity Act — would prohibit candidates from federal office from spending campaign funds at businesses owned by themselves or their immediate family members. This would apply to candidates for president, vice president, and Congress.

Argument in favor

Candidates for federal office shouldn’t be allowed to use their pursuit of public office to enrich themselves. Using donor money at one’s own businesses is a form of self-dealing that shouldn’t be allowed.

Argument opposed

As long as candidates are careful to pay fair market value for business services, they shouldn’t be prohibited from using any business’ services even if they happen to own a stake in it.

Impact

Candidates for federal office; candidates for Congress; candidates for vice president; candidates for president; and campaign spending.

Cost of H.R. 3686

A CBO cost estimate is unavailable.

Additional Info

In-Depth: Rep. Raul Ruiz (D-CA) reintroduced this bill from the 115th Congress to prohibit candidates for federal office from spending campaign funds at businesses they or their immediate family members own or control. When he introduced this bill as part of a three-bill package, the Ruiz Ethics Package, last Congress, Rep. Ruiz said: 

“People shouldn’t be allowed to line their pockets when they're in public service or running for office. I was deeply troubled that President Trump paid his own businesses over $8 million in campaign funds, and I'm troubled by the idea that any public servant can use tax dollars to increase their own profits. The public should feel confident that politicians are elected to serve the people, not get rich. My ethics package helps prevent any elected official, regardless of party, from abusing their authority for personal gain.”

The two other bills in the Ruiz Ethics Package last Congress were: 

• Public Service Spending Integrity Act (H.R. 839), which would have prohibited federal dollars (including federal contracts) from being spent on businesses owned or controlled by the President, Vice President, cabinet members and their immediate family members and prohibit Congresspeople from using their personal office funds on businesses owned or controlled by themselves or their immediate family members; and 
  
• Public Service Transparency Act (H.R. 840), which would have required candidates for President or Vice President, as well as cabinet nominees, to release their tax returns during their candidacies and while in office.

In the current Congress, the Public Service Spending Integrity (H.R. 1626) passed the House as an amendment to H.R. 1, the For the People Act. After H.R. 1’s passage, Rep. Ruiz said: 

“No President or Cabinet members, Republican or Democrat, now or in the future, should spend taxpayer dollars on their own businesses to enrich themselves or their family. Working for the government should be about serving the people, not self-service. I am proud to have secured passage of my bill, the Public Service Spending Integrity Act as a part of H.R. 1, the For the People Act, a bill that keeps our promise to help clean up corruption, protect Americans' fundamental right to vote, and make government work for the people!"

Assessing this bill’s odds of passage in August 2017, the Center for Public Integrity’s Sarah Kleiner said it, along with a raft of other money-in-politics bills proposed by Democrats in the 115th Congress, had “little chance of passing.”

This bill doesn’t have any cosponsors in the 116th Congress. Last Congress, it had six Democratic cosponsors and didn’t receive a committee vote.

In Depth:  In April 2019, financial disclosures from the 2020 presidential candidates revealed that President Trump’s re-election campaign had spent $168,333 at Trump-branded enterprises in the first quarter of 2019. According to its filing with the FEC, the campaign spent $137,025 on rent at buildings such as Trump Tower, paid $25,436 to the Trump Corporation for “legal & IT consulting” and spent $5,289 for lodging at Trump hotels and $584 at the Trump Grill. 

Anna Massoglia, a researcher at the Center for Responsive Politics, told MarketWatch that while campaigns typically spend on hotels, food and lawyers who handle compliance matters, these expenditures “raise more attention” because the candidate’s name is attached to the recipients. She added that Trump enterprises have received campaign money in recent years as well, and said that the links between Trump’s spending and his business interests is at a larger scale than has been observed in the past. Other critics of the Trump re-election campaign’s spending have called them unfair to donors or an example of grift.

A senior Trump campaign official defended the Trump re-election campaign’s spending, saying that the campaign paid fair market value under negotiated agreements and works closely with its lawyers to ensure strict compliance with the law. 

According to a tracker by the Center for Responsive Politics, total payments from the Trump political operation to Trump-related properties and businesses are about $18.7 million as of July 26, 2019.

Media:

• Sponsoring Rep. Raul Ruiz (D-CA) Press Release (115th Congress)
  
• The Press-Enterprise
  
• TIME
  
• MarketWatch