Dem lawmaker cleared of ethics violation, after “substantial reason” of guilt found by OCE

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A piece in The Intercept caught my attention about a lawmaker cleared of ethics charges by the House Ethics Committee. Normally this wouldn’t be notable but in this case, the House Ethics Committee went against the conclusion drawn by the Office of Congressional Ethics. That body found “substantial reason” to believe that Democrat Rep. Lori Trahan was guilty of breaking campaign finance laws.

In the last days of her tight Democratic primary in Massachusetts in 2018, Rep. Trahan deposited $300,000 into her campaign coffers. That money was classified as a personal loan. She used the money for an ad blitz on television that likely played a big role in her victory. She won the primary race by only 155 votes. A candidate loaning his or her own campaign money isn’t particularly unusual but with Rep. Trahan’s filing of a personal financial statement, it became clear that Trahan didn’t have the assets to make this kind of loan. So, the question became where did this money come from?

Her critics pointed their fingers at her wealthy husband, claiming his companies financed the timely donation to her campaign. When she was asked about this, Trahan not only denied the allegation but doubled down in the denial – she called it a sexist accusation. Yep. She threw the woman card.

“The suggestion that I did not have the personal resources to make that loan to my campaign is just inaccurate,” she said. “There’s a lot of narratives you want to change when you are taking on a run like this, and you’re going back to Congress as one of those 131 women, and that’s one of them, right? That women can start successful businesses, they can earn income, they can have affordable day care, they can get paid the same as men who are doing the same job, and they can make a loan that they can afford to their campaign.” She said that when her next financial disclosure in spring 2019 was revealed, everything would be cleared up.

Sounds like an overreaction. The question wasn’t about the abilities of women to have their own businesses and make their own livings. The question was brought up because her financial statements weren’t lining up to show she had enough personal assets to cover a loan of that amount. She deflected to victimhood instead of just answering the question. Brushing it off by telling critics to just wait for her next financial disclosure filing was less than transparent, to put it kindly. When asked a month later by another reporter if she could categorically deny that her husband did not contribute more than the $2,700 allowed by law she replied, “Yeah, look, the suggestion that I personally did not have the funds is completely inaccurate.”

She lied and her story came out. So, why did the House Ethics Committee clear her?

It is now clear that Trahan was lying. What was ultimately revealed, after a series of corrections made by Trahan and $400,000 in legal advice, was that her husband had shifted assets out of companies he owned into a joint checking account which was then quickly deposited into Trahan’s congressional campaign. That’s not what Trahan’s critics are claiming — that is now her own story.

Yet, earlier this month, the Ethics Committee cleared Trahan by finding that, while the loan had indeed been made out of funds from her husband’s companies, doing so was legal because a prenuptial agreement stipulated that such funds were joint marital property. Trahan’s financial disclosure, however, lists all of the assets her husband used to make the loan as “SP,” for spouse, rather than “JT,” for joint, as she lists other joint property. And the prenup, in fact, stipulates that separate property will remain separate and that “each party waives, discharges, and releases all right, title, and interest in and to the separate property that the other party now owns or acquires after the execution of this Agreement, or acquires from the proceeds of any separate property now owned, including but not limited to any real property which either party may acquire with funds derived from the proceeds of his or her own separate property.” But the prenup also says: “All wages, salary, and income of each party earned or received during marriage, together with all property purchased with such wages, salary and income, shall also be marital property.”

But even if the committee granted that the funds were indeed jointly owned, part of the loan came from a company that was not subject to the prenup. A $50,000 loan made to the campaign by Trahan on June 30, 2018 originated with a company owned by her husband, DCT Development. DCT Development was founded prior to their 2007 marriage and not listed in the prenup as joint property. That was an oversight, Trahan said. “According to Representative Trahan, she and Mr. Trahan intended DCT Development, Granite Rock Businesses, and the income he received from those entities to be marital property under the agreement. Representative Trahan did not provide the Committee with any documentary evidence to support her explanation,” wrote the Ethics Committee in its final report. Federal campaign finance law states that a spouse cannot contribute more than the legal maximum (at the time, $2,700).

Some of the assets used by Trahan’s husband were not his alone. On April 2, 2018, the committee report reveals, Mass Eagle Development LLC deposited $100,000 into David Trahan’s personal account. He lists himself as just a one-third owner of Eagle Development in Lori Trahan’s financial disclosures (which list it as David Trahan’s separate property).

On August 21, David Trahan transferred $200,000 to the joint checking account with his wife. A few weeks earlier, he had drawn $180,900 from Middlesex Land Holdings LLC and $110,000 from Poplar Hill Development LLC. He lists himself as a half-owner of Poplar Hill.

The ethics committee noted that her husband’s properties aren’t separate property in their pre-nup, so the question remained – were the properties purchased from the proceeds of his other separate property, which meant they were off-limits, or whether the withdrawals count as income that becomes a joint asset. Since the Ethics Committee couldn’t make that determination, it cleared her. That’s about as swampy as it gets. She knows how to work the edges because she was chief of staff to former Rep. Marty Meehan, who was the lead Democratic sponsor of the McCain-Feingold Act in the House. She boasted about her work on campaign finance reform in a press release in 2019.

Since the campaign owes Rep. Trahan and her husband $300,000, Trahan has been aggressively fundraising, even violating her pledge to not take money from the PACs of corporate lobbying firms. Trahan’s spokesperson claims “that they fit within the narrow definition created by End Citizens United.” Like I said, Trahan knows how to work the system. And, the House Ethics Committee is complicit in allowing her to do so.





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