Democratic Congresswoman Lori Trahan has issued a statement saying she used money from her husband’s personal account to help finance the final days of her closely won election for the 3rd Congressional District in November 2018, but that the couple’s bank accounts were fluid per a prenuptial agreement.
Trahan said in the statement that she “didn’t give much thought to what bank account to use.”
Trahan said that in 2018 her husband, Dave, deposited $300,000 “from income Dave had earned to our joint checking account.”
That money was then transferred from their joint account to her campaign account in August 2018.
“I now know that the way I contributed those funds constitutes a gray area in campaign finance law,” she said.
The Federal Elections Commission says it is illegal for a spouse to donate more than $2,800 to a candidate during a campaign.
Trahan’s finances, particularly during the final days of the 2018 primary for the district that includes Haverhill, have been under scrutiny for months amid accusations that the freshman congresswoman broke campaign finance law when she transferred funds from personal accounts into her campaign coffers. The Campaign Legal Center, a Washington, D.C.-based watchdog, filed a complaint with the Federal Elections Commission last spring.
Adav Noti, senior director for the center and former associate general counsel of the Federal Elections Commission, said the issue is black-and-white.
“It appears to answer the key question: Was it her money and was it disclosed properly? The answer is no and no,” Noti said.
He said it is illegal to funnel money from a spouse’s personal bank account into a campaign finance account.
“You can spend an unlimited amount of your own money,” he said, “but you can’t spend other people’s money.”
The Campaign Legal Center’s complaint suggested Trahan didn’t have enough revenue and assets to cover the $300,000 in loans to her campaign, based on personal financial disclosures filed with the clerk of the U.S. House of Representatives.
According to the FEC, a similar complaint has been filed by Gene Blake, 8 Spruce Circle, Andover, who is a supporter of one of Trahan’s opponents in the 2018 Democratic primary — Dan Koh. He fell 145 votes short of Trahan.
Trahan said in an email last week that the accusations are politically motivated.
“This has been a trumped-up political charge since the beginning,” Trahan said. “When the FEC has reviewed cases like mine, they have repeatedly found no violation.”
Koh, who has since been elected to the Andover Select Board, said last week that “campaign finance laws exist to ensure that all candidates play by the same rules.”
“It is clear today that our member of Congress broke those laws during her campaign and then tried to hide it,” he said. “It’s incredibly disappointing for the voters of the district who deserve fair elections and transparency from their elected officials.”
Another group, the Foundation for Accountability and Civic Trust, alleges Trahan may have broken campaign finance laws. The conservative watchdog group based in Washington, D.C., asked the Office of Congressional Ethics to investigate the source of the loans.
The findings of the FEC or the Congressional Ethics office investigations have not been released yet.
In her statement, Trahan said her husband “deposited $50,000 and $55,000 into our joint checking account before I filed my first and second quarterly reports in 2018, and in August (2018), he deposited an additional $200,000.
“I loaned money to my campaign in similar amounts from that joint checking account – $50,000 on March 31, $50,000 on June 30, and $200,000 on August 22,” she said. “Later in the campaign, I used a home equity line of credit to loan my campaign an additional $71,000.”
Attorney Jonathan Berkon, representing Trahan, said the couple merged their finances long before the congressional race.
“Before they got married, and long before the campaign, Congresswoman Trahan and her husband entered into a premarital agreement, which gave each spouse an equal right to manage and dispose of their marital property – including each other’s income,” Berkon wrote in an email to The Eagle-Tribune. “Under the agreement and state law, the funds used by Congresswoman Trahan to loan money to her campaign were her ‘personal funds’ and were eligible for use in the campaign.”
An FEC spokesman said he couldn’t get into specifics of the case, but generally speaking, “any money that a candidate gives to his/her campaign has to be from personal funds of the candidate.”
Moreover, he said, in the case of joint accounts, a campaign can use half of the amount in the joint account. The other half is considered to be the spouse’s, he said, and is limited to $2,800 per election, whether a primary or general election.
In Trahan’s statement, she said that since she was outspent by her opponents, she had to tap into her own resources.
“I just started running with the confidence that we would figure it out,” she said.