Archive for September 2010
Christine O’Donnell’s Use of Campaign Funds to Pay Personal Expenses: An Impetus for Change in How Elected Officials Track and Report Expenses?
What if all candidates for public office used Expensify to track and report both their campaign expenses and their expenses while in office?
Recently “Tea Party” Republican Senate candidate Christine O’Donnell made headlines when she upset longtime congressman Mike Castle in the Republican primary for the Delaware US Senate seat. In the aftermath of her primary victory, O’Donnell was accused by CREW, the Citizens for Responsibility and Ethics in Washington, of using more than $20,000 in campaign funds to pay her rent and other personal expenses, including a bowling outing of all absurdities. If true, O’Connell faces possible legal charges as she allegedly lied about her expenditures on forms she filed with the Federal Election Committee, committed false statements; and that, by failing to include the campaign funds she misappropriated as income, she committed tax evasion.
True or not, O’Donnell’s expense reporting scandal is hardly the first time expense reports have been the pathway to scandal for a politician or political party. In addition to O’Donnell’s expense reporting scandal, in recent years we have seen:
Stripper Expense Fraud - In early 2010, the Republican National Committee (RNC) suffered an expense related body blow as it reimbursed about $2,000 in expenses for “meals” rung up by its members during an evening out at a Hollywood strip club. The same RNC financial report also disclosed the party had spent $17,514 for private jets, $12,691 on limousines, and $19,016 at the posh W Hotel in Washington.
Travel Expense Fraud - The GOP is not alone, in February 2010, the House Ethics Committee concluded that New York Democratic Congressman Charles Rangel had violated House gift rules by accepting payment from corporations for reimbursement for travel to conferences in the Caribbean. The committee required him to repay those expenses.
Child Expense Fraud - In 2008 it was disclosed that then-Alaska Governor and Republican VP candidate Sarah Palin had Alaska state taxpayers foot the bill for her children’s travel expenses while she flew them all over the country for events they had no compelling reason to attend. In one particular case, Palin and her daughter even flew to New York City on “State” business.
The American public deserves greater accountability by its elected officials when it comes to how they spend tax dollars and campaign contributions. However there is only so much the public can do when expenses are disclosed and made public months after they occur. Moreover, because the expense reimbursement process is a manual one, nefarious expense report submitters can often disguise suspect expenses under “acceptable’ categories. Imagine how many other strip club receipts claimed as “meals” have gone unnoticed through the years?
One solution to prevent expense fraud and abuse by our elected officials is to demand they use automated expense report tracking and submission and that the info be published and open to the public on a regular basis. Below I have identified six ways the voting public would benefit if all candidates for public office used Expensify to track and report both their campaign expenses and their expenses while in office.
1. Transparency. The spending data can be easily published to the public to see where their political contribution (or tax dollars, if they choose the public financing option) go.
2. Fraud protection. Where, when, how much, and (with receipt images) exactly what was purchased is clearly recorded, ensuring all campaign money goes to the campaign and not the campaigner. Fraud depends on paper to give a veneer of security. By bypassing the paper, you bypass fraud. There’s only one way to make a purchase appear on your credit card history: to make a purchase. It’s essentially impossible to forge a credit card purchase, and because we get it straight from the bank and track every change made by the account holder, there’s an airtight audit trail from purchase to reimbursement, visible by all parties, and retained forever.
3. Accuracy. Precise knowledge of where campaign dollars go, by district and block, to ensure actual spending fits the opportunity.
4. Cost savings. The efficiency of organizing and processing expense reporting electronically means less money spent on bookkeeping and more money spent where voters and donors want it spent.
5. Real-time. Tax-payers and campaign donors don’t have to wait weeks or months for expenses to be manually submitted, reported, and released to the public. A responsible candidate could publish their spending daily, proving they have no unscrupulous behavior to hide and sending a message to all their staffers that spending errors, deliberate or not, are quite likely to attract unwanted attention.
6. Access. Because it’s all online and in real-time, voters have immediate visibility into how much their candidates are spending, when they are spending it, and what they are spending for.
The expense tracking and reporting process currently being used by our candidates and elected officials is not much different than the system used 20, 30, or even 50 years ago. As they have for years, politicians and their staffers make purchases, collect paper receipts in their wallets, type the paper receipt into Excel or an paper expense form, print it out, sign and submit it. The accountant then retypes everything into Quickbooks or whatever system they use. Reimbursement ensues. The process is time-consuming, wasteful, and so manual it basically invites people to cheat. With the technology available today, there is absolutely no reason we can’t have real-time, transparent, accurate, and cost-reducing expense tracking and reporting. A system that protects taxpayers and campaign donors from the recurring, unnecessary and embarrassing fraud too often associated with irresponsible, entitled politicians and their staffers. The American voting public is quick to deride our political system for being wasteful and unethical in how it spends taxpayer money. Automating the expense tracking and reporting process and reporting it online and in real-time would be one giant way to bring power back to the people.