Lewis omitted campaign funds in FEC report

Rep. Jerry Lewis (R-Calif.) failed to report to the Federal Election Committee (FEC) a $276,614 gain in campaign funds invested in stock incurred just days before last year’s election.

{mosads}Lewis yesterday acknowledged the omission in a one-paragraph note to the FEC in response to a letter the agency sent him on May 22.

To help GOP efforts late in the campaign, Lewis cut the National Republican Congressional Committee (NRCC) a $335,000 check Oct. 30. The payment from a T. Rowe Price account “simultaneously triggered” a sale of a large amount of stock, according to Lewis’s memo and his spokesman, Jim Specht. Because Lewis invested the campaign money in large chunks of stock, he was forced to liquefy a large piece of the campaign holdings to contribute to the NRCC, Specht explained.

Lewis’s campaign committee received a 1099-B report of the stock sale that included the total gain information this year and is now amending its report to reflect the net gain in the value of the stock, the campaign committee noted in the letter to the FEC.

According to his FEC records, Lewis paid the IRS $108,190 in taxes in March. It is unclear whether that amount includes taxes he owes on the Oct. 30 gain and whether Lewis’s campaign first contacted the FEC about the discrepancy or whether the agency contacted him. Specht said he did not know whether the campaign paid those taxes and referred additional questions to Lewis’s campaign lawyer at William & Jensen.

“The committee contacted the FEC to inform them of the oversight and to properly report the sale in an amendment,” the committee said in its FEC letter.

Earlier this year, The Hill reported that the FEC planned to review whether Lewis’s campaign committee violated election laws by failing to disclose contributions within a 48-hour deadline.

Specht said the committee waited until now to report the amount of the gain to the FEC because it took a long time to determine the exact amount.

It is legal for members of Congress to invest campaign funds in stock and several do, said Ken Gross, an election lawyer at Skadden Arps. But, as in every other stock-related investment, it is risky because a campaign can lose money just as easily as it can gain it.
 
“Any profits can be used for campaign purposes…but you roll the dice,” Gross said. “It also can be used for other expenses associated with official duties such as legal defense needs.”
 
Specht said Lewis has been investing his campaign funds in stocks for years. Even so, Lewis no doubt welcomed the extra infusion the stock took in during the last cycle when he paid nearly $1 million in legal fees associated with a Justice Department probe of his ties to a lobbying firm that received hundreds of millions of dollars in government contracts. Lewis, a prolific fundraiser, still has deep campaign pockets; his campaign committee’s cash on hand was $936,962 as of March 31.
 

Aaron Blake contributed to this report