I would appreciate any input on a little research I did last week.

[pennylane100]

I was checking my local congressman through Opens Secrets web site and found that in the last two election cycles his campaign has paid almost $200,000 to a LLC comany. The secretary of state sites lists only the agent for service of process for this company. This person happens to be the congressman's chief of staff. I think this kind of arrangement is a little suspect. I have a suspicion that the company is actually owned by the congressman himself but, of course, I do not know that for a fact.

Do any of the great legal minds here at DU think this type of arrangement is quite normal or does it sound a little suspicious. Any input would be very welcome.

[jberryhill]

1. The way this typically works....

Is that the LLC is facially some sort of consulting, management, or campaign service company that is paid for "services" rendered to the campaign.

The LLC revenue goes to family and friends of the candidate for the "services" they provided through the LLC.

If he is an employee, director or officer of the company, then income from the company would show up on his financial disclosures. So, the better route is for him to have a different company which is a contractor to the LLC, and he gets paid by that second company for consulting, speaking fees, or whatnot.

For example, he pays $X to Able Co., a campaign management company. Able Co. arranges an event, and pays Baker Co. $Y to book the candidate as a paid speaker at the event. On his financial disclosure, the incoming from Baker Co. shows up as speaking fees, and in his campaign disclosures the payment to Able Co. shows up as a campaign expense - but those two transactions are not connected in any public disclosure, because Able Co. doesn't have to account to the public on where its money went.

[rfranklin]

2. I would bet that is exactly what happened to that $200,000...

and it is so easy and cheap to set up the scam.