Rep. Maxine Waters facing new legal questions over campaign mailers

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Maxine Waters issues warning to Wall Street, lays out agenda as head of House Committee on Financial Services

Democratic Rep. Maxine Waters issued a fresh warning to Wall Street as she outlined her agenda as the new chairwoman of the House Financial Services Committee, saying she won't let the banks and financial institutions 'run amok' and lead the country into another crisis.

Rep. Maxine Waters took the helm of the Financial Services Committee this month after easily winning re-election as part of the Democrats’ House takeover. But according to the California Democrat’s post-election filing – which has prompted fresh calls for a full audit – her campaign may have some financial issues of its own to sort out.

The Citizens for Waters report to the Federal Election Commission from Dec. 11 lists $183,022 in debt to her daughter Karen Waters, who is in charge of distributing “slate mailers.”

The mailers have faced scrutiny since 2010 because the campaign, beginning in 2004, has paid Waters’ daughter or her public relations firm Progressive Connections to produce, print and mail the sample ballots. Watchdog groups have raised questions about the propriety of campaign funds financially supporting a family member, as well as Waters raising contributions in excess of federal limits through an unusual process. Since 2004, the campaign has paid the younger Waters almost $1 million, based on previous news reports.

WATCHDOG PRESSES FEC FOR AUDIT ON MAXINE WATERS FUNDRAISING PRACTICES

But another point in the report that raised red flags is $13,000 debt listed to a charter school group -- which was the subject of an earlier FEC complaint against the Waters campaign, first reported by Fox News.

That organization, Families & Teachers for Antonio, backed the losing gubernatorial campaign of Antonio Villaraigosa, a former Democratic Los Angeles mayor. The independent organization, which was not part of the gubernatorial campaign, had paid $25,000 to the Citizens for Waters Committee to put Villaraigosa on Waters’ slate mailers -- which are sample ballots sent out to about 200,000 voters in her Los Angeles district listing congresswoman’s endorsed candidates.

In its FEC complaint, the National Legal and Policy Center, a conservative government watchdog, contends the $25,000 payment to the Waters campaign violated election law. That’s because FEC guidelines say only another candidate—or candidate’s committee—may pay for being listed as the endorsed candidate on a slate mailer. (So, if the Villaraigosa gubernatorial campaign had made the payment, it wouldn’t have been a violation, according to the legal center.)

Even if the Waters campaign pays $13,000 or the full $25,000 back to the charter school group, it won’t undo an illegality, according to the watchdog group, which is now asking the FEC for a full audit of payments to Citizens for Waters derived from Waters’ slate mailers.

“Listing the illegal campaign contribution as an obligation doesn’t solve the problem,” said Tom Anderson, director of government integrity project for the National Legal and Policy Center. “Even if Waters paid the donation back, and in full, the violation would have already occurred.”

The group plans to submit a new FEC complaint, but Anderson told Fox News they can’t do so until the partial government shutdown is over.

“We feel she’s only reimbursing part of the money because her campaign is short on cash and owes debts to her daughter,” Anderson added.

A Waters spokesperson did not respond to calls and emails from Fox News.

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Waters has been among the highest-profile House Democrats for her calls to impeach President Trump. Last week, she issued a stark warning to Wall Street and banks about her oversight agenda with the Financial Services Committee.

The charter school organization supporting Villaraigosa was largely bankrolled by former New York Mayor Michael Bloomberg and Netflix CEO Reed Hastings. Bloomberg, who gave a total of $3.5 million to the Families & Teachers group, gave $1 million to the organization on the day it paid the Waters campaign committee, according to the legal center that made the complaint. Federal law limits individual contributions to $2,700, and $5,000 for political action committees.

The slate mailers are an unusual form of fundraising, though not uncommon in California state races. Waters sought an FEC advisory opinion in 2004 that allows her to use the slate mailers to raise money far in excess of the existing contribution limits for federal campaigns.

The FEC advisory opinion said payments from other candidates to appear as endorsed candidates on the slate mailers “would not constitute support of, or in-kind contributions to, any federal candidate appearing in the brochure, so long as the authorized committee of that federal candidate reimburses the Waters Committee.”

So, legally, candidates are paying a reimbursement for the slate mailer, rather than buying an endorsement.

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The FEC complaint last fall alleged that since the Families and Teachers for Antonio payment didn’t come from the candidate or candidate’s committee, it was not legal under the 2004 FEC advisory opinion.

Fred Lucas is a White House correspondent for The Daily Signal. Follow him @FredLucasWH.