Governor stands by his use of funds

BOISE – Idaho Gov. Dirk Kempthorne defended his campaign spending practices Monday, while Democrats raised new questions about whether they conflict with federal tax laws.

Idaho Democratic Party Chairman Richard Stallings sent a letter to the Internal Revenue Service asking whether Kempthorne’s use of campaign funds for meals, flowers, travel, candy and gifts makes those funds reportable as taxable income.

“I respectfully ask for an IRS review of these matters,” wrote Stallings, a former four-term congressman, “and, in order to inform the citizens of Idaho, a statement as to whether such expenditures, which are claimed as a legitimate function of a public officeholder are, in fact, in compliance with federal tax law.”

Stallings’ letter to IRS Commissioner Mark W. Everson attached a copy of Kempthorne’s latest campaign finance report, noting what he called “such obviously personal expenditures” that he said showed the governor was essentially supplementing his personal income with campaign contributors’ money.

Brian Whitlock, Kempthorne’s chief of staff, said, “He’s asking a hypothetical question with no basis in fact. It’s wishful thinking on his part, and smacks of petty politics.”

Kempthorne defeated Stallings in 1992 when both men ran for the U.S. Senate, ending Stallings’ congressional career.

But Boise State University political scientist Jim Weatherby said, “It’s an interesting question. … I’m not surprised the Democrats are wading in on this, because of the furor it has caused, and I think the feeling on the part of quite a few people that these do, in fact, appear to be personal expenses.”

In the first six months of this year, Kempthorne charged to the campaign dozens of meals near his downtown Boise office at restaurants ranging from Le Café de Paris to McDonald’s. He also charged trips to Republican Governors Association meetings, travel inside and outside the state, and expenditures large and small at everything from gift shops to grocery stores to Starbucks.

Kempthorne, who has announced he won’t seek a third term, still has more than $70,000 in campaign debt from his 2002 campaign. His major contributors during the first six months of this year included corporations that stood to benefit from legislation he signed into law this spring, including corporate tax incentives, telephone deregulation and more.

Kempthorne issued a statement defending his spending, saying it covered everything from lunches with staff, to expenses for the first lady to travel to speaking engagements in small Idaho towns, to chocolates for an event kicking off the renovation of the state’s new governor’s mansion.

“That’s the story that the media and critics don’t want told – that the governor and the first lady are keeping good on our promise to the people of Idaho to be active and visible in making Idaho the very best state in the nation to work and raise a family – and when it’s not appropriate for the taxpayers to cover the associated expenditures, Idaho law says campaign funds can be used,” Kempthorne wrote.

The governor said he uses his campaign funds “to cover political and other expenses related to holding office.”

Purchases from a local dollar store were for “decorations … for an event hosted by the first lady,” he wrote. When flowers were sent, he said, “the campaign, not the taxpayers purchased (them) to add a touch of class to an official event or to send condolences from the Office of the Governor to those who may have lost a loved one.”

Whitlock noted that Stallings’ own name appears in the U.S. House of Representatives’ booklet on campaign ethics, as an example of “what not to do.”

Stallings acknowledged that he received a public “letter of reproval” from the House Committee on Standards of Official Conduct in 1987 after he borrowed money from his campaign to purchase a used Dodge for both campaign and personal use, with the idea that he’d drive it for the campaign, and his kids would use it when he was in Washington, D.C. The loan was paid back with interest, but the committee ruled that candidates can’t borrow from their campaigns for personal expenses.

According to the committee’s records, the violation was found to be “mitigated by lack of improper intent.”

Stallings said, “I made full disclosure and in fact paid it back. … I could’ve put the same money into a CD and got about the same kind of interest for the campaign.”

Stallings said he hopes the IRS will clarify whether Kempthorne’s spending is appropriate.

“If … it’s wrong, the governor ought to be held accountable,” he said. “Perhaps he needs to make restitution as I did, and set the proper example for political leadership in this state.”

He added, “If our Legislature does not have the courage to pass the kind of legislation that we need to regulate campaign finances, then maybe the IRS through their rulings will at least force people like the governor to be more responsible with the funds that he has.”

The IRS could not be reached for comment; Stallings said he mailed the letter on Friday.