Paying Family Members and the Candidates’ Salaries with Campaign Funds

Thursday, June 16, 2016

This blog post was written by Chris Gober, Managing Partner of The Gober Group. Chris served as legal counsel to Senator Ted Cruz’s presidential campaign and is a trusted legal adviser for the most consequential matters in American politics, including campaigns, litigation, and investigations.

Each election cycle we are reminded of how much the press loves to write about candidates who pay their spouse, their children, and even themselves with campaign funds. Here are just a few of those headlines:

 The truth is, there is no way to inoculate your campaign from similar headlines if you’re going to use campaigns funds to pay the candidate’s family members or the candidate, and you should expect the story to be published at some point during the campaign. But if you’re going to do it, make sure you’re doing it the right way so you have a defensible response to your detractors who will allege that your candidate is lining his or her pockets with other people’s cash in violation of the law.

To that end, when paying a candidate’s family member, make sure you’re doing so under the following conditions:

  • The family member is providing a bona fide service to the campaign; and
  • The payments reflect the fair market value of those services.

If the candidate is receiving a salary from his or her campaign, make sure you’re adhering to the following rules:

  • The salary must be paid by the principal campaign committee.
  • The salary must not exceed the lesser of either the minimum annual salary for the federal office sought or what the candidate received as earned income in the previous year.
  • Individuals who elect to receive a salary from their committees must provide income tax records and additional proof of earnings from relevant years upon request from the Federal Election Commission (FEC).
  • Payments of salary from the committee must be made on a pro rata basis (thus, candidates cannot receive a whole year’s salary if he or she is not a candidate for an entire twelve-month period).
  • Incumbent federal officeholders may not receive a salary payment from campaign funds.
  • The first payment of salary shall be made no sooner than the filing deadline for access to the primary election ballot in the state in which the candidate is running for office. In those states that do not have a primary election, candidates may not receive payment until after January 1 of each even-numbered year.