SAN JOSE — After taking more than $200,000 out of his campaign war chest last year to pay bills related to an ethics probe, Rep. Mike Honda has quietly set up a fund dedicated to collecting money for that cause.
The San Jose Democrat, locked in a close race against repeat Democratic challenger Ro Khanna, asked the House Committee on Ethics to approve the Michael Honda Legal Expense Trust Fund in December. And the committee approved the fund the following month.
“It is something we did so we can cover the cost of legal help,” Honda said in a short interview last week.
At issue in the investigation is whether Honda’s congressional office violated House rules that prohibit politicians from using taxpayer funds that pay for office staff for campaign purposes.
In September, the Office of Congressional Ethics said in a report that Honda had appeared stunned when investigators notified him that his campaign manager told office staff in 2013 that the Washington, D.C., office makes policy, the district office arranges events and the campaign uses those events to raise money.
At the time, Honda acknowledged to investigators that “it doesn’t look good.”
The report — based on a dozen interviews and about 1,400 pages of emails and documents provided by Honda’s office — said office staffers doubling as campaign volunteers prepared campaign materials, used information from the congressional office for campaign purposes and regularly discussed campaign matters at official staff retreats and during “coffee breaks” in Honda’s congressional offices.
The House Ethics Committee is probing the matter.
That forced Honda in the last three months of 2015 to spend $86,000 on legal services and pay $15,000 to Singer Associates, a San Francisco-based crisis communications firm. Earlier in the year, he spent a total of $109,000 for similar purposes.
Honda said last week that one reason for setting up the fund is to allow potential donors to Honda’s campaign to know their money is going toward re-election to his ninth term — and not legal bills.
“I think it’s fair for people to know that their campaign contributions are being used for the campaign,” said Honda, who represents the 17th Congressional District.
But the creation of the fund also allows individual contributors to give more than the $2,700 allowed per election.
“It gives people an end-run around contribution limits,” said Jessica Levinson, a professor at Loyola Law School and president of the Los Angeles Ethics Commission. “Now they can give a campaign contribution and donate to the defense fund. That’s the criticism against having these funds.”
According to rules set by the House Committee on Ethics, annual donations to the fund are capped at $5,000 per donor, including pro bono legal services, and money from registered lobbyists is prohibited.
Legal expense funds have been created for politicians at all levels of government — from former President Bill Clinton, former Alaska Gov. Sarah Palin to disgraced former Santa Clara County Supervisor George Shirakawa Jr.
But Levinson said that she doesn’t often hear about a member of Congress starting such a fund.
“I know there are different versions of it at every level of government,” she said, “but do many Congress people avail themselves the ability to do that? I do think it’s a rarity.”
Ethics committee staff last week pointed to one such case from 2011 involving Rep. Don Young, R-Alaska. The committee required Young to pay back nearly $60,000 in campaign funds related to gifts and expenses for hunting trips he’d taken from 2001 to 2013.
The committee also issued Young a “letter of reproval,” something his critics said amounted to a slap on the wrist. Young, 82, was elected to the House in 1973 and is currently in his 22nd term.
Karen Haas, clerk of the House of Representatives, said she could not provide information about how many other legal expense funds have been created for members of Congress.
“You would need to research the legal expense fund documents on our public terminal here in the Legislative Resource Center” in the Cannon House Office Building, she said. “LRC staff do not provide research services.”
Donations to the legal funds are reported quarterly, with the next report due at the end of this month. The information in the report, however, is available only at the D.C. office, Haas said.
Khanna’s camp called the lack of public access to the information alarming.
“The fact that information and details about who is contributing to Rep. Honda’s legal defense fund is not readily available just raises further questions about these highly unusual ethics charges,” said Khanna campaign spokeswoman Lynda Tran.
The fund is under the oversight of a trustee, Jennifer May of Next Level Partners, a D.C.-based fundraising and campaign compliance group.
The next quarterly campaign finance reports — which are easily accessible online — are due on Friday.
Honda’s campaign manager, Michael Beckendorf, said legal and consultant fees related to the ethics probe would be “minimal” this time around.
But that’s the case simply because such contributions would likely end up in the new legal fund.
Beckendorf said at this point Honda has not been called to testify before the ethics commission. And he added that the commission has not created an investigative subcommittee — which could indicate where the probe is headed.
“In every case where there has been a sanction or a formal reprimand, it has been done so only after an investigative subcommittee was formed,” Beckendorf said.
He said the separate legal fund will help the campaign fight Khanna, a Fremont attorney who once worked in President Barack Obama’s Commerce Department, “tooth and nail.”
According to the last quarterly report, Khanna, who lost by 3.6 percentage points in 2014, had considerably more funds on hand than the incumbent: $1.7 million vs. $572,000, with Honda spending 95 percent of the $292,000 that was raised in that reporting period.
The 17th Congressional District includes Sunnyvale, Santa Clara, Cupertino and North San Jose, stretching up through Milpitas and into Fremont and Newark in Alameda County.
Contact Eric Kurhi at 408-920-5852. Follow him at Twitter.com/erickurhi.
