Times investigation leads to complaints seeking federal investigation into Kevin McCarthy PAC spending at luxury resorts

(Robert Gauthier/Los Angeles Times)

Times investigation leads to complaints seeking federal investigation into Kevin McCarthy PAC spending at luxury resorts

California Politics

Paul Pringle
Adam Elmahrek

February 29, 2024

Federal election officials have been asked to investigate whether former House Speaker Kevin McCarthy personally benefited from violating the law from the nearly quarter-million dollars his campaign committees spent at a luxury resort in Rancho Palos Verdes while he led Congress.

Complaints filed with the Federal Elections Commission by two employees of the Terranea Resort point to the findings of a Times investigation published in December that found that two McCarthy committees paid about $240,000 to the hotel and the spa by the sea.

two and a half years

period ending in 2018. The committees reported to the FEC that the costs were for lodging and catering, and a campaign spokesperson for McCarthy told The Times that they were for our annual event, which he also described as a PAC retreat.

The five-page complaints, which echo each other, note that McCarthy did not provide the FEC or The Times with a more detailed explanation of the Terranea spending, including the number of such retreats.



So this only adds to the question about the actual use of these funds, the complaints say, adding that the payments may not have been made for legitimate PAC or campaign activities, but to enrich McCarthy personally. The complaints also name McCarthy’s committees and their treasurer, Jill Thomson.

McCarthy spokesman Drew Florio did not respond to the Times request


to interview the former congressman and Thomson or otherwise obtain comment from them regarding the complaints. An FEC spokesperson said the agency does not comment on requests for investigations or whether an investigation has been initiated.

The complaints were filed by Terranea employees Antonio Rodriguez and David Gomez Martinez through a law firm representing Unite Here Local 11, a union embroiled in a battle to organize workers at the resort. Rodriguez and Gomez Martinez are supporters of the union campaign.

The two employees indicate in the complaints that during the period in which these payments were made, they worked in various positions at the resort in the banquet and catering departments and have no knowledge or memory of any event or events organized by or held on behalf of from Congressman McCarthy or his committees at the resort. The complaints were notarized and signed under penalty of perjury.

They point out that Terranea’s owners, including Robert J. Lowe, founder of the company that developed the resort, made large financial contributions to McCarthy’s committees. The complaints show that the donations show that the relationship between McCarthy and the hotel owners is extremely cozy.

The FEC needs to investigate where all this political money is going, Rodriguez said in an email to The Times. Gomez Martínez declined to comment.

Lowe did not respond to an interview request


made through its headquarters.

The Times investigation found that most of the money McCarthy spent in Terranea came from a barely regulated leadership PAC he controlled, the Majority Committee PAC. The newspaper also reported that, according to FEC data, the Bakersfield Republican leadership PAC spent more than $1 million on hotels, private air travel and dining experiences from 2012 through last June.

That’s more than double the combined total spent by the leadership PACs of the seven other lawmakers who have held the top positions in the House and Senate for their parties for all or part of that period, according to a Times -analysis of FEC declarations. A historic uprising led by far-right Republicans ousted McCarthy as chairman in October, and he resigned from Congress in December.

Leadership PACs like McCarthys are subject to fewer spending controls than other campaign accounts. The legal guardrails for PACs are so weak that the FEC determined last year that there is no barrier to siphoning commission money for personal expenses. As a result, lawmakers can use the PACs as slush funds to ensure lavish lifestyles, good government advocates say.

But federal law prohibits members of Congress from spending money from other campaign accounts for personal use. About $116,000 of McCarthy’s spending at Terranea came from one of his campaign committees. Most of that $68,000 amount was reported to the FEC as catering and lodging expenses.

In total, the two McCarthy committees made 20 payments to Terranea between 2015 and 2018 while he served as majority leader in the House of Representatives. Most were listed under the lodging expense category, and 11 were in even amounts, such as $7,500 and $10,000. The reports did not explain why these amounts were expressed in round dollars.

McCarthy’s spending at Terranea stands out especially among current and former congressional leaders because much of the money reportedly goes to housing. And there’s no indication in McCarthy’s FEC filings why spending on Terranea was high over the two-year period and then stopped, although a McCarthy campaign committee reported about $470 in meal costs there in 2022.

The FEC does not require politicians to disclose in financial reports many details about expenditures beyond the recipient, date, amount and general category of expenditures. McCarthy’s records do not reveal who stayed or dined at Terranea courtesy of the committees, and there are no records of how much the PAC spent per night on a room, and nothing of what type of rooms, or how many, were rented. The data provides little clue as to whether the expenditures were related to specific fundraising events or other campaign activities.

Florio, McCarthy’s spokesman, said in a statement to The Times in October that the costs covered lodging, catering and event space rentals associated with the PAC retreat.

He did not respond to follow-up questions, including questions about the number of people attending events


and the specific costs allocated to each.

Violations of the law that ban personal use of money from campaign accounts that are not leadership PACs have led to criminal convictions of former members of Congress, including Duncan Hunter, a Republican from San Diego County. Former Rep. George Santos (R-N.Y.) was expelled from Congress in December after House investigators determined he spent tens of thousands of campaign dollars on rent, a sexually explicit website, Botox and luxury goods.

But the rules for leadership PACs have been poorly defined since the FEC authorized the committees in the late 1970s. Critics argue that the ban on personal use of campaign funds under the federal Election Campaign Act also applies to leadership committees, but they have been unable to convince a majority of the FEC to take that position.

In its decision last winter, the FEC ruled by a four-to-two vote that nothing in the law prohibits politicians from using leadership PAC money for personal expenses. The decision was the result of a complaint that a leadership PAC for former House member Lou Barletta (R-Pa.) had paid his wife $33,000 in rent on a property he jointly owns with her.

Advocates for stricter enforcement of campaign finance laws have long accused the FEC of looking the other way when complaints of alleged violations come in. Among them is Saurav Ghosh, director of federal campaign finance reform for the Washington-based Campaign Legal Center, a nonprofit whose mission includes advocating for transparency in election spending.

The FEC does not enforce the law in most cases, Ghosh said.

Through the agency’s press office, The Times asked the six commissioners who chair the FEC to respond to that criticism, but received no response.


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