Palazzo used campaign funds for ethics investigation

U.S. Rep. Steven Palazzo used $61,000 of campaign funds to cover legal expenses related to an investigation into the congressman for allegedly using campaign money to pay for personal expenses.

As first reported by Forbes, Palazzo’s campaign paid Jackson law firm Watkins & Eager $61,000 in December 2020. The campaign has not yet told the Federal Election Commission why it paid the law firm, but a spokesperson explained to Forbes that the payments covered legal fees related to Palazzo’s ethics investigation.

“Yes, those are legal fees, and that is how we will describe them (to the FEC),” Justin Brasell of campaign consultancy Triumph Campaigns wrote in an email to Forbes. When asked if they pertained to Palazzo’s ethics investigation, Brasell replied, “Yes.”

The FEC allows candidates to use campaign funds to cover legal fees related to the office they hold. An advisory opinion issued in 1998 stated that “any legal expense that relates directly to allegations arising from campaign or officeholder activity would qualify for 100% payment with campaign funds.”

Palazzo’s attorney at Watkins & Eager is Gregg Harper, who served as the U.S. Representative for Mississippi’s 3rd congressional district from 2009 to 2019. During his tenure, Harper served on the House Ethics Committee, which is currently investigating Palazzo. The legal fees Palazzo paid made up almost 60% of his campaign’s disbursements during the six-week period covered in the 2020 year-end report to the Federal Election Commission that revealed the payments.

Federal law and U.S. House rules prohibit conversion of campaign money to personal use — the reason Palazzo is under investigation. Mississippi Today has previously reported that Palazzo used campaign funds to pay himself and his former spouse nearly $200,000 through companies they own — including thousands to cover the mortgage, maintenance and upgrades to a riverfront home Palazzo owned and wanted to sell. A Mississippi Today report also questioned thousands in Palazzo campaign spending on swanky restaurants, sporting events, resort hotels, golfing and gifts.

A congressional ethics report made public in March claimed that Palazzo misspent campaign and congressional funds, and says it found evidence he used his office to help his brother and used staff for personal errands and services.

The report says it found “substantial” evidence that Palazzo used his position and office to help his brother, Kyle Palazzo. The actions in question included Rep. Palazzo potentially using his official office and resources to contact the assistant secretary of the Navy to help his brother’s efforts to re-enlist, and paying his brother nearly $24,000 over 10 months as a “political coordinator.”

The report also said the Office of Congressional Ethics found evidence that Palazzo used congressional staffers for personal errands, such as two staffers spending an entire workday looking for iron-on clothing labels for Palazzo’s children’s clothes before they departed for summer camp.

The House Ethics Committee investigation of Palazzo is ongoing. The committee could dismiss the allegations, offer its own rebuke of Palazzo, or pass the matter off for criminal investigation to the U.S. Department of Justice.

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Rep. Palazzo used campaign funds to fight ethics investigation of his campaign spending

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