State Representative Mike Sexton may continue to spend $400 each month in campaign funds to rent part of a building he owns, Iowa Ethics and Campaign Disclosure Board executive director Megan Tooker has determined.
As Bleeding Heartland reported in August, Sexton stored campaign materials for free at his home for nearly two years after re-entering political life. While running for re-election to Iowa House district 10 in 2016, the Republican lawmaker began renting space for his campaign in one of two commercial buildings he and his wife had recently purchased. As of July 2018, the real estate company registered by Rebecca Sexton had received a total of $11,200 from the campaign.
I brought the matter to Tooker’s attention because although an administrative rule allows the use of campaign funds for office expenses, including rent and utilities, I had never seen an Iowa lawmaker or legislative candidate spend so much for that purpose. I questioned whether $400 per month reflected the fair market value for storage and office space in Calhoun County, as required by Iowa law. In addition, I thought the campaign expenditures might be construed as delivering a “personal benefit,” since the payments would either supplement the Sextons’ household income or cover part of the contract on the couple’s real estate investment.
In a September 27 letter, Tooker noted that Sexton had said his campaign was paying about 25 cents per square foot, plus $100 each month for utilities, while the trucking company renting the remainder of the building was paying 66 cents per square foot and $100 for utilities. (Those numbers are consistent with what the lawmaker told me in July.) A realtor and certified appraiser provided a letter to the ethics board, expressing the view that Sexton’s LLC, Tall Corn Property, was charging his campaign less than fair market value for rent. Tooker concluded,
Based on the totality of the circumstances, I am satisfied that the amount your LLC is charging your campaign for rent and utilities appears reasonable and is not “clearly in excess of fair market value.” […] Thus, in accordance with Iowa Code 68A.302, it is permissible for your campaign to rent the above-described office space from your LLC for $400 (including utilities).
Now that Sexton’s spending has the ethics board’s seal of approval, I wonder how many other Iowa elected officials will decide to use campaign funds to facilitate commercial real estate investments. State law does not limit how much square footage a campaign can rent for storage or office use. Nor is there any limit to how much money contributed by individuals or political action committees can be used for rent, as long as the lease agreement corresponds to the fair market value for space in any given building.
Appendix: Full text of Iowa Ethics and Campaign Disclosure Board executive director Megan Tooker’s September 27 letter to State Representative Mike Sexton.