Senate passes $700B ’sweetened’ rescue package

Senate passes $700B ’sweetened’ rescue package

(Yahoo News)

WASHINGTON – After one spectacular failure, the $700 billion financial industry bailout found a second life Wednesday, winning lopsided passage in the Senate and gaining ground in the House, where Republicans opposition softened.

Senators loaded the economic rescue bill with tax breaks and other sweeteners before passing it by a wide margin, 74-25, a month before the presidential and congressional elections.

In the House, leaders were working feverishly to convert enough opponents of the bill to push it through by Friday, just days after lawmakers there stunningly rejected an earlier version and sent markets plunging around the globe.

List of Earmarks, etc…

by Rich Lowry – (NRO)

…apparently in the bailout bill (based on a list going around). Pretty outrageous. Isn’t this in John McCain’s wheelhouse?

New Tax earmarks in Bailout bill
– Film and Television Productions (Sec. 502)
– Wooden Arrows designed for use by children (Sec. 503)
– 6 page package of earmarks for litigants in the 1989 Exxon Valdez incident, Alaska (Sec. 504)

Tax earmark “extenders” in the bailout bill.
– Virgin Island and Puerto Rican Rum (Section 308)
– American Samoa (Sec. 309)
– Mine Rescue Teams (Sec. 310)
– Mine Safety Equipment (Sec. 311)
– Domestic Production Activities in Puerto Rico (Sec. 312)
– Indian Tribes (Sec. 314, 315)
– Railroads (Sec. 316)
– Auto Racing Tracks (317)
– District of Columbia (Sec. 322)
– Wool Research (Sec. 325)

Once 3 pages, bailout bill now length of novel

(Yahoo News)

Two Saturdays ago, it totaled just three pages — the White House’s request for $700 billion to rescue tottering financial institutions by buying their devalued mortgage-related assets.

After an intense weekend of negotiations, the draft of the bailout legislation before Congress had swelled to 42 pages.

The following Friday, after almost a week of marathon talks between Treasury Secretary Henry Paulson and key lawmakers in both parties, the working version was up to 102 pages. It went down to defeat Monday in the House, mostly at the hands of Republicans.

Once the Senate was finished adding sweeteners Wednesday to entice reluctant House Republicans to change their minds and vote for the bailout, the bill heading for passage had grown to 451 pages.

It was unclear whether it would expand still more as House leaders hunted for the votes needed to clear the bill.

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Congress Needs An Ethics Bailout

By INVESTOR’S BUSINESS DAILY | Posted Wednesday, October 01, 2008 4:20 AM PT

Public Trust: As members of Congress grab $700 billion from taxpayers’ pockets for bad loans — encouraged for decades by the laws they passed — who will rescue them from ethical bankruptcy?

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After the 2006 election giving Democrats a majority in both Houses of Congress for the first time in more than a decade, the incoming speaker of the House, Nancy Pelosi, promised that “the Democrats intend to lead the most honest, most open and most ethical Congress in history.”

It hasn’t turned out that way. Barely a month before presidential and congressional elections comes a cherry on top of the layers of congressional Democratic ethical lapses of the 110th Congress — a new scandal involving the speaker’s own campaign cash.

The Washington Times reports that over the past decade, the speaker funneled $99,000 in rent, utilities and accounting charges from her political action committee to Financial Leasing Services, a real estate and investment firm owned by her husband, Paul Pelosi — a practice the House voted to ban last year with Pelosi’s support (after which the bill failed in the Senate).

Since her husband became treasurer of the speaker’s PAC to the Future, the payments have quadrupled, according to Federal Election Commission records.

According to the Times, the PAC’s rent grew to four times what it was early this year; a Pelosi senior adviser told the paper this was due to San Francisco’s expensive real estate market.

Placing spouses on their campaign and PAC payrolls was one of the key attacks Democrats made against Republicans in the Jack Abramoff lobbying scandal, most notably during their successful 2006 campaign. The Pelosi revelations come four years after Team Majority, another Pelosi PAC, was fined $21,000 by the FEC for exceeding the legal limit on campaign contributions.

Pumping cash from your own campaign to your husband’s firm is a strange way of trying to turn the institution over which Pelosi presides into the “most ethical Congress in history.”

But then taking to the House floor last week in the face of a market meltdown and delivering a fallacious rant against “the Bush Administration’s failed economic policies . . . built on budgetary recklessness, on an anything-goes mentality, with no regulation, no supervision, and no discipline in the system” was a strange way for a speaker of the House to try to gain passage of what was supposed to be a bipartisan financial rescue plan.

What both the speaker’s new scandal and her reflexive partisanship show is that this Democratic Congress is not concerned about ethics, nor is it interested in working together with either the president or the minority party in Congress to solve problems.

House Democrats chose as their leader Nancy Pelosi, whose San Francisco congressional district is one of the most radical in the country, for the sake of grabbing and keeping power in the most effective way possible, and wielding that power to enact left-wing ideology into law. And, if possible, destroy or cripple the Bush presidency while they’re at it.

The most ethical Congress in history?

With Chris Dodd, D-Conn., still serving as Senate Banking Committee chairman, who took a sweetheart loan deal from Countrywide mortgage? With Kent Conrad, D-N.D., still Senate Budget Committee chairman, who did the same?

How about Rep. William Jefferson, D-La., whose freezer in his Washington, D.C., home was found by the FBI to contain $90,000 in cash? He may be indicted by a grand jury on 16 corruption charges, but he still takes to the floor of the House of Representatives and votes as a member of this self-styled most ethical Congress ever.

Adding mirth to the muck, Jefferson was reportedly pressured, unsuccessfully, to resign his House Ways and Means Committee seat by none other than that panel’s chairman, Charles Rangel, D-N.Y. (Jefferson was later thrown off). Maybe that’s what Rangel was busy with when he forgot to report to the IRS the $75,000 in rental income for his Dominican Republic beach house. No sign of scandal shaming Rangel into stepping down.

Voters will have no shortage of things to think about as they step into the voting booth next month. One of them should be the Democratic Congress’ shattered promise of setting and keeping the highest ethical standards.

 

1999 NY Times – Fannie Mae Eases Credit To Aid Mortgage Lending

September 30, 1999

Fannie Mae Eases Credit To Aid Mortgage Lending

By STEVEN A. HOLMES

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets — including the New York metropolitan region — will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates — anywhere from three to four percentage points higher than conventional loans.

”Fannie Mae has expanded home ownership for millions of families in the 1990’s by reducing down payment requirements,” said Franklin D. Raines, Fannie Mae’s chairman and chief executive officer. ”Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.”

Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s.

”From the perspective of many people, including me, this is another thrift industry growing up around us,” said Peter Wallison a resident fellow at the American Enterprise Institute. ”If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.”

Under Fannie Mae’s pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 — a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.

Fannie Mae, the nation’s biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.

Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites..

Home ownership has, in fact, exploded among minorities during the economic boom of the 1990’s. The number of mortgages extended to Hispanic applicants jumped by 87.2 per cent from 1993 to 1998, according to Harvard University ‘s Joint Center for Housing Studies. During that same period the number of African Americans who got mortgages to buy a home increased by 71.9 per cent and the number of Asian Americans by 46.3 per cent.

In contrast, the number of non-Hispanic whites who received loans for homes increased by 31.2 per cent.

Despite these gains, home ownership rates for minorities continue to lag behind non-Hispanic whites, in part because blacks and Hispanics in particular tend to have on average worse credit ratings.

In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae’s and Freddie Mac’s portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups.

The change in policy also comes at the same time that HUD is investigating allegations of racial discrimination in the automated underwriting systems used by Fannie Mae and Freddie Mac to determine the credit-worthiness of credit applicants.

 

 

House Conservatives Introduce ‘Free Market’ Substitute for Bailout

House Conservatives Introduce ‘Free Market’ Substitute for Bailout
Wednesday, October 01, 2008
By Josiah Ryan, Staff Writer

(CNSNews.com) – Following the defeat of the $700-billion bailout package on Monday, Rep. Jeb Hensarling (R-Texas), chairman of the Republican Study Committee (RSC), introduced a bill that he said relies on the free market rather than the federal government to solve the nation’s financial problems.
 
Instead of mandating that the U.S. Treasury purchase up to $700 billion in teetering mortgages and mortgage-backed securities, as the plan backed by the Bush administration and congressional leadership mandated, the RSC alternative would try to restore confidence in the mortgage market by insuring all such investments at 100 percent of their value.
 
Under the plan, mortgages that Treasury officials deemed to be risky would be insured at a higher premium than mortgages considered stable. The mortgages would be insured by the federal government, i.e., tax dollars. Thus, the plan is not pure free market but is more reasonable than an outright federal purchase of the mortgages with tax dollars, suggested Hensarling.
 
“In order to fundamentally deal with the crisis, some part of the full faith and credit of the government will have to be behind it [the solution],” Hensarling told CNSNews.com, and this would shore-up confidence in the mortgage and mortgage-backed securities markets.  “But Wall Street ought to be paying for that, and we ought to be limiting taxpayer exposure.”
 
The plan also includes provisions important to Democrats that had been a part of the Bush plan, such as a provision that would severely limit the size of the “golden parachute” an executive, whose failing companies opted into the government’s insurance plan, could receive and ensuring that financial institutions participating in the program would have to disclose more about their mortgage-asset holdings.
 
Hensarling said at a press conference Monday that under ordinary circumstances conservatives would not consider granting the federal government such powers of intervention, but in these “extraordinary times” his caucus realizes that compromise is necessary.
 
“We come here ready to swallow hard, but we can’t swallow everything,” said Hensarling. “We do not feel that models such as loans secured by assets and the insurance model received the attention they were due. On a normal day, a conservative would run for the exits from either of those plans, but these are extraordinary times.”
 
However, the bill also includes provisions that appeal to free-market conservatives, including the gradual privatization of federal lending giants Fannie Mae and Freddie Mac; regulations barring Government Sponsored Enterprises (GSE’s) from engaging in risky investments; and temporary tax cuts and regulatory relief for businesses.
 
A press release from the RSC about the alternative plan states that it will allow Wall Street to work its way out of the financial crisis rather than cause it to depend upon the American workers’ tax dollars.
 
“We believe that we can help Wall Street work out of this crisis, not force the taxpayers into a bailout,” said the RSC. “We believe that voluntary private capital, not involuntary taxpayer capital, will help the system recover.”
 
“House conservatives believe that any model that essentially has taxpayers bailing out Wall Street is fundamentally flawed,” said Hensarling at the press conference.
 
Sources on Capitol Hill told CNSNews.com that at least five other conservatives in the House, including  Reps. Bill Sali (R-Idaho), Paul Ryan (R-Wis.), Joe Barton (R-Texas), John Shadegg (R-Ariz.), and Marsha Blackburn (R-Tenn.) are also developing alternative plans to deal with the mortgage crisis.

ACORN’s Senator

By INVESTOR’S BUSINESS DAILY | Posted Tuesday, September 30, 2008 4:20 PM PT

Election ’08: Barack Obama wasn’t just the second-largest recipient of Fannie Mae and Freddie Mac political contributions. He was also the senator from ACORN, the activist leader for risky “affirmative action” loans.

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Despite efforts to blame the rescue bill’s failure on the GOP, it should be remembered that 95 Democrats — some 40% of the Democratic Caucus — withheld support. Obama himself also deserves blame — not only for the bill’s failure, but also for the crisis it was designed to solve.

As the New York Times reports, “Aides to Mr. Obama said he had not directly reached out to try to sway any House Democrats who opposed the measure.” Is the reason the fact that the slush fund for ACORN in the original bill, siphoning off 20% of any future profits for such activist groups, was trimmed from the tree?

Obama, who once represented ACORN in a lawsuit against the state of Illinois, was hired by the group to train its community organizers and staff in the methods and tactics of the late Saul Alinsky. ACORN would stage in-your-face protests in bank lobbies, drive-through lanes and even at bank managers’ homes to get them to issue risky loans in the inner city or face charges of racism.

In the early 1990s, reports Stanley Kurtz, senior fellow at the Ethics and Policy Center, Obama was personally recruited by Chicago’s ACORN to run training sessions in “direct action.” That’s the euphemism for the techniques used under the cover of the federal Community Reinvestment Act to intimidate financial institutions into giving what have been called “Ninja” loans — no income, no job, no assets — to people who couldn’t afford them.

CRA was designed to increase minority homeownership. Whenever a bank wanted to grow or expand, ACORN would file complaints that it was not sufficiently sensitive to the needs of minorities in providing home loans. Agitators would then be unleashed.

Chicago’s ACORN used Alinsky’s tactics against institutions such as Bell Federal Savings and Loan and Avondale Federal Savings. In September 1992, the Chicago Tribune described the group’s agenda as “affirmative action lending.”

Obama also helped ACORN get funding. When he served on the board of the Woods Fund for Chicago with Weather Underground terrorist William Ayers, the Woods Fund frequently gave ACORN grants to fund its activist agenda.

In 1995, Kurtz reports, Obama chaired the committee that increased funding of ACORN and other community organizers. The committee report boasted that the fund’s “non-ideological” image “enabled the Trustees to make grants to organizations that use confrontational tactics against the business and governmental ‘establishments’ without undue risk of being accused of partisanship.”

The CRA empowered regulators to punish banks that failed to “meet the credit needs” of “low-income, minority and distressed neighborhoods.” It gave groups such as ACORN a license and a means to intimidate banks, claiming they were “redlining” poor and minority neighborhoods. ACORN employed its tactics in 1991 by taking over the House Banking Committee room for two days to protest efforts to scale back the CRA.

As a former White House staff economist writes in the American Thinker, Obama represented ACORN in a 1994 suit against redlining.  ACORN was also a driving force behind a 1995 regulatory revision pushed through by the Clinton administration that greatly expanded the CRA and helped spawn the current financial crisis.

Obama was the attorney representing ACORN in this effort. Last November, he told the group, “I’ve been fighting alongside ACORN on issues you care about my entire career.” Indeed he has. Obama was and is fully aware of what ACORN was doing with the money and expertise he provided. The voters should be aware on Nov. 4 of the roles of both in creating the current crisis.

 

About Obama’s illegal foreign campaign contributions from GAZA Palestine, which he listed as GA(like Georgia)

About Obama’s illegal foreign campaign

contributions from GAZA Palestine, which he

listed as GA(like Georgia)

Do you like his slick cuteness, listing GAZA as GA to be confused with GEORGIA (USA)?

Palestinian brothers inside the Hamas-controlled Gaza Strip are listed in government election filings as having donated $29,521.54 to Sen. Barack Obamas campaign, according to WorldNetDailys (WND) Jerusalem bureau chief, Aaron Klein.
http://www.worldnetdaily.com/index.php?f…
The donations would violate election laws, including prohibitions on receiving donations from foreigners and guidelines against accepting more than $2,300 from one individual during a single election, Bob Biersack, a spokesman for the Federal Election Commission, said in response to a query.

The contributions also raise numerous questions about the Obama campaigns lax online donation form, which apparently allows for the possibility of foreign contributions.

Last week, the Atlas Shrugs blog outlined a series of donations in 2007 made to Obamas campaign from two individuals, Monir Edwan and Hosam Edwan (See 8/4/08, below). In an online form on Obama’s campaign site, the Edwans listed their street as Tal Esaltan, which they wrote was located in Rafah, GA.

Rafah is not a city in Georgia. The Atlas blog immediately raised concerns that the money may have been donated from the Gaza Strip town of Rafah.

A WND investigation tracked down the Edwans, who are brothers living in the Tal Esaltan neighborhood of Rafah, a large refugee camp in the Hamas-controlled Gaza Strip.

Speaking to WND, the two brothers praised Obama and admitted giving the money online to his campaign. They said they are not U.S. citizens or green card holders but are citizens of Palestine.

Monir and Hasam Edwan denied their financial transactions online were actual donations to Obamas campaign. Instead they claimed they purchased about $30,000 in Obama T-shirts from the presidential candidates online store — a contention that did not hold up during a WND interview, when they changed their story several times.

Monir Edwan claimed he sold the T-shirts in Gaza for around $9 and that a profit was made.

But it was pointed out to Edwan the T-shirts for sale on Obama’s website are listed as $20.08 and that selling the merchandise for less would not yield a profit.

Edwan could not explain how he managed to get shipments of T-shirts into the Gaza Strip during the months he claimed to have purchased the merchandise, since Israel imposed a tight closure of the Gaza Strip starting in June 2007 that lasted until June 2008.

We don’t want to cause any damage to Obama’s campaign, was Edwan’s reply.

• 1 month ago

Additional Details

1 month ago

n violation of every election law in the books, the Obama Campaign is actively soliciting and accepting money from all over the world.

It is illegal for any U.S. candidate for federal office (and most state and local offices) to accept campaign contributions from foreign nationals. It is also illegal for any U.S. candidate for President to accept more than $2,300 per election cycle.

So, why has Barack Hussein Obama accepted over $24,000 from Monir and Hosam Edwan in Rafah, Gaza? And why is he lying about it by noting on his official filings with the Federal Election Commission that Rafah is in Georgia? Rafah is the HAMAS-controlled city on the border of Egypt and is the site of the Rafah gate.

Does reporting to the Federal Election Commission FEC on contributions really matter anymore?

The following information sources are all over this unreported scandal.

http://atlasshrugs2000.typepad.com/atlas…

1 month ago

http://www.debbieschlussel.com/archives/…
http://www.freerepublic.com/focus/news/2…
http://donordata.org/rafah-city.htm http://donordata.org/0827326-donor.htm

http://www.theobamafile.com/_images/Obam…

1 month ago

Dr. Philip
THE PICTURE IS FROM THE FEC WEBSITE ITSELF
IF YOU CALL THAT A BIASED WEBSITE YOU’RE HOPELESS SINCE THAT’S WHAT OBAMA SENT IN TO THE FEC!

1 month ago

MICHAEL
THIS IS FROM THE FEDERAL ELECTION COMMISSION WEBSITE
http://www.theobamafile.com/_images/Obam…

 

Wednesday, October 1, 2008

EXCLUSIVE: Pelosi paid husband with PAC funds

Jennifer Haberkorn (Contact)

EXCLUSIVE:

House Speaker Nancy Pelosi has directed nearly $100,000 from her political action committee to her husband’s real estate and investment firm over the past decade, a practice of paying a spouse with political donations that she supported banning last year.

Financial Leasing Services Inc. (FLS), owned by Paul F. Pelosi, has received $99,000 in rent, utilities and accounting fees from the speaker’s “PAC to the Future” over the PAC’s nine-year history.

The payments have quadrupled since Mr. Pelosi took over as treasurer of his wife’s committee in 2007, Federal Election Commission records show. FLS is on track to take in $48,000 in payments this year alone – eight times as much as it received annually from 2000 to 2005, when the committee was run by another treasurer.

Lawmakers’ frequent use of campaign donations to pay relatives emerged as an issue in the 2006 election campaigns, when the Jack Abramoff lobbying scandal gave Democrats fodder to criticize Republicans such as former House Majority Leader Tom DeLay of Texas and Rep. John T. Doolittle of California for putting their wives on their campaign and PAC payrolls for fundraising work.

Last year, Mrs. Pelosi supported a bill that would have banned members of Congress from putting spouses on their campaign staffs. The bill – which passed the House in a voice vote but did not get out of a Senate committee – banned not only direct payments by congressional campaign committees and PACs to spouses for services including consulting and fundraising, but also “indirect compensation,” such as payments to companies that employ spouses.

Related links:

• Stephen Dinan and Jennifer Harper: “Bailout” by another name sounds sweeter

• Wesley Pruden: A job for the right woman

• Hoyer, Blunt hopeful of progress on rescue bill

• Joseph Curl: Presidential hopefuls play blame game

• EDITORIAL: What is the problem?

“Democrats are committed to reforming the way Washington does business,” Mrs. Pelosi said in a press release at the time. “Congressman [Adam] Schiff’s bill will help us accomplish that goal by increasing transparency in election campaigns and preventing the misuse of funds.”

Last week, Mrs. Pelosi’s office said the payments to her husband’s firm were perfectly legal, insisting she is compensating her husband at fair market value for the work his firm has performed for the PAC. But ethical watchdogs said the arrangement sends the wrong message.

“It’s problematic,” said Melanie Sloan, executive director of the Citizens for Responsibility and Ethics in Washington (CREW), a nonprofit ethics and watchdog group. “From what I understand, Mr. Pelosi doesn’t need the money, but this isn’t the issue. … As speaker of the House, it sends the wrong message. She shouldn’t be putting family members on the payroll.”

A senior adviser to Mrs. Pelosi described the payments to FLS as “business expenses.”

“She’s followed all the appropriate rules and regulations in terms of records and paperwork,” said Brendan Daly, Mrs. Pelosi’s spokesman. “When [former treasurer] Leo McCarthy became ill, she thought that it was best that that firm did the accounting and she’s paid fair market value in San Francisco.”

Between 1999 and 2006, FLS collected $500 per month to cover rent, utilities and equipment for the leadership PAC, according to the FEC records. The PAC’s address is listed as a personal mailbox in San Francisco, across the street from FLS’s Montgomery Street office building, but the rent payments went to an office space.

In early 2007, the PAC’s treasurer, Leo T. McCarthy, former Democratic speaker of the state assembly and lieutenant governor in California, died. Mr. Pelosi took over as treasurer and his company’s PAC payouts rose.

At that point, FLS started charging the PAC $24,000 per year for accounting work. In January 2008, the PAC’s rent – paid to FLS – also quadrupled from $500 to $2,000 per month.

Mr. McCarthy, the previous treasurer, had done the work as a volunteer, according to FEC documents and Jennifer Crider, a senior adviser to Mrs. Pelosi and spokeswoman for the Democratic Congressional Campaign Committee. She said FLS’ accounting fees are in line with costs for other PACs.

The jump in rent was an adjustment to reflect San Francisco’s pricey real estate market, Miss Crider said. The rent was adjusted to $1,250 per month, with $750 in back rent to reflect that the rent should have been increased in mid-2007. This was the first increase since the PAC was established in mid-1999, records show.

Over the first six months of 2008, FLS was the largest vendor for Mrs. Pelosi’s PAC. Brian Wolff, a political consultant, is the second-largest vendor, bringing in $22,500 this year.

FLS’ payments represent 11 percent of the $213,900 the PAC raised over the first half of this year, according to the FEC documents.

PACs, which are designed to help politicians contribute to other candidates and build influence with colleagues, operate under lighter restrictions than traditional campaign committees.

Meredith McGehee, policy director at the nonpartisan Campaign Legal Center, said putting family members on a PAC payroll is bound to raise questions and, in some cases, allow for abuse.

“The reality is that under the current system, PACs are rife with self-dealing transactions,” she said. “The laws and regulations could and should be strengthened.

“There is a point now that you’re starting to talk about real money,” she said of Mrs. Pelosi’s PAC. “This is not just a mom-and-pop operation and any self-dealing transaction by a member of Congress is going to get scrutiny, particularly with large amounts of money and prominent members.”

It is illegal for members of Congress to hire family members to work on their official staff, but hiring relatives to work on a campaign or PAC is legal.

To be sure, many political action committees employ or work with family businesses. Last year, CREW found that 19 members of Congress used campaign committees or PACs to purchase services from a family member between 2002 and 2006.

Mrs. Pelosi’s PACs have been in trouble before. In 2004, one of her political action committees, Team Majority, was fined $21,000 by the FEC for accepting donations over federal limits. It was one of two PACs she operated at the same time. The Team Majority PAC was closed shortly after the fine was levied.