Reid to pay back campaign for gifts bought from granddaughter

WASHINGTON — Sen. Harry Reid said Tuesday he will pay back his campaign more than $16,000 that was spent last fall to buy holiday gifts made by his granddaughter and in turn given to donors and staff.

A Reid campaign official said the spending “complied with all FEC rules.” But after the Federal Election Commission asked for more information about the payments and as questions mounted about Reid’s relationship with the vendor, the Senate majority leader from Nevada decided to nip the matter.

“I thought it would be nice to give supporters and staff thank-you gifts that had a personal connection and a Searchlight connection, but I have decided to reimburse the campaign for the amount of the expenditure,” Reid said in a statement. He told reporters he would not comment further.

Federal law prohibits lawmakers and candidates to spend campaign money for personal purposes. Craig Holman, a government affairs lobbyist on ethics and campaign finance, said the federal election agency has interpreted the law to allow for some uses such as hiring a family member to work on a campaign, or purchasing goods from family members as long as it can meet a fair market test.

“However, automatically it raises alarms,” said Holman, who lobbies for the Ralph Nader-founded Public Citizen. “Is Reid using campaign funds to enrich his own family that could run afoul of personal use of campaign funds? It’s an iffy practice once you start dipping into campaign funds and paying family members for buying gifts.

“I’m surprised Harry Reid would even start venturing into this area,” Holman said. “I suspect he has documentation but he ought to know this was going to raise questions.”

The issue came to light after the Federal Election Commission flagged the expenses in a letter last week and asked Reid’s campaign organization, Friends for Harry Reid, to explain them.

In its year-end finance report, the Reid campaign reported spending $5,416.93 on “holiday gifts,” paid to Ryan Elisabeth of Berkeley, Calif., on Oct. 7. Another $11,370 was reported spent on Oct. 23.

Reid’s office confirmed on Tuesday that Ryan Elisabeth was Ryan Elisabeth Reid, the 23-year-old daughter of the senator’s oldest son, Rory Reid, former chairman of the Clark County Commission. A graduate last year of the Parsons School of Design in New York, she operates a jewelry design under the “Ryan Elisabeth” name. She also is creative director of the Sprat Theater Company in New York, where she wrote and directed a play, “One Day in the Life of Henri Shnuffle,” that was performed last year.

“Ryan Elisabeth jewelry uses unique design to empower women, tell stories, and inspire change. The pieces are also pretty badass, to boot,” said one review on a website devoted to “creative gift ideas.”

In a case previously, Reid reimbursed his campaign $3,300 in 2005 after the FEC raised questions about his use of campaign funds to contribute to a Christmas bonus fund for employees of the Ritz Carlton,where he lives when he is in Washington.

Republicans used this latest opportunity to fire a shot at Reid.

“It’s pretty brazen for Senator Harry Reid to funnel nearly $17,000 in campaign funds to his granddaughter for ‘holiday gifts.’ One of these days Reid will learn that Nevadans don’t appreciate him using campaign money as his personal slush fund,” said Jahan Wilcox, a spokesman for the Republican National Committee.

Contact Stephens Washington Bureau Chief Steve Tetreault at STetreault@stephensmedia.com or 202-783-1760. Follow him on Twitter @STetreaultDC.