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Watchdog Files Palin Complaint


Citizens for Responsibility and Ethics in Washington, a watchdog group, has filed a complaint with the Federal Election Commission against Alaska Gov. Sarah Palin, the Republican National Committee and several political operatives, alleging they violated campaign finance laws after “improperly spending” nearly $150,000 on a high-end fashion shopping spree in September at Neiman Marcus, Saks Fifth Avenue, Barney’s New York and Macy’s to wardrobe the Republican vice presidential candidate and her family.

This story first appeared in the October 23, 2008 issue of WWD. Subscribe Today.

In a six-page FEC complaint filed Thursday, the watchdog group, citing news reports and FEC records, pointed to clothing and accessories purchases for Palin and her family from several high-end stores, including a purchase of  $49,425 at Saks Fifth Avenue and $75,062 at Neiman Marcus, with RNC funds.

“It is ridiculous that the RNC would spend $150,000 to outfit a vice presidential nominee and her family at any time, but it is more outrageous given the dire financial straights of so many Americans and the state of our economy,” said Melanie Sloan, executive director of CREW, in a statement “As if that isn’t bad enough, the expenditures violate campaign finance law. The FEC should investigate immediately.”

It is illegal for political campaigns to use funds for the “personal use” of candidates on items such as clothing. But the law has an apparent loophole for money donated by the national political parties to campaigns. The FEC has never weighed in on whether national political parties can donate funds to campaigns for personal use expenditures, such as clothing, according to a spokesman.

A McCain-Palin campaign spokeswoman has said the clothes would be donated to charity.

-Kristi Ellis

Palin’s Fashiongate

At least someone is shopping: the Republicans and Sarah Palin.

Given the beleaguered state of American retailing in the downward spiraling economy, stores such as Neiman Marcus, Saks Fifth Avenue, Barneys New York and Macy’s no doubt welcomed the Republican National Committee’s shopping spree on behalf of Palin with open arms. In some cases, it may even have helped goose their September same-store sales. And in this day and age, anything that boosts the profile of fashion and retailing can only be a good thing.

Not that one would know it from the furor Palin’s wardrobe, hair and makeup created on Wednesday — even if the result has turned her into a politician admired for her style and stirred fashion trends nationwide, from her hairdo to her red shoes to her eyeglasses. Even her impersonator, Tina Fey, has been quoted as praising the vice presidential nominee’s looks.

Meanwhile, the hubbub over Palin’s near-$150,000 shopping spree (did she get the “friends and family” discounts?) in September continued to rumble Wednesday, with observers from the right defending it and those from the left throwing fuel onto the fire, shades of Nancy Reagan’s “Galanos-gate” in the Eighties.

In Democratic circles, there was a predictable amount of schadenfreude. “The reason it’s damaging,” said Bob Shrum, John Kerry’s campaign manager from 2004, “is that it’s water cooler-coffee shop conversation. People hear about this, they remember it, and they repeat it immediately because it undermines the whole sense that she’s just your hockey mom from down the street. We thought she was the woman in a cloth coat. Now it turns out she’s the woman in coat-ure.”

Jeffrey Toobin, a writer for The New Yorker and a CNN political analyst, agreed with that assessment: “It’s a story with no upside for the Republicans. You can debate how bad it is, but it’s certainly not something John McCain wants to spend his time thinking about right now. This is a party who made endless fun of John Edwards for his $400 haircut; what about her $150,000 wardrobe? How do you explain it?”

Many Republicans attempted not to. Rich Lowry, the editor of the National Review and one of Palin’s biggest champions in the press, claimed not to have been following the saga. “Haven’t read any Palin clothes stories yet. So I’m not up to speed. Sorry!” he said by e-mail.

John Leo, who writes a column for the conservative Manhattan Institute’s City Journal, was a little more willing to admit the story posed a problem for fellow Republicans. “It’s a serious mistake,” he said. “It’s a waste of money and it plays to surfaces and all the things Republicans are supposed to oppose.”

Whichever pricy labels Palin has donned, she should not get too attached to them. “All of the clothes purchased by the RNC (not the campaign) will be donated,” campaign spokeswoman Marie Comella said in an e-mail. “The RNC purchased the items, continues to own them and will donate them at the conclusion of the campaign.” The campaign would not comment on exactly which charity will receive the designer duds. And retail and fashion industry executives generally were hiding in the bushes, declining to comment on the news.

Still, her wardrobe fell under heightened scrutiny: while the economy nosedives and the candidates spar about the financial woes of “Joe Six-Pack” — now superseded by “Joe the Plumber” — many wondered exactly what kind of clothes that amount of money buys. Palin’s style has certainly evolved in the course of two months; during her nearly two-year tenure as the governor of Alaska, she showed an affinity for fitted blazers, the occasional twinset, and the requisite fur-hooded winter jacket. For some photo-ops, she even went casual, donning T-shirts, while her inauguration dress — a magenta confection with long sleeves — had a distinctly “Dynasty”-esque look.

On the presidential campaign trail, though, Palin — and her apparent personal shoppers — have stepped things up (her predilection for red footwear seems to be all her own, however, as evidenced by the bright red sandals she wore to an Anchorage event back in May). A search of the Federal Election Commission records for the RNC’s expenditures in September turned up a total of $145,200 in purchases made by Palin and her family at a long list of better and midtier department stores, which was first reported by (upon further scrutiny, The Atlantic Web site noted that Republican direct marketer Jeff Larson is listed as the buyer for a number of the stores). While the FEC records do not identify whether the purchases were made by McCain or Palin, the McCain campaign has not disputed the news reports that the vice presidential nominee and her family made the purchases along the campaign trail, stretching from Minneapolis to St. Louis to New York.

A breakdown of the spending provided in the FEC filing charts her team’s spending across the U.S. since her nomination: Saks Fifth Avenue, St. Louis, $7,575, Sept. 10; Barneys New York, $789, Sept. 10; Bloomingdale’s New York, $5,102, Sept. 10; Neiman Marcus, Minneapolis, $75,062, Sept. 10; Atelier, $4,902, Sept. 10; Saks Fifth Avenue, New York, $41,850, Sept. 10; Macy’s, Minneapolis, $4,396, Sept. 10; Macy’s, Minneapolis, Minn., $4,537, Sept. 22; Macy’s, Minneapolis, $512.92, Sept. 25; Gap, Minneapolis, $133, Sept. 25, and Lord & Taylor, $350, Sept. 25.

Palin has in the past gone heavily for Escada — even admitting to buying some of its styles at secondhand stores in Anchorage — and for the vice presidential debate on Oct. 2 wore a black Elie Tahari suit, according to a source. But a recent tour of the designer collection floor at New York’s Saks Fifth Avenue revealed she’s lately been adding a lot of pieces by Akris Punto, the company’s lower-priced line. “She has been wearing our jackets,” a saleswoman said, pointing out a red twill jacket (retailing for $1,190) and an ombré striped jacket ($1,500), the latter of which Palin appeared to be wearing the day her nomination was announced. Salespeople at St. John and Escada, two labels which sell the kind of sleek, embellished suits Palin has been sporting recently, acknowledged they “had heard” she was wearing their designs, but could not point out any specific items (spokespeople for all three companies declined to comment).

Federal election laws prohibit a political campaign from using campaign funds to purchase a long list of items and services, including clothing, country club memberships, household food items and sporting events.

However, in the case of Palin’s purchases at several high-end department stores, the RNC gave the money to the campaign through a “coordinated expenditures” fund that is legal on its face.

Where the law becomes murky and has not been tested is on the question of whether “coordinated expenses” between the national party and a candidate’s campaign are considered a direct contribution to the campaign and therefore meet the “personal use” prohibitions applied to campaigns, said Lawrence Noble, former general counsel of the FEC, who now specializes in political law at Skadden, Arps, Slate, Meagher & Flom LLP & Affiliates.

“What makes this more gray is the fact that the party committee [the RNC] is doing it in coordination with the campaign,” said Noble. “The use by candidates and their campaign funds to buy clothing, buy cars or pay the rent has been looked upon as inappropriate, which is why we passed laws dealing with campaign committees. However, the law does not extend to the party committee and here the question is ‘Is this an expense by the party committee or is it in effect a contribution to the campaign, which the campaign then spent on [Palin]?’”

Noble said there are two issues at play: whether it is legal and what the public perception is.

The legal issue is not an immediate factor because no complaints have been filed with the FEC and the commission often takes several months to issue rulings on complaints. That means Palin’s shopping spree will be played out and judged in the court of public opinion.

“Generally, there has been a sense that candidates should not be able to use their campaign funds to buy personal items,” said Noble.

Massie Ritsch, communications director at the Center for Responsive Politics, a nonprofit research group tracking money in politics and its impact on elections and public policy that operates the Web site, said the campaign is going to have to weigh the political costs of the affair. Ritsch said there could potentially be justifications for the expenses passing muster with the FEC, but the concern right now is “whether it will pass the smell test with voters.”

Nancy Watzman, director of the Party Time Project for the Sunlight Foundation, a government watchdog group, said Palin’s expenses on designer clothing are unprecedented.

“For ordinary people tightening their pocket books, wondering where they are going to make the next cuts and shopping at discount stores…this cuts into the image that she is an ordinary hockey mom and raises questions about how ordinary she really is,” said Watzman.

What made it tough for the Republicans is that the Palin scandal came on a day when McCain was showing a slight uptick in a few key battleground states. Two new polls showed him opening a narrow lead against Barack Obama in Florida. Another showed Obama’s lead in Virginia shrinking from 8 percentage points to 2. (A second had Obama rising to 10.)

But even with a slight improvement, McCain is fighting an uphill battle and a decreasing number of routes to hit the magic number of 270 electoral votes.

Currently, Obama retains double-digit leads in all of the states Kerry won in 2004. In Iowa and New Mexico, which went to George W. Bush in the last two elections, Obama has leads of over 8 percent. Should those numbers hold on election day, just six electoral votes separate him from victory.

Meanwhile, Colorado is leaning Democratic after voting Republican in the past. If it were to flip, Obama would win. Same for Ohio, Missouri or North Carolina, where polls all favor the Democratic ticket, but by much smaller margins. (Should Obama lose all four of those but emerge victorious in Nevada, he will hit 269 electoral votes, and a tie would send the deciding vote to the House of Representatives, which is controlled by Democrats and would likely vote in his favor.)

The whole fashion affair is just a storm in a teacup, of course. Politicos’ wardrobes invariably end up being a topic of conversation at some point, for better or worse: Michelle Obama’s $148 dress from White House|Black Market she wore on “The View” was raved about, while few have questioned how much her Thakoon ones have cost (about $1,000 to $1,500 at retail). Jacqueline Kennedy’s clothes budget was ridiculed (even by her husband), while Nancy Reagan was put under the spotlight for accepting free gowns from the likes of Adolfo and James Galanos while her husband was president.

One thing is for certain in the latest episode, though: It’s doubtful McCain will reprise then-Sen. Richard Nixon’s emotional TV appearance defending his wife Pat’s “respectable Republican cloth coat.”


WWD’s inside look at what the political insiders have to say about Palin’s Fashiongate.

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