Thursday, March 08, 2007

Did Adrian Smith's Family Cash-In on 2006 Campaign?

by Kyle Michaelis
Neal Smith Receives $141,666 From Son's Campaign

Right off the bat, I want to make clear that I am not asserting any law-breaking on the part of 3rd District Congressman Adrian Smith's campaign or on the part of his family. But, the fact that Smith's father, Neal Smith - an insurance salesman and former chair of the Scotts Bluff County Republican Party - was the second biggest recipient of funds from his son's 2006 campaign raises some pretty big questions for which Rep. Smith definitely owes some answers.

Ranging from $75 amounts for "In-Kind Office Use" to amounts greater than $12,000 for "Payroll Processing," the elder Smith took in a total of $141,666 from 55 disbursements during the 2006 campaign cycle. According to the Center for Responsive Politics at, only the Virginia-based communications firm Greener & Hook received more money from Adrian's campaign, taking in a whopping $535,000 for ad buys and media production.

It's hard to imagine what legitimate purpose there could possibly have been for the total disbursements of more than $116,000 to Neal Smith for this mysterious "Payroll Processing." To a suspicious mind, that has to sound like either a deliberately vague catch-all for a lot of different payments or else a pretty clear cut case of the Smith family keeping some of the controversial Club for Growth's money for themselves.

(Readers should remember that Adrian Smith's primary victory was fueled by mostly out-of-state contributions from the anti-farm subsidies, pro-corporate Club for Growth - the membership of which ultimately donated around $400,000 to his campaign.)

In other words, Neal Smith appears to have been getting while the getting was good. And, there's some evidence he may not have been alone in doing so.

Adrian Smith's mother, Joanna - Secretary of the Nebraska Republican Party - received a paltry $1,500 from the campaign, but Adrian himself had a take of almost $23,000. Like father like son?

Of course, these payments by the campaign might all be entirely on the level, but they just open the door to so many possibilities for corruption as the line between a campaign's accounts and a candidate's personal income all but disappears. As the San Diego Union-Tribune reports:
It is illegal to spend campaign funds for personal use, but it is not illegal to use them to pay family members who provide "bona fide services" at fair-market value....

Although paying family members with campaign funds is not an uncommon practice in Congress, election watchdogs say it is controversial because it can be difficult to measure the quality and quantity of services being provided....

The issue of paying campaign funds to family members gained national attention [in 2005] when it became public that [resigned House Majority Leader] Tom DeLay, R-Texas, had paid more than $500,000 to his wife and daughter since 2001...DeLay was indicted in Texas on unrelated charges of conspiracy in a campaign finance scheme.
In Western Nebraska, it takes a whole lot of bona fide services to reach a fair market value greater than $140,000. Remember, we're talking about a Congressional District with 4 of the 10 poorest counties in the nation. This is a sum big enough that it can't help but raise eyebrows and invite a much higher degree of public scrutiny.

I want to personally thank Lisa at SmithWatch for bringing this issue to light. Hers is quickly becoming one of the best politician-specific blogs in the country, and she has done an absolutely wonderful job of challenging Smith's record and holding him accountable - two vital functions in a working democracy that our local media have essentially abandoned.

I commend SmithWatch for its continuously impressive efforts, and I can't help but notice that Smith seems scared about being subjected to this close of scrutiny by one of his own constituents. Not only was Smith searching desperately for an online mouthpiece to counter SmithWatch last month, but it even seems he's trying to obscure his critics by recruiting a blogger from Kearney to start a seemingly worthless blog that will say nice things about him now being referred to as Adrian Smith Watch, This Old House, and the Adrian Smith Report by Nebraska's rightwing blog community.

Try as they might, I've got a feeling they won't have much success at silencing the real SmithWatch - which more and more readers will find so long as Adrian Smith keeps acting like Adrian Smith in Congress.

With this $140,000 payment to his father and this $23,000 payment to himself, Adrian Smith and his family have some serious explaining to do. What was going on in the Smith campaign, and what is this mysterious "payroll processing" that was supposedly worth more than 116,000 dollars? Seriously, I think a lot of people might be interested in that line of work - whatever it is - unless all it entails is Neal Smith just getting paid for being the candidate's father.

The people expect answers and deserve the truth. And, they can count on SmithWatch and the New Nebraska Network standing right here to see that they get them.

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Blogger Kyle Michaelis said...

AmericaBlog - which was very excited about Scott Kleeb's candidacy and linked to stories here at NNN a couple of times in 2006 - has also jumped on the story inspired by SmithWatch's original report. A commenter on that site has done a more thorough bit of research into what Neal Smith's "payroll processing" could possibly mean.

Gray writes:

Hmm, eliminating all corporate payments, I condensed the list down to 38 individuals who received money from Smith, including his father. The Stunning result: Smith paid more than $116000 for the processing of 332 payments to 37 persons, totalling $235,000. That's about 50 cent for processing each dollar.

Hmm, strange that Smith's dad offered his own son such a lousy deal, isn't it?

Some would say strange. I would say downright unbelievable.

Then, there's also this fantastic comment by tireiron chef that breaks down the payments to Neal Smith better than I possibly could:

In-Kind: Birthday Invitations: $219.35
In-Kind: Flight for two: $497.58
In-Kind: Office Space: $2525.00
Debt Repayment: $22,055.54
Payroll Processing: $116, 389.38
Getting your corrupt practices exposed in your first 100 days in office: Priceless. . .

Anonymous Anonymous said...

I find it intersting that Neal Smith also gave a little more than $2000.00 to his sons campaign in 2006.

I'm not really sure what that means, but it does seem odd to me.

This whole thing is a mess.

We'll see if anybody else picks up on this-I'm talking to you Hastings Tribune.

Anonymous Anonymous said...

It's funny, too, that John Erickson who is running for city council in Lincoln bought himself a "2 piece suit" with campaign funds last month.

It may not be illegal, but...

Anonymous Anonymous said...

Kyle ---- below is a letter sent to Lisa, but the shoe fits for you quite well also.

Lisa ---I have been a fan since I first read your blog. Your efforts with Smith Watch were daily rubbed in the face of my Republican friends. Now you have totally destroyed any credibility that you had. You are about where Dan Rather was when he made a fool of himself about the phony letter on Bush.

My question is: How are you going to correct your screw up?

You are so meticulous on everything I have ever read from you. How did this get by you? My friends tease me of drinking the kool-aid. By passing on inaccurate information you are not only guilty of drinking the kool-aid, you are guilty of “serving” to those than had faith in you.

You passed on information as if it were fact. Strange that you would chastise a reader yesterday for “misinformation” yet you are guilty of what you accused another of doing.

Case in point. Every blogger from Kyle up and down the Democratic side made note that “in kind” for birthday invitations were paid to Smith’s father to get his grand total. How stupid. Why didn’t you catch that ridiculous statement? Since you evidently do not know what is going on here is how it works. “In kinds” are donations to a campaign other than cash. They are never paid back, just accepted in lieu of cash. You and the rest owe Smith an apology before he makes you look really stupid at every speaking engagement he will ever give. Then even the most friendly media to our cause with have to agree with Smith on how stupid we are on campaign administration issues.

Next and most important. If you would have gotten out your adding machine (not even a calculator) and added things up you would have found the total NUMBERS for money raised and money spent just did not add up. Do you get it yet? Or is your vision blurred so much by your bias that you cannot differentiate fact from fiction?

My suggestion is before you totally ruin your reputation by passing on incorrect information you back track openly and humbly on your site. Most that I have talked to consider you a pretty good investigative reporter. However, you will better serve the party by getting back to reporting on issues rather than attempting character assassination as per above.

In the future, don’t do this crap that embarrasses me and fellow Democrats. There is too much ammunitions out there on why our country needs progressive leadership without twisting numbers to make up dirt.

I voted for Scott and gave him money. It is too bad he lost, but your efforts are a stab in his back and other Democrats running for office. We need to be 100% accurate. Ninety nine per cent is not good enough.

If professionalism is too much to ask make way for someone that can reach the necessary level of excellence needed by the Democratic party at his point in time.

Blogger Kyle Michaelis said...


Yeah, it was the in-kind birthday invitations that we made a big deal about - YUP!

Oh, wait - no it wasn't. My focus has been entirely on the $116,000 in mysterious payroll processing. I don't remember that or the $22,000 in debt repayment being in-kinded at all.

Care to give us your explanation for how Smith could pay half as much in "payroll processing" to his father as he paid in actual payroll to his staff?

Seriously, that's a nice story you've got there. I hope it works in convincing the Nebraska media that there's no story here, but I wouldn't count on it.

Anonymous Anonymous said...

Let's see now. Neal Smith owns the building that Adrian Smith houses a real estate business. And, someone needs to pay for the gas in Daddy's private plane. Check it out bloggers. You have no idea what is going on here. Welcome to Scottsbluff, NE The best thing that can happen to this place is either a flood or a drought.


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