Trahan says $300,000 of campaign cash came from husband’s income

Lori Trahan represents the Massachusetts Third Congressional District in the US House of Representatives. Josh Reynolds for The Boston Globe

Dogged by questions about the source of a last-minute cash infusion into her 2018 campaign, Representative Lori Trahan said Wednesday that $300,000 she loaned her campaign was her husband’s income that he deposited into an account they shared.

Trahan, a Westford Democrat, offered the explanation as part of a lengthy statement she sent to donors and supporters, in which she argued that she viewed her husband’s money as her own and framed the financial maneuvering as falling into a “gray area” of campaign finance law.

Under pressure from campaign finance watchdogs and a potential primary opponent, Trahan has repeatedly said that $371,000 in money she loaned her campaign came from her own personal funds. That includes in April, when an NBC Boston reporter asked if she could “categorically deny” that her husband helped her beyond giving the maximum individual contribution allowed by law, which at the time was $2,700 for a primary election and $2,700 for a general.

“Yeah,” Trahan said then. “Look, the suggestion that I personally did not have the funds available is completely inaccurate.”

On Wednesday, she admitted she made “several errors” in her financial disclosures but defended the use of her husband’s income because they’ve considered each other’s funds as “our money.” She said she and her husband had a written agreement when they married in 2007 that all of their income would “be our marital property, and each of us would have an equal right to manage and spend it.”

Under federal law, spouses, like any individual donor, are barred from giving beyond the individual cap. But candidates are allowed to pull personal funds from accounts they hold jointly with a spouse. They’re generally limited to half of the amount in those accounts unless a candidate specifies how much of a financial stake he or she has in it.

Trahan didn’t report the joint account on required federal disclosure forms until after the November election, when the Globe began asking questions about the source of the last-minute infusion of cash into the campaign. She financed a blitz of television ads, winning the 10-person primary by only 145 votes over second-place finisher Dan Koh.

Trahan aides have repeatedly said the freshman lawmaker did nothing wrong. Her campaign has insisted that money she had loaned her campaign came out of her own personal funds, including $300,000 from the joint bank account and $71,000 she borrowed from a home equity line of credit.

Aides have also said that much of the money in the account came from Trahan’s consulting business, Concire Leadership Institute, from which she earned roughly $275,000 in 2018.

Trahan acknowledged Wednesday that she “could have done it differently,” including dipping into open lines of credit or saving her own income to use toward the campaign. But she didn’t give the decision of pulling the money from the joint account “much thought” because of how she and her husband structured their finances.

Trahan aides said Wednesday she and her husband shifted the $300,000 into the account to specifically loan it to her campaign.

“All of it — what I earned, what Dave earned — was our money, regardless of whether it was in my account, Dave’s account, or a joint account,” she said. “I now know that the way I contributed those funds constitute a gray area in campaign finance law.”

Trahan described facing a well-financed opponent in Koh, and recognizing that after “having asked so many people to invest in me financially, I determined I would do the same.”

She said she and her husband decided to move $300,000 of his income into their joint checking account, first in installments of $50,000 and $55,000 before she filed quarterly campaign reports in March and June, showing she had loaned her campaign $50,000 each time.

David Trahan then deposited another $200,000 in August, Trahan said. It was the exact amount Trahan loaned her campaign on Aug. 22 to help finance a last-minute advertising blitz ahead of the September primary.

Trahan pointed to past FEC rulings that she argued “suggest what I did was not a violation.” That includes a case from the 1970s in which actress Jane Fonda gave hundreds of thousands of dollars to the Senate campaign of her then-husband Thomas Hayden. The FEC ruled that there wasn’t a violation, citing California’s community property laws in which a couple’s assets are considered to be held jointly.

The explanation, however, did not leave campaign finance watchdogs convinced.

“It’s a complete admission of guilt to the campaign finance violations,” said Adav Noti, senior director with the nonpartisan Campaign Legal Center, which in March had called on federal regulators to open a probe into Trahan.

“The money was not Trahan’s; it was transferred to Trahan’s joint bank account for the express purpose of financing her campaign. And Trahan falsely reported the source of the funds to the FEC,” said Noti, who challenged Trahan’s description of the situation. “That’s not ‘a gray area in campaign finance law’ — it’s a very large and very illegal campaign contribution.”

The questions about Trahan’s financing have followed her for months, and have prompted Koh to openly consider challenging her again in the 2020 primary. She also reported accumulating more than $186,000 in legal expenses this year, the bulk of which were reported just this month.

Koh on Wednesday criticized Trahan, saying it was “clear that our member of Congress broke those laws during the campaign and then tried to hide it.”

“It’s incredibly disappointing for the voters of the district who deserve fair elections and transparency from their elected officials,” he said.