Herman Cain’s campaign reversed itself Tuesday and acknowledged that Cain profited when his campaign did business with his motivational speaking company.
The statements mark an abrupt change from remarks by campaign spokesman J.D. Gordon last week, when he asserted that Cain had not profited from the transactions. The Atlanta Journal-Constitution pressed Gordon on those statements, prompting Tuesday’s acknowledgment.
Campaign finance experts say it is not unusual — nor is it illegal — for candidates to do business with their own companies. But political analysts say the fact that money from campaign contributors wound up in Cain’s personal company doesn’t look good to voters.
“You’re using campaign funds for private purposes,” said Bob Grafstein, political science professor at the University of Georgia. “Your campaign should not be for personal enrichment.”
Other analysts say the transactions could feed the perception that Cain is more interested in making money through his candidacy than in running for president, a view his campaign vehemently denies.
The Cain campaign paid $50,937 to his company, called T.H.E. New Voice Inc., for copies of two pamphlets, called “Leadership Requires Leadership” and “Common Sense,” campaign officials said. The pamphlets have been passed out to people during Cain’s campaign.
Campaign officials said that while federal regulations generally prohibit a candidate from making personal profits from political contributions, the law allows a candidate to make purchases from his or her own company.
Candidates for federal office are not barred from using campaign funds to pay their own companies for goods and services, said Rick Thompson, former executive director of the Georgia ethics commission and a consultant on campaign finance compliance to such clients as Gov. Nathan Deal.
The law requires that the campaign pay market rates. The candidate’s company cannot simply hand over the product at free or reduced rates, since that would constitute an improper corporate gift, Thompson said.
The campaign did not purchase copies of Cain’s autobiography “This is Herman Cain” from his motivational speaking company, but rather from the publisher and retailers. These purchases were reported to the publisher as “author purchases” and consequently were not credited toward his royalty payments, campaign officials said.
Andra Gillespie, an associate professor of political science at Emory University, said the discussion of the Cain campaign’s connection to his own company adds momentum to the “counternarrative” that his interest lies not with becoming president, but with “improving his brand quality.”
Questions about his motivation dog the candidate, partly because of his unorthodox campaign, Gillespie said. His lack of an organization in the early primary states, particularly Iowa, causes observers to take the campaign less seriously, she said.
“You have to have a campaign infrastructure, you have to have a field organization in place, you have to have people out there knocking on doors, otherwise you don’t win,” she said.
Tuesday’s developments add to a string of reversals on issues by Cain and his campaign, ranging from statements on his position on abortion to this week’s controversy over past allegations of sexual harassment.
Cain’s reversal on this finance question is minor, Gillespie added, except that it follows the harassment complaints against Cain that were revealed Sunday. “Given fact that it is on the heels of the political story Sunday night, this is not a good week.”
The reversal may show Cain’s campaign trying to get out in front of controversies before they blow up, she said.
“If that’s the case, it’s evidence that they have learned from this most recent scandal,” she said. “It bodes well for him.”
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