WASHINGTON – Rep. Tom Reed’s congressional campaign paid more than $45,000 to rent office space in Corning from a family business over four years, a practice that echoes Donald Trump’s controversial habit of renting campaign space in his office buildings and hotels.
It’s entirely legal for members of Congress to rent campaign space from family-owned businesses so long as the rent that’s paid is in line with fair market rates, which the rent Reed paid – $1,000 a month in recent years – appears to be.
However, this doesn’t mean that the practice won’t become an issue in his fall race against Democrat John Plumb, of Randolph, given that Democrats have accused Trump, the Republican presidential nominee, of lining his own pockets by renting campaign office space at Trump Tower in Manhattan and holding campaign events at his golf resort in Florida.
“This might be something the congressman’s opponent could make hay with, but I don’t know if it raises any legal issues,” said Brendan Fischer, associate counsel with the Campaign Legal Center.
Reed’s campaign finance reports show he began making payments for rent, utilities and maintenance to RR Resource Recovery in June 2012. The payments totaled $45,669.24.
The payments stopped April 1, 2016.
RR Resource Recovery is a debt collection firm. Reed, a Republican from Corning who was first elected to Congress in 2010, listed himself as partial owner of RR Resource Recovery on his 2012 financial disclosure form. That form showed that Reed had drawn between $15,001 and $50,000 in income from the firm.
Reed’s wife, Jean, is listed as partial owner of RR Resource Recovery on the congressman’s 2013, 2014 and 2015 financial-disclosure forms. She drew between $45,003 and $150,000 in income from the firm over those years.
A source close to the Reed campaign said RR Resource Recovery is a family partnership led by the congressman’s brother John.
The company owns a one-story building at 99 First St. in Corning that it rented to the Reed campaign. Zillow, the real estate firm, estimated that monthly rent for the property should range between $1,000 and $2,300. The rent Reed paid fell into that range.
That’s important because lawmakers are not allowed to lowball or highball the rent on family properties they use for campaign purposes. Fischer said that charging too low a rent could be seen as an in-kind campaign contribution, while a high rent could be seen as lining the family pockets.
That’s just what Trump found himself accused of when the Huffington Post reported last month that Trump Tower nearly quadrupled the rent it charged the Trump campaign, to $169,758, between March and July. That rent hike occurred even though the campaign’s staff shrunk over those months, and it coincided with Trump’s decision to stop funding his own campaign and instead rely on contributions.
Unlike Reed, the Trump campaign appears to be paying above fair market value for those offices, Fischer said.
The source close to the Reed campaign said the operation moved into the property owned by RR Resources Recovery because it was available in 2012. The campaign moved to different offices in Corning several months ago after RR Resource Recovery rented the First Street property to another tenant, the O’Brien Financial Group.
Asked for comments about the office rental, Amy Hasenberg, a Reed spokeswoman, replied with a statement vilifying Plumb.
“Tom has no ownership nor involvement in RR Resource Recovery. Everything is transparent and has been disclosed,” she said. “We must focus on the real issues at hand because that is what is fair to New York voters. Tom is trying to take care of our needs while John Plumb continues to deceive voters. Plumb will not answer questions and he will not commit to living in New York after November 8. Plumb is here for political gain: this isn’t fair to New York families.”
Hasenberg’s comments stem from a recent interview on Time Warner Cable News in which Plumb refused to commit to living in New York’s 23rd Congressional District if he loses his race with Reed.