Sen. Ron Johnson (R-WI) bought his seat in the Senate last fall, spending
$9 million out of his own pocket to get the seat. Except, maybe he didn't, now that his company has conveniently
paid him $10 million in "deferred compensation."
That's probably going to raise some questions with the Federal Elections Commission, but also could raise some serious questions from the IRS, according to the experts.
Election lawyers and reporters have raised questions about the similar amounts and whether the company, not Johnson, was underwriting his campaign. The apparent lack of a written deferred compensation agreement signed and dated before the election is problematic, experts tell TPM.
The Supreme Court's Citizens United ruling opened up the floodgates for companies to spend unlimited funds on independent campaign expenditures benefiting candidates, but corporations still cannot give directly from their treasuries to federal candidates' campaigns.
Aside from election law violations, Johnson's $10 million payday also may violate the Internal Revenue Code's requirements that any deferred compensation agreement must be in writing—even if it's between the top executive and the company he owns.
In January 2005, the IRS imposed new rules requiring any compensation deferment agreement to be formalized in a written document and imposing a severe 20 percent penalty on any agreements that do not comply with the new rules....
Johnson told the Milwaukee Journal-Sentinel, which first reported on the $10 million payment, that it was "an agreed-upon amount" that was determined at the end of his tenure with the company.
Agreed upon with whom?
"That would be me," he said.
Johnson has subsequently declined to produce a written document or any proof that the deferred compensation was agreed to before the campaign when he stopped taking a salary from Pacur.
How convenient for him, that he can agree with himself to reimburse himself for his campaign. And that he can loan himself $6 million dollars at "an interest rate of .69 percent—virtually interest free." That should also be a bit of an issue for the IRS, since they tend to frown upon loans that carry less than market-rate interest.
So it appears that Johnson has been using his company, a company which has received significant financial assistance from taxpayers over the years, as his personal piggy-bank. And he raided that piggy-bank to buy a Senate seat, where he can make policy even more favorable to his company. That's sure a handy arrangement for himself.