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THE SENATOR’S SCANDAL:

Ethics group amends Ensign complaint over $96,000 payment

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AP Photo/Lauren Victoria Burke

Sen. John Ensign, R-Nev., is seen talking with reporters on his way to a vote on Monday, June 22, on Capitol Hill in Washington.

Updated Saturday, July 18, 2009 | 2:02 a.m.

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Republican Sen. John Ensign’s parents were added Friday to a complaint before the Federal Election Commission suggesting they violated campaign finance law by paying $96,000 to the family of the woman with whom he was having an affair.

The latest filing by the watchdog group Citizens for Responsibility and Ethics in Washington comes as the senator’s office continues to insist the payments to the family of Cynthia Hampton were gifts, not severance to the former campaign aide, as the woman’s husband claims.

The distinction is important. In a televised interview last week the husband, Doug Hampton, who also worked for the senator as a top aide, said his wife was paid severance in excess of $25,000.

If the payments were severance, the senator may have committed a felony violation of campaign finance law by failing to disclose them as required.

The problem intensified this week when news outlets, including MSNBC’s “The Rachel Maddow Show,” picked up on a statement from the Ensign camp to The Washington Post.

Ensign’s office had been calling various outlets to clarify that the two payments were the same — the $96,000 payment from the parents included the one in excess of $25,000 that Doug Hampton had referred to during his TV interview with Las Vegas Sun columnist Jon Ralston.

From the effort to clear up news reports that added the two payments together, further confusion emerged.

The Washington Post issued a correction that said the senator’s office “says that the alleged $25,000-plus severance payment to the Hamptons that some critics had questioned is part of the generous $96,000 gift Ensign’s parents decided to give the Hamptons.”

Maddow and others latched onto the word “severance” in that sentence as an admission by Ensign that the payment was in fact severance.

When contacted Friday, Ensign’s office said the wording by the news organization was incorrect, and the intent of the statement was to explain that the total gift was $96,000.

Ensign’s office repeated the statement by the senator’s attorney that the $96,000 was “made as gifts, accepted as gifts.”

The senator’s attorney has said the $96,000 payment was a single check but was to be considered as eight separate $12,000 payments from each parent to Cynthia Hampton, Doug Hampton and two of their three children.

Limiting each payment to $12,000 shields the Ensign parents from taxes, as that was the ceiling to avoid gift taxes in the 2008 tax year.

The Hamptons have not disputed that the $96,000 includes the $25,000 payment. Doug Hampton’s attorney declined to comment.

The severance versus gift debate underlies the watchdog group’s complaint to the Federal Election Commission. If the payment was severance, it would need to be reported as an in-kind contribution to the committees where Cynthia Hampton worked. No such disclosure was made.

Knowingly failing to report a payment of $25,000 or more could be a felony. The watchdog organization, known as CREW, has also sought investigations by the Senate Ethics Committee and Justice Department.

Tax experts have told the Sun that calling the payment a gift would not necessarily make it so, and that the parties would need to provide contemporaneous evidence to prove the case — perhaps a written or oral agreement, or third party witness.

Also, for the Hamptons to avoid paying income taxes on the gift, they would have to show that it was given with “detached and disinterested generosity.”

CREW on Friday amended its request for a Federal Election Commission investigation to include the senator’s parents, Michael and Sharon Ensign. The couple may have violated campaign finance law by giving beyond the legal limit for contributions, the letter said.

CREW said the maximum the parents would have been able to contribute to the senator’s personal campaign committee, Ensign for Senate, is $9,600 this election cycle — $2,400 from each of them for both the primary and general elections.

Additionally, the maximum the parents could have contributed to the senator’s leadership Political Action Committee, the Battle Born PAC, is $10,000 for the year — that is, $5,000 each.

“Accordingly, there is no way Michael and Sharon Ensign could have both made $12,000 severance payments to Cynthia Hampton without violating the dollar limits,” according to the CREW filing.

CREW said the maximum civil penalty would be a $10,000 fine or double the amount above the allowed contribution.

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