Exclusive: Susan Collins' plight gets worse with new corruption allegation, possible ethics probe

Ethics watchdog accuses Maine senator of "blatant corruption" after GOP tax bill sweetened husband's investments

By Roger Sollenberger
September 9, 2020 6:00PM (UTC)
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U.S. Sen. Susan Collins talks to reporters during a campaign stop at Blackie's Farm Fresh Produce on Thursday. (Ben McCanna/Portland Press Herald via Getty Images)

The American Democracy Legal Fund (ADLF) sent a letter Wednesday to the U.S. Senate Ethics Committee asking to open an investigation into allegations that Sen. Susan Collins of Maine — a Republican who faces a tight re-election battle this fall — used her office to financially benefit her husband and, subsequently, herself.

The charges, laid out in the letter and exclusively obtained by Salon, are informed by a recent HuffPost article reporting that Collins — who now trails Democrat Sara Gideon in most polls, in one of the most closely-watched races in the country — has advocated and voted for policies that benefited her husband's consulting and lobbying business.

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"This is a clear pattern of unethical and corrupt behavior by Sen. Susan Collins and the Senate Ethics Committee must begin an immediate investigation into her abuse of office," ADLF's Brad Woodhouse told Salon in a statement. "We are in the middle of a pandemic that has cost more than 180,000 Americans their lives, and instead of focusing on helping her constituents, Sen. Collins is using her office to enrich herself and her husband. This blatant corruption must be thoroughly investigated by the Senate Ethics Committee."

Salon can also report that, according to Collins' latest financial disclosures, her husband's investments in eight companies as much as doubled following Collins' vote in favor of the GOP's 2017 tax bill — increasing in value by perhaps $340,000 to $600,000 as those companies took in billions of dollars in corporate tax benefits and stock buybacks.

In 2012, Collins married Thomas Daffron, a longtime adviser who first met her in 1974 when she was an intern in the office of Rep. William Cohen, a Maine Republican who later served 18 years in the Senate. Daffron consulted on Collins' 1996, 2002 and 2008 Senate campaigns and was COO for a company called Jefferson Consulting from 2006 to 2016.

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The complaint alleges that Daffron received $54.95 million in government contracts and $3.5 million in lobbying revenue during his years at Jefferson Consulting, or approximately $58.4 million combined. As a member of the Senate Appropriations Committee, Collins exercised oversight over agencies that granted Jefferson Consulting $10 million in government contracts in that time, according to the complaint.

While Collins served on the Appropriations subcommittees on defense and on military construction and veterans affairs, as well as on the Homeland Security contracting oversight subcommittee and the Senate Special Committee on Aging, her husband's company made $6 million from the Department of Veterans Affairs, $850,000 from Washington Headquarters Services, $370,000 from the Pension Benefit Guaranty and $300,000 from the Department of Homeland Security's Office of Procurement Operations.

Of that $10 million, $767,000, or 7.5%, came from non-compete contracts.

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In 2011, the year before she married Daffron, Collins took two actions that his business could have benefited from directly, HuffPost reported: Her vote to repeal a 3% withholding tax on government contractors, and a letter to then-President Barack Obama urging him not to sign an executive order requiring government contractors to disclose political contributions exceeding $5,000.

(Jefferson Consulting gave $443,000 in political contributions from 2006 to 2016 when Daffron led the company, including $5,000 to Collins, the complaint says.)

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In fairness, both moves were bipartisan: The Senate voted 95-0 on the contractor tax repeal, and Collins' 2011 letter to Obama was also signed by Sen. Claire McCaskill, D-Mo., Sen. Joe Lieberman, I-Conn., and Sen. Rob Portman, R-Ohio. Obama ultimately did not sign the order.

In 2012, the complaint says, Collins voted against legislation requiring political intelligence consultants to register just as lobbyists do, as well as against ethics restrictions that included banning gifts and meals from lobbyists and restricting paid travel.

At the same time, the letter alleges, Collins appeared to use her office to financially benefit her husband's business — which also led to a significant increase in her own personal net worth.

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In 2011, the year before Collins and Daffron married, she reported more liabilities than assets, including a negative net between minus-$165,000 and minus-$689,000. Between 2011 and 2018, Collins' personal net worth rose between $2.4 million and $5.8 million.

According to Salon's review of Collins' financial disclosures, her husband holds stock worth up to $2.26 million in companies that reported billions in gains from the 2017 Republican tax bill, and billions more from subsequent buybacks that capitalized on the breaks in that bill. Eight companies account for as much as $600,000 of those holdings, the disclosures show.

Proponents of the tax bill faced backlash for the record-setting run of stock buybacks — which were illegal until 1982 — with critics alleging that the corporate breaks largely went toward the enrichment of stockholders and not toward economic growth, capital investment or employee wages.

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In 2018, companies in the S&P 500 spent $806 billion on buybacks, smashing the previous record of nearly $590 billion, which had been set in 2007, the year before the Great Recession. When share prices dropped in the fourth quarter of 2018, companies spent even more, setting a fourth consecutive quarterly record for buybacks.

Amid concerns this spring that coronavirus relief packages might set off another string of buybacks, President Trump slammed companies that used the 2017 tax benefits to purchase their own stock.

"I never liked stock buybacks from their standpoint. When we did a big tax cut, and when they took the money and did buybacks, that's not building a hangar, that's not buying aircraft, that is not doing the kind of things that I want them to do," Trump said in March.

He said that the bill had not placed restrictions on companies because "we thought they would have known better but they didn't know better," and that he now favored limits.

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"I am fine with restricting buybacks," Trump said. "In fact, I would demand that there be no stock buybacks. I don't want them taking hundreds of millions of dollars and buying back their stock because that does nothing."

Collins claimed that her vote for the tax bill would help lower- and middle-income families, in an open letter to constituents published in December of 2017 in the Portland Press-Herald.

"I supported this legislation because it will help lower-income and middle-income families keep more of their hard-earned money, boost the economy and encourage businesses, both small and large, to grow and create jobs here in Maine and around the country," Collins wrote.

Collins' office did not immediately reply to Salon's request for comment.


Roger Sollenberger

Roger Sollenberger is a staff writer at Salon. Follow him on Twitter @SollenbergerRC.

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2020 Election Reporting Republicans Sarah Gideon Senate Republicans Susan Collins Tax Bill Thomas Daffron