Lessons From David Paterson's Expense Reports

Last week new New York Governor David Paterson publicly acknowledged his extramarital affairs. Now his method of payment for these dalliances is being scrutinized.

The New York Comptroller’s Office revealed credit card records for more than 15 months back when Paterson was lieutenant governor. He used his state credit card to cover thirteen questionable hotel stays in Albany, between Jan. 1, 2007 and February 18, 2008, for a tab totaling $2,500. He does not admit to using campaign money to pay for his dates. He is, however, reimbursing his campaign account for two Manhattan hotel charges. More reimbursements may follow.

Even if you are not a political big, the ethical line can blur when writing off business expenses. This dilemma is particularly prevalent in the political and corporate worlds where dining with clients, wooing delegates, and networking with consultants is part of the job. People should know better than to go expense crazy, but it is human nature to push the envelope and opt for nicer things than normal, says Henry Stern, founder of New York Civic, a political watchdog organization. “Spend the company money like you would your own money,” says Stern. “The problem is most people spend their own money poorly, so the rule really is to expense money like you wish you were spending your own money.”

Consider giving any expense questions the “press conference” test, says Marci Alboher, author of One Person/Multiple Careers. “If you'd be embarrassed to disclose an expense in public at a press conference, then maybe you'd want to think twice about considering charging that item or service to your business.” Stern advocates using common sense: Just because you neglected to pack a suit for a business trip, doesn’t mean your company should pay for a nice new one. “When you start drinking on the job then that’s not a travel expense either. A good rule is: Don’t be a pig. Do what is fair and responsible and chances are you’ll be backed up. A $400 John Edwards haircut is not a legitimate expense.”