Much of the money goes to her daughter's public relations company, the newspaper said. Progressive Connections has handled Waters' campaign mailers since 2004, records show.
Waters has represented Los Angeles in Congress since 1991 and is the most prominent black elected official in California. The House ethics committee recently charged that she used her influence to get federal aid for a bank in which her husband owns stock.
A Waters representative said her campaign mailers and sample ballots comply with state and federal laws and that other candidates are billed only for their fair share of the production costs.
Parke Skelton, a consultant working this year for the Democratic nominee for California insurance commissioner, said Waters does not charge for endorsements -- although her choices do have to pay a share if they want to appear on her printed materials.
Payments to Karen Waters do not violate House ethics rules or federal election law as long as they are reasonable, officials say.
Celebrity Families of 2014 [PHOTOS]