Category: Ethics

The Hill reported yesterday that “[t]he House Ethics Committee has launched a formal investigation of sexual harassment allegations against Rep. Eric Massa (D-N.Y.)”  

One can understand how the Hill reached this conclusion.  The resolution adopted by the House Ethics Committee states that the Chair and Ranking Member “have been jointly engaged in an investigation concerning alleged or actual misconduct on the part of former Representative Eric Massa including actions that were offensive, inappropriate, created a hostile work environment, or were otherwise in violation of laws, rules, regulations or other standards of conduct.”  It goes on to note that “the conduct of a current or former Member, officer, or employee of the House . . . may have violated one or more laws, rules, regulations, or other standards of conduct . . . .”  (emphasis added).  This certainly sounds as if the Committee is investigating Massa and the sexual harassment allegations against him. 

The problem is that Massa resigned in March, and the Committee has consistently taken the position that it loses jurisdiction over a Member once he or she resigns.  See, e.g.,  Statement of the Committee on Standards of Official Conduct in the Matter of Representative Vito Fossella (Dec. 19, 2008) (“Representative Fossella did not seek re-election, and the Committee will lose jurisdiction over him when his term expires on January 3, 2009.”); Investigation of Allegations Related to Improper Conduct Involving Members and Current or Former House Pages 78 (Dec. 8, 2006) (“Rep. Kolbe is retiring from the House at the end of his term, and will no longer be within the Committee’s jurisdiction after his retirement.”);   Investigation of Certain Allegations Related to Voting on the Medicare Prescription Drug Improvement and Modernization Act of 2003 57 n. 158 (Sept. 30, 2004) (“Due to Representative Smith’s retirement, the Committee will lose jurisdiction over Representative Smith at the end of this Congress.”). 

Moreover, the language quoted from the resolution above was all contained in the “Whereas” clauses.  When one gets to the “Resolved” Clauses, which actually establish the Investigative Subcommittee, there is no language conferring jurisdiction on the subcommittee to investigate former Members, officers or employees.  The resolution states simply that the subcommittee is established “with jurisdiction to conduct a full and complete inquiry into whether the conduct of any Member, officer, or employee violated any law, rule, regulation or other standard of conduct applicable to the performance of their duties with respect to the allegations of misconduct recited above.”  Given the resolution’s previous express reference to “former” Members and the Committee’s historical position with regard to its jurisdiction, it seems unlikely that this language was intended to confer jurisdiction over Massa himself. 

Thus, despite the (perhaps intentional) ambiguity of the Committee’s resolution, it is probably not conducting an investigation of Massa or his alleged misconduct, except to the extent that such misconduct is relevant to any violations by the real targets of the investigation—those hapless individuals who may be found, as in the Mark Foley investigation, to have been insufficiently vigorous in reporting or otherwise acting on their knowledge of the former congressman’s misconduct.

           In perusing the Office of Government Ethics report on Executive Order 13490 (the “Ethics Pledge”), I was struck by one waiver that the administration has granted.  Under Section 2 of the E.O., all covered appointees are prohibited from participating in certain matters related to their former employers or clients.  In the case of Stephen J. Rapp, appointed by President Obama as Ambassador at Large for War Crimes Issues, this turns out to be a problem.  Ambassador Rapp’s previous employment was with the United Nations, where he had been appointed by the Secretary General to serve as independent prosecutor for the Special Court for Sierra Leone, a tribunal set up to address war crimes in that country. 

            As explained in a September 8, 2009 memorandum from the State Department’s designated ethics official, Rapp’s ambassadorial duties would involve participation in many matters prohibited by Section 2.  He is expected to be in “constant contact with United Nations and Sierra Leone Court officials at all levels regarding particular matters [such as] communications with respect to operations of the Sierra Leone Court and other United Nations-affiliated courts; oversight of those institutions on behalf of the United States Government on such matters as appointment of judges, prosecutors, and other senior officials and on personnel and budgetary matters; information sharing; cooperation of member-states; arrests of fugitives; ongoing cases for violation of International Humanitarian Law; disposition of prisoners; U.S. diplomatic efforts on behalf of the tribunals; and other issues related to U.S. support for the courts.”  Accordingly, application of Section 2 would prevent Rapp from adequately performing his duties as Ambassador at Large. 

            To solve this problem, the State Department granted Rapp a waiver from the strictures of Section 2, allowing him to participate in matters related to the United Nations and the Sierra Leone Court.  The designated agency official explained: 

It is my determination that the literal application of the restriction in this situation would be inconsistent with the purposes of the restriction.  Because the United Nations is an international organization consisting of many countries, including the United States, and the Sierra Leone Court is a tribunal tasked with creating a forum for the trial of violations of international humanitarian law, the interests of these organizations are generally consistent with the interests of the United States.  The United States provides significant funding to both the United Nations and the Sierra Leone Court and is the largest single contributor to both.  Also, because neither organization is organized for the purpose of generating a monetary profit, there is no concern that you would take official action motivated to increase the revenues of either of these organizations.  I therefore believe that as Ambassador at Large for War Crimes Issues, you will not leave the public with the appearance that your actions are influenced by the interests of your former employers, rather than by the interests of the United States. 

            There are at least two fundamental problems with this reasoning.  First, if one accepts the asserted premise, namely that the interests of the United States and the United Nations are “generally consistent,” the conclusion would be that the United Nations should not be considered a “former employer” within the meaning of the Executive Order.  However, the Executive Order excludes only entities of “the Federal Government, State or local government, the District of Columbia, Native American tribe, or any United States territory or possession.”  It noticeably does not exclude international organizations, foreign governments or nonprofits.  It is presumably not within the purview of the designated ethics officer to substitute his determination about what former employers present a conflict issue for that of the Executive Order. 

            Second, the notion that the interests of the United States are more “generally consistent” with those of the United Nations than with the interests of the typical former employer is ludicrous.  It is true that the United States is a member of the United Nations, but so are Iran, Venezuela, Cuba, Libya, and North Korea, just to name a few countries whose interests have been known to diverge from ours.  Even our closest allies have potential conflicts of interest which in some respects may be more serious than those of any domestic U.S. employer.  (This is why, for example, lobbyists for Canada still have to register under the Foreign Agents Registration Act and British citizens are prohibited from contributing to U.S. political campaigns).  Needless to say, there have been numerous historical examples of conflicts between the United States and the United Nations, including on issues relating to war crimes and the International Criminal Court. 

            During his 1953 confirmation hearing for Secretary of Defense, the then-President of General Motors was quoted (not quite accurately) as saying “what’s good for General Motors is good for the country.”   Surely the statement that “what’s good for the United Nations is good for the country” is no more defensible.

             For those who would like to read the aforementioned leaked House Ethics report, it is now available here.  No thanks to the Washington Post.

           The Senate Ethics Committee has issued a letter of “qualified admonition” to Senator Roland Burris regarding sworn and unsworn statements made by the Senator regarding the circumstances of his appointment to the Senate seat vacated by Barack Obama.  Burris, of course, was appointed by then-Governor Rod Blagojevich, who subsequently was impeached and indicted for misconduct that included attempting to sell that same Senate seat.  The Committee informs Senator Burris that “you should have known that you were providing incorrect, inconsistent, misleading, or incomplete information to the public, the Senate, and those conducting legitimate inquiries into your appointment to the Senate.” 

            The Committee points in particular to Burris’s January 5, 2009 affidavit, in which he averred that he was contacted on December 26, 2008 by Sam Adams, Jr., an attorney employed by Governor Blagojevich (and a fine beer), who asked if he would be interested in accepting the Governor’s appointment to the Senate seat.  In the final paragraph of the affidavit, Burris states: “Prior to the December 26, 2008 telephone call from Mr. Adams, Jr., there was not any contact between myself or any of my representatives with Governor Blagojevich or any of his representatives regarding my appointment to the United States Senate.”  (emphasis added) 

            Unfortunately for Burris, this statement is difficult to reconcile with a conversation that he had with Rob Blagojevich, the Governor’s brother, on November 13, 2008.  Even more unfortunately for him, that conversation was tape recorded by federal investigators, and the transcript was produced to the Senate Ethics Committee.  

            The conversation was initiated by Blagojevich, who called Burris to seek his help in raising money for his brother’s campaign.  Burris, however, quickly brought up the subject of the Senate seat, telling Blagojevich “I’m very much interested in, in trying to replace Obama.”  The remainder of the conversation continues in that vein, as Blagojevich and Burris strategize as to how Burris could raise funds for the Governor without creating a public trail which might make it more difficult for Burris to be appointed.  As Burris summarized toward the end of the conversation: “number one, I, I wanna help Rod.  Number two, I also wanna, you know hope I get a consideration to get that appointment.” 

            Burris’s affidavit, therefore, would seem to be clearly false.  Moreover, the November 13 conversation was highly relevant to the inquiries being conducted with regard to Burris’s Senate appointment by Governor Blagojevich, who, as the Committee notes, “had recently been arrested and charged with corruptly using his authority to make a Senate appointment in exchange for campaign contributions and other benefits.”  As the Committee rather mildly puts it, “you should have known that any conversations you had about your desire to seek the Senate seat and about any possible fundraising for the Governor were critical to these inquiries.” 

            You think?   

            Furthermore, Burris had plenty of further opportunities to disclose the November 13 conversation prior to the time that he was seated by the Senate.  The Committee notes that “despite repeated and specific questioning, you did not disclose [the November conversation]” to the Illinois House Impeachment Committee at a January 8, 2009 hearing.  Similarly, Burris failed to disclose this conversation during meetings with Senate leaders and the press during this time period   

            Finally, the Committee notes that Burris has given “multiple and at times contradictory explanations for failing to disclose all your contacts with the Governor’s associates, which individually and collectively gave the appearance that you were being less than candid.” 

            To put the matter plainly, Burris repeatedly failed to disclose his conversation with Rob Blagojevich, despite knowing that this conversation was critical to both the Illinois legislature and U.S. Senate on matters of the utmost importance to the public interest (the impeachment of a Governor and the seating of a U.S. Senator, respectively).  Moreover, his conflicting and unpersuasive explanations of this failure leave little alternative but to conclude that it was intentional. 

            In deciding nonetheless to give Burris the lightest possible punishment (a “qualified” admonition), the Committee apparently gave great weight to the fact the Sangamon County State’s Attorney found “no actionable violations of law.”  This, however, would seem a slender reed to support the Committee’s action (or inaction).  The state prosecutor decided that there was insufficient evidence to charge Burris with perjury.  It appears that this decision was based largely on the fact that in testifying before the Illinois Impeachment Committee, Burris gave incomplete, but not false, answers to broad questions.  With regard to the January 5 affidavit, the state prosecutor apparently accepted Burris’s explanation that his statement was meant only to refer to discussions regarding his actual appointment, not merely to his interest in getting an appointment.  Although this explanation might be sufficient to avoid a perjury charge, it is also one that the Committee itself found wanting.   

            In the context of intentional withholding of critical information from the Senate about a matter of such importance, one would think that at least a serious slap on the wrist would be warranted.   

But apparently one would be mistaken.

            When the Washington Post published an expose a few weeks ago regarding a House Ethics Committee report that was inadvertently released by a committee employee, I wondered why the Post did not put the actual report on its website so that readers could understand the full context of the information the Post was reporting.   According to this interview with one of the Post reporters, the explanation is as follows: 

“[T]he Post reporters and editors are handling this document and its contents with the utmost care. We recognize, and have made clear in our discussions with the ethics committee leaders and the implicated lawmakers, that these investigations are typically handled in a significant amount of secrecy, at least until action is taken or deadlines for action by the committee are triggered. We want to be sure we do our share of fairly and evenly reporting deeper into the allegations and contact the lawmakers in question before publishing information about allegations in the document we obtained.” 

            In other words, the Post claims it is withholding information from its readers in order to protect the confidentiality of the ethics process in the House.     

            This is just not credible.  If the Post were concerned about the confidentiality of the ethics process, it would not have reported broadly on the contents of the leaked report.  It is difficult to imagine that publishing the full report would have any greater impact on the confidentiality of the process than the reporting that the Post has done.  If there were particular passages of the report that were particularly sensitive, they could have been redacted before the document was made public. 

            It is far more likely that the Post’s refusal to make the document public is motivated by a desire to protect its “scoop,” not by the public interest.  This is unfortunate because publishing the actual document would be more useful to its readers, and might even prompt those readers to provide valuable feedback that could advance the public’s understanding of the issues.

           The newly formed Office of Congressional Ethics has run into a bit of trouble as a result of one of the first matters that it has referred to House Ethics Committee.  In a lengthy report, the Ethics Committee rejected and sharply criticized OCE’s findings with regard to an investigation of Representative Sam Graves.  OCE found “substantial reason to believe” that Representative Graves created the “appearance of a conflict of interest” when he and his staff invited a witness to testify at a 2009 Small Business Committee hearing on renewable fuels.  This appearance was allegedly created by the fact that the witness, Brooks Hurst, owned shares of two biofuel companies in which Graves’ wife was also an investor. 

            In evaluating whether Graves had an apparent conflict of interest, it is important to first consider whether Graves’ financial interest in the biofuel industry created an impermissible conflict of interest (actual or apparent) with respect to his legislative activity in the area of renewable fuels.  If so, Graves would be required either to divest himself of any financial interest in the two biofuel companies or to refrain from taking any legislative action that might affect (or be reasonably be perceived as affecting) his financial interest.  Arguably, participating in a Small Business Committee hearing on renewable fuels could constitute such an action. 

            One school of thought would hold that Graves’ financial interest does not create a conflict at all, but rather serves to align his interests with those of the constituents in his rural farming district, who tend to benefit from federal policies that promote biofuels.  Andrew Stark, in his book Conflict of Interest in American Public Life (2000), terms this the “Kerr argument,” so-called after Senator Robert Kerr, who said in 1962: “I represent the oil business in Oklahoma, because it is Oklahoma’s second-largest business and because I am in the oil business . . .  They don’t want to send a man here who has no community of interest with them, because he wouldn’t be worth a plugged nickel to them.” 

            One can criticize the Kerr argument, as Stark does, and it would be going too far to say that Kerr’s position represents the official policy of the U.S. Congress.   Nevertheless, it is a fact that neither the House nor the Senate has sought to prohibit Members from holding financial interests that may be affected by their legislative activities.  In its report on the Graves matter, the Ethics Committee quotes the House Ethics Manual on this point, observing that “’[n]o federal statute, regulation or rule of the House absolutely prohibits a Member or House employee from holding assets that might conflict with  or influence the performance of official duties.’” 

            Instead, Members of Congress are required, by statute and rule, to disclose their financial holdings so that the public can judge whether their actions may have been influenced by these interests.  As the Ethics Committee notes, Graves fully and accurately complied with this requirement.  It is also worth observing that the ownership interest in question amounted to only 0.18% and 0.125% of the two companies respectively, and were valued at a total of between $16,000 and $65,000.  (Hurst’s holdings in the same companies represented about a 0.5% and 0.33% interest respectively). 

The only other relevant provision is House Rule 3, clause 1, which provides “[e]very Member . . . shall vote on each question put, unless having a direct or pecuniary interest in the event of such question.”  However, this provision could not prohibit Graves’ participation in the Small Business Committee hearing because (1) it applies only to actual votes on legislation, not to committee hearings; (2) as interpreted by House precedent, this provision would not apply to the kind of legislation that was discussed in the Small Business Committee hearing because such legislation would have only affected Graves’ financial interests as a member of a class; and (3) the House rule does not actually prohibit anything, but merely leaves it up to the Member to determine whether he or she has a “direct or pecuniary interest” that makes it appropriate to refrain from voting. 

OCE, therefore, did not find that Graves’ financial interest created a conflict with regard to participating in the hearing.  Instead, it found substantial reason to believe that Graves’ financial interest created (the appearance of) a conflict with regard to his role in inviting Hurst to be a hearing witness, given that Hurst had a financial interest in the same two biofuel companies. 

OCE’s position, however, suffers from certain difficulties.  First, OCE does not explain how Hurst’s testimony or participation in the hearing could possibly have advanced Graves’ financial interests, other than the fact that Hurst recommended in the course of his testimony that Congress take certain legislative actions, such as extending the federal Biodiesel Blender’s Credit, which would benefit the biofuel industry.  But these actions, which Hurst advanced as a representative of the Missouri Soybean Association, would benefit the industry as a whole, not just the two biofuel companies in question.  If there would be no impermissible conflict of interest in Graves himself sponsoring, supporting or voting for such legislation, it is difficult to see how Hurst’s testimony could possibly create one. 

Second, it is not obvious why the fact that Graves and Hurst happened to share a financial interest in the same companies has any bearing on the conflict issue.  Why would the issue be any different if Hurst had happened to own shares in a different biofuel company that would benefit from the same legislation?  Or if Hurst had no personal investment at all, but had taken the same position as a representative of the industry?  If there is nothing improper in Graves inviting a witness who supported the same legislative positions as Hurst (and OCE does not suggest otherwise), it is hard to see why it would be improper to invite Hurst. 

Finally, the OCE’s position is further undermined by the fact that there was no realistic possibility that Hurst’s testimony would actually benefit Graves or anyone else.  As the Ethics Committee noted, the Small Business Committee’s hearing was purely informational, and the committee itself had no jurisdiction over the legislation discussed.  Thus, the potential benefit to Graves would seem to be not only indirect, but extremely remote as well. 

           

All in all, I have to agree with the Ethics Committee’s view that inviting Hurst to testify did not create any impermissible conflict, or appearance of a conflict, under the applicable House rules.

           At the Volokh Conspiracy, David Kopel discusses whether President Obama needs congressional consent to accept the Nobel Peace Prize, including a check in the amount of more than $1 million (which Obama has said will be donated to charity).  Kopel concludes that the matter is governed by the Foreign Gifts and Decorations Act, 5 U.S.C. § 7342, which provides the congressional consent needed to accept a “present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State” under Article I, § 9, cl. 8 of the Constitution.  Under Kopel’s analysis, Obama may accept the prize without further congressional consent, but only if he signs the check over the government, as the statute requires. 

            Kopel’s analysis seems correct, but only if one assumes that the Nobel Peace Prize Committee constitutes a “foreign government” as defined by the Act.  This is by no means obvious because, while the members of the committee are appointed by the Norwegian Parliament, their acts in awarding the prize would seem to be essentially private in nature and are conducted on behalf of the Alfred Nobel Foundation, rather than on behalf of the Norwegian Government.   

            If, in fact, the Nobel Peace Prize Committee is not a foreign government, however, the legal situation gets even messier.  18 U.S.C. § 201 (c), generally known as the illegal gratuities statute, provides that it is a crime if someone: 

            (1) otherwise than as provided by law for the proper discharge of official duty—  

(A) directly or indirectly gives, offers, or promises anything of value to any public official, former public official, or person selected to be a public official, for or because of any official act performed or to be performed by such public official, former public official, or person selected to be a public official; or  

(B) being a public official, former public official, or person selected to be a public official, otherwise than as provided by law for the proper discharge of official duty, directly or indirectly demands, seeks, receives, accepts, or agrees to receive or accept anything of value personally for or because of any official act performed or to be performed by such official or person. 

It might be argued that the prize was not given to the President “for or because of any official act,” but only because of the general pro-peace tone of his campaign and/or presidency. This would be a factual question, but I believe that members of the committee have suggested that the prize was given, in part, on account of particular acts taken by Obama as president, including steps to de-nuclearize Europe. In any event, for purposes of this analysis, I will assume that there is evidence to show that the prize was given, in part, for or because of an official act.

This may not be a legal problem for Obama, however, because federal regulations issued by the Office of Government Ethics provide for a number of circumstances under which a federal employee may accept a gift and explicitly declare that such a gift “shall not constitute an illegal gratuity otherwise prohibited by 18 U.S.C. 201(c)(1)(B).”

There are at least two regulatory exceptions that would seem to help Obama here. First, 5 C.F.R. § 2635.204 (d) permits employees to accept gifts “if such gifts are a bona fide award or incident to a bona fide award that is given for meritorious public service or achievement by a person who does not have interests that may be substantially affected by the performance or nonperformance of the employee’s official duties or by an association or other organization the majority of whose members do not have such interests.” If the award is worth more than $200, acceptance requires written authorization from an agency ethics official. The regulations then give the following example: “Based on a determination by an agency ethics official that the prize meets the criteria set for this in § 2635.204 (d)(1), an employee of the National Institutes of Health may accept the Nobel Prize for Medicine, including the cash award which accompanies the prize, even though the prize was conferred on the basis of laboratory work performed at NIH.”

This provision would seem to authorize Obama’s acceptance of the prize, assuming that he obtains the required written authorization. I suppose one could argue, as Kopel does, that the Nobel Peace Prize Committee has an “interest” in influencing U.S. foreign policy, but I doubt that this is the type of interest referred to by the regulation.

Moreover, a second regulatory exception, 5 C.F.R. § 2635.204 (j), provides that “[b]ecause of considerations relating to the conduct of their offices, including those of protocol and etiquette, the President or Vice President may accept any gift on his own behalf or on behalf of any family member, provided that such acceptance does § 2635.202 (c)(1) or (2), 18 U.S.C. 201 (b) or 201 (c) (3), or the Constitution of the United States.” Since the illegal gratuities provision is not mentioned in paragraph (j), this paragraph evidently purports to exempt the President and Vice President from the illegal gratuities statute altogether.

Of course, one might wonder where the Office of Government Ethics got the authority to exempt anyone from a federal criminal law. The Supreme Court has wondered the same thing. See United States v. Sun-Diamond Growers, 526 U.S. 398 (1999) (“We are unaware of any law empowering OGE to decriminalize acts prohibited by Title 18 of the United States Code.”) Nevertheless, these exceptions are recognized by the executive branch and for all practical purposes qualify the prohibitions of the illegal gratuities statute.

It is worth noting, however, that the regulations only purport to exempt certain gifts from the prohibition against receipt of illegal gratuities under 18 U.S.C. § 201(c)(1)(B). They do not address the giving of illegal gratuities under 18 U.S.C. § 201(c)(1)(A). Thus, one could still argue that the Nobel Peace Prize Committee, by offering Obama a gift for or because of an official act, violated the illegal gratuities statute.

           The Senate Ethics Committee has issued letters to Senators Kent Conrad and Chris Dodd dismissing a complaint filed by Citizens for Responsibility and Ethics in Washington (CREW) regarding mortgages the Senators obtained through the Countrywide Financial “VIP” program.  The committee found no “substantial credible evidence” that the mortgages violated Senate ethics rules, but nonetheless told each Senator that “you should have exercised more vigilance in your dealings with Countrywide in order to avoid the appearance that you were receiving preferential treatment based on your status as a Senator.”

            In order to understand and evaluate the Committee’s findings, it is necessary to look at the relevant provisions of the Senate gift rule which the Senators were charged with violating.  Unfortunately, the Committee itself does not discuss these provisions, or explain how its factual findings relate to these provisions. 

 

In relevant part, the Senate gift rule provides:

No Member, officer, or employee of the Senate shall knowingly accept a gift except as provided in this rule.

A Member, officer, or employee may accept a gift (other than cash or cash equivalent) which the Member, officer, or employee reasonably and in good faith believes to have a value of less than $50, and a cumulative value from one source during a calendar year of less than $100. No gift with a value below $10 shall count toward the $100 annual limit. No formal recordkeeping is required by this paragraph, but a Member, officer, or employee shall make a good faith effort to comply with this paragraph.

* * *

For the purpose of this rule, the term “gift” means any gratuity, favor, discount, entertainment, hospitality, loan, forbearance, or other item having monetary value. The term includes gifts of services, training, transportation, lodging, and meals, whether provided in kind, by purchase of a ticket, payment in advance, or reimbursement after the expense has been incurred.

* * *

The restrictions . . . shall not apply to the following:

* * *

19) Opportunities and benefits which are

(A) available to the public or to a class consisting of all Federal employees, whether or not restricted on the basis of geographic consideration;

(B) offered to members of a group or class in which membership is unrelated to congressional employment;

(C) offered to members of an organization, such as an employees’ association or congressional credit union, in which membership is related to congressional employment and similar opportunities are available to large segments of the public through organizations of similar size;

(D) offered to any group or class that is not defined in a manner that specifically discriminates among Government employees on the basis of branch of Government or type of responsibility, or on a basis that favors those of higher rank or rate of pay;

(E) in the form of loans from banks and other financial institutions on terms generally available to the public; or

(F) in the form of reduced membership or other fees for participation in organization activities offered to all Government employees by professional organizations if the only restrictions on membership relate to professional qualifications.

In order to determine whether Senators Conrad and Dodd violated this rule, one would expect that the Committee would ask the following questions:

1. Did the Senators receive a benefit from Countrywide that qualifies as a “gift” as defined in the Senate rules?

2. Was the particular benefit one that had a value of more than $100?

3. Was the benefit one that was generally available to the public?

4. Was the benefit offered to members of a group or class in which membership was unrelated to congressional employment?

5. If the answers to questions 1-3 above were yes, and the answer to question 4 was no, were the Senators aware of (or should they have been aware of) these facts?

Did the Senators receive a “gift” as defined in the rule? It is clear that the Senators received loans from Countrywide. It is less clear from the Committee letters what other benefits they may have received. According to the Committee, participants in the VIP program (including those designated as “Friends of Angelo [Mozilo],” the Countrywide CEO, like Senators Conrad and Dodd) “were often offered quicker, more efficient loan processing and some discounts.” However, the Committee does not specifically say whether the Senators received these benefits and, if so, what they were.

Were the benefits received worth more than $100? With regard to the loans, the answer is obviously yes. Assuming that the Senators received discounts, the answer is presumably yes for these as well. The Committee neither describes nor attempts to determine the monetary value of any improved service the Senators may have received.

Were the benefits received generally available to the public? The Committee states to both Senators that “the loans you received appear to have been available industry-wide to borrowers with comparable loan profiles.” This suggests that mortgages on the properties in question would have been generally available to the public. However, with respect to the mortgage that Senator Conrad received on an eight-unit apartment building, the Committee also states that “the substantial credible evidence is that it would not be unprecedented for Countrywide to approve mortgages on multi-unit properties if the loan could be resold on the secondary market.” There is a significant gulf between a loan being “generally available” to the public and it not being “unprecedented” for Countrywide to extend such a loan. The Committee does not attempt to reconcile this discrepancy.

With regard to the terms of the loans, the Committee states to both Senators that “[t]here is no evidence that the interest rates for your Countrywide mortgages were below prevailing market rates.” It also states that the “terms and conditions” of the mortgages were “available to borrowers with similar loan profiles.”

With regard to discounts or other financial benefits, however, the Committee is less definitive. It states, for example, that there is no credible evidence the Senators “knowingly received” any “financial benefits not available to other borrowers with similar loan profiles.” It also states there is no evidence that the Senators were ever informed they “were receiving specific discounts or other special treatment not available to other borrowers because [their] status as a Senator.” These statements leave open the possibility that financial benefits or discounts were received, albeit without the Senators’ knowledge about the fact of or reason for preferential treatment.

Finally, with respect to service, the Committee states that “[w]hile your Countrywide loans were handled through the V.I.P. loan unit and designated as F.O.A. loans, the service you received was available to thousands of other non-Senate customers at Countrywide . . . .” This implies that there was service provided through the VIP/FOA program that was not generally available to the public. The Committee, however, does not specifically state that the Senators received preferential service, nor identify the nature of the service or its value.

Were the benefits offered to members of a group or class in which membership was unrelated to congressional employment? The Committee fails to answer this question, which is a surprising omission. It emphasizes the fact that the VIP and FOA programs expanded to be quite large and that the VIP unit “handled thousands of loans worth billions of dollars for a very broad spectrum of individuals, large numbers of whom had never met, let alone befriended, Mr. Mozilo.” But this fact seems rather immaterial to the issue, which is whether Senators Conrad and Dodd were included in the VIP program because they were Senators. The Committee never addresses this issue.

If Senators Conrad and Dodd were included in the VIP/FOA program because they were Senators and thereby received discounts, services or other benefits not generally available to the public and with a value greater than the de minimis level, then they received a prohibited gift under the Senate rule. Reading between the lines, one might infer that the Committee found this to be the case, but it goes to some length to avoid saying one way or the other.

What knowledge did Senators Conrad and Dodd have regarding their inclusion in the VIP/FOA program and any benefits that they received as a result? The Committee told each Senator that it “found no evidence that you fully understood the scope of the V.I.P. program, knew that you were in the ‘Friends of Angelo’ program, or attempted to use your status as a Senator to receive loan terms not available to the public.” It fails to explain what it was that was not “fully understood” by the Senators. One might infer that the Senators received a benefit of which they were unaware, or they received a benefit which they did not understand resulted from their participation in the VIP program. However, if this were the case, the Committee should have said so.

Perhaps the most surprising omission is that the Committee does not say whether the Senators understood that they had been included in the VIP program as a result of their congressional status. It indicates that Conrad “did not recall ever being informed what the program was, and . . . assumed it was merely an employee and customer relations effort.” Dodd told the Committee that he “inquired with Countrywide as to what the V.I.P. program was and [was] told that it offered heightened attention to service quality.” Neither of these statements, however, specifically addresses the question of whether Conrad and Dodd were told, or assumed, that they were “VIPs” as a result of being Senators or for some other reason.

The Committee does tell the Senators that their inclusion in a “VIP” program should have raised “red flags” and caused them to inquire further to determine exactly how they came to be members of the program, whether they received treatment based on their official positions and whether they were receiving preferential treatment not available to other borrowers with similar loan profiles. One might infer, therefore, that the Senators had no specific information as to how they came into the program, but the Committee neither expressly states a position on this point, nor explains why the Senators thought they were in the program.

Finally, it should be noted that although the Committee found “no evidence” that the Senators ever asked for “special treatment,” the Committee does note that Conrad spoke personally with Mozilo in 2002 about the possibility of obtaining a mortgage for his beach property, and he later told a Countrywide employee that he was going to tell Mozilo what great service Countrywide provided. While these facts alone don’t prove that Conrad asked for special treatment, they might suggest that he was willing to accept it.

Conclusion. As this post has gone on long enough, I will save extended analysis for another time. For the moment, suffice to say that the Committee’s letters seem to be carefully worded so as to allow it to find no violation without actually explaining why. The most charitable, and I think the most likely, explanation for this is that the Committee concluded the violations were minimal and not the result of any active effort on the part of the Senators; it therefore wrote the letters in a manner designed to minimize the political fallout for Conrad and Dodd. This is understandable, but it is not without cost in terms of public confidence in the ethics process.

            As mentioned in my last post, it is possible that the new guidelines on stimulus lobbying will apply to Members of Congress and thus prohibit agency officials, during the period that competitive grant applications are being evaluated, from engaging in oral communications with Members and their staffs about the applications.  (This thought was suggested by Senate staffer Tom Jones on the google group of the Open House Project).  As a policy matter, this would make sense because using congressional influence would be an obvious way for applicants to try to affect the award of stimulus funding.  This is particularly true if applicants are limited in their ability to approach agency officials directly. 

            Enforcing such a limitation on Members of Congress and congressional staff, however, is tricky.  As a practical matter, it is difficult for agency officials to refuse to take meetings with Members and staff, or to demand that the subject matter of such meetings be limited.  Even if there were a prior agreement to respect the restrictions of the executive branch rules, it would be relatively easy to circumvent them.   As in, “I know that I am not allowed to talk to you about my constituent’s excellent grant application, but I just wanted you to know that I will be very disappointed if it is not approved.” 

            Moreover, it is unlikely that congressional actors would suffer any consequences even if they were to blatantly violate the executive branch rules.  Although the House and Senate Ethics Manuals warn Members that certain types of administrative proceedings do not permit ex parte communications with agency officials, they stop short of suggesting that such communications would violate congressional rules or result in disciplinary action.  In fact, as the Senate Ethics Manual points out, “neither the Senate, nor the House, has to date, disciplined a Member solely because of that Member’s intervention with an executive agency.”  (This statement must now be qualified by the fact of the Senate Ethics Committee’s admonishment of Senator Domenici, but it is doubtful that this precedent would be applied in the absence of aggravating circumstances beyond merely providing assistance to a constituent).    

            So how can the administration ensure that Members of Congress do not undermine the intended effect of the stimulus lobbying restrictions?  One possibility would be to require agency officials to publish information about stimulus-related contacts by Members of Congress, just as they are required to do with respect to contacts by registered lobbyists.  The published information could identify instances where Members or congressional staff sought to communicate about specific grant applications in violation of the executive branch rules.  Such disclosure might deter congressional attempts to circumvent the rules or, at a minimum, would alert competitors to the tactics being used in order to win grant proposals.

Roland Burris, the junior Senator from Illinois, has a problem.  Actually, he has many problems.  After being appointed to the U.S. Senate by then-Governor Rod Blagojevich, Burris testified about the circumstances of his appointment before the Illinois legislature, which was considering Blagojevich’s impeachment for, among other things, attempting to sell that very same Senate seat.  Based in part on Burris’s assurances that his appointment had no hint of the corruption that had allegedly marked Blagojevich’s earlier attempts to fill the vacancy, the U.S. Senate decided to seat Burris. 

Since then, Blagojevich has been impeached and removed from office and, it turns out, Burris’s testimony regarding the circumstances of his appointment was, at best, incomplete.  Specifically, Burris now admits that he spoke three times in October and November of last year with Rob Blagojevich, the Governor’s brother, who solicited campaign contributions on his brother’s behalf.  Burris says that he decided to make this additional disclosure “because he recently reviewed the full transcript of the proceedings and saw that it wasn’t clear that he disclosed all his contacts” to the state legislature.  Others, less charitably, have suggested that Burris lied to the legislature or knowingly failed to disclose information that was clearly relevant to the proceedings.   

Burris now faces the possibility of a state criminal investigation for perjury.  In addition, the state legislature might conduct further investigation, possibly with an eye toward holding Burris in contempt.  Burris could also face an investigation by the Senate Ethics Committee.  It is also possible that the Senate’s decision to seat Burris could be re-opened, and the matter could be referred to the Senate Rules Committee to investigate the validity of the appointment.  Finally, there is a possibility that Illinois could change the law regarding Senate vacancies and provide for an immediate special election to fill out the remainder of the Senate term.

There are several reasons why state proceedings here would be inadequate. State proceedings could only address the question of whether Burris made an intentionally false statement material to the issue of Blagojevich’s impeachment. They could not address the question of deliberate omission, nor could they address the question of whether Burris made false or incomplete statements to the U.S. Senate (such as in his “interview” with Majority Leader Reid). Moreover, state proceedings could not address the real question of interest to the U.S. Senate and the general public, i.e., whether Burris made misrepresentations or omissions material to the validity of his appointment.

An investigation by the U.S. Senate is therefore in order. The matter could be referred to the Senate Rules and Administration Committee because that committee had jurisdiction over the issue of whether Burris should have been seated in the first place. However, it is unclear whether that issue can be re-opened at this stage. Under Senate precedent, Burris could have been seated “without prejudice” to the Senate’s right to review the validity of his appointment at a later time. Despite the controversy surrounding Burris’s appointment, the Senate did not, as far as I know, attempt to limit or condition Burris’s seating in this fashion. Therefore, it is arguable that it is too late to review the validity of the appointment.

In any event, this matter seems more appropriate for investigation by the Senate Ethics Committee. Even if Burris’s appointment is still a live issue, the new information provided by Burris would not, in itself, necessarily be sufficient to invalidate the appointment. On the other hand, if Burris lied about or intentionally failed to disclose this information, he certainly failed to comply with the Senate’s standards of conduct and engaged in conduct tending to bring the Senate into disrepute. This is a matter that falls squarely within the jurisdiction of the Ethics Committee.

The Ethics Committee should therefore commence an investigation to determine whether Burris made misrepresentations or deliberate omissions regarding the circumstances of his appointment, including in his testimony to the state legislature and his communications to the Senate. If the question of the validity of the appointment itself remains an issue, the Senate should also adopt a resolution empowering the Ethics Committee to investigate that question and to report its findings to the Rules Committee and/or the Senate.

Finally, the possibility that the Illinois legislature may change the law to require an immediate special election is not a reason for the Ethics Committee to hold off action. Even if a special election is held and a replacement for Burris is elected, it is likely that Burris would challenge the constitutionality of applying this new law to him since at the time of his appointment the law provided that he would serve until the general election of 2010. Thus, there is no guarantee that waiting for a special election will make this matter go away.