Category: Ethics

Today’s Roll Call discusses Chairman Rangel’s reporting of his Sunny Isle condo transactions.  The article notes “the inconsistent reports are myriad errors, discrepancies and unexplained entries on Rangel’s personal disclosure forms over the past eight years that make it almost impossible to get a clear picture of the Ways and Means chairman’s financial dealings over time.” 

I remain puzzled as to how these discrepancies, which are evident on the face of the disclosure forms, escaped notice by the House Ethics Committee for so many years.

          Representative Charles Rangel, the chairman of the House Ways and Means Committee, has been in hot water for several matters, most recently his ownership of a beach property in the Dominican Republic.  Rangel has acknowledged that he failed to pay taxes on income from the property and failed to properly disclose that income on his annual financial disclosure report (FD).            

            Rangel’s FDs, it should be noted, were filled out by hand, presumably by Rangel himself.  If that is the case, it should hardly be a surprise if there are inaccuracies in the filings.  Filling out an FD is a time-consuming and complicated process, and the rules and guidance are often unclear.  One can imagine that a Member of Congress would not have the time to do a proper job of it.

             A look at Rangel’s FDs illustrates the legal and ethical jeopardy that Members of Congress may face when these reports are scrutinized, particularly in light of the Justice Department’s ongoing prosecution of Senator Ted Stevens for filing false FDs. Rangel’s FDs, like those of other Members of Congress, may be found at opensecrets.org (I accessed them through the CREW website).     

Rather than look at one of the previously scrutinized matters, I focused my attention on Rangel’s ownership of a condominium in Sunny Isles, Florida. This was mentioned in passing in a July 11, 2008 NY Times article by David Kocieniewski, who noted that Rangel “bought a condominium in 2004 in Sunny Isles, Fla. for $50,000 to $100,000 and sold it last year for $100,000 to $250,000.”

The article’s information presumably came from Rangel’s FDs, but a closer look raises a number of questions. Rangel’s FD for 2004 does indeed indicate, in the “Assets and Unearned Income” Section, that the Sunny Isles condominium (located in the Winston Towers 500 building in Sunny Isles) was valued at $50,001 to $100,000 at the end of 2004. However, in the “Transactions” Section, it is indicated that Rangel purchased the condominium on March 4, 2004 for $100,001 to $250,000.

It is possible that Rangel bought the property for slightly more than $100,000 and its value declined to below $100,000 by the end of the year. A far more likely possibility, however, is that Rangel marked the wrong box in one of the sections. My guess is that he paid more than $100,000 for the condo, but this is just a guess.

Another interesting fact is that Rangel’s 2004 and 2005 FDs indicate “rent” as the “type of income” for the Sunny Isles condo, but state “none” as the “amount of income.” If he received no income, one wonders why he put “rent” as the type of income. He did the same thing for several years with respect to the property in the Dominican Republic, where he identified rent as the type of income but (apparently inaccurately) put “none” as the amount. This raises a question as to the accuracy of the Sunny Isle disclosure.

Rangel’s 2006 FD is also puzzling. The “Transactions” Section shows that the Sunny Isles condo was sold for $250,000 to $500,000. The date of the transaction is put as “7-21-07.” This, however, must be wrong since the 2006 FD was filed on June 15, 2007 and, in any event, the 2006 FD is only supposed to disclose transactions that occurred during calendar year 2006. One might assume, therefore, that the transaction occurred on 7-21-06, but again, this is a guess.

If Rangel made a profit on the sale of the condo, he also probably should have disclosed that in the “Assets and Unearned Income” Section of the 2006 FD. I say “probably” because the form requires the disclosure of “capital gains” from the sale of an asset. “Capital gains” is a tax term, and it has never been entirely clear to me what happens if a filer sells an asset, and the profit is not a taxable “capital gain” (eg, if a stock is sold in a 401k).

If all of this is not confusing enough, Rangel’s 2007 FD also discloses, in the “Transactions” Section, the sale of the Sunny Isles condo. This time the date of the sale is left blank. The amount of the sale, however, is stated to be $100,001 to $250,000. Was this an attempt to correct the previous year’s filing? Who knows?

In short, Rangel’s FDs leave a number of questions regarding the Sunny Isles condo. Was it purchased for 50-100k or for 100-250k? Was there rental income or not? Was it sold in 2006 or 2007? Was it sold for 100-250k or 250-500k? Did Rangel make a profit on the sale?

The one thing that seems clear is that Rangel’s FDs were not carefully prepared or reviewed prior to filing. Moreover, the House Ethics Committee either did not review the filings, or failed to notice any of the internal discrepancies related to the Sunny Isles condo.

            One other motion filed by Senator Stevens should be noted because it refers to what I anticipate will be at the core of his defense.   The issue, explained below, is whether Senate Ethics guidelines clearly require the disclosure of the “things of value” Stevens received. 

            The government charges that Stevens received various things of value over a seven-year period (1999-2006) from VECO and its CEO, Bill Allen, and that Stevens falsified his financial disclosure reports (FDs) for those years by failing to report these things of value as either gifts or liabilities.  In particular, the government alleges that from 2000 to 2006, “STEVENS accepted from ALLEN and VECO more than $250,000 in free labor, materials, and other things of value in connection with the substantial renovation, improvement, repair and maintenance to [Stevens’s personal residence in Girdwood, Alaska].” 

            Significantly, the indictment alleges that these things of value had to be disclosed as either a gift or liability, but does not specify which.  In his motion, Stevens asks: “Was it a gift or liability?  Why did this alleged gift or liability qualify as such under the applicable rules for completing the form in question?  Notably, the monetary disclosure thresholds are vastly different for gifts and liabilities:  during the relevant period a gift had to be disclosed if it exceeded an amount between $260 and $305, while a liability had to be disclosed only if it exceeded $10,000.” 

            In a footnote, Stevens amplifies this point: “Wholly absent from the indictment is any allegation by the government about why the things of value at issue qualified as a ‘gift’ or ‘liability’ as those items are described on the face of the Financial Disclosure Form.  These words, in the context of the completion of the form, are terms of art and cannot be interpreted colloquially or cavalierly.  See Senate Financial Disclosure Report, date 3/08, pp. 14-17, available at http://ethics.senate.gov/downloads/pdffiles/cover1.pdf  (instructions for “Gifts” and “Liabilities” sections) (relevant pages attached as Exh. 1).”  

Piecing these points together with what has been reported about the Stevens case, I anticipate that the Senator’s defense will go something like this: (1) Stevens expected that he would be billed in the ordinary course for any work performed on his house; (2) Stevens paid those bills he received but did not keep close track of what work had been done versus what work was billed; (3) to the extent that work was performed but not billed, Stevens did not understand that he was required to report this as a “liability” on his FD; and (4) a reasonable person, reading the Senate Ethics rules, instructions and guidance would not have understood that there was any such obligation.

From the prosecution’s perspective, the last point could be a bit of a problem. Looking at the Senate FD form, one would be hard-pressed to reach the conclusion that disclosure of unbilled contractor work is required. The page for reporting liabilities states: “Report liabilities over $10,000 owed by you, your spouse, or dependent child . . . to any one creditor at any time during the reporting period. Check the highest amount owed during the reporting period. Exclude: (1) Mortgages on your personal residences unless rented; (2) loans secured by automobiles, household furniture or appliances; and (3) liabilities owed to certain relatives listed in Instructions. See Instructions for reporting revolving charge accounts.”

The language used here directs the filer’s attention to mortgages, financed purchases, credit card balances and similar types of loan transactions. Similarly, the two examples given, “mortgage on undeveloped land” and “promissory note,” suggest the type of transaction associated with the extension of credit, rather than a debt incurred in the ordinary course of commerce.

The Instructions for filling out the FD also are suggestive of a loan-type transaction. For example, the instructions state: “Report the name and address (city, state) of the creditor to whom the liability is owed. You must also indicate the type of liability and date the liability was incurred, interest rate, and term (if applicable) of each liability. The category of value which must be checked is that which indicates the highest amount owed on that liability during the reporting period, not just at the end of the period. If the liability was completely paid during the reporting period, you may also note that on the form if you wish.”

The brief discussion of “liabilities” in the Senate Ethics Manual is similarly indicative of some sort of loan: “Personal obligations aggregating over $10,000 owed to one creditor at any time during the reporting period, regardless of repayment terms or interest rates, must be reported. The identity (name of the creditor), type, interest rate, term and amount of the liability must be stated. Except for revolving charge accounts (e.g. credit card accounts), the largest amount owed during the calendar year is the value to be reported. For revolving charge accounts, the value is determined by using the balance occurring within 30 days of the end of the reporting period (e.g. for annual Reports, the year-end or December balance is used); however, if the revolving charge account is less than $10,000 at the close of the reporting period, no reporting is required.”

With one exception, all of the examples given in these sources, including the examples of things that do not need to be disclosed, involve loan-type liabilities that would ordinarily be owed to financial institutions and carry an interest-rate of some sort. The one exception is that the Ethics Manual notes that Senate filers are “not required to report tax deficiencies [because] such matters involve the government as a creditor, are normally confidential, and may be contested.” Even this example (of something that need not be disclosed) involves a debt that is overdue and carries an interest rate established by law.

It would not be surprising if the average Senate filer, reading these various sources of guidance, reached the conclusion that “liabilities” did not extend to bills received in the ordinary course of commerce. This conclusion is buttressed by a quick review of the most recent FDs of 28 Senators (Akaka through Craig, excluding Bingamin and Corker, whose FDs I could not, for some reason, open). These Senators either reported no liabilities, or reported liabilities such as “mortgage,” “line of credit,” “promissory note,” “credit card,” or “student loan.” None of the FDs reported ordinary debts to contractors or others who provide goods and services without some credit aspect.

Of course, a wider search might yield different results. But one would expect that there would be a fair number of filers in recent years who incur obligations of more than $10,000 to someone during the course of a year. Anyone who has had a kitchen remodeled or any other substantial home project can testify that it doesn’t take much to reach the $10,000 mark. Not to mention things like medical bills or attorneys fees, which can easily reach those levels. If in fact there are few or no Senate filers who have disclosed such items, one could infer that the term “liability” has not been interpreted to reach such ordinary debts.

If Stevens makes this argument, the prosecution will no doubt respond that a debt owed to a contractor falls within the literal language of the Ethics in Government Act, which requires disclosure, with some exceptions not applicable here, of “total liabilities owed to any creditor” (see 5 U.S.C. App. § 102 (a) ((4)). It could rely on Opinion 94-11 (5-25-94) of the Office of Government Ethics, which advised that executive branch employees must disclose “outstanding fees for legal or other services as a liability on a public financial disclosure report.” OGE rejected the argument that the terms “liabilities” or “creditor” could be “limited to cash loans” or “defined in a manner other than their ordinary usage.” It therefore concluded that “[l]iabilities owed to creditors typically include promissory notes, mortgages, debts arising out of installment sales agreements, outstanding fees for personal services, revolving charge accounts such as credit card balances, outstanding bills for consumer goods and services, contractual financial obligations, overdue tax liabilities, and any other debt owed to a creditor.”

There are, however, two problems with this response. First, while OGE has the authority to interpret financial disclosure requirements for the executive branch, it has no such authority with regard to the legislative branch. The fact that the Senate Ethics Committee has apparently chosen not to incorporate OGE’s advice in the guidance provided to Senate filers may suggest that the Committee was not in agreement with this advice. If anything, the Committee’s silence arguably underscores the ambiguity in the instructions provided to Senate filers on this point, ambiguity which, as noted in an earlier post, the court is constitutionally prohibited from resolving with its own interpretation.

Finally, even if the OGE opinion controlled, the prosecution might have a problem. The opinion refers to “outstanding bills” for goods and services, but Stevens did not receive any bills for the services that are at issue. Thus, it is not at all clear, under the OGE opinion, that Stevens would have an obligation to disclose unbilled work as a “liability.”

These considerations suggest that the prosecution may have a difficult time proving that Stevens falsified his FD by failing to disclose liabilities.

        This post sets forth a little legal background that may be helpful in understanding this week’s indictment of Senator Ted Stevens (R-AK).   

Stevens is charged with failing to disclose, on his annual financial disclosure form (FD), hundreds of thousands of dollars in goods and services he received from a private corporation and its CEO from 1999 to 2007.  Prosecutions of Members of Congress (or, I suspect, anyone else) for failing to make disclosures on their FDs are rare, but not unheard of.  As Dennis Thompson notes in Ethics in Congress, “[l]ike mail fraud and income tax evasion, disclosure offenses are sometimes used to reinforce charges that investigators regard as more serious but for which they have less conclusive evidence.”

The seminal case is United States v. Hansen, 772 F.2d 940 (D.C. Cir. 1985). Hansen was a former Representative from Idaho, who was indicted on four counts “for failing to disclose, respectively, a $50,000 bank loan to his wife, cosigned by Nelson Bunker Hunt, on his form for 1978, an $87,475 silver commodities profit on his form for 1979, a $61,503.42 loan from Nelson Bunker Hunt on his form for 1980, and $135,000 in loans from private individuals on his form for 1981.” Hansen was convicted, and raised a number of arguments on appeal, all of which were rejected by a panel that included then-Judges Antonin Scalia (who authored the opinion) and Ruth Bader Ginsberg.

Hansen’s primary argument was that the Ethics in Government Act, which established the requirement of filing annual FDs, provided for only civil, not criminal, penalties for false filings, and that it was therefore contrary to congressional intent to impose criminal sanctions for such filings under the False Statements Act. The court reviewed the text and legislative history of the Ethics in Government Act and concluded that, while it was clear that this statute provided for only civil penalties and that provisions for criminal sanctions in earlier versions of the legislation were dropped because of opposition by some members of Congress, there was no clear and manifest indication of an intent to repeal the False Statements Act with respect to this particular area. Judge Scalia, not surprisingly, gave no weight to the fact that 123 members of Congress filed an amicus brief supporting Hansen on this point.

Hansen also argued that the omissions from his financial disclosure form were not material. As described by the court, “[t]he test of materiality is whether the statement ‘has a natural tendency to influence, or was capable of influencing, the decision of the tribunal in making a [particular] determination.’” Hansen pointed out that in his case there was no tribunal conducting any type of investigation or making any type of determination that might have been affected by the failure to disclose the debts and transactions in question.

The court, however, rejected this argument as well. Judge Scalia noted that the FDs are forwarded to the House Ethics Committee, which is charged by the House with the duty of investigating potential ethical violations by its members. He observed that there could be no doubt that the particular omissions in question had the natural tendency to influence an investigation by the Committee because “after [the omissions] came to light, the Committee undertook an investigation and concluded that the transactions violated House Rules.” In any event, the court concluded that the question of materiality “does not require judges to function as amateur sleuths” by determining whether omitted information would actually been sufficient “to alert a reasonably clever investigator that wrongdoing was afoot.” It was enough that “[h]ere the falsifications related to financial transactions within the Committee’s charge, and tended to conceal information that would have prompted investigation or action; no more is needed.”

The court’s conclusion in this regard may have been affected by its holding, following D.C. Circuit precedent, that the question of materiality was an issue of law for the court, not an issue of fact for the jury. That holding, however, was overruled 10 years later by the Supreme Court in United States v. Gaudin, 515 U.S. 506 (1995) in an opinion written by none other than Justice Scalia. No longer bound by D.C. Circuit (or Supreme Court) precedent, Justice Scalia found that “[d]eciding whether a statement is ‘material’ requires the determination of at least two subsidiary questions of purely historical fact: (a) ‘what statement was made?’; and (b) ‘what decision was the agency trying to make?.’” The Court held that it was for the jury to answer these questions and to make the ultimate determination of materiality by applying the materiality test (did the false statement have a natural tendency to influence, or be capable of influencing, the decision in question).

Another aspect of the Hansen case was overruled by the Supreme Court in United States v. Hubbard, 514 U.S. 695 (1995). In Hubbard the Court held that (longstanding precedent to the contrary notwithstanding) the False Statements Act applied only to statements made to the executive branch, as opposed to statements made to the legislative or executive branches. In the aftermath of Hubbard, therefore, there were no criminal penalties applicable to filing of false FDs.

However, Congress responded to the Hubbard case by enacting amendments to the False Statements Act (codified at 18 U.S.C. § 1001) in 1996. These amendments made clear that the Act did in fact apply to matters within the jurisdiction of the executive, legislative or judicial branches. The 1996 amendments, however, did not make the False Statements Act applicable to all statements made to the legislative branch. Instead, the amendments provided that the law would apply only to (1) administrative matters, including a claim for payment, a matter related to the procurement of property or services, personnel or employment practices, or support services, or a document required by law, rule, or regulation to be submitted to the Congress or any office or officer within the legislative branch or (2) any investigation or review, conducted pursuant to the authority of any committee, subcommittee, commission or office of the Congress, consistent with applicable rules of the House or Senate.

The House Report on the amendments (H.Rep. 104-680) notes that “[o]ver the last four decades, section 1001 has been used to prosecute Members of Congress who lie on their financial disclosure forms, initiate ghost employee schemes, knowingly submit false vouchers, and purchase personal goods and services with taxpayer dollars,” and specifically cited Hansen for the proposition that the False Statements Act had been applied to filings under the Ethics in Government Act. The report leaves no doubt that it was Congress’s intent to reinstate holdings such as Hansen and ensure that the False Statements Act would apply to “all financial disclosure filings, including those required pursuant to the Ethics in Government Act.”

               On June 12, 2008, Citizens for Ethics and Responsibility in Washington (CREW), a prominent “watchdog” group, issued a press release stating “in light of a news report detailing favorable loan terms given to current and former public officials by Countrywide Financial, [CREW] has written to both the Senate and House Ethics Committees asking for investigations into members of Congress that may have received loans in violation of existing gift bans.”  Specifically, CREW pointed to media reports that Senators Christopher Dodd (D-CT) and Kent Conrad (D-ND) received preferential treatment under a “V.I.P.” program “that waived points, lender fees and company borrowing rules for prominent people.”  CREW explained that “[a]lthough there is no evidence that either Sen. Dodd or Sen. Conrad were aware they were receiving special treatment from Countrywide, their receipt of the unusually favorable loans creates exactly the sort of appearance of impropriety that the gift rule was designed to address.” 

            A few weeks later, on July 2, the Washington Post reported that Senator Barack Obama (D-Ill.) received a discounted loan from Northern Trust when he purchased his $1.65 million home in Chicago.  Like Senators Dodd and Conrad, Senator Obama paid no origination fees or discount points, yet received a below-market interest rate.  Like Senators Dodd and Conrad, Senator Obama evidently received better treatment from this financial institution than would have been available to a member of the general public. 

            Despite these similarities, CREW did not call for an ethics investigation of Senator Obama’s loan.  This was no mere oversight on CREW’s part.  CREW executive director Melanie Sloan claimed in an interview on CNN that there was a principled distinction between the two situations.  “Both Dodd and Conrad were getting special treatment under a program designed to give them special treatment because they were Senators,” she explained, “Senator Obama just got better treatment because he was a wealthy guy.”

This explanation, however, reflects CREW’s spin on the facts, not the facts as they have been reported to date. In the first place, it is somewhat misleading to state that Senators Dodd and Conrad were in “a program designed to give them different treatment because they were Senators.” The Senators were in a program designed to give preferential treatment to certain prominent or well-connected persons. It was not designed specifically for Senators or other members of Congress. While there is evidence that Senators Dodd and Conrad were included in the program (at least in part) because they were Senators, the program was not limited to elected or government officials. James Johnson, the former chief executive of Fannie Mae, for example, received a loan under this program.

There is no evidence to suggest that the Countrywide program was made available to people who were poor credit risks or who lacked financial assets to justify the loans that were made. Certainly Dodd, Conrad and Johnson are all, to use Sloan’s term, “wealthy guys,” and it seems likely that everyone who got a Countrywide VIP loan was a “wealthy guy” (or gal).

So how is the Obama loan situation any different? Unlike Countrywide, Northern Trust did not have a formal VIP program. But according to a Northern Trust executive interviewed in the Post story, it was the bank’s practice to “pursue successful individuals, families and institutions.” As part of this practice, Northern Trust would offer preferential rates and terms to certain borrowers, including Senator Obama, taking into consideration the “person’s occupation and income.” So it sounds very much like Senator Obama received a preferential loan from Northern Trust because of a discretionary decision by that bank that was based, in part, on the fact that he was a Senator. In other words, pretty much the same thing that happened with the Dodd/Conrad loans.

From the standpoint of the Senate ethics rules, the Dodd/Conrad and Obama loan situations are also the same. The Senate rules permit Senators to accept “loans from banks or other financial institutions on terms generally available to the public.” In neither case were the terms “generally available to the public.” Senators are also allowed to accept benefits offered to members of a group or class “in which membership is unrelated to congressional employment.” Presumably, therefore, a Senator may obtain a loan on terms extended to all persons of a certain income or asset level. However, if qualification for the loan terms depends on subjective judgments that may include consideration of the applicant’s congressional employment, which was evidently the case with regard to both the Dodd/Conrad and Obama loans, the loan probably violates the gift rule.

In short, CREW’s attempt to distinguish the Dodd/Conrad and Obama loans does not hold water. If the former warrant an ethics investigation, the latter does as well.

My attempts to get a response from CREW have been unsuccessful.

For a discussion of the legal ethics rules for lawyers working for Congress, please see The Ethical Obligations of Congressional Lawyers.

          The Senate Ethics Committee has issued a “qualified admonishment” of Senator Pete Domenici for making a telephone call in October 2006 to David Iglesias, then the U.S. Attorney for the District of New Mexico.  Domenici called Iglesias to inquire about the timing of potential indictments in an ongoing federal grand jury probe of alleged public corruption.  This corruption investigation was, at the time, an issue in a hotly contested congressional race in the First Congressional District of New Mexico.   

            In its letter to Senator Domenici, the Committee noted that it found “no substantial evidence to determine that you attempted to improperly influence an ongoing investigation.”  Nonetheless, the Committee found that “you should have known that a federal prosecutor receiving such a telephone call, coupled with an approaching election which may have turned on or been influenced by the prosecutor’s actions in the corruption matter, created an appearance of impropriety that reflected unfavorably on the Senate.” 

            This may represent the first time that the Committee has ever disciplined a Member simply for a communication with an executive official or agency, and its reasoning could significantly increase the risk of ethics violations when a Senator or staffer intervenes with the executive branch.   

The only authority cited in support of the Committee’s conclusion is the “general guidance under Rule 43 to avoid communications with a federal agency on a matter in which it is ‘engaged in an on-going enforcement, investigative, or other quasi-judicial proceeding’ (Senate Ethics Manual, 2003 ed., page 179).” Rule 43 provides that Senators may contact executive officials or agencies on behalf of “petitioners” (i.e., constituents or other citizens who seek their assistance) for various purposes, including requesting information, urging “prompt consideration,” and “express[ing] judgments.” However, Rule 43 also provides that the “decision to provide assistance to petitioners may not be made on the basis of contributions or services, or promises of contributions or services, to the Member’s political campaigns or other organizations in which the Member has a political, personal or financial interest.”

As Dennis Thompson points out in Ethics in Congress (1995), Rule 43 is almost entirely “devoted to saying what members may do. . . . The only conduct specifically proscribed or even deemed questionable is providing assistance on the basis of contributions or services.” Thus, it is not surprising that, as the Senate Ethics Manual specifically 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.”

As for the snippet of guidance cited by the Committee, the full sentence states: “Notwithstanding these limitations respecting court interventions, the Committee has ruled communications with an agency with respect to a matter which may be the subject of litigation in court is, nevertheless, generally permitted, where the communication is with the agency (or its attorneys, e.g., the Department of Justice) and not directed at the court, where the agency is not engaged in an ongoing enforcement, investigative or other quasi-judicial proceeding with respect to the matter, and where the communication is based upon public policy considerations and is otherwise consistent with Rule 43.”

This sentence is not exactly a model of clarity, but it is far from apparent that it means, as the Committee now interprets it, that Senators must generally avoid communications with federal prosecutors or other officials with regard to investigative or enforcement activities. In the first place, the sentence, like Rule 43 itself, focuses on what is permitted, and does not directly address what is proscribed. Moreover, the sentence, like Rule 43 itself, is directed at providing Senators with guidance on what they may do on behalf of constituents (in fact, it appears in a chapter of the Ethics Manual entitled “Constituent Service”) or other petitioners. It is not obvious that it has any application to Senator Domenici’s call, which, as far as we know, was not made on behalf of anyone else. Certainly there is no allegation that Senator Domenici received any contributions or services related to making the call.

To the extent that the sentence quoted by the Committee contains an implicit proscription of contacts with federal agencies, it would seem to relate to the prior two paragraphs of the Ethics Manual, which caution Senators against ex parte communications to the court in legal proceedings or to agencies with regard to formal adjudications or other proceedings that must be conducted “based only upon a record developed during a trial-like hearing.” Indeed, the Committee’s own “Overview of the Senate Code of Conduct and Related Laws” summarizes its guidance in this area as “EX PARTE communications may be prohibited in some judicial and quasi-judicial proceedings.”

Domenici’s conversation with Iglesias was not a prohibited ex parte communication. Anyone is free to communicate with a federal prosecutor regarding a matter that is the subject of a federal grand jury investigation, although the prosecutor is not free to provide information regarding that investigation. Thus, although Domenici’s call certainly seems inadvisable (in part because Domenici was attempting to solicit information about the timing of indictments that Iglesias could not or should not have provided), it did not appear to violate any specific prohibition contained in either Rule 43 or the Ethics Manual.

As now interpreted by the Committee, however, any communication with an executive agency regarding an investigation or enforcement activity would seem to be suspect under the ethics rules. For example, suppose a Senator communicates with the Federal Trade Commission to urge it to institute, expand or expedite an investigation of the oil companies for price gouging. Such a communication (which would seem unexceptionable under current Senate norms) could be viewed as a violation of the Committee’s guidance on agency communications and thereby subject the offending Senator to discipline. This would particularly be the case if the Senator’s communication were explicitly or implicitly linked to a political consideration such as an upcoming election.

         Congressman Albert Wynn has announced that he will leave the House in June and join the law firm of Dickstein Shapiro.  According to today’s Roll Call: “Wynn claims that he got clearance from the House ethics committee to begin negotiating for his Dickstein Shapiro job after he lost his primary in February, but he refuses to disclose the document. He has filed a recusal form with the Clerk of the House certifying he will avoid actions that will create the appearance of a conflict of interest.”

             What puzzles me is that statement that Wynn “refuses to disclose the document.”  Section 301 of the Honest Leadership and Open Government Act amended House Rule 27 to establish three new requirements for Members (and officers/senior staff) who conduct negotiations for future employment: (1) within 3 business days after commencement of any negotiation or agreement for future employment or compensation, the Member must file a “statement of disclosure” with the House Ethics Committee; (2) the Member must recuse himself from “any matter in which there is a conflict of interest or  an appearance of conflict of interest” and notify the House Ethics Committee of such recusal; and (3) upon making the required recusal, the Member is required to submit the “statement of disclosure” to the Clerk for public disclosure.         

As the Ethics Committee explains in a March 28, 2008 memorandum (interestingly, issued the day after Wynn’s departure was announced): “All Members, officers, and very senior staff who recuse themselves from official matters pursuant to Rule 27 must complete and submit the recusal form to the Committee. At that time, Members must also submit to the Clerk a copy of the completed employment negotiation form regarding that private entity, which they had previously submitted to the Committee. The Clerk will make that form available for public disclosure.” (emphasis in original).

The Roll Call editorial indicates that Congressman Wynn has filed a recusal form with the Clerk. This is somewhat confusing since the obligation is to file the recusal form with the Ethics Committee. Perhaps Wynn is contending that he has not yet recused himself in accordance with Rule 27 but is merely filing a notice of intent to recuse himself at some later date. If he has actually recused himself, however, he is clearly obligated to submit his previously-filed statement of disclosure to the Clerk, and the Clerk is required to make that statement public.

          The House Republicans have come out with an alternative to creating an Office of Congressional Ethics (as proposed by the Democratic members of the Special Task Force on Ethics Enforcement).  Although I have not seen the actual GOP proposal, the Roll Call description suggests that it has some promising elements, although further refinement is needed.

At the outset, the proposal would focus on reforming the House Ethics Committee itself, as opposed to creating a new outside entity. If nothing else, this focus recognizes the fact that the ultimate constitutional responsibility for disciplining members lies within the House itself, and cannot be outsourced to another entity. Thus whatever advantages may be obtained by creating an independent ethics office, they do not obviate the need for a House Ethics Committee that enjoys the trust and confidence of the institution and the public.

The proposal would have the members of the Ethics Committee appointed jointly by the Speaker and the Minority Leader, and would have the chairmanship rotate between the parties without regard to which one is in the majority. This idea would be to reduce partisanship and thus the types of partisan stalemates that the committee has experienced in the past.

I think that this is a good idea, but it is important to recognize reducing partisanship on the committee will not necessarily enhance the committee’s zeal to enforce the ethics rules. On the contrary, it could be argued that because the committee members would have a mutual interest in not rocking the boat, the absence of partisanship actually works in the opposite direction. Therefore, it becomes all the more important that there be mechanisms to trigger action by the committee.

The GOP proposal also suggests adding four former members to the committee, with the idea that these individuals would be more disinterested in their decisionmaking. I am not sure that the benefit of this reform would outweigh the practical and perhaps constitutional objections to the idea.

The proposal also recommends that outside complaints be allowed for the first time since 1997. As I have argued before, allowing such complaints is critical to re-establishing the credibility of the ethics process.

Under the proposal, the outside complaints would be “funneled” to the Ethics Committee through the House Inspector General. Although it is not clear from the Roll Call article, presumably the IG would perform some screening function, ie, weeding out at least clearly frivolous complaints. The IG would thus be performing a function not unlike that of the Parliamentary Commissioner for Standards, which I have suggested in earlier posts provides a good model for ethics enforcement.

Delegating this function to the IG is an interesting idea. The IG is an officer selected by the House leadership for a term of the Congress, but is normally expected to continue in that position from Congress to Congress. The IG also operates under the policy direction and oversight of the Committee on House Administration. It is not clear, therefore, that the IG has the degree of independence that would be optimal for performing the sensitive function of reviewing complaints against Members of Congress. (This is not, I hasten to add, any comment on the current IG, whom I do not know but about whom I have heard only positive things). One also one wonders how compatible this function would be with the IG’s other duties, which mostly consist of conducting financial, efficiency and similar type audits.

My personal inclination would be to vest this function in a separate and independent officer of the House, who would be appointed by the House for a non-renewable fixed term (perhaps two Congresses) on the joint recommendation of the Speaker and Minority Leader. This would give him or her the requisite independence to perform the job. I also think that this officer needs to do more than simply review complaints, but should have the authority to perform preliminary inquiries, dismiss or settle minor matters, and make reports and recommendations to the Ethics Committee itself.

Finally, the GOP proposal apparently recommends that, in order to break partisan deadlocks on the Ethics Committee, “[a]ny complaint that remains unresolved after a 90-day period would be referred to the Justice Department for investigation.” I have an admittedly knee-jerk negative reaction to this aspect of the proposal. Not all ethics matters involve illegality; some are simply inappropriate for Justice Department referral. Even with regard to complaints that do involve, or arguably involve, illegality, however, it is not desirable from an institutional perspective for the House to rely on the executive branch to perform its constitutionally assigned function of disciplining its members

UPDATE:According to an informed source, I have leapt to conclusions with regard to the function of the House Inspector General under the House GOP ethics proposal. I assumed that the IG would perform some sort of screening function with regard to outside complaints. Actually, the proposal envisions the IG merely receiving the outside complaints and logging them in for tracking purposes.

Simon Davidson, the ethics columnist for Roll Call, responded to the points I made in yesterday’s post regarding the Senate Ethics Committee’s admonishment of Senator Larry Craig.  Set forth below is our exchange of emails, reprinted with Mr. Davidson’s kind permission.

Mr. Stern: