Ethics: 2008 News

Rep. Wynn Should Leave Congress Immediately: Statement of Meredith McGehee, Campaign Legal Center Policy Director

Earlier today the Campaign Legal Center signed on to a letter with a coalition of reform groups urging Rep. Albert Wynn (D-MD) to step down from his position on the House Energy and Commerce Committee. The Campaign Legal Center calls on Rep. Wynn to resign from his office altogether for the sake of his constituents and Congress as a whole.

Rep. Wynn simply cannot avoid conflicts of interest or appearances of conflict while serving in Congress and waiting to join the lobbying practice at a major DC law firm. For him to stay in Congress under such circumstances does a disservice to his constituents. Rep. Wynn's announcement that he would remain in Congress after accepting work as a lobbyist undermines the integrity of the United States Congress. His actions will only serve to further tarnish the image of Congress in the eyes of the public.

Clearly continued service to Maryland's Fourth District is not Rep. Wynn's top priority or he would not be leaving his constituents without representation for the final months of his term as he plans to do under the current scenario. A lucrative career as a lobbyist awaits Rep. Wynn regardless of when he leaves office, but inasmuch as he has already accepted a position, he should leave office immediately.

To read the letter by the Campaign Legal Center, click here.

Groups Release Government Integrity Reform Agenda

On November 6, 2008 the Campaign Legal Center, the Brennan Center for Justice, Common Cause, Democracy 21, the League of Women Voters, Public Citizen and U.S. PIRG released a statement and government integrity reform agenda for the 111th Congress. Among the top priorities on the agenda: fixing the presidential public financing system and creating a new public financing system for congressional races.

To read the agenda, click here.

To read the statement, click here.

Office of Congressional Ethics Misses Grand Opening: Statement of Meredith McGehee, Campaign Legal Center Policy Director

The ethics task force's proposal was months late. The adoption of a new ethics process dragged on far longer than warranted. Now, on the date when it should be up and running, the Office of Congressional Ethics (OCE) did not open for business today despite a backlog of potential ethical improprieties meriting further investigation.

OCE is supposed to help make some headway in repairing the tattered reputation of Congress in the wake of a dizzying array of ethical scandals. The failure to get the new ethics office up and running expeditiously raises still more questions about how much Congress is willing to change the sad status quo of ethics enforcement on Capitol Hill.

Speaker Nancy Pelosi and Minority Leader John Boehner should make OCE appointments a priority with members named before the August recess. The jury is still out on whether the OCE will make any difference in ethics enforcement in the House. But we already have an answer for the 110^th.

Groups Urge Congressional Leaders to Strengthen Ethics Rules

Reform groups sent a letter today asking House Speaker Nancy Pelosi and House Republican Leader John Boehner to review and strengthen, at an appropriate time, the new House ethics rules that deal with Members' negotiating and accepting new jobs.

The letter was triggered by the recent controversy surrounding Representative Al Wynn's acceptance of a lobbying job at a Washington lobbying law firm and his decision to remain as a Representative for a period of time after accepting the job.

The reform groups include the Campaign Legal Center , Common Cause, Democracy 21, the League of Women Voters, Public Citizen and U.S. PIRG .

A copy of the letter sent to Speak Pelosi is below:

Dear Speaker Pelosi,

Our organizations greatly appreciate the outstanding leadership you have provided for the successful enactment of landmark ethics and lobbying reforms in this Congress.

In light of this, we are writing to express our concerns about how the new House ethics rules applied to Representative Al Wynn's recent acceptance of a job as a lobbyist and to his decision to remain as a Representative for a period of time after accepting the job.

Our organizations include the Campaign Legal Center , Common Cause, Democracy 21, the League of Women Voters, Public Citizen and U.S. PIRG.

Representative Wynn's initial reaction was to remain as a member of the House Energy and Commerce Committee after accepting a lobbying job at a Washington lobbying law firm which had numerous clients with interests pending before the Committee. He resigned from the Committee only after this conflict became a matter of public controversy.

Given the actions of Representative Wynn, and related questions about how well the new House ethics rules deal with Members' negotiating and accepting new jobs, we believe that these new rules need to be reviewed and strengthened, at an appropriate time.

For example, in contrast to the Wynn matter, the new Senate ethics rules prohibit a Senator from negotiating or accepting a job involving "lobbying activity," as this term is defined in the Lobbying Disclosure Act, until after a successor is elected to the Senator's seat.

Our organizations believe a similar kind of provision should be adopted by the House that recognizes a Representative should not negotiate or accept a job involving lobbying activities until after a successor to the Representative has been elected, or the Representative has left the House. Furthermore, it should be made clear that in the case of a lame duck session, this provision would apply to a Representative, even where a successor has been chosen in the election that came before the lame duck session.

The new House ethics rules, furthermore, establish disclosure and recusal requirements that apply when a Member engages in negotiations for or accepts a new job. These rules, however, do not provide for timely or adequate disclosure to the public.

Under the new rules, while a Member must file a statement with the House Ethics Committee that the Member is engaged in negotiations for employment, the statement is not made public unless the Member takes the further step of recusal from a matter in which the Member may have a conflict, or the appearance of a conflict, of interest.

It is solely up to the Member to decide, however, whether such recusal is required. And while t he Member is required to notify the House Ethics Committee of such a recusal, there is apparently no requirement for the Member to publicly disclose the circumstances that caused the recusal.

The potential absence of timely and adequate public disclosure under the new rules is illustrated by the fact that while numerous House Members have announced they will retire at the end of this Congress, only two Representatives, to date, have filed notices of employment negotiations that have become public.

This calls into serious question whether the new disclosure and recusal rules provide the public with adequate and timely information.

We urge the House to review and address at an appropriate time the matters we have raised and look forward to working with you and interested House members to address these matters.

Thank you again for you strong leadership on ethics and lobbying reforms.

New Lobbying and Ethics Rules 2 Pager

Since the passage of the Honest Government and Open Leadership Act (HLOGA) was enacted last year, various elements of the law have taken effect while others have not or are still being interpreted. Below is a brief summary of the rules and their current status as of March 2008. The staff of the Campaign Legal Center has compiled a brief summary of the rules and their current status as of March 2008.

To view the 2 page summary on the Honest Leadership and Open Government Act, click here.

Reform Groups Call on Representative Albert Wynn to Step Down from House Energy Committee

Below for your information is a letter that reform groups sent today to Representative Albert Wynn (D-MD), urging him to step down from the House Energy and Commerce Committee, in light of announcing his intention to resign from the House of Representatives in a few months in order to take a position at the lobbying law firm of Dickstein Shapiro LLP.

The six reform groups include the Campaign Legal Center, Common Cause, Democracy 21, the League of Women Voters, Public Citizen and U.S. PIRG.

April 10, 2008

Dear Congressman Wynn :

On March 27, you announced your intention to resign your seat in the House of Representatives in the next few months to take a position at the lobbying law firm of Dickstein Shapiro LLP.

As you know, the Open Government and Honest Leadership Act of 2007 amended House Rules to require any sitting member of the House who is in negotiations or has accepted an offer of future employment to recuse himself or herself from any official matter that might affect their future employer. The rule further requires members in your situation to recuse themselves from any official matter that might appear to be a conflict of interest as a result of negotiations or agreement regarding future employment or compensation.

You indicated to the House Committee on Standards of Official Conduct in writing on March 28 that you will comply with these requirements.

According to 2007 year-end lobby disclosure reports filed with the Clerk of the House, Dickstein Shapiro LLP lobbied on behalf of the following clients:

Triple Canopy	Nuclear Electric Insurance Ltd.
Airnet Systems, Inc.	Eversealed Windows
Teco Energy	Nstar Electric & Gas Corporation
Swisher Intl.	Covanta Energy Corporation
American Greyhound Track Operators Assn	Novozymes North America
Stamps.com	Diamond Management & Technology
Arkansas State Univ.	Millenium Cell
American Society of Interventional Pain Physicians	Delmarva Power & Light Company
Artel, Inc.	Luiginos
Peabody Energy	Dey, L.P.
Atlantic City Electric Company	Intuit
Oracle Corporation	Interactive Gaming Council (IGC)
Cigar Assn of America	Harbour Group Industries, Inc.
DKRW Energy LLC	Hach Co.
Exoxemis
E.I. Dupont Nemours & Co.

In your capacity as a partner in the Public Policy & Law Practice division at Dickstein Shapiro, it is possible that you would advocate on behalf of any of the clients listed above.

Therefore, consistent with your Statement of Recusal filed with the Committee on Standards of Official Conduct, you cannot "act directly or through others in deciding, approving, or disapproving official matters" or "recommend, investigate, advise or otherwise contribute to or influence such official matters," that might affect any of the Dickstein Shapiro clients listed above who remain as clients of the firm.

Based on the different industries represented in the list above, to avoid any conflicts of interest or any appearance thereof, you will likely need to recuse yourself from all official matters relating to the issues of energy, telecommunications, tobacco, construction, higher education, information technology, gambling, environmental issues, and pharmaceuticals. By voting on or participating in the consideration of legislation in these issue areas, you may create the appearance of a conflict of interest because legislation on these issues may affect the clients of your future employer.

Furthermore, the official actions you might take that could influence matters of relevance to the clients of Dickstein Shapiro include more than just recorded floor votes. As you know, the actions taken by committee members during the mark up of a bill can influence the final outcome as much as a vote for passage. And there are other official activities undertaken by committees, such as hearings and investigations, which could affect the interest of clients of Dickstein Shapiro.

Therefore, we believe that you should step down from serving on the House Energy and Commerce Committee. It is difficult to believe that any direct or indirect action you might take in an official capacity as a member of this committee, especially as Chairman of the Subcommittee on Environment and Hazardous Materials, would not affect the interests of clients Dickstein Shapiro represents.

In consideration of the House Rules that apply to Members of Congress who engage in future employment negotiations and accept future employment positions, we urge you to step down as a member of the House Energy and Commerce Committee.

We would appreciate your letting us know about the steps you are planning to take regarding this matter within the next week.

Campaign Legal Center League of Women Voters
Common Cause Public Citizen
Democracy 21 U.S. PIRG

Reform Groups Send Letters to Candidates on Presidential Public Financing

On February 20, 2008, reform groups called on presidential candidates Senator John McCain (R-AZ), Senator Hillary Clinton (D-NY), Governor Mike Huckabee and Representative Ron Paul (R-TX) to co-sponsor or endorse legislation pending in Congress to repair the presidential public financing system.

To read the letter from reform groups to Senator clinton on public financing, click here.

P: Contributions by Minors (Thompson Plaintiffs)

To read the group letter to Governor Huckabee on public financing, click here.

To read the group letter to Senator McCain on public financing, click here.

To read the letter from reform groups to Representative Paul on public financing, click here.

Letter Sent to Speaker Pelosi on Flawed Ethics Guidance

February 6, 2008

Dear Speaker Pelosi:

As you know, our organizations strongly supported the landmark ethics and lobbying reforms passed by Congress last year and strongly praised the House for this major accomplishment.

Our organizations include the Campaign Legal Center, Common Cause, Democracy 21, the League of Women Voters, Public Citizen and U.S. PIRG.

One of the important new ethics rules adopted by the House last year requires that during a national party convention, a Member "may not participate in an event honoring that Member of such event is directly paid for by a registered lobbyist or a private entity that retains or employs such a registered lobbyist." Rule XXV, cl. 8.

The purpose of this rule was to prevent lobbyists and lobbying organizations from currying favor with Representatives by paying for lavish parties to "honor" the Representatives at the national conventions, as has been done at past conventions.

The language, purpose and spirit of the new ethics rule makes clear that this includes lobbyist-funded parties at the national conventions to "honor" multiple House members, such as a congressional state delegation, a congressional committee, a congressional caucus or any other group of members of Congress .

Nevertheless, the House Ethics Committee issued a guidance on December 11, 2008 stating that the new ethics rule applies only if a party "honors" a specific Member, but not if the party "honors" a group of Members.

The Ethics Committee�fs unjustifiable guidance threatens to seriously undermine the public credibility of the new ethics rules.

It would mean that the goal of the House in adopting the new rule was to prevent a lobbyist or lobbying organization from paying for a lavish party to curry favor with a single Representative, but not to prevent the same lobbyist or lobbying organization from paying for a lavish party to curry favor with a group of Representatives.

This makes no sense.

Furthermore, it is in direct conflict with an interpretation of the same ethics rule in the Senate issued by the Senate Ethics Committee, and with an interpretation made by the House Clerk and Senate Secretary of analogous language contained in the new lobbying disclosure law.

The House Clerk and Senate Secretary correctly concluded that the lobbying disclosure provision requiring lobbyists and lobbying organizations to report payments made for "the cost of an event to honor or recognize a covered legislative branch official," covers payments for events held for multiple honorees from Congress.

The Senate Ethics Committee interpretation issued on February 4, 2008 makes clear that the Senate ethics rule, virtually identical to the House ethics rule, does not allow lobbyists or lobbying organizations to pay for events at the national conventions

to honor groups of Senators, such as a state congressional delegation or to honor specifically identified Senators.

A Washington Post editorial said about the House Ethics Committee guidance (January 14, 2008):

The new ethics law prohibits lobbyists and the entities that employ them from hosting -- read, paying for -- convention parties to "honor" lawmakers. This is a phenomenally cushy perk, in which key members of Congress get to entertain and curry favor with their supporters, at the expense of the lobbyists who want to curry favor with them. Section 305 of the new law provides that during the convention, a member of Congress "may not participate in an event honoring that Member . . . if such event is directly paid for by a registered lobbyist under the Lobbying Disclosure Act of 1995 or a private entity that retains or employs such a registered lobbyist." No parties, you might think?

Think again. The House ethics committee, in its wisdom, issued an interpretation of the new law last month that leaves little of it intact.

A New York Times editorial said about the House Ethics Committee guidance (February 4, 2008):

Congress�fs new ethics rules ban deep-pocketed corporate lobbyists from "honoring" members with lavish V.I.P. galas at the presidential nominating conventions. As originally written, the rules instructed House members to firmly decline the honor. But as newly loopholed by the committee, the rules will only ban a single lawmaker from being so honored. Representatives are free to belly up to fetes honoring groups of them. 3

The misinterpretation of the House ethics rule described above is not the only problem with the House Ethics Committee guidance on party conventions. The guidance also says, in effect, that lobbyists and lobbying organizations can finance parties "to honor" a single Representative by paying for the party through a conduit.

This interpretation would mean that a lobbyist or lobbying organization could do indirectly what they are prohibited from doing directly, which simply reverses the standard legal interpretation for such efforts to circumvent a law or rule.

On December 18, 2008 our organizations wrote to the House Ethics Committee on this matter. The letter concluded:

We strongly urge the Ethics Committee to withdraw the guidance on parties at the national conventions that it issued on December 11, 2007, and to provide new guidance for Rule XXV, cl. 8, that properly implements, rather than destroys, the new House ethics rule adopted to prevent lobbyists from throwing lavish parties for Members at the party conventions.

We have received no response from the Ethics Committee.

This is not the only guidance, furthermore, issued by the House Ethics Committee that has raised serious problems regarding its interpretation of the new House ethics rules.

Our organizations strongly urge you to take all steps necessary to ensure that the Ethics Committee withdraws its misinterpretation of the new ethics rule on party conventions and issues a new guidance that carries out the clear meaning, purpose and spirit of the new rule.

It is essential for the Ethics Committee guidance to be revised in order to prevent a major House accomplishment in this Congress from being publicly undermined and to protect the integrity and credibility of the House as an institution.

Thank for your attention to this matter.

Campaign Legal Center League of Women Voters

Common Cause Public Citizen

Democracy 21 U.S. PIRG

Bundling Disclosure Provisions Undermined by New FEC Rules?: Comments of Paul S. Ryan, Legal Center FEC Program Director

After much discussion of the difficulty of crafting a compromise and a bit of self-congratulation, the FEC today unanimously adopted rules to implement the bundling disclosure requirements in the Honest Leadership and Open Government Act of 2007—the important ethics and lobbying reform law passed by Congress in 2007. Unfortunately, the rules adopted by the FEC today may seriously undermine the purposes of the law and the intent of the law's principal sponsors—including President-elect Obama and Sen. Feingold—as expressed on the floor of the Senate. It's worth noting at the outset that the rules were made available to the public literally one minute before the start of this morning's meeting and the rule was not accompanied by the "Explanation & Justification" (E&J) that the Commission must approve and publish before the rules take effect. The Commission anticipates publishing the E&J by mid-January. For these reasons, the following are preliminary thoughts regarding the most significant issues in the rulemaking.

The Campaign Legal Center filed written comments in the rulemaking, together with Democracy 21, Common Cause, the League of Women Voters and U.S. PIRG, and also participated in the rulemaking hearing.

In our comments and testimony, we pointed to two issues in the rulemaking of great importance to the effectiveness of the law. First, the manner in which the Commission defined "bundled contribution" is of critical importance to the effectiveness of the law. The statute defines a "bundled contribution" as one, inter alia , where the recipient candidate or committee "credits" the funds to the registrant "through records, designations, or other means of recognizing" that a certain amount of money has been raised by the registrant. One question in the rulemaking was how broadly the Commission would interpret the phrase "or other means of recognizing." Would the Commission include within the definition only written, formal means if recognizing bundled contributions, or would the Commission interpret "recognizing" in a broader, literal way based on the root of the word "recognizing"— cognoscere , the Latin verb "to know." We advocated the latter approach, i.e. , disclosure is required any time a candidate knows that a lobbyist has bundled contributions for the candidate.

To illustrate the importance of this issue to bundling disclosure, consider the following hypothetical scenario. A lobbyist walks up to a Senator and tells the Senator: "I've raised $100,000 for you from friends at my country club. You'll be seeing the checks in your mail any day now." The Senator replies, "Thank you very much. I really do appreciate it."

It's difficult to imagine the mindset wherein this scenario isn't considered lobbyist bundling. Yet, in the absence of a written record, this scenario would not likely be covered by the FEC's newly-adopted definition of bundling. Instead, under the FEC's new rule, reportable bundling only occurs where the candidate bestows some tangible benefit on the lobbyist, such as title or an autographed photo, or where the candidate has a formal tracking system for bundled contributions. Knowledge on the part of a candidate that a lobbyist has bundled contributions is not enough under the new FEC rule to trigger reporting requirements. Instead, in the absence of a written record, knowledge plus a tangible benefit to the lobbyist is required to trigger the reporting requirements.

The simple fact that the hypothetical example given above does not constitute reportable lobbyist bundling under the FEC's new rule is a grave disappointment, but it's not our only disappointment with the new rule.

Our second significant disappointment with the new rule related to fundraising events jointly hosted by multiple lobbyists—a common practice here in DC. Here's what the principal Senate sponsors of the legislation, President-elect Obama and Sen. Feingold, had to say on the floor of the Senate about jointly-hosted fundraising events.

Mr. Obama. … In a situation where a fundraising event is cohosted by a number of different lobbyists, I am concerned that some might want to avoid reporting bundled contributions by dividing up the total receipts of a fundraising event among many sponsors or cohosts of the event. Certainly, that was not our intention. Does my friend from Wisconsin agree with me?

Mr. Feingold. Yes, the purpose of the bundling reporting provision is to get as much disclosure as possible of bundling by lobbyists. … When two or more lobbyists are jointly involved in providing the same bundled contributions—as, for instance, in the case of a fundraising event co-hosted by two or more lobbyists—then each lobbyist is responsible for and should be treated as providing the total amount raised at the event, for purposes of applying the applicable threshold to the funds raised by that lobbyist, and for purposes of reporting by the committee of the "aggregate amount" of bundling contributions "provided by each" registered lobbyist "during the covered period."

… [A] campaign should not be able to avoid disclosing, for example, that three lobbyists raised $30,000 in a single fundraiser by claiming that each lobbyist has been credited with only one-third of the total amount. If this evasion were allowed, reporting for any fundraising event could be avoided simply by adding enough lobbyist cohosts for the event so that all of the lobbyists fall below the threshold. We certainly did not intent that result.

153 Cong. Rec. a t S10699 (emphasis added).

We advocated a position consistent with that of President-elect Obama and Sen. Feingold in our comments and testimony. Lobbyist bundling disclosure would be severely undermined if disclosure could be avoided through simple expedient of adding additional lobbyist co-hosts to a fundraising event, in order to keep each lobbyist under the $15,000 reporting threshold. Yet this is precisely what the rules adopted today by the FEC allow.

I'll use another hypothetical example to illustrate this point. Consider the case where a candidate plans a fundraiser where she anticipates raising $150,000, having lobbyists co-hosting the event and raising the money. Under the reporting regime envisioned by President-elect Obama and Sen. Feingold, and advocated by us in the rulemaking, each lobbyist co-host would be reported as having bundled $150,000, with the reporting forms designed in such a way as to prevent over-counting.

However, under the rules adopted by the FEC today, candidates and lobbyists can avoid disclosure in precisely the manner envisioned by President-elect Obama and Sen. Feingold. One would think the FEC would have learned—in the wake of the two Shays lawsuits where the agency was found to have violated the Administrative Procedures Act—not to adopt rules that are clearly contrary to law, but apparently not. Using the hypothetical example above, the candidate could simply make sure that at least 11 lobbyists were co-hosting event in order to attribute less than the $15,000 reporting threshold to each lobbyist co-host ( e.g. , $150,000 / 11 = $13,636).

The Commission assured the public at its meeting this morning that it would approve an "Explanation & Justification" for the new rules no later than January 15, 2009. It is possible that the "Explanation & Justification" will make clear that Commission interprets its rules approved today as preventing these problems we envision—but I'm not holding my breath. Stay tuned.