A Question of Ethics

What, Exactly, Is the Point of the New Office on Ethics?

March 24, 2008

Q: I am a House staffer with a question about the newly created Office of Congressional Ethics. From reports I have read, it appears that the OCE will not have authority to issue sanctions. Rather, if I understand it correctly, after the OCE investigates a potential ethics violation, the most it can do is recommend further investigation by the House Committee on Standards of Official Conduct. If that’s right, what’s the point of the OCE?

A: Given your question, it is unlikely to surprise you that the newly created Office of Congressional Ethics has already attracted its share of critics, many of whom have charged that the OCE is merely an attempt to score political points by appearing to address Congressional corruption without actually doing so. Critics from the left and right have even used the same language to condemn the OCE, calling it an unnecessary “layer of bureaucracy.” Like you, these critics question whether the OCE will serve any real purpose.

To a certain extent, the critics have a point. As you note, the OCE cannot issue sanctions. In fact, the OCE is twice-removed from any real sanctions. The strongest action the OCE can take is to recommend further investigation by the House ethics committee. Yet, beyond a letter of condemnation, the strongest action the ethics committee can take is to recommend that the House issue sanctions. Put crudely, the role of the OCE is to conduct an investigation to determine whether another committee should conduct an investigation to determine whether to recommend sanctions to the House.

On the other hand, given all of the work that went into it, it is hard to imagine that the creation of the OCE could be completely without purpose. The resolution creating the OCE came after an 11-month, bipartisan review by the Special Task Force on Ethics Enforcement, which the House established in January 2007 to determine whether it should create an independent ethics enforcement entity. The task force consisted of eight Members, four from each party, and met at least 30 times. It solicited input from reform groups, scholars, and current and former ethics committee staff. At the end of its review, in December 2007, it issued its recommendations in a 25-page report. The task force’s ultimate recommendation was to create the OCE. According to the task force’s report, the recommendation was based on “months of study, meetings, and discussion by members.”

As to the purpose of the OCE, the task force’s report identifies two primary “goals” with respect to improving the current ethics process. First, the OCE is intended to add an independent-review element by non-Members. This addresses the concern that the public does not trust Members to police themselves. Second, it is intended to increase the transparency of the House ethics process, which has historically been subject to confidentiality under ethics committee procedures.

The task force sought to accomplish the first goal — independent review — by creating the OCE and setting strict qualifications for its board members. The board will be bipartisan. Of the six OCE board members, the Speaker will nominate three with the concurrence of the Minority Leader, and the Minority Leader will nominate three with the concurrence of the Speaker. Members, lobbyists and federal employees all are ineligible to serve on the board. And finally, board members must agree not to seek any federal public office within three years after leaving the board.

The task force sought to accomplish the second goal — increased transparency — by overhauling the review process. Under the resolution, the OCE is to conduct its review in two stages: a preliminary review and a second- phase review. A preliminary review is triggered by the written request of at least two board members — one of whom must have been appointed by the Speaker and one by the Minority Leader. To move from a preliminary review to a second-phase review requires the affirmative vote of three board members. Otherwise, the review is terminated.

If the matter does advance to a second-phase review, after the OCE conducts such a review it must refer the matter to the House ethics committee and provide two documents: (1) a report recommending dismissal or further inquiry, or stating that the board vote on this issue was a tie; and (2) findings of fact. The resolution states that neither document should contain conclusions regarding the guilt or innocence of the person subject to the review, because such matters are the sole purview of the ethics committee.

This is where the transparency comes in. In most circumstances, after the ethics committee reviews a matter referred by the OCE, unless the OCE and the ethics committee agree that the matter should be dismissed, the ethics committee must make public: (1) the OCE report; (2) the OCE’s findings of fact; and (3) the ethics committee’s own commentary regarding the status of the matter. Ultimately, the ethics committee must recommend how to resolve the matter.

Well, will it work? That depends on whom you ask. The unpredictability of the OCE’s efficacy is apparent from the conflicting predictions about its fate. Some say the board’s lack of authority both to issue subpoenas and to impose sanctions will make it a paper tiger. Others have voiced the opposite concern: that a mere referral by the OCE to the ethics committee will be tantamount to a guilty verdict, and that the committee will have no function but to affirm what has been referred by the OCE.

It is the presidential primary season, which invariably means that there is constant talk about “change.” Less common is any discussion about whether the “change” will be for the good. In the case of the recently created OCE, there is no question that it will be a change. What is less clear is whether the change will be for the better or worse. Even the chairman of the ethics task force, Rep. Mike Capuano (D-Mass.), acknowledged the OCE’s uncertain fate. As he put it: “It might fail. It might not.”

© Copyright 2008, Roll Call Inc. Reprinted with permission. Widely regarded as the leading publication for Congressional news and information, Roll Call has been the newspaper of Capitol Hill since 1955. For more information, visit www.rollcall.com.


A Question of Ethics

Organizations Struggle With New Disclosure Rules for Members

March 10, 2008

Q: I am general counsel of a trade association with hundreds of member businesses throughout the country. My question concerns the new law requiring us to disclose the identity of any member business that “actively participates” in planning our lobbying activities. We are struggling with this new obligation because the term “actively participates” is so vague that it seems virtually impossible to determine to whom it applies. I have heard that another trade association has filed suit to challenge the legal validity of the new law. How did the challenge come about? And, must our organization comply while it is pending?

A: Before turning to your questions, it is worth reviewing the basic rules of lobbying disclosure to see where this particular requirement fits in. Broadly speaking, the Lobbying Disclosure Act requires lobbyists to file regular reports disclosing the identity of their clients and the interests that they represent. It also requires businesses with in-house lobbyists to file such reports. These requirements shine sunlight on businesses’ lobbying activities.

Businesses cannot avoid this sunlight merely by conducting their lobbying activities through another organization. Until last year, the LDA prevented this method of eluding disclosure by requiring all lobbying organizations to disclose the identity of any business that substantially funds their lobbying activities and “in whole or in major part, plans, supervises or controls” those activities.

Last fall, however, Congress determined that even with this requirement some businesses were still forming lobbying coalitions and eluding disclosure. Congress therefore broadened the disclosure obligation to require organizations to identify any member business that substantially funds their lobbying activities and “actively participates” in the planning, supervision or control of such activities. The stated purpose of this change was to close “a loophole that … allowed so-called ‘stealth coalitions,’ often with innocuous-sounding names, to operate without identifying the interests engaged in the lobbying activities.”

Whether Congress intended to target trade associations, the new law does raise tricky questions. The challenge now is to determine which, if any, of your member businesses qualify as “actively participating” in lobbying activities. This is particularly difficult not just because of the vagueness of “actively participates,” but also because of the somewhat vague definition of “lobbying activities,” which covers efforts in support of your “lobbying contacts” (another defined term), including “preparation or planning activities, research and other background work” intended for use in such contacts.

Associations that would prefer not to attempt the perplexing task of determining which members qualify as “actively participating” in “lobbying activities” have an alternative. An organization is excused from the disclosure requirement if it simply lists all of its members on the Internet.

Last November, three trade associations that apparently were not enthused with this option jointly sent a letter seeking guidance from the Secretary of the Senate and the Clerk of the House. The Senate Secretary and the House Clerk thereafter issued the requested guidance, which states that “actively participating” means “engaging directly” and provides examples. These include participating in decisions about selecting lobbyists and formulating lobbying priorities and strategies. Conversely, they said, a member does not “actively participate” when it merely plays a “passive role” in lobbying activities. Examples include “occasionally” responding to requests for information in support of lobbying activities or expressing an opinion regarding legislative goals through means generally “on par with” all other members.

At least one of the three associations that had sent the letter, the National Association of Manufacturers, was so dissatisfied with the guidance that it filed suit. The suit argues that the disclosure requirement impermissibly burdens the First Amendment rights of freedom of speech, assembly and petitioning the government to redress grievances. The argument that may have the best chance of success, however, is that the language is unconstitutionally vague.

The NAM argues not only that the term “actively participates” is vague but also that the term “lobbying activities” is. This latter argument faces a challenge because the term “lobbying activities” implicates so many other reporting requirements that have been in place since 1995. If the term is unconstitutionally vague, it is fair to ask how lobbying firms have managed to file reports for the past 12 years. Moreover, the fact that the term “lobbying activities” is so important to the LDA’s requirements means that, if the NAM’s challenge of that language were to prevail, the court’s decision would essentially gut the LDA and force Congress to start over.

One could argue that the very fact that the Senate and House provided such detailed guidance illustrates not that the language is clear, but rather just the opposite. Otherwise, why would such detailed guidance be necessary? Moreover, the guidance is of limited relevance to the language of the requirement itself given that the guidance explicitly states that it does not bind the very official responsible for enforcing the requirement: the U.S. Attorney for the District of Columbia.

All of this, while pertinent to how we got here and where the law might go next, still leaves your second question of whether you must comply in the meantime. Yes, you must. The fact that a court might strike down the new requirement is not a sufficient reason to ignore the law as it is currently written. And, the first report is due April 20. So, if you don’t want to post a list of all of your members, you should do whatever you can to determine which of your business members you must identify on your disclosure report. This could take a lot of work at substantial cost. However, the newly heightened civil and criminal penalties for noncompliance mean the cost of not doing the work could be even greater.

© Copyright 2007, Roll Call Inc. Reprinted with permission. Widely regarded as the leading publication for Congressional news and information, Roll Call has been the newspaper of Capitol Hill since 1955. For more information, visit www.rollcall.com.