A Question of Ethics

May Firms Woo Prospective Employees From the House?

April 21, 2008

Q: I am the human resources manager for a lobbying firm and have a question about our efforts to hire a senior House staffer. We recently extended him an offer and are now trying to persuade him to accept it.

A longtime tradition of our firm is to hold a Founder’s House Weekend for anyone to whom we offer a job. It is at the beach house of our firm’s founding partner, and typically involves a lavish dinner in honor of the prospective employee, who stays at the house. We would have liked to throw a Founder’s House Weekend for this staffer but are concerned about the House gift rules. I gather there is an exception for personal hospitality but that it doesn’t apply to lobbyists. Therefore, I think we will have to take a pass on this tradition for the House staffer. Is that right?

A: Whoa! Don’t cancel Founder’s House Weekend just yet. Sure, the personal hospitality exception to the House prohibition upon gifts may not apply. But don’t forget that there are more than 20 other exceptions. In fact, there is one that could be right on point.

But before turning to those exceptions, the place to start is always the gift prohibition itself. Under a House rule, a staffer may not accept any “gift,” which the rule defines as a “gratuity, favor, discount, entertainment, hospitality, loan, forbearance, or other item having monetary value.” The rule provides several examples, including services, transportation, lodging and meals. Under these definitions, an invitation to Founder’s House Weekend is almost certainly a gift. This means that the staffer may not accept it unless an exception applies. It also means that if an exception does not apply, proceeding with Founder’s House Weekend could expose your firm and the founding partner to sanctions. So, let’s look at the exceptions.

The exception you mention covers “personal hospitality.” Unfortunately, you are right that the Founder’s House Weekend does not qualify. First, as you point out, the exception does not apply to hospitality provided by a lobbyist. This is not because the House thinks that the quality of hospitality provided by lobbyists is unacceptably meager. Rather, the personal hospitality exception is one of several places in the House rules where the restrictions on lobbyists are heightened out of concern for the appearance of improper influence.

Second, even if your founding partner were not a lobbyist, the applicability of the personal hospitality exception would still be in doubt. Under the rule, personal hospitality means hospitality that is intended for a nonbusiness purpose. Wooing a prospective employee might not qualify. Moreover, while you don’t mention who typically pays for the weekend, note that, according to the ethics manual, the exception does not apply where the host’s expenses are to be reimbursed by the business, or deducted as business expenses.

Nevertheless, there is hope yet for Founder’s House Weekend. Consider the exception for benefits provided in connection with employment discussions. This exception applies to “food, refreshments, lodging, transportation, and other benefits … customarily provided by a prospective employer in connection with bona fide employment discussions.” The idea behind the exception appears to be that the gift rule should not deprive staffers who are seeking employment in the private sector the same benefits enjoyed by other prospective employees.

The key requirement here is that the benefit must be “customarily provided by a prospective employer.” Does this mean that the benefit must be one that a typical employer customarily provides? Or, to qualify for the exception, is it enough that the specific employer in question customarily provides the benefit to prospective employees? These questions are critical because, while Founder’s House Weekend has a long history at your firm, not every firm customarily provides such a benefit to its prospective hires.

Fortunately, the Ethics Manual answers these questions favorably for you. The manual includes an example involving employment discussions between a lobbying firm and a House staffer during which the firm offers the staffer use of a beach condo for a weekend. The manual states that the offer is not acceptable unless the firm has a history of making the same offer to comparable prospects in the private sector. Therefore, given that it is a longtime tradition of your firm to hold a Founder’s House Weekend for any prospective employee, it should qualify.

One final note. Firms less scrupulous than yours might view this exception as an opportunity to conduct bogus employment discussions merely as an excuse to bestow gifts upon House Members and staffers. Don’t. The exception applies to benefits in connection with bona fide employment discussions. Founder’s House Weekend qualifies. Benefits in connection with sham discussions do 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

May Lobbyists Rely on the Congressional Ethics Manuals?

April 8, 2008

Q: As a freelance lobbyist, I am very concerned about my new obligations to comply with the Congressional gift and travel rules. I may be a bit nervous by nature, but these rules seem hyper-technical to me. This makes me worried that I might inadvertently run afoul of them, so I have been busy educating myself as much as possible.

To that end, I have just started going through the House and Senate ethics manuals. Last week, however, I was discussing this with a friend of mine who is an attorney, and he warned me that I should not rely on the manuals because they are not intended for people outside Congress. I think that maybe he was just pulling my leg because he knows how gullible and nervous I can be. He’s not right, is he?

A: As you seem well aware, the Honest Leadership and Open Government Act of 2007 changed everything for lobbyists. Prior to the act, while it was generally a good idea for lobbyists to have a sense of the ethical rules governing Members and staffers, this was primarily for political and business reasons. With the passage of HLOGA, however, lobbyists now have a much stronger incentive to learn the rules: the prospect of civil and criminal liability. Lobbyists are now required to read the Congressional gift and travel rules. More to the point, lobbyists also must comply with them. And, in order to ensure they do comply, it is not enough that lobbyists read the rules. Lobbyists should understand them, too.

Given this sudden raising of the stakes, lobbyists like yourself have been scrambling to educate themselves about rules that are not always easy to understand, even for those of us who study them regularly. Fortunately, there is a wide array of educational resources available, and the good news is that you have chosen two of the best: the House and Senate ethics manuals. The bad news (which I hesitate to share with someone who admits to being “a bit nervous by nature”) is that even these resources have their limitations. Let’s look at those limitations one at a time.

The first is staleness. Last month, the House Committee on Standards of Official Conduct published what it called “the first complete revision of the House Ethics Manual since 1992.” For those of us who have struggled to make sense of an ethics manual that has not always corresponded to the current rules, this is great news. However, as time passes, unless updates become more regular, the guidance will again become stale. Moreover, the Senate manual has not undergone the thorough revision that the House manual received. Rather, the current Senate Ethics Manual is dated 2003. Consequently, some of its content is out of date. The problem for a lobbyist like you is that, if you look only at the ethics manuals, you will have no way of distinguishing between guidance that is up to date and guidance that has been superseded.

A second limitation is thoroughness. The House Ethics Manual’s chapter on gifts is 63 pages long and full of illustrative examples. The Senate gift chapter is more than 40 pages long and also contains many examples. Yet, even at these lengths and with all the examples, there is no way the manuals can capture every potential situation and possible application of the rules. While the manuals can clarify some of the gray areas, they cannot clarify them all. You most certainly will find yourself in a situation that the manuals do not squarely address.

One way Members and staff resolve these gray areas is to solicit input directly from the House and Senate ethics committees. According to an annual report released by the Senate committee in January, last year alone the panel wrote more than 1,000 advisory letters, over 700 of which concerned gift and travel. These letters came in response to specific requests regarding specific circumstances. However, because the ethics committees are within Congress, they generally do not issue advisory letters to people outside Congress. This leaves lobbyists like you out of luck.

This raises the final limitation — the one that your friend probably had in mind. The manuals were not created for people outside Congress. In fact, the authors of the ethics manuals are not even the same people who are responsible for enforcing lobbyists’ obligations to comply with the Congressional gift and travel rules. While the House and Senate ethics committees issue the manuals, the U.S. attorney’s office has the authority to prosecute lobbyists’ violations of those rules, and theoretically could interpret the rules differently than the manuals.

In reality, of course, it is unlikely that federal attorneys would pursue a prosecution unless they believed that a lobbyist had been more than negligent in violating the rules. The government attorneys responsible for enforcing the rules said as much to Roll Call last month. Moreover, even in the event of a prosecution, a lobbyist who diligently seeks to comply with the ethics manuals would have a strong defense to any action based on an alleged knowing violation of the rules. Nonetheless, there is always a risk that the attorneys will maintain that the manuals are not binding on them.

None of this is to say that you should not review the ethics manuals. To the contrary, you are smart to do so. The more you familiarize yourself with the gift and travel rules, the more you will hone your ability to identify situations in which the rules might apply — an invaluable skill for compliance. However, it is to say that reviewing the manuals alone may not be enough. Fortunately, there are other resources available: the rules themselves, Congressional training sessions and trade group seminars, just to name a few. Heck, even newspaper columns on ethics have some worthwhile tips every now and then.

© 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.