A Question of Ethics

May Capitol Hill Staffers Sell Their Personal Items?

January 26, 2009

Q: I apologize if this is a simple question, but I only just recently became a House staffer, and I am still learning all of the rules that now apply to me. My question concerns two Super Bowl tickets that I won in a raffle. Rather than attend the game, I have placed an online ad to sell the tickets. I have received lots of good offers, but yesterday a die-hard Arizona Cardinals fan blew the other offers out of the water. I started e-mailing with him right away, and I was all ready to sell him the tickets when I noticed that his e-mail address domain name belongs to a major lobbying firm. I looked him up and, sure enough, he is registered as a lobbyist. Because the Member I work for is new to the House, I have no idea whether the lobbyist or his firm has any plans to lobby me or my Member. But something still doesn’t feel quite right. Is it OK to sell him the tickets?

A: No need to apologize for simple questions. They are my favorite kind. Unfortunately, this is not one. In fact, you must have good instincts because you have identified a real ethical quandary where even Hill veterans might not recognize one: sale of personal items.

You’re new to the House, so let’s start at the beginning: the House gift rule. This is a rule with which you will need to become very familiar. Embodied in clause 5 of House Rule 25, the gift rule establishes restrictions upon the gifts you may receive while you are a staffer. Broadly, you may not accept any gift from anyone at any time, unless an exception applies. “Gift” is defined as “a gratuity, favor, discount, entertainment, hospitality, loan, forbearance, or other item having monetary value.”

Just on its face, this is an extremely broad prohibition. It would appear to cover nearly everything, even including items or money received in purchases and sales. After all, when the guy at the deli hands you your sandwich for lunch, you are accepting an “item having monetary value.” Yet, that can’t be a gift rule violation.

This is where the exceptions come in. The exceptions try to limit the extent to which the gift rule inhibits Members and staffers from carrying on their everyday lives. They cover things like gifts from relatives, gifts based on personal friendship, and prizes — such as the tickets you won. The exception that applies to typical purchases and sales allows you to accept anything for which you pay the “market value.”

So, there is no need for staffers who are new to the House to cancel their yard sales or close their eBay accounts. However, House ethics guidance regarding the “market value” exception does suggest that, when making sales, staffers should be wary of exceedingly generous offers. In particular, they should be on the lookout for offers that are so generous that the House Committee on Standards of Official Conduct — or federal prosecutors — might consider the offers to qualify as “gifts.”

Your situation calls to mind some of the allegations against former Sen. Ted Stevens (R-Alaska), who was convicted last year of failing to report hundreds of thousands of dollars in gifts. While most news reports on Stevens’ trial focused on allegations that he had received home improvements that he did not pay for, the indictment also contained allegations of a sweetheart deal involving a car swap between Stevens and his friend Bill Allen.

Prosecutors alleged that Stevens received Allen’s brand new Land Rover Discovery in exchange for $5,000 in cash and Stevens’ vintage Ford Mustang. At the time of the swap, prosecutors said, Stevens’ Mustang was worth less than $20,000, while Allen’s Land Rover was allegedly worth more than $40,000. Prosecutors contended that, because the value of what Stevens received so greatly exceeded the value of what he gave up, he had received a “gift.”

In your case, you say that the lobbyist’s offer blew all the other offers out of the water. The House Ethics Manual states that a gift rule violation may exist when a staffer “is sold property at less than market value, or receives more than market value in selling property.” So, the question is whether the lobbyist is offering “more than market value” for your tickets. Unfortunately, discerning the market value of Super Bowl tickets is not easy. Depending on seat location, prices at ticket agencies such as StubHub range from $1,500 for nosebleed seats to as much as $150,000 for luxury suites. You might consider researching ticket agencies’ prices for seats like yours to confirm that the lobbyist’s offer is comparable to the going rate. If his offer substantially exceeds the ticket agencies’ prices, it would be difficult to understand why he doesn’t buy tickets from an agency instead.

On the other hand, maybe he’s just a lazy shopper. I assume that there is nothing in your ad that would indicate that you are a staffer, so it would seem unlikely that the lobbyist is trying to curry favor. (It didn’t say “House Staffer Offers Super Bowl Tickets,” did it?) Yet, even if it is not his intent to curry favor, and even though you have no reason to suspect that the lobbyist will lobby your office, suppose he does. Would the fact that he had recently overpaid you for your tickets give rise to an appearance of impropriety?

As you know, Stevens was convicted. This doesn’t mean that you will be carried off to jail for negotiating a good price at your next yard sale. It does mean, however, that when selling personal items you would be wise to be wary of offers that seem too good to be true. On the other hand, if the lobbyist’s offer is within a reasonable range of the going rate for your tickets, you may have a deal.

© Copyright 2009, 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 Members Use Campaign Funds for Parking Tickets?

January 12, 2009

by C. Simon Davidson

Q: My New Year’s resolution is to stop getting parking tickets. I would be embarrassed to count all the money I send each year to the D.C. treasurer for parking fines. Yet a recent article made me wonder if, as a Member of the House, I have to pay these fines with my own money. The article said that at least one other Member pays for parking tickets with campaign funds and that this is allowed under the rules. If this is true, maybe I don’t need a New Year’s resolution after all. I’m not sure how comfortable I would be using campaign funds for parking tickets. But, just out of curiosity, do the rules allow it?

A: I presume you are referring to the recent reports that, over the past several years, Rep. Charlie Rangel (D-N.Y.) has used campaign funds to pay roughly $2,000 in parking fines. In fact, Rangel is certainly not the only Member to use campaign funds for parking tickets. In 2005, Sen. John Kerry (D-Mass.) made news when his campaign paid $300 to the City of Boston for overdue parking tickets. Similarly, during the 2008 Democratic presidential primaries, New York Sen. Hillary Rodham Clinton’s campaign reportedly paid parking fines in New Hampshire and South Carolina. And,there are likely many more campaigns that pay parking tickets without making the headlines.

So, is this OK? May Members use campaign funds for parking tickets? Or are all of these Members violating the rules? The answer, as it turns out, isn’t that straightforward. Sometimes Members may use campaign funds for parking tickets and sometimes they may not. The trick is to know the difference.

The House Ethics Manual states that a “Member’s use of campaign funds … is permissible only if it complies with the provisions of both the House Rules and the Federal Election Campaign Act.” In this case, House and Federal Election Commission rules are substantially the same. Both provide that a Member may use campaign funds for “bona fide campaign or political purposes” but may not convert campaign funds to personal use. Personal use is defined as “any use … to fulfill a commitment, obligation or expense of any person that would exist irrespective of the candidate’s campaign or duties as a Federal officeholder.” While a federal statute defines “personal use” to include any “noncampaign-related automobile expense,” the FEC assesses vehicle expenses on a case-by-case basis.

Under these rules, FEC and House guidance both state that a Member may lease or purchase a vehicle with campaign funds and use that vehicle on an unlimited basis for campaign and official House purposes. A Member may also use campaign funds for the vehicle’s operating expenses, including insurance, maintenance, registration fees and taxes. However — and here’s the key — if a Member uses the vehicle for personal use beyond a de minimis amount, the Member must personally reimburse the campaign “in an appropriate amount.” The House Ethics Manual urges Members to consult the FEC regarding how to determine the appropriate amount.

While it is not always easy to predict exactly what the FEC would say with regard to a particular expense, the commission has issued advisory opinions regarding vehicle expenses that could shed light on how the FEC might view parking tickets. For example, in 2001 a Member sought FEC guidance regarding personal use of a vehicle purchased with campaign funds. The Member estimated that 95 percent of the vehicle’s annual mileage would be campaign-related. The Member proposed maintaining travel records of the mileage for personal use and reimbursing the campaign at the Internal Revenue Service standard mileage rate. The FEC approved the Member’s proposed record-keeping and reimbursement rate. Interestingly, the FEC added that 5 percent annual personal use was de minimis and that, therefore, the Member’s proposed reimbursement was not even necessary.

What does this all mean for parking tickets? In the absence of any guidance directly on point, it would seem reasonable that, under FEC rules, it should be permissible to use campaign funds for parking tickets incurred while a campaign-funded vehicle is being used for campaign or official purposes. Indeed, the 2005 news reports of Kerry’s use of campaign funds for parking tickets included a statement from an FEC spokesman who said that Members may use campaign funds for parking tickets as long as the tickets were “campaign-related.”

But what about parking tickets incurred during personal use of a campaign-funded vehicle? The answer here is less clear. Under the 2001 FEC opinion cited above, one could argue that, if the Member’s personal use of the vehicle was “de minimis,” it would still be permissible for the campaign to pay for the parking tickets. After all, if a Member is not required to pay for the expense associated with de minimis personal use of a vehicle, shouldn’t that also excuse the Member from paying for any parking tickets incurred during such use?

On the other hand, federal law explicitly defines “personal use” to include “a noncampaign-related automobile expense.” The FEC might interpret this to include parking tickets during personal use, meaning that Members could not use campaign funds for such tickets.

Ultimately, only the FEC and the House Committee on Standards of Official Conduct can say for sure when Members may use campaign funds to pay parking tickets and when they may not. I’d say the safest bet would be to keep your New Year’s resolution after all.

© Copyright 2009, 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.