A Question of Ethics

May Former Staffers Help New Staffers Do Their Jobs?

May 19, 2009

Q: I recently became the chief of staff for a Member of the House, replacing someone who had held the position for several years. I am trying to learn the ropes as quickly as possible and have found that the former chief of staff has been an invaluable resource in getting me up to speed. He is particularly helpful with the Member’s schedule. Given that he is no longer a House employee, are there any restrictions on the help that he can provide me?

A: In 1977, the House created what is now House Rule 24, which prohibits Members from maintaining “unofficial office accounts.” The rule essentially erected a wall between private funds and official allowances, prohibiting private funding of official House expenses. The House commission that recommended the rule said that its purpose was to put an end to “influence peddling” through private financing of the official expenses of Members of Congress.

Shortly after the rule was adopted, the House ethics committee published an advisory opinion declaring that Rule 24 prohibits not only monetary contributions to official expenses, but in-kind contributions as well. The opinion states: “For purposes of House Rule 24, the private contribution of in-kind services for official purpose is prohibited.” Broadly, this means that only official staff should do official work. When does the assistance of a former staffer qualify as the type of services that are prohibited by Rule 24?

In answering that question, the case of former Rep. Bud Shuster (R-Pa.) is a useful guide. In 1996, a watchdog group filed an ethics complaint against Shuster, focused in part on Shuster’s relationship with his former chief of staff, Ann Eppard. An investigative subcommittee conducted a lengthy investigation after which it charged Shuster with several violations and issued a report. Eppard herself was also ultimately indicted for conduct related to the investigation.

One of the allegations against Shuster was that his office allowed Eppard to do official work even after she left Congress to become a lobbyist. The report states that, after Eppard left Shuster’s staff, Shuster “routinely encouraged, authorized or otherwise accepted the scheduling and advisory service of Ms. Eppard on matters that were official in nature.” This, the report said, violated what is now House Rule 24. The report said that “the regular involvement of a volunteer/ political advisor in a congressional office who performs tasks properly associated with the official responsibilities of House Members and employees is inappropriate.”

During the investigation, Shuster’s staffers testified that the reason they sought Eppard’s advice was because of her institutional knowledge. Some staffers also explained that they felt it was appropriate for them to seek Eppard’s assistance because she had become an employee of Shuster’s campaign and that any request to see Shuster obviously had implications for his campaign.

The investigative committee disagreed and concluded that Shuster had violated House Rule 24. The report’s key finding was that Eppard “rendered extensive assistance to Representative Shuster’s congressional staff on a regular and routine basis that supplanted the duties normally performed by congressional employees.” Although the conduct in question primarily involved Shuster’s staffers and not Shuster himself, the report stated that “Members of the House are ultimately responsible for ensuring that their offices function in accordance with applicable standards.”

It should be noted just how extensively involved Eppard remained in Shuster’s office even after becoming a lobbyist. According to the report, when staff received requests for appointments in Shuster’s office, the staff routinely sought Eppard’s assistance in identifying the persons making the requests, explaining why they might be seeking the requests and determining what their views on certain issues might be. The staff solicited Eppard’s input on the majority of the appointment requests that the subcommittee reviewed during its investigation. Eppard’s authority was so extensive, the report said, that in some instances Shuster’s scheduler was authorized to follow Eppard’s direct instructions.

I presume that you do not plan to utilize the former chief of staff nearly as much as Shuster’s office used Eppard. However, you do mention that you find his assistance in scheduling particularly useful. Shuster’s case illustrates that you should be careful not to allow the former chief of staff to be involved in the actual scheduling of your Member’s appointments.

But this does not mean that incoming staffers can never rely on the help of former staffers. The Shuster report acknowledged that a “limited amount of involvement by a departing congressional employee with his or her former employing office … might be reasonable under certain circumstances to ensure a smooth transition before his or her successor becomes familiar with job responsibilities.” So, a little help in the short term should be OK. Just don’t let him do your job.

© 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

Must Senators Disclose Good Deals on Property Sales?

May 5, 2009

Q: As a member of a Senator’s staff, one of my jobs is to help prepare his financial disclosure report. As we scramble to finish this year’s report, I was interested to read that a watchdog group has filed an ethics complaint against Sen. Chris Dodd (D-Conn.) alleging that he failed to report what I’ve seen described as a sweetheart deal on property that he purchased. This got me concerned about my own Senator’s financial disclosure reports and whether we need to report any deals that he received on purchases and sales in 2008. In particular, our Senator sold his home last year, and it has subsequently plummeted in value to the point that it is now worth 25 percent less than the selling price. Must we report the sale?

A: It’s springtime, which, in the world of Congressional ethics, means it’s financial disclosure season. Now is as good a time as ever to brush up on financial disclosure basics.

The Senate has required at least some sort of financial disclosure since 1968. According to the Senate Ethics Manual, public disclosure of personal financial interests is “often considered the key component to an effective code of conduct for legislative ethics.” Disclosure “provides the mechanism for monitoring and deterring conflicts.” Its purpose is to allow constituencies to judge official conduct in light of possible conflicts of interest arising from Members’ and staffers’ personal finances.

The system is governed by the Ethics Reform Act of 1989, which delegates the authority to administer the disclosure reports to the Ethics Committee. Members must file their reports by May 15 each year, disclosing information regarding their previous year’s compensation, assets, liabilities, major transactions and positions held. Members must also disclose any gifts that they received, unless an exception applies. False statements can lead to harsh penalties, up to and including jail time.

There are two different sections of the reports where disclosure of real estate sales might sometimes be required. The first is the “Transactions” section, for all purchases or sales of more than $1,000. Transactions involving personal residences, however, are explicitly exempted. You refer to the property here as “his home.” If by this you mean his personal residence, there is no need to include the sale in the Transactions section.

The other section is a little trickier: the “Gifts” section, where Members must disclose all gifts received, unless an exception applies. For purposes of the financial disclosure report, a gift means a payment, forbearance, advance, rendering or deposit, or anything of value, unless consideration of equal or greater value is received by the donor. (Note that this definition is similar to the Senate gift rule.) Therefore, when a Member sells or buys a property, he could be required to disclose the exchange as a gift if he receives substantially greater value than he gives up.

In Dodd’s case, Judicial Watch filed an ethics complaint alleging that he committed multiple violations, including his alleged failure to disclose a gift on his disclosure report. Dodd allegedly used his influence to help his friend Edward Downe obtain a presidential pardon from Bill Clinton without undergoing the normal vetting process. Subsequently, the complaint alleges, Dodd bought an interest in an Irish cottage from an associate of Downe’s at a price well below market value. In fact, the complaint says, just six years after the purchase, it is now worth as much as four times what he paid for it. The complaint alleges that Dodd should have reported his purported sweetheart deal as a “gift.”

Dodd’s office has responded that the charges are baseless. In fact, his office says, the price that Dodd paid for the property interest was not below market value at the time of the purchase, but actually well above. If this is right, Dodd surely was not required to disclose the purchase as a gift. This is true regardless of how the property’s value might have changed since the purchase.

Similarly, the change in the property’s value after your Senator sold his home is irrelevant to the question of whether it qualifies as a gift. To determine whether it was a gift, the focus is not on what happens to the property’s value after the sale. Rather, the focus is on the market value at the time of the sale and its relationship to the price that he sold it for. In a market as unstable as this one, it is hardly surprising that the property has changed in value since he sold it. Assuming the sale price was about market price at the time, there should be no need to disclose it as a gift. Making a smart sale is not the same thing as receiving a gift.

One more point merits mentioning. If your Senator did receive any gifts last year, he may have bigger problems than assessing whether they must be included on his disclosure report. Disclosure obligations aside, the gift rule prohibits Senators from accepting any gift unless an exception applies. As the report states: Disclosure of gifts does not authorize their acceptance. It’s important to get your financial disclosure report right each spring. But, don’t forget, the gift rule applies year-round.

© 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.