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Tuesday, September 25, 2012

After Waters Inquiry, House Panel Recommends New Ethics Rules


Saying that public trust is at stake, a special House ethics panel on Tuesday called for new rules to prevent lawmakers and their staffs from violating conflict of interest standards and proposed other new measures designed to keep partisan squabbles from undermining future investigations of such wrongdoing.

The broad set of recommendations, coming only a few months before the House will adopt a new set of rules for the next Congress, were released as the ethics committee finally completed a three-year investigation of Representative Maxine Waters, Democrat of California, an inquiry that itself got caught up in controversy because of such partisan disputes and ambiguous ethics rules.

The unusual st atement issued on Tuesday by the chairman and vice chairman of the special committee appointed to handle the investigation of Ms. Waters concluded that she had not violated House rules in late 2008 when she called Henry M. Paulson Jr., the Treasury secretary at the time, to set up a meeting that included executives from a financially troubled bank that her husband owned stock in.

But in the course of the investigation, the special committee determined that the House rules were not sufficient to prevent such conflicts, because even though Ms. Waters apparently refrained from further actions after she realized she had a conflict, her chief of staff continued to work to help the Boston-based bank, OneUnited, which was near collapse.

As a result, the special committee that investigated Ms. Waters recommended on Tuesday that House members should be required to notify their entire staffs if they have concluded that they should recuse themselves from involvement in a matter because of a conflict, as Ms. Waters apparently did not do.

Executives at the company involved should also be notified of the decision, the committee recommended, and the lawmaker's staff should then be informed of the details of the apparent conflict of interest.

Current House rules only ambiguously require that lawmakers refrain from taking action that might bring them direct personal financial benefit, particularly if their action assists an individual company, instead of a broad class of companies.

“The recommendations we have shared will result in greater attention being paid to the issue of conflicts and, thereby, greater trust by all of our constituents,” the committee said in its statement.

The special committee also unanimously voted to informally reprimand Mikael Moore, Ms. Waters's chief of staff, by issuing what is called a letter of reproval, because of Mr. Moore's role in helping OneUnited get federal bailout money by adding special language to legislation then pending in Congress.

“Your actions on behalf of OneUnited Bank's private efforts to obtain assistance and avoid collapse created dramatic appearances of conflict,” the panel said in the letter of reproval.

Because the committee did not find conclusive evidence that Mr. Moore knew that Ms. Waters, who is his grandmother, had a conflict of interest when he took steps to help OneUnited, it decided not to file formal charges against Mr. Moore that would require consideration by the full House.

Ms. Waters told investigators that she had instructed Mr. Moore to stay away from the topic, but there is some confusion over the timing of that directive. The committee suggested that the House revise its conflict rules to include action by a grandchild that might create a conflict - as happened with Mr. Moore - noting that there was currently no explicit prohibition.

The investigation of this case took three years in large part because of a dispute that rocked the ethics committee after the chief counsel accused Republican-appointed staff members of improperly sharing confidential case materials with Republican lawmakers on the committee.

These and other allegations led the ethics panel to conclude that it had operated, at least in the past, in far too partisan a fashion, undermining its own efforts, as disputes between competing staff members in this case threatened to compromise the investigation of Ms. Waters.

In the Waters case, this is what led to the unprecedented appointment of a special outside counsel, a former federal prosecutor named Billy Martin, who took over the investigation, and the decision by the panel's chairman and vice chairman, and other committee members, to recuse themselves from the inquiry and allow new specially appointed members to handle the matter.

The report issued on Tuesday was released with a statement b y Representative Robert Goodlatte, Republican of Virginia, and Representative John A. Yarmuth, Democrat of Kentucky, who served as chairman and ranking member, respectively, of the special committee.

To prevent such problems in the future, the special committee recommended that future staff members, many of whom are lawyers, should not be hired if they have previously served on a lawmaker's partisan staff, as has traditionally been the case.

“Even if both committee leaders and the individuals themselves believe they could serve on the nonpartisan, professional staff in a fair and unbiased fashion, members or other staff are far more likely to begin to view any disagreement as a partisan issue, leading to suspicion and distrust,” the committee said, which is what took place in the Waters investigation.

The committee also recommended that more formal rules be drafted to direct the performance of its top two staff members, who in the last Congress were s een almost as emissaries of the top Republican and the top Democrat, instead of as impartial legal advisers.