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At that point, the OCE referred the matter to the House Ethics Committee, which reviews the office’s findings and is empowered to mete out punishment. Though the committee in August agreed that Schmidt’s acceptance of the legal services constituted an improper gift, it said it would not impose further sanctions because she was unaware of the compensation agreement between the defense fund and the coalition.
“The Committee’s review of the matter indicated that Representative Schmidt did, in fact, receive an impermissible gift from TCA as OCE has alleged, and therefore the Committee did not dismiss the OCE matter,” a statement released by the committee in August read. “However, the Committee has found that Representative Schmidt’s lawyers failed to inform her of their payment arrangement with TCA, and made false and misleading statements to her about their relationship with TCA and TALDF. ... Representative Schmidt must now disclose and repay the gift.”
Schmidt has yet to file amended disclosures that detail debts she incurred with the TALDF, according to House records.
The CREW complaint filed Wednesday cites a confidential summary of OCE interviews with Bruce Fein, one of Schmidt’s lawyers at the legal defense fund, and Barry Bennett, her former chief of staff. Fein told OCE investigators that he “explained TALDF’s legal services were provided at no charge to Representative Schmidt and that was his understanding at their first meeting,” according to one attached memorandum. Though Bennett told investigators that Schmidt was waiting to see whether contingency-fee payment agreements were permitted under House ethics rules, Fein told investigators that “the legal services for the defamation suit are not part of a contingency fee arrangement. The services are pro bono like any other services provided,” the summary of his interview said.
“The public record speaks for us. I don’t think I have anything more to add,” Fein said Wednesday when reached at his office.
If the OCE decides to launch a new probe into Schmidt’s knowledge of the fee arrangement, two members of its eight-member board — one appointed by the Minority Leader and one appointed by the Majority Leader — must submit a written request to start a preliminary review. After that, three votes would be needed for it to proceed to the sort of formal investigative stage that could result in a referral of its findings to the Ethics Committee.