Sept. 23, 2014 SIGN IN | REGISTER

Ethics Rules Allow Smith to Collect on Locker Rentals

As a Member of Congress, Dr. Paul Broun (R-Ga.) can’t get paid for providing medical services to patients. But Rep. Adrian Smith (R-Neb.) can get paid for renting storage lockers to customers who need a place to stash stuff.

The two second-term Members occupy opposite ends of the murky House rules on Members’ outside income.

Smith’s office said he is the sole proprietor of a public storage business called My Other Garage in Gering, Neb., and in May he filed a financial disclosure form reporting rental income of between $15,000 and $50,000 from the storage business.

Roll Call could not locate the company — there is no listing in the Gering directory for a business by that name, and the Nebraska secretary of state’s online database shows no records for the business.

Federal laws and House rules prohibit Members of Congress from earning income in certain professions, notably medicine, law and real estate sales. The ethics committee has ruled that Broun, a family practice doctor, and the other physicians in the House, can consult with patients and accept limited payments to offset the costs of their services, but they can’t profit from it.

Beyond these prohibited fields, any outside “earned income” from permissible sources is limited to about $25,000 a year.

But Smith lists his rental business as an investment (“unearned income”), which has no limits under House rules.

Ethics experts say that for the purpose of financial disclosure, the difference between earned and unearned income is generally viewed to be a question of capital. If the income derived from a capital investment, like a rental property or stock — or, in Smith’s case, storage lockers — it is “unearned” income. If the income derives from a personal service, like teaching a class or repairing a car, it is earned income and subject to the income limits.

Smith’s office said the Congressman has checked with the Committee on Standards of Official Conduct and received the green light for his income from the storage business.

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