Ethics Clears Way for Convention Parties

Posted December 12, 2007 at 6:41pm

The party will go on. That was the call that lobbyists and ethics experts sounded after the House ethics committee put out its advisory memo Tuesday on the new rules for soirees at the upcoming Democratic and Republican national conventions.

While many event planners and ethics lawyers had hesitated to advise clients about what would be acceptable under the new ethics laws, lawyers say the committee not only clarified the rules for convention parties but expanded what would have been viewed as acceptable based on a stricter interpretation of the law.

“The House ethics committee has taken a statutory provision that was loaded with loopholes to begin with and basically expanded those loopholes so much that there ain’t very much left,” said Robert Kelner, an ethics lawyer at Covington & Burling.

Although conventions have historically been considered “ethics-free zones” where gift rules don’t apply, the reform bills that passed earlier this year changed that. The bills include a provision that precludes companies that retain or employ lobbyists from holding an event during the convention honoring any Member who is not running for president. That includes private lobby shops as well as trade associations and other companies.

While individual Members cannot be honored at parties, the ethics committee memo states that events to honor a delegation or caucus are permissible as long as the event doesn’t specifically name lawmakers or provide a special benefit such as giving the Member a prominent ceremonial role or speaking role at the event. Lawmakers can also be named as a member of a party’s honorary host committee as long as the list includes non-Congressional members.

“It was not clear at all from that statute that you could host an event for a Congressional delegation or caucus,” Kelner said. “It was a possibility but it was not at all clear and the ethics committee has now blessed doing so.”

The committee also clearly laid out the rules as applying only between the specific start and end dates of the conventions. That means lobby shops and companies could throw private events and fundraisers on the day before or after the convention.

Other so-called expansions by the committee are being viewed a bit more skeptically by ethics lawyers.

“In its guidance the committee tries to create what appear on the face to be some fairly generous loopholes or safe harbors where they permit one to honor a delegation, or they permit a Member to be listed on a host committee as long as others are,” said Stefan Passantino of McKenna Long & Aldridge.

“There are aspects of the safe harbor here that I think can directly make people feel as though they can engage in activities under this guidance that could very easily be seen as circumventing the spirit of the law.”

Passantino said that just because there appear to be loopholes under the committee’s interpretation doesn’t mean he’ll be advising clients to take advantage of them. For instance, while the committee notes that no lobbyists or private entity that employs lobbyists can directly pay for events, the letter states that a private organization that gets funding for an event from a lobbyist or private entity would not “disqualify” a Member from participating in the event.

That could create a cottage industry of 527s and other private entities set up solely for the purpose of funneling funds for convention parties, ethics lawyers said. Under another potential scenario, a company with a Washington, D.C., presence could align itself with a company or organization in Minnesota and Colorado that does not lobby in order to help sponsor an event without running afoul of the law.

While the committee cleared up many of the questions lawyers had regarding throwing events, there is still some confusion about making sure parties comply with the widely attended event requirement, Kelner said.

Ethics lawyers say they also are looking to see what comes out of the Senate Ethics Committee, which is supposed to be releasing its own clarification soon.

“It is certainly true that this provides some guidance that gives me personal comfort that our clients are going to be able to put on ethically compliant events based on this guidance,” Passantino said. “I am still going to undertake the next step to get events pre-cleared by the committee if we can.”

Ethics lawyers acknowledge that the increased scrutiny has left many of their clients in two camps — either too skittish to throw a party or just waiting to see how to throw a party that complies with the law. At least one lobby shop with Denver ties, Brownstein Hyatt Farber Schreck, says it plans on doing events during the Democratic convention.

“We definitely want to be involved in a variety of events, but have been waiting on clarification on how the new rules will affect our ability to participate and look forward to reviewing it,” said Al Mottur, head of the firm’s D.C. office.