Wang: ‘Firewall’ Needed for Contributions and Earmarks

Posted March 26, 2010 at 4:56pm

There was a time when Members of Congress up for re-election could fall back on the tried-and-trusted argument that they “bring home the bacon.” But runaway deficits and perceived earmarks abuses in recent years — from the infamous “Bridge to Nowhere” to Members of Congress allegedly trading earmarks for campaign cash — have made federal spending toxic.

[IMGCAP(1)]While both parties in the House have pledged a moratorium on earmarks, sooner or later the allure of spending the public dime will be too strong to resist (consider it lawmakers’ equivalent of “retail therapy”). Already, several GOP House Members have requested earmarks (albeit mostly for public works projects), notwithstanding their caucus’ one-year moratorium on all earmarks, and the Senate has rejected a two-year moratorium. To the extent Members are continuing to earmark, Congress may wish to consider some internal controls to reduce the appearance or threat of corruption sometimes associated with the practice.

Members who appear to steer earmarks to their campaign benefactors can get into a lot of trouble, depending on how close of a connection exists. Soliciting or accepting campaign contributions in exchange for seeking earmarks violates federal criminal bribery and gratuity laws, as well as Congressional ethics rules. Although the Office of Congressional Ethics recently dismissed allegations of such conduct against several Members, this does not diminish the severity of the crime. Short of a permanent ban on earmarks or a complete revamping of campaign finance laws, both of which are unlikely, Congress could attempt to address this problem by requiring more disclosure for earmark requests. But the Honest Leadership and Open Government Act of 2007 supposedly did just that, and the perceived problem has not abated.

One implement in the ethics law tool bag that has not yet been attempted is firewalls. Businesses and law firms are familiar with firewalls (sometimes called “Chinese walls”), which prevent employees working for clients with adverse interests from sharing their clients’ sensitive information. Similarly, the national party committees have firewalls to ensure their independent spending on advertising is not counted toward their campaign finance limits for expenditures coordinated with their candidates.

Members could apply the principles of firewalls to their earmarking practices by prohibiting staff working on earmark requests from any involvement with their campaign fundraising operations. Congressional ethics rules already prohibit legislative staff from performing campaign tasks during their official work time. These rules, however, are intended mostly to prevent subsidizing campaign work using the government payroll. Legislative staff are still permitted to serve in campaign roles so long as they are paid appropriately using campaign funds.

According to reports released by the OCE, at least one subject of the recently closed investigations claimed to have already implemented some form of this firewall. The Member stated that his legislative staff responsible for earmarks had “no role in the fundraising process.” Nonetheless, the same Member, as well as other subjects of the investigation, admitted their earmarking staff did attend their campaign fundraisers, where they were able to meet with contributors who had requested earmarks.

If Congress were to enact a firewall policy in its ethics rules, it might consider prohibiting legislative staff working on earmarks from attending fundraisers and having any involvement in campaign finance for their principals. Of course, Members themselves still wear both legislative and campaign hats, and they cannot easily firewall themselves. But even some Members in the OCE investigation claimed to have done just that. In one case, the Member stated he was not personally involved in fundraising for his re-election campaigns and did not call or write to contributors. Some Members also claimed they do not review fundraising records or reports to see who contributes to their campaigns. Others stated they do not meet personally with the entities requesting earmarks.

A meaningful firewall policy need not necessarily include all of these elements, some of which might seem draconian to certain Members or incompatible with their office procedures. For example, while one subject of the OCE investigation essentially rubber-stamped his staff’s earmark recommendations, others were more actively involved. Similarly, Members had varying levels of involvement in their campaign fundraising. Regardless of these different approaches, Members should at least consider refraining from discussing earmark requests and prospective earmark recipients with their fundraising staff.

Whether earmarking ethics is an actual problem, or whether firewalls are needed, the prospective penalties for running afoul of federal criminal laws are quite severe. Even an admonishment from the Congressional ethics panels can be a significant career setback. Viewed in this light, the next time Members build a “Bridge to Nowhere,” they should consider also building some prophylactic walls.

Eric Wang, a political law attorney, has advised clients on all aspects of government ethics laws. He can be reached at ericwang@alumni.princeton.edu. The author currently serves as counsel to a member of the Federal Election Commission, which administers federal campaign finance law. The agency does not have jurisdiction over the bribery and gratuity laws and Congressional ethics rules discussed in this article. The views expressed are the author’s own and do not necessarily represent those of his principal or agency.