Editorial: Error-Prone

Instructions for House Financial Disclosures Remain Confusing

Posted May 4, 2010 at 5:29pm

The deadline for House Members, senior staff and administrative officers to file financial disclosure forms is May 17 — and, helpfully, this year the form includes a box for reporting capital gains on the sale of stocks and other property.

The only problem is, the instruction manual issued by the House ethics committee contains no directions for filling out the box.

Such instructions were included in a 29-page draft set of disclosure rules posted last month on the websites of the Committee on Standards of Official Conduct and the Clerk of the House — but then pulled down and replaced with what amounts to a reversion to last year’s 23-page rule book.

The longer draft was a welcome attempt by the ethics committee to clarify the financial disclosure process and make it less error-prone.

Ethics Chairwoman Zoe Lofgren (D-Calif.) and ranking member Jo Bonner (R-Ala.) have said they want to upgrade reporting technology and training to ease the financial and travel disclosure process, which we welcome. They’ve obtained $50,000 to finance the upgrade.

Unfortunately — and characteristically — the two committee leaders have not publicly discussed their vision for disclosure improvement but just left observers to infer that the draft instructions were part of that effort.

Every year, the committee staff reviews 2,100 forms, and they are pored over by journalists, ethics watchdogs and political opponents for irregularities. Every year, numerous Members file corrections to their statements, mostly because of confusion over what needs to be reported.

The 29-page draft instruction book not only contained rules for capital gains disclosure but dismantled lengthy explanatory paragraphs in favor of simple bullet points and boldface reminders.

It highlighted, for example, a reminder that the forms need to account for every asset disclosed in prior ethics reports.

In addition, the new manual included instructions for reporting “assets and unearned income” such as bank accounts, mutual funds, real estate, trusts and retirement accounts, and had new or expanded explanations covering annuities, hedge funds, college savings accounts, insurance policies, investment clubs and intellectual property rights.

The longer, more helpful rules manual apparently was pulled and replaced with the old version — again, the ethics committee is a virtual information black hole — after Roll Call discovered that one of the new instructions may have violated the federal Defense of Marriage Act.

It called for disclosure of the assets of spouses in same-sex couples married in states permitting gay marriage on the same basis as those of heterosexual married couples. DOMA decrees that “spouse” in any federal regulation can refer only to a “person of the opposite sex who is a husband or wife.”

It strikes us as silly for the committee to have pulled its entire revised manual because one limited provision needed to be excised. Maybe next year transparency will be fuller — and simpler.