Congress

House conflict-of-interest rules still not up to snuff, ethics experts lament

Democratic rule changes haven’t extended to Ethics panel, watchdogs say

The burden of proof to show that a member improperly wielded that influence for personal benefit remains steep, according to some government watchdog groups. (Bill Clark/CQ Roll Call file photo)

House Democrats have touted their new rules package for its crackdown on potential corruption among members and staffers, lobbying, and money in politics.

But the House Ethics Committee’s conflict-of-interest standards for members who own businesses small and large — from plumbing companies to the largest privately owned alcohol retailer in the country — leave a lot to be desired, multiple congressional ethics experts told Roll Call.

Yes, the House Ethics panel maintains that members of Congress may not use “the influence of [their] position … to make pecuniary gains,” its manual from 2008 makes clear.

But the burden of proof to show that a member improperly wielded that influence for personal benefit is steep.

ICYMI: Pelosi, Lewis and House Democrats unveil legislative agenda for 116th

Define interest

The Ethics Committee has set the precedent of only narrowly interpreting and enforcing that “pecuniary gains” clause.  Even if members own or have stakes in businesses that are part of a “class” of companies that are acutely affected by certain pieces of legislation, that’s OK — they’re technically at liberty to introduce such bills, vote on them, and be advocates for or against them in committee, according to the 2008 manual.

In 2015, the committee cleared Texas Rep. Roger Williams of any wrongdoing after investigating the circumstances of an amendment he offered that directly affected his car dealership empire in the Austin area. Williams’ amendment exempted car dealerships like his from a rule that prevented some dealerships from renting out cars under recall.

Though the amendment could have affected the Texas Republican’s “personal financial interests,” the panel concluded that “the totality of the circumstances surrounding Representative Williams’ actions did not create a reasonable inference of improper conduct.”

Exactly what the “class” and “pecuniary gains” rules mean is open to interpretation, said Tyler Cole, the legislative director and counsel at Issue One, a government watchdog group.

Therein lies the point of contention between government watchdogs and the precedents set by the Ethics Committee.

“Folks on the outside like us would say that it should be applied more broadly,” Cole said. “The House has taken the position that it doesn’t apply to a member of Congress who has an interest as part of a class.”

Recusing themselves

Members are, of course, at liberty to recuse themselves from voting and speaking on certain matters if they think it will help them politically.

The late Sen. John McCain, for instance, consistently recused himself from voting on alcohol-related legislation, even though he ran virtually no risk of reprimand from the Senate’s Ethics panel for choosing otherwise. The Arizona Republican’s wife, Cindy McCain, is an heiress to one of the largest Anheuser-Busch distributorships in the country.

McCain sidelined himself for votes in the 1980s and 1990s on bills requiring alcoholic beverage producers to provide government warning labels on containers, among other alcohol-related votes.

Freshman Rep. David Trone enters the 116th Congress with a similar — yet considerably bigger — interest in the alcohol industry.

The Maryland Democrat, who poured nearly $25 million of his own money into primary races over the last two cycles, co-owns the largest private alcohol retailer in the country, Total Wine & More.

Alcohol sale and production is regulated mostly at the state and local level, per the 21st Amendment, which repealed Prohibition. Total Wine has invested millions of dollars into lobbying and lawsuits to gain access to states that had protective laws for local wine, liquor and beer shops.

The U.S. Supreme Court will hear the opening arguments of a case — to which Trone and Total Wine are party — where retailers sued to open up stores in Tennessee, which has residency requirements for alcohol shops. Total Wine won at the district and circuit level. 

“Congressman Trone ran for office to bring compassion, competence, and civility to Washington, and of course he will follow the letter and spirit of every law to ensure he is representing Maryland’s Sixth Congressional District with integrity,” a Trone spokeswoman said. 

Trone and dozens of other lawmakers who own or have stocks in farms, businesses and other federally regulated entities do not have to go the McCain route to comply with congressional ethics rules.

In fact, the House ethics manual encourages members to vote on every bill they can.

“Certain matters go to the very heart of a Member’s official responsibilities. Chief among them is voting on legislation,” the manual states.

Recusal, in nearly all cases, is a strictly political step.

“The only time that the ethics rules really would require Trone to recuse himself from official actions would be something like a government contract going to Total Wine,” said Craig Holman, a government affairs lobbyist at liberal watchdog group Public Citizen. “If it’s some issue that affects the alcohol industry generally or wine distributors, more than just the Total Wine company, then there is no determination by congressional ethics rules that there’s a conflict of interest.”

Voters decide

Ultimately, experts tell Roll Call, the Ethics Committee puts the onus on voters to determine whether lawmakers’ personal business interests conflict with their work in the Capitol.

The panel requires financial disclosures as the primary vehicle to help voters make informed decisions about their members’ potential conflicts.

“What Congress replaces conflict of interest with is disclosure,” Holman said. “They view that by requiring all members to disclose their assets and their income and their debts, the disclosure and the transparency takes the place of actually having to regulate conflict of interest.”

But Holman and other ethics experts say voters often don’t hold their members to the high ethical standards they should.

A pair of indicted Republican congressmen won re-election in November despite being under investigation by the Ethics Committee.

New York Rep. Chris Collins was indicted in August on felony insider trading charges stemming from a bad investment in an Australian biotech company. Federal prosecutors say Collins leaked sensitive information about a failed clinical trial to his son, another investor, days before the company’s stock plunged to nearly zero.

California Rep. Duncan Hunter was also handed an indictment in August, alleging he used $250,000 in campaign funds for personal expenses ranging from tequila shots to dental work. He faces 60 federal charges. His trial is scheduled to begin in September. 

Collins and Hunter had the closest races of their congressional careers in November, but both emerged victorious. 

“If you’re relying on voters to enforce [House ethics rules], you’re just not going to see that happen very often unless the violation is particularly egregious, and the voting district is particularly divided,” Holman said.

“If they’re a rather homogeneous district — Republican or Democrat — they’re going to keep re-electing their member.”

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