House panel: New rules needed in lawmaker probes

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By LARRY MARGASAK, Associated Press

WASHINGTON (AP) — Hardly any endeavor so unnerves members of Congress as policing each other's conduct. Now, a temporary ethics panel that went in to rescue a troubled investigation of senior Rep. Maxine Waters has emerged with a warning Tuesday to avoid partisan infighting when investigating congressional wrongdoing.

New rules, it said, are needed when potential conflicts of interest arise for lawmakers and their staffs.

In fact, the House Ethics Committee is designed to encourage bipartisan cooperation — it has five members from each political party. But that system suffered a total breakdown by last February, when political bickering caused all five Republicans and the ranking Democrat to step aside from the Waters case to avoid the public perception of a tainted investigation.

The new panel brought in to finish the Waters investigation issued a strong rebuke Tuesday, saying the ethics committee's mission "calls upon members to step out of their partisan framework...." It called for committee members to "constantly evaluate their actions ... to ensure that they are living up to the highest standards of this committee."

The unusual statement comes after the group's findings last week in the case of Waters, D-Calif., second-ranking Democrat on the Financial Services Committee, who could head that panel if Democrats win back the House.

Acting chairman Bob Goodlatte, R-Va., and the top acting Democrat, John Yarmuth of Kentucky, said in a statement that the panel concluded in a 10-0 vote that there was no "clear and convincing" evidence that Waters tried to steer federal bailout money to a bank where her husband is an investor.

The temporary panel also determined unanimously that while Waters undertook efforts to avoid a conflict of interest, her chief of staff and grandson, Mikael Moore, tried to assist minority-owned OneUnited Bank despite his boss' instruction not to do so because of her husband's investment in the bank. The committee sent Moore a letter admonishing his conduct.

The substitute committee followed the recommendations of Billy Martin, an outside counsel who had to be hired to first investigate the original committee members and then the actions of Waters and her chief of staff. He found the original committee members did not violate House rules.

The turmoil in the committee began in 2010, when former Democratic ethics chairman Zoe Lofgren of California — and the chief counsel she appointed — accused two committee lawyers of communicating their investigative findings only to Republican committee members. Lofgren suspended both lawyers.

When Republicans won control of the House in 2010, and the new Congress took over, Lofgren and the four remaining Democrats then on the committee resigned and all five Republicans remained.

The new Republican chairman, Jo Bonner of Alabama, invited the two staff members back but they declined the offer. Internal documents later surfaced showing that partisanship had been affecting the work of the committee.

Goodlatte and Yarmuth said in their statement that the committee must "be sensitive to appearances that may be created if only particular staff members are routinely relied upon by members of a particular party." Such actions breed distrust that "should raise a red flag" among committee members, the statement said.

The statement said the former chief counsel hired by Lofgren, Blake Chisam, had a partisan background, and recommended that the panel "avoid hiring professional staff who have previously served as partisan staff."

When potential conflicts of interest arise, the panel said the lawmaker should inform all staff members, as well as the entity involved, of the member's decision to step aside from any further involvement — even if the entity is a constituent, the statement said. It added that the House should adopt policies or rules requiring a congressman to immediately notify staff of any financial or other conflicts with constituents.

The temporary panel also took aim at Waters' decision to hire her grandson as chief of staff, saying that "employer-employee relationships with grandchildren can be just as fraught with risk as other familial relationships in the workplace."

Waters has insisted that when she sought a meeting at the Treasury Department to help ailing minority-owned banks, she was doing so on behalf of all minority-run banks that were financially threatened by their investments in troubled mortgage giants Fannie Mae and Freddie Mac.

OneUnited, where Waters' husband owned stock, eventually received a $12 million bailout but Treasury officials have testified that Waters had nothing to do with that decision.

The key conclusion in the concluding ethics report was that Waters disclosed her financial interest in a public hearing, listed the investment in her public financial disclosure report and told Rep. Barney Frank, D-Mass., while he was chairman of the Financial Services Committee that she was stepping aside from any legislation involving OneUnited.

"It is the Waters Committee's belief, and hope, that most members understand that they cannot take official actions that would assist a single entity in which the member has a significant interest, particularly when that interest would clearly be affected by the assistance sought," the ethics report said.

"Certainly Representative Waters seemed to understand that principle."

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