Insider's Game

The “special favors” performed by Maxine Waters’ chief of staff were mundane tasks normally relegated to an administrative assistant or intern. Yet the House Committee on Standards of Official Conduct inflated those actions into something more significant, namely the “crafting [of] legislation.” You have to wonder who the Committee thought it would be fooling when it drafted its Statement of Alleged Violations last June.

The Committee Statement, released on August 9, is notably different from the report prepared a year ago by the independent Office of Congressional Ethics. Both documents allege ethics violations, and both rely on sleights of hand to show violations of the rules.

As noted here earlier, the OCE report faulted Rep. Waters for requesting a meeting between senior Treasury officials and the National Bankers Association, a group of minority-owned banks. The request made to Treasury would have benefitted many NBA members, though a major beneficiary would have been OneUnited, a minority-owned bank headquartered in Boston with five branches in California, Waters’ home state. Waters’ husband, who once sat on its board, held many shares in OneUnited.

The OCE report alleged that Rep. Waters had violated House Rule 23, Clause 3, which forbids government officials from receiving “compensation… by virtue of influence improperly exerted from his position.” The fatal flaws in that charge were twofold: First, Waters could not have received compensation from the Treasury meeting because that meeting yielded no results. Second, Waters’ request, to have Treasury hear out the concerns of an industry group, would not, by any stretch of the imagination, ever be considered, “improper influence.” That term applies to the interference with a government official’s proper performance of his duties.

Waters “had a long history of assisting small and minority owned banks generally, and NBS in particular,” noted the Committee Statement. It also explained why the meeting, on September 9, 2008, yielded no results: “Treasury was unable to grant OneUnited’s request because it lacked the legislative authority to do so.”

But the Statement also claims that only representatives of OneUnited showed up, “and no other representatives from NBA or any other NBA member bank were present.” The OCE report says that NBA counsel George Lyons, who has no affiliation with OneUnited, was also scheduled to attend. The Statement fails to mention that one of the attendees, OneUnited’s Senior Counsel Robert Cooper, was Chairman-Elect of the NBA.

The Statement contradicts the OCE Report, which noted that the request to Treasury was on behalf of the NBA, not OneUnited singularly. The Statement makes no mention of the fact that OneUnited, was referenced “as an exemplar of the impact the Treasury Department’s decisions would have on minority-owned banks.” Waters did not attend the meeting, but her Chief of Staff, plus staffers for Barney Frank and John Kerry, both from OneUnited’s home state, attended.

After the Treasury meeting that went nowhere, Waters consulted with Frank before she took any legislative action, out of her concern about tripping over any ethics rules. Frank told her to, “stay out of it,” and she did. Frank took the lead in shaping legislation that would affect the NBA and one of his constituents. [See Exhibit 18 of the OCE report.]

The Committee’s case against Waters depends on the meaning of “it.” Apparently, Waters took Frank’s admonition to mean that she should take no role in drafting legislation. (As noted here previously, theHouse Ethics Manual clearly states that a member may vote on legislation affecting his own business interests. The standards for other types of actions are undefined.) The Committee interpreted Frank’s remark to mean that her office should break off all contact with OneUnited, as if the bank were a litigant in a pending criminal trial.

Waters’ office did keep the NBA and OneUnited apprised as to how things were moving forward. Why didn’t OneUnited contact Frank’s office directly? The answer seems obvious to anyone who remembers what happened during the week subsequent to the meeting with Treasury. On September 18, Hank Paulson informed Congress that a financial meltdown was imminent and that he needed unlimited authority, with zero accountability, in order to save capitalism. The Chairman of the Financial Services Committee and his staffers suddenly become extremely busy; they could not respond to emails and phone calls. Frank and others, who found Paulson’s request unacceptable, were forced to quickly draft TARP legislation from scratch.

According to the Committee Statement, it was during this period, late September 2008, that Waters’ Chief of staff, Mikael Moore, who happens to be Waters’ grandson, “was actively involved in assisting OneUnited in their request for capital from Treasury and crafting legislation to authorize Treasury to grant the request.”

How was Mikael Moore involved in “crafting legislation”? By opening up the .doc file and sending it to the printer, and handing over the hard copy. Really. That’s what Committee Statement alleges. Check out Exhibit 12 of the OCE report. It shows an email, dated September 22, 2008, from OneUnited’s lawyer, Leander Foley, to OneUnited’s CEO, Kevin Cohee. The email attachment includes some draft legislation. Cohee then forwarded the message to Moore, and asked Moore to print out the document for Cohee prior to his meeting.

Similarly, on the prior Friday, on September 19, 2008, Cooper sent Moore an email with thoughts on proposed legislation, and directed Moore to forward the message to a staffer on the Financial Services Committee. Moore presumably sent the email.

Members of the House are not stupid. Or at least most of them aren’t. They know the difference between crafting legislation and forwarding email messages, or printing out someone else’s work product. They know that the claim that Moore “helped craft legislation” is a trivialization of the process, an insult to their intelligence.

The Committee Statement deemed the insignificant favors by Moore to be ethics violations. Moore’s favors “created an appearance that [Waters] was taking official action for [Waters’] personal benefit, which did not reflect creditably on the House.” Waters’ failure to instruct Moore to refrain from providing any assistance to OneUnited violated the “spirit,” of House Rule 23, Clause 3, which prohibits compensation derived from improper influence.

Finally, “Reasonable persons could construe [Waters’] Chief of Staff’s continued involvement in assisting OneUnited as the dispensing of special favors to OneUnited…” Apparently, this is the first time ever that the actions taken by Moore–keeping a constituent informed and performing secretarial courtesies–constituted “special favors” and ethical violations. Reasonable persons are far more likely to find that the House Committee members embellished and parsed the facts in a manner that demonstrates their bad faith.