Ethics Office Probes Wall Street Giving Ahead of House Vote on Bank Bill
A congressional ethics office is investigating campaign donations made by the financial industry to some U.S. House members as they were preparing to vote on the Wall Street regulation overhaul in December.
The Office of Congressional Ethics is looking into contributions to eight House members, including six members of the House Financial Services Committee. For seven of the lawmakers, fundraisers were held days before the House passed the financial plan on Dec. 11, according to invitations posted online by the Sunlight Foundation, a Washington-based watchdog group.
The Senate passed the Wall Street plan today, 60-39, and sent it to President Barack Obama for his signature. The biggest overhaul of financial-industry regulation since the Great Depression aims to prevent a repeat of the 2008 credit crisis.
The ethics office sent letters to people who hosted the fundraisers in December and companies that made contributions through their political action committees. The ethics office is independent of the House ethics committee and recommends whether the House panel should consider taking action against members.
“The OCE inquiry is simply that, an inquiry,” said lobbyist Julie Domenick, who held a Dec. 10 fundraiser for Representative Joseph Crowley, a New York Democrat, and said she received a letter from the ethics office. “It doesn’t mean that anyone has done anything wrong.”
The event was scheduled the previous Nov. 4, according to an e-mail sent by the organizers. Domenick, of Multiple Strategies LLC in Washington, said in an interview that the more the public realizes that Congress, through the ethics panels, “is serious about enforcing a high standard of ethics, we’re all served well.”
Other lawmakers whose contributions are being examined include Democrat Melvin Watt of North Carolina and Republicans Tom Price of Georgia, Frank Lucas of Oklahoma and Jeb Hensarling of Texas, their offices said. Also being examined, according to a lawyer familiar with the investigation, are Democrat Earl Pomeroy of North Dakota and Republicans John Campbell of California and Christopher Lee of New York.
Pomeroy and Crowley are members of the House Ways and Means Committee; the others are on the Financial Services panel. Hensarling is the lawmaker who didn’t schedule a fundraiser during the days before the House vote, according to the Sunlight Foundation.
Lawmakers said they were cooperating with the investigation and that there was no connection between contributions and their votes.
“I have always kept complete separation of legislative and fundraising activities,” Lucas said in a statement. “Any suggestion to the contrary is totally inaccurate and not supported by the facts. I have no doubt at the end of OCE’s full review they will find no appearance of impropriety in my actions.”
Hensarling’s press secretary, George Rasley, said, “The premise of the complaint is unfounded, and Congressman Hensarling looks forward to having this cleared up.”
In a statement, Price said his “voting record and opposition to Washington bailouts has been consistent since Day One under both the current and previous administrations.”
Crowley’s office issued a statement saying the lawmaker “has always complied with the letter and spirit of all rules regarding fundraising and standards of conduct.”
Watt didn’t immediately respond to a request for comment. Calls to Lee, Pomeroy and Campbell’s offices seeking comments weren’t returned.
According to Federal Election Commission records, MasterCard Inc.’s political action committee gave $5,000 to Crowley on Dec. 11, while the Morgan Stanley PAC gave $2,000 to him four days later. Lucas got $1,000 each on Dec. 3 from committees for the Independent Community Bankers of America and the Managed Funds Association, which represents hedge funds.
Watt received $1,000 from the Bank of America Corp. PAC and $2,500 from the Goldman Sachs Group Inc. PAC on Dec. 15. Hensarling got $2,500 from the Investment Company Institute PAC on Dec. 7 and $1,000 from the Citigroup Inc. PAC on Dec. 22, FEC records show.
The Wall Street regulation plan, passed over the opposition of the financial industry and all House Republicans, would tighten rules for derivatives, expand oversight of hedge funds and set up a mechanism to liquidate failing financial firms whose collapse would harm markets.
All of the Democrats involved in the ethics inquiry voted for the bill in December; all of the Republicans voted against it. Jon Steinman, a spokesman for the ethics office, declined to comment.
Membership on the Financial Services Committee has its rewards. The 14 first-term representatives on the committee raised an average 53 percent more than the other 44 lawmakers who first took office in 2009, according to FEC records.
“Fundraising and lawmaking are inextricably linked,” said David Donnelly, campaign manager of the Campaign for Fair Elections, an advocacy group that supports public funding of campaigns. “The only surprising fact in this story is that just eight members are under investigation.”
The ethics office refers its findings to the House ethics committee, which then decides whether to take action or close a case.
The House ethics committee rebuked then-House Majority Leader Tom DeLay, a Texas Republican, in October 2004 for giving “the appearance that donors were being provided with special access.” DeLay solicited energy industry contributions for a June 2002 fundraiser as House and Senate negotiators were writing legislation to spur more domestic oil production.