Cantor’s New Job Shows Lack of Transparency in Ethics Rules

Despite 2007 law, members still rarely disclose employment negotiations.

WASHINGTON, DC - MAY 7: House Majority Leader Rep. Eric Cantor (R-VA) speaks during a news conference about the Success and Opportunity through Quality Charter Schools Act, on Capitol Hill, May 7, 2014 in Washington, DC. A vote in the House is expected on the bill later this week.
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Billy House
Sept. 2, 2014, 8:30 a.m.

Word that former House Ma­jor­ity Lead­er Eric Can­tor has already ac­cep­ted a job with a Wall Street in­vest­ment firm—just two weeks after leav­ing Con­gress—is the latest sign of weak­ness for a law de­signed to shed light on law­makers who ne­go­ti­ate for post-Cap­it­ol Hill work while in of­fice.

Can­tor has joined Moel­is & Co. as a vice chair­man and man­aging dir­ect­or, the firm an­nounced Monday morn­ing. His of­fi­cial last day as a House mem­ber was Aug. 18.

A tea-party chal­lenger ous­ted Can­tor from his con­gres­sion­al seat in a June Re­pub­lic­an primary, and he stepped down as the No. 2 House Re­pub­lic­an shortly after that. The an­nounce­ment by Moel­is says he will “provide stra­tegic coun­sel to the firm’s cor­por­ate and in­sti­tu­tion­al cli­ents on key is­sues.” Can­tor will be based in New York but will con­tin­ue to reside in Vir­gin­ia and be open­ing an of­fice in Wash­ing­ton for the firm, ac­cord­ing to an aide.

Can­tor is quoted in the an­nounce­ment by the firm as say­ing he has known the chair­man and CEO of the com­pany, Ken Moel­is, for some time.

And, ac­cord­ing to John Mur­ray, a former top ad­viser to Can­tor in Con­gress act­ing as a spokes­man this week, Can­tor’s dis­cus­sions with Moel­is stemmed from a Ju­ly get-to­geth­er about his fu­ture gen­er­ally. The idea of work­ing for the firm came up, and began to in­tensi­fy after that. Can­tor de­scribed the same chro­no­logy in an in­ter­view with The Wall Street Journ­al.

As writ­ten, the Hon­est Lead­er­ship and Open Gov­ern­ment Act of 2007 re­quires law­makers to file pub­lic dis­clos­ures with the House when they ne­go­ti­ate for work and when con­flicts arise. But the law’s rules ap­ply dif­fer­ently today than in­ten­ded when it was passed.

In the House, based on leg­al guid­ance from the Eth­ics Com­mit­tee, the gov­ern­ment pan­el in charge of the fil­ings was changed from the Clerk’s Of­fice to the Eth­ics Com­mit­tee, which is ex­tremely se­lect­ive about what it makes pub­lic.

So while Can­tor’s talks with Moel­is about the job date from Ju­ly, he filed no pub­lic no­tice about them with the clerk’s of­fice.

Mur­ray said the former lead­er “has fol­lowed to the ‘T’ every as­pect of the pro­cess re­quired when a mem­ber of Con­gress en­gages in any job ne­go­ti­ation.” He ad­ded, “He filed all the rel­ev­ant ma­ter­i­als in a timely fash­ion.”¦ It is a con­fid­en­tial fil­ing and is not pub­licly avail­able ac­cord­ing to our leg­al team.”

There is noth­ing il­leg­al or un­eth­ic­al about de­part­ing law­makers look­ing for work while they serve out their terms. But the law was put in place as a trans­par­ency meas­ure after former Rep. Billy Tauz­in caused a stir by leav­ing the House in 2003 to take a $2 mil­lion-a-year job in the phar­ma­ceut­ic­al in­dustry, just months after play­ing a lead role in draft­ing le­gis­la­tion to in­tro­duce a pre­scrip­tion-drug be­ne­fit to Medi­care.

But, ac­cord­ing to law­makers and out­side gov­ern­ment watch­dogs and oth­ers fa­mil­i­ar with the com­mit­tee’s hand­ling of such fil­ings, the law is be­ing in­ter­preted very nar­rowly. The res­ult has been that law­makers them­selves now de­term­ine when a po­ten­tial con­flict ex­ists and when such dis­clos­ures of ne­go­ti­ations should be re­leased pub­licly—via a fil­ing in the clerk’s of­fice.

Gov­ern­ment watch­dogs say the House rul­ing re­quires pub­lic fil­ing (with the clerk) of the “No­tice of Ne­go­ti­ation,” only if the mem­bers ac­tu­ally re­cuse them­selves from an of­fi­cial ac­tion due to a spe­cif­ic con­flict of in­terest or ap­pear­ance of con­flict of in­terest.

But most law­makers don’t even ap­pear to be fol­low­ing that nar­row­er re­quire­ment. For ex­ample, a chart in the Eth­ics Com­mit­tee’s Sum­mary of Activ­it­ies Re­port from the 112th Con­gress lists the num­ber of No­tices of Ne­go­ti­ation (218) filed and the num­ber of re­cus­als (113). Yet, on file in the clerk’s of­fice are few­er than 10 such no­tices of ne­go­ti­ations since the law was in­sti­tuted.

In short, law­makers are now ad­vised that their no­tices do not have to be made pub­lic—they can be kept private by the Eth­ics Com­mit­tee—un­less law­makers them­selves de­term­ine there is a spe­cif­ic con­flict and de­cide they must file a fol­low-up dis­clos­ure or no­tice re­cus­ing them­selves.

So the law has yiel­ded al­most none of the pub­lic in­form­a­tion it was de­signed to provide, and who law­makers ne­go­ti­ate with is largely un­known—and wheth­er their of­fi­cial du­ties present any con­flicts with those em­ploy­ers.

Meredith McGe­hee, policy dir­ect­or at the Cam­paign Leg­al Cen­ter, told Na­tion­al Journ­al earli­er this year that the eth­ics law is be­ing in­ter­preted so nar­rowly that “it is simply not mean­ing­ful.”

“Swiss cheese” is how McGe­hee de­scribed the cur­rent sys­tem, while Craig Hol­man, a le­gis­lat­ive rep­res­ent­at­ive for the gov­ern­ment-watch­dog group Pub­lic Cit­izen, said the law’s in­tent was to “let the pub­lic know,” but he said that is not what’s hap­pen­ing.

“That was the en­tire in­tent,” said Hol­man.


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