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.