After Collins Scandal, More Scrutiny for Members Serving on Boards

Ethics watchdogs also hope to target private and nonprofit boards.

Rep. Chris Collins at the Republican National Convention in Cleveland on July 19, 2016
AP Photo/J. Scott Applewhite
Sept. 11, 2018, 8 p.m.

In the wake of Rep. Chris Collins’s indictment for insider trading, House lawmakers are trying to push through a rule change that would prevent similar misconduct. Ethics watchdogs support the bill, which closes a gaping hole in House protocol—but they hope that Democrats will go even further if they retake the House in November.

The resolution was introduced in early August by a pair of Collins’s fellow New York members, Democrat Kathleen Rice and Republican Tom Reed. It’s modeled after a decades-old Senate rule barring members from serving on the boards of publicly held companies, and unlike the Senate rule, the proposal also stops members from remaining on boards they joined before their election. Rice and Reed are gathering cosponsors and hope to pass the bill with bipartisan support.

The rule change has widespread buy-in from clean-government advocates, who sent a letter to lawmakers last week urging them to support it. The only problem: The rule change does not address members’ involvement with privately held and nonprofit companies.

“When you have a public servant who is in office, their main focus should be the well-being of the entire country,” said Tyler Cole, legislative director and policy director at Issue One. “When that same member of Congress is serving in a governing capacity of a private entity, then you can get conflicts that arise.”

According to an analysis from The Washington Post, at least 97 House members are connected to private corporations in some way, although few serve directly on boards. Besides Collins, who sat on the board of Innate Immunotherapeutics, National Journal could identify only Rep. Neal Dunn. The Republican sits on the board of Summit Bank in Florida. The legislation would not require him to leave.

Many more members serve on the boards of nonprofit companies, which present different ethical issues. The 2010 Citizens United ruling allows political nonprofits to spend unlimited amounts of money, so long as their spending is not coordinated with candidates or parties. Cole said the potential for politicians to serve on politically active nonprofits “in the post-Citizens United world” can also “raise some concerns.”

Craig Holman, public-affairs lobbyist at Public Citizen, said he tried to persuade Reed and Rice’s offices to block members from sitting on either private or nonprofit boards, but said they declined to “go that far.” Holman and Cole both still support the bill.

“There’s no question that we have a lot of work to do when it comes to regulating members’ relationships with private companies and nonprofit organizations,” Rice said. “And I’m eager to work with my colleagues to make changes. But our resolution addresses a gaping and, quite frankly, shocking loophole in the House rules.”

According to Daniel Weiner, senior counsel at the Brennan Center for Justice, that loophole may also be the easiest to fix. “There are a lot more thorny questions with privately held companies,” Weiner said. “Yes, your family ice-cream shop … I’m not sure that raises my hackles. But your family plastics company that manufactures for the Defense Department—that’s a problem.” At the very least, Weiner personally believes companies that do business with the government should be “off-limits” to lawmakers.

In Washington, Democrats are laying the groundwork for further reforms. Members have rolled out several ambitious reform packages, and the Trump administration is reportedly bracing for an onslaught of ethics investigations if Democrats retake the House.

Democrats are also rallying voters under the clean-government banner on the campaign trail. In Houston’s 7th Congressional District, Democratic challenger Lizzie Pannill Fletcher has criticized incumbent Republican John Culberson for his decision to dump stock in the Collins-linked biotech firm days before one of its drugs failed a do-or-die clinical test. In Minnesota’s 3rd District, Democrat Dean Phillips has made corruption a central issue in his campaign, as has Democrat Brendan Kelly in Illinois’s 12th District.

The message polls well. An April Pew Research survey found that 83 percent of Americans believe it’s “very important” for the U.S. that “elected officials face serious consequences for misconduct,” but just 30 percent believe they do. Republican leaders, say ethics watchdogs, ignore that message at their own peril.

“It’s clear Republicans haven’t made the corruption and draining the swamp—haven’t put the same emphasis on that that Democrats have,” said Aaron Scherb, director of legislative affairs at Common Cause, a pro-transparency group that provided input on the Rice-Reed bill. “I think we’re seeing representatives like Conor Lamb and other candidates around the country who have made corruption and undue influence a key part of their campaigns, and that’s certainly resonated.”

Democratic Rep. John Sarbanes of Maryland, who leads his caucus’s Democracy Reform Task Force, said that if Democrats get the gavel back in November, they’ll push to pass an ethics package “in the first 100 days.” By mid-August, more than 160 House Democrats had signed onto Sarbanes’s “by the people” government reform resolution.

It’s not clear how the Rice-Reed bill might get rolled into larger reforms if it fails to gain steam before the midterms. But Sarbanes said he would consider legislation that goes even further than the proposal. “The basic theme of the reform package that we have developed is broad enough to encompass those kinds of changes. … I think we have to go much bigger than that. I think that the public, frankly, has an appetite right now for significant, bold change that is not nibbling around the margins, is not just closing a loophole here or closing a loophole there.”

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