Making Government Transparent and Accountable
The Sunlight Foundation uses cutting-edge technology and ideas to make government transparent and accountable. Underlying all of our efforts is a fundamental belief that increased transparency will improve the public's confidence in government
The Sunlight Foundation Blog
-
Is It Time to Revisit the Federal Advisory Committee Act?
A September 21st news story in Roll Call reported that the Obama administration is “strongly considering limiting the ability of lobbyists to serve on federal advisory panels.” Specifically,
“the White House is likely to either tell agencies to ban lobbyists from the panels or to provide the agencies guidance . . . suggesting they avoid having lobbyists serve on the committees. Some sources said the effort to limit lobbyists’ participation would apply to all federal advisory bodies. . . .”
Were the administration considering such a move as a way to improve the reliability of advice issued by the committees, banning lobbyists would likely not achieve that goal. However, other measures may go a long way towards minimizing the appearance or occurrence of conflicts of interest. Here are some open questions.
Firstly, should federal law require all members of federal advisory committees to publicly file annual financial disclosure reports? Doing so may allow other members of the committee, government officials, and the general public to determine whether a committee member has a vested financial interest with respect to influencing recommendations made by the committee. It might also encourage the committee member making the filing to be mindful of potential conflicts.
Secondly, should federal law require all members of federal advisory committees to publicly file a conflict of interest form whenever a conflict is likely to occur? The form could describe the nature of the conflict, and be shared with other members of the committee as well as the public. For significant conflicts of interest, committee members could consider recusing themselves from voting on proceedings, if not from the entire deliberative process. The administration could create guidelines for when recusal is appropriate.
Thirdly, should there be regular audits of financial disclosure and conflict of interest filings to determine whether heretofore unidentified conflicts of interest exist, with the commensurate ability to impose appropriate remedial action when necessary? All filings could be maintained in real time in an online searchable database, with the audits also publicly available. In addition, GSA likely should implement rules to ensure that the documents are scrubbed of personally-sensitive information, such as home addresses, phone numbers, social security numbers, etc.
Although there may be some temptation to apply the financial disclosure or conflict of interest filing requirements to lobbyists only, in this context that doesn’t make a lot of sense. It is likely that people who serve on advisory committees are those who are intensely interested in the issues that the committee addresses, and likely are engaging in related activities in their professional lives. Indeed, that nexus of involvement is exactly the point behind using federal advisory committees: they bring together people with diverse backgrounds to share their expertise in order to help the government craft better policies.
Consequently, removing lobbyists from the mix will likely remove a vital source of expertise for committees. Moreover, imposing disclosure requirements only on lobbyists, and not on everyone, doesn’t make a lot of sense.
It is good that the administration is paying attention to federal advisory committees. It may be time to consider whether to update the Federal Advisory Committee Act in other respects. For example, FACA doesn’t require that all committee minutes and other documents that are publicly available be also accessible to the public online. Additionally, the FACA online database needs serious upgrades.
For more information on FACA, see John’s blogpost, this CRS report, and this backgrounder from GSA.
Update:
Thirty minutes after publishing the above post that explored questions surrounding whether it makes sense to ban lobbyists from serving on federal advisory committees, White House Ethics Counsel Norm Eisen wrote on the White House blog that “it is our aspiration that federally-registered lobbyists not be appointed to agency advisory boards and commissions.”
We recognize that there are many registered lobbyists who currently serve on these committees as a result of a prior appointment. When these appointments expire, it is our hope that agencies not reappoint anyone who is currently registered as a federal lobbyist at the time of their potential reappointment.
In the blogpost, the White House has indicated that it will make “adjustments” to the policy as appropriate to assure “all interested parties that their voices will be appropriately heard in the process.” It will be interesting to see whether they allow waivers for lobbyists in certain instances.
-
House Launches Personal Financial Disclosure Database
As required by the Honest Leadership and Open Government Act, the Clerk of the House launched an online database for current personal financical disclosures. The site only hosts PDF copies of these reports and is only searchable by member, not by anything they list on the reports. (I also had difficulty loading the PDF in the most recent version of Adobe Acrobat.) Kudos to the House for moving towards much greater transparency!
If you want to see how this information can be displayed in a more user-friendly and compelling way, check out the Open Secrets Financial Disclosure database.
-
Stevens and Disclosure
So, the indictment is in and the charges against Sen. Ted Stevens include seven counts of making false statements on his personal financial disclosure forms from 1999-2006. Many of these false statement counts revolve around work done on Stevens’ Girdwood, AK home courtesy of the VECO oil company. Sunlight’s Bill Allison makes the case at Real Time Investigations that if the money spent on equipment, parts, and labor did not constitute a gift, but rather a loan, then Stevens would be allowed to omit them from his disclosure forms, thereby acquitting him of several false statement charges:
[F]rom my quick read of the indictment, it appears that the government is suggesting that when Stevens says he has no liabilities of more than $10,000, that means the hundreds of thousands of dollars Stevens is alleged to have received as benefits from VECO couldn’t possibly have been loans. But if (and for the record, I doubt this is likely), if Stevens was borrowing money, labor and materials to renovate a residence from VECO rather than accepting it as a gift, I’m not sure Stevens would have to report it under current personal financial disclosure rules, which say,
property which is held or maintained solely for recreational or personal purposes does not have to be reported…. (p. 131)
and
Mortgages secured by a personal residence (including secondary residences) that are not used for rental purposes do not have to be disclosed. (p. 136)
Suppose there was some understanding Stevens would repay Veco or its CEO, Bill Allen, for the home repairs, the car swap, the furniture and so on — shouldn’t the public know of those potential conflicts of interest? The indictment reminds us,
The primary purpose of the yearly Financial Disclosure Forms is to disclose, monitor and deter conflicts of interest, thereby maintaining public confidence in the integrity of the United States Senate and its Members. Because the yearly Financial Disclosure Forms require public disclosure of financial information by each Member of the United States Senate, such as income, assets, gifts, financial interests, and liabilities, the Forms provide the public at large, including the voters of a particular state, with the information necessary to allow the public to evaluate and consider official conduct by a Member of the United States Senate in light of that Member’s private finances.
Do the current disclosure requirements adequately “deter conflicts of interest, thereby maintaining public confidence in the integrity of the United States Senate and its Members,” if they exempt personal residences, mortgages, car loans and so on from public view?
-
Another Call for Mortgage Disclosure
Last month, after Portfolio revealed that Sens. Chris Dodd and Kent Conrad received favorable loan deals from mortgage giant Countrywide, members of the Senate Ethics Committee attempted to attach an amendment to housing relief legislation that would require the disclosure of mortgages and their details for members of Congress in their annual personal financial disclosure reports. The amendment was ruled non-germane and was dropped from consideration.
In the House, Rep. Mark Souder is keeping the disclosure flame alive, introducing a bill to require mortgage disclosure on personal financial disclosure reports. Souder’s bill would mandate the disclosure of home mortgages including the name of the creditor, the interest rate on payments, the number of years remaining, and the amount of the mortgage.
This is a good step in providing more detailed and accurate information on personal financial disclosure reports, and certainly a proper response to the Countrywide revelations. Congress should take this issue seriously and aim to adopt the transparency reforms in Souder’s bill.
For further steps on clarifying and furthering disclosure in personal financial disclosures, you can see Ellen Miller’s Op-Ed in Roll Call (no subscription needed this time) from a few weeks ago.
-
The GAO’s Unheeded Mandate
I recently came across a mandate that the GAO perform periodic reviews of financial disclosure practices across the government, which appears to be unenforced and unimplemented. (more)
My search started in the House rules from Ellen’s post last week pointing to this house rule, which leads from this search to this doc, from 1990. More clearly, there was language requiring the Comptroller General (head of the GAO) to "No later than December 31, 1992, and regularly thereafter, the Comptroller General shall conduct a study to determine whether the provisions of this title are being carried out effectively" –requiring the GAO to periodically review the effectiveness of those disclosure requirements.
It turns out that "by 1992" was clear enough to get a report written on financial disclosure (in 1990), but "regularly thereafter" appears to be interpreted as "whenever it comes up again," or perhaps "once every 20 years." Could it be that reviewing financial disclosure isn’t a priority? GAO standards actually dictate that legal mandates from Congress come before even congressional requests, so this requirement would seem to sit at the very top of the GAO priority food chain (see page 4 of the GAO’s protocols document ).
While this might seem to apply only to Congress, since I’m linking to house rules, the requirement actually comes from the Ethics in Government Act, which mandates financial disclosure from employees (see subsection (f), here) of all 3 branches of government, up to the President and Vice President, Judges, members of Congress, and several categories of related employees. (For an example of who qualifies for disclosure requirements, see this legislative branch explanation page.)
So what’s really going on? Is this an oversight? — has no member of Congress wondered if maybe the financial disclosure system is ineffective, and that there may be a built in mechanism to review it? Is it an ethics committee style detente, a congressional lack of will to put one’s own house in order? Surely such a disclosure requirement is noticed by members of Congress and governmental employees, since they have to disclose personal details. Do they seek to avoid stricter enforcement?
The spectacular paper The Political Economy of Transparency: What makes disclosure policies effective? warns that "transparency systems, always imperfect political compromises, must improve over time in scope, accuracy, and use in order to be sustainable. We have suggested that they can be improved by strengthening user intermediaries, encouraging effective enforcement, taking advantage of regulatory synergies, and complementing market interactions (Fung, Graham, Weil, 2002)."
I’m wondering whether the General Accountability Office, itself a champion of public information and transparency, has an untapped role to play in demanding accountability through disclosure of financial information from Congress, by performing the reviews of the effectiveness of disclosure programs as they’re charged to do.
-
Congress’s Landed Gentry
So what is it with members of Congress and land deals? Sen. Harry Reid failed to disclose what the Associated Press describes as “a $1.1 million windfall on a Las Vegas land sale” on property he hadn’t owned for three years. “The complex dealings allowed Reid to transfer ownership, legal liability and some tax consequences to Brown’s company without public knowledge, but still collect a seven-figure payoff nearly three years later,” reporters John Solomon and Kathleen Hennessey wrote. Rep. Charles Taylor, meanwhile, “owns at least 14,000 acres of prime land in western North Carolina. He’s also the local congressman. So when he steers federal dollars to his district, sometimes he helps himself, too,” John Wilkes reported in the Wall Street Journal (the story is available online here). Sen. Bob Menendez has his lease deal with nonprofit for which he’s secured federal funds, while House Speaker Dennis Hastert has his own profits from earmarks and land deals. The real estate dealings of Rep. Gary Miller and Rep. Alan Mollohan have also come under scrutiny (as noted in the Journal article).
Members of Congress file personal financial disclosure forms that are supposed to alert the public of any potential conflicts of interest a lawmaker might have. The foregoing examples suggest that the disclosures are inadequate for the purpose; that members can have substantial personal interests in government policy that are not apparent from looking at the disclosure forms, or that members can file incomplete disclosures or altogether leave out information so that that public is left unaware of a member’s business dealings. Disclosure is meant to safeguard Congress from members acting in their own interets, as the House Ethics Manual makes makes clear:
Public disclosure is intended to provide the information necessary to allow Members’ constituencies to judge their official conduct in light of possible financial conflicts with private holdings. Review of a Member’s financial conduct occurs in the context of the political process.
In other words, if Congressman So-and-so’s financial disclosure form shows he’s lining his pockets with taxpayer money, or renting to nonprofits for which he secures earmarks, or in business with recipients of federal contracts he’s helped secure, throw the bum out of office. But if the bums obfuscate, omit or otherwise obstruct disclosure, the political process will be unable on its own to keep Congress clean.
I am by no means a policy guy, but here’s a recommendation: Why not levy a 100 percent federal tax on any profit not properly disclosed by a member of Congress. That would certainly focus their attention.
-
Seeking Volunteers to Investigate Congress:
Last week at Sunlight, we exposed House Speaker Dennis Hastert’s use of a secret, undisclosed trust to make a $2 million profit selling land located near the proposed route of the Prairie Parkway, a project Hastert has backed with $207 million in earmarks.
There are still 539 congress members and delegates whose disclosure forms haven’t been scrutinized. Want to investigate them, I’ll explain below, and then you can email me if you’re interested (ballison@sunlightfoundation.com).
The House Ethics Manual states, "The objectives of financial disclosure are to inform the public about the financial interests of government officials in order to increase public confidence in the integrity of government and to deter potential conflicts of interest." (The Senate Ethics Manual is similar). On June 14, members of Congerss made public those disclosures. As a public service, the Web site PoliticalMoneyLine.com has put them online. The House disclosure forms start here — and the Senate (all on one page) is here. Go to the site, find your member, download the form, and spend a little time learning about your member’s financial interests.
Are there entries you don’t understand? Are there private companies, partnerships, or trusts for which no public information is available? Are investments in land identified in ways that you can find them on a map?
Inform yourself, and let me know what you find, either by email or by posting information online on your site (and sending us a link) or on ours.
Let’s make sure that we deter potential conflicts of interest by reading their disclosure forms, and making sure they know we’re watching.
Thanks a lot, and I’ll let you know as new projects come up. Of course, if you have suggestions for projects we should pursue, we’re all ears.
Bill
Bill Allison, Senior Fellow, Sunlight Foundation
-
Daylight AM:
- Yet another city is subpoenaed in the investigation into Appropriations Chairman [sw: Jerry Lewis]‘ (R-Calif.) earmarking practices. The San Bernardino Sun reports that Highland, California has become the eighth city, county, or university to receive a subpoena in the federal investigation. The Sun also notes the debate over earmarks that took place on the floor of the House yesterday as [sw: Jeff Flake] (R-Ariz.) forced members to defend their earmarks. Unfortunately, the House voted by 6 to 1 margins to maintain all of the earmarks, which included a $500,000 earmark placed by Lewis to renovate a swimming pool in Banning, California. The Banning swimming pool had previously received a combined $500,000 in earmarks from Lewis.
- Not only did Majority Leader [sw: John Boehner] (R-Ohio) return to the House leadership in an unexpected victory last year, but he also won $2,700 at the slots. Boehner was waiting for an aide at a "pit stop" in northern Michigan and "decided to play the slots … and won."
- Jeffrey Shockey, revolving door poster boy and central figure to the [sw: Jerry Lewis] scandal, revised his 2004 financial disclosure forms to show that he made $500,000 more from his former lobbying clients while he was working in Lewis’ office.
- Roll Call reports that the Senate’ millionaires club has expanded by one to 46 Senators. [sw: John Kerry] (D-Mass.) and [sw: Jay Rockefeller] (D-W. Va.) still sit atop the list while presidential aspirant Russ Feingold (D-Wisc.) reported $19,000 in negative net worth. That makes for a total of $2 million.
- The GOP is trying to find a balance on spending restraint and earmark reform, according to The Hill. Republicans in the Senate are "trying to salvage a spending-reform provision empowering individual senators to strip new earmarks out of conference reports without handing the rank and file unlimited power to wage wars of attrition to defeat bills they do not like."
- The Hill has a run-down on the personal finances of members that were released yesterday.
-
Members Disclose Finances:
Today the personal financial disclosure forms of members of Congress were released to a public eager to know that they elected people who make vastly more than the average American to rule this country. Who flew your member to some exotic locale? How much property or stock does your member own? Check it out for yourself at Political Money Line. And remember, Duke Cunningham went to jail because of one enterprising journalist who was searching through his financial disclosure and found a real estate deal that just didn’t look right. Have at it!
