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
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Lawmaker Investments and Disclosure
According to an article in today’s Washington Post, the number of lawmakers owning and trading stocks has nearly tripled since 2001. This brings with it a concern that personal financial conflicts of interest may interfere with the honest legislating the public expects from their representatives or appear to to the general public, lessening trust in an institution that is hardly held in high-regard.
You can read the whole Post article to hear about the various stories of lawmakers owning stocks and taking positions that would support their bottom line. I’m going to focus on the underlying disclosure issues that are brought up from this problem.
As has been reported here and at Real Time Investigations, personal financial disclosures for lawmakers are wholly inadequate, particularly in reference to stock trading. As the Post article notes, “The congressional financial disclosure system, an annual form filled out and policed by members of Congress, is supposed to help keep lawmakers honest and reassure the public by making stock holdings transparent. But the reporting is delayed, information is limited and the paper forms prevent the computer analysis of trading that is commonplace elsewhere.”
Financial disclosure forms are filed annually. There is no way to police a practice when the reporting is this rare. There is also no reason that the reporting could not be in real time. All of this information is reported in real time to the Securities and Exchange Commission (SEC). Stock sales, purchases and trades could easily be reported in real time to the Clerk of the House or the Secretary of the Senate and publicly disclosed in a delayed fashion so as not to directly affect the daily trading on the exchanges or futures markets.
Rep. Brian Baird sponsored a bill that would begin to move the disclosure train in the right direction. The Stop Trading on Congress Knowledge Act (H.R. 682) — please forgive the mortifying acronym — would require lawmakers to disclose to either the Clerk of the House or Secretary of the Senate all stock activity within 90 days of taking action. The bill would also require those trading intelligence to lawmakers on financial matters to register and disclose their activities under the Lobbying Disclosure Act of 1995.
Baird’s bill looks like a good vehicle to move disclosure in the right direction, not only on financial disclosure, but also on lobbying disclosure. I’m going to go into the bill and relevant sections to check what it will change and how that could move lobbying disclosure down the road a little more.
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Health Reform Dissenter Received Inordinately Large Pay-Out From Pharmacy Chain in Purchase of Pharmacy
Rep. Mike Ross has been the most consistent dissenter from his party’s attempt to pass health care reform citing costs, fear of government control and rising deficits. One thing he has failed to mention in all of this is his personal financial investment in making sure certain provisions do not pass into law. According to an investigative report by the award-winning Marcus Stern of ProPublica, Ross sold a pharmacy he owned to a national pharmacy chain for a price that far exceeded its value.
Arkansas Rep. Mike Ross — a Blue Dog Democrat playing a key role in the health care debate — sold a piece of commercial property in 2007 for substantially more than a county assessment [2] (PDF) and an independent appraisal [3] (PDF) say it was worth.
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But the $420,000 was just the beginning of what Ross and his pharmacist wife, Holly, made from the sale of Holly’s Health Mart. The owner of USA Drug, Stephen L. LaFrance Sr., also paid the Rosses $500,000 to $1 million for the pharmacy’s assets and paid Holly Ross another $100,001 to $250,000 for signing a non-compete agreement. Those numbers, which Ross listed on the financial disclosure reports he files as a member of Congress, bring the total value of the transaction to between $1 million and $1.67 million.
Ross’ wife was also allowed to keep her job as the store’s pharmacist. Ross is also a huge recipient of health care industry campaign cash having pulled in $342,475 since 2007, more than from any other industry. The pharmacy chain in question, USA Drug, is lobbying Congress to not include a public option in any health reform bill that is reported. Ross is one of the biggest opponents of a public option, stating he will vote against any bill that contains one.
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Ethics Link Line-Up
The party may be over, but the investigation is just beginning. The House Ethics Committee confirms that it is investigating lawmakers involved in the PMA Group contributions-cum-earmarks scandal embroiling the House Defense Appropriations Subcommittee.
Lawmakers just filed their personal financial disclosures and we’re already seeing problems. Rep. Marion Berry under reported the value of property he owns in here in Washington. Sen. Chris Dodd, facing serious questions about his personal finances, asked for a 90-day extension to file his report. Nearly one-in-five senators were like Dodd and could not file their report on time. This included serial late-filer Sen. Bob Corker. Has this guy ever filed a report on time?
The Hill reports on one of those personal financial disclosures, those of Rep. Don Young. Apparently, Young has spent $1.3 million defending himself in an investigation into his relationship with the oil services company from Hades, VECO. Has there ever been one company that got so many politicians sent to jail or placed under investigation?
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Every Obama Administration Personal Financial Disclosure
ProPublica went through the process of requesting all of the personal financial disclosures from the Obama administration and has posted them to their site. Recently the administration streamlined the process of requesting access to the financial disclosure forms. Sunlight’s John Wonderlich wrote about that here.
And you can peruse the 179 Obama administration financial disclosures here.
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Unraveling Rangel
Rep. Charles Rangel, chairman of the powerful House Ways and Means Committee, failed to report purchases, sales or his ownership of assets at least 28 times since 1978 on his personal financial disclosure forms. Assets worth between $239,026 and $831,000 appeared and disappeared with no disclosure of when they were acquired, how long they were held, or when they were sold, as House Rules require. Rangel told C-SPAN’s Newsmakers program that the ethics panel would clear him on multiple ethics questions soon. More details at Real Time Investigations.
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Sen.-Designee Gillibrand’s Transparency Record
Today, New York Governor David Paterson appointed Rep. Kirsten Gillibrand to fill Hillary Clinton’s Senate seat. Gillibrand has, from day one of her congressional career, worked to make her office one of the more transparent in the Congress.
Entering Congress in 2007, Gillibrand was at the vanguard of transparency innovation in Congress. She was the first congressional candidate to sign Sunlight’s Punch Clock pledge, a promise to post her daily schedule once she had taken office, and to post her schedule (which has been archived at Congresspedia). She was also one of the first to post her earmarks, earmark requests, and personal financial disclosures to her official web site without a requirement to do so. Gillibrand was also a chief proponent of requiring Inspector General reports to be posted online. We truly hope that she carries this spirit of transparency with her to the Senate.
In doing so, she should aim to improve the content of her official schedule. One thing we’ve noticed is that her schedule has grown sparse, only notes official events, and does not list meetings with anyone from outside of government. In moving to the Senate, Gillibrand should aim for a higher standard of transparency in her schedule.
A shining example for congressional schedules can be found in the schedules of the Montana delegation, Sens. Max Baucus, Jon Tester, and Rep. Denny Rehberg. All three of these lawmakers post detailed schedules that note many meetings with lobbyists, home state residents, industry executives, union members, and others who come to Washington to talk and lobby their elected officials. That is what a truly transparent schedule looks like. Hopefully, as she moves up to the Senate, Rep. Gillibrand will continue to advance transparency and improve her efforts at maintaining a transparent office.
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Home Loan Disclosures
Now that it is official that the Feds are investigating Countrywide’s “VIP” home loan program, it’s time to revisit one of the key problems in disclosure that abetted the hiding of these loans. Since every member of Congress is required to file an annual personal financial disclosure report it would seem as though the public would have the ability to know which lawmakers received loans from which mortgage company and at what rate. Unfortunately, personal financial disclosures do not require lawmakers to list private residences or any home that does not generate income (ie: rent).
This is a problem with an easy solution. Earlier this year, numerous lawmakers, including Rep. Mark Souder and members of the Senate Ethics Committee, introduced bills to require limited, but adequate, disclosure of personal residences. Now that this issue is back in the headlines Congress should move quickly to address future concerns and tackle the myriad other problems with the personal financial disclosure forms.
The Sunlight Foundation’s Executive Director Ellen Miller had an op-ed in Roll Call (sub. req’d) earlier this year that addressed the failings of the personal financial disclosure:
…Congress must make personal financial disclosures more transparent and accurate. All of the manners in which lawmakers obscure their finances must be eliminated. Exact dollar figures must replace ranges. Loopholes for residences that do not generate income should be closed. Lawmakers must reveal how much stock they own, show who they are doing business with when engaged in a partnership, and list property in a more transparent manner. Personal financial disclosure reports must live up to the desire of Congressional leaders to operate in an open and honest manner.
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In Broad Daylight: FBI Peeks Into VIP
An investigation begins into the Friends of Angelo. Stevens’ conviction prompts reform group push. Some people don’t like transparency. That and more in today’s news:
“Friends of Angelo” beware! The FBI is investigating the “VIP” home loan program for public officials operated by Countrywide. Countrywide chief Angelo Mozilo made sure that public officials who could be influential in matters relating to his business received “VIP” rates on interest rates and loan fees. Sen. Chris Dodd and Sen. Kent Conrad both received “VIP” loans from Mozilo’s Countrywide. They are currently both cooperating with a Senate Ethics Committee investigation. The operator of the “VIP” program Robert Feinberg spoke to federal investigators noting, “he’s not aware of any discounts linked to favors, but he did see e-mails noting the potential value of the relationships to Countrywide’s political and business interests.” Both Conrad and Dodd stated that they did not know that a “VIP” program would provide them with special perks and savings. Feinberg, however, responds, “nine times out of ten, once you mention ‘V.I.P’ the person’s gonna ask you ‘what am i getting for being in this V.I.P department?’ Or ‘what am I getting because I know Angelo?’ Or ‘I talked to Angelo and he said I’m getting this.’”
Sen. Ted Stevens faced a welcome reception among fellow Republicans in Alaska as he denounced the “corrupt prosecutors” who successfully won seven convictions against the seven-term senator. Back in Washington, reform groups are organizing to pressure the Senate to create an independent body, working in conjunction with the Senate Ethics Committee, to oversee ethics complaints. The House approved an independent oversight board this year. The ethics committees in both chambers have taken flack for failing to properly police their members. While the ethics process has, since the eighties, primarily been used as a partisan tool, the system completely shut down after former Majority Leader Tom DeLay was reprimanded multiple times for various abuses of House rules.
Some dare call it transparency. The Aspen Times reports on local political donors who are uneasy about the availability of campaign contribution information online. Most of these individuals did not know that their contributions would be part of the public record and are upset that Google searches for their name turn up their political contributions. Involvement in the activities of public figures, particularly the financing of them, requires disclosure to ensure an open and honest system of governance. There is no reason to fear Big Transparency.
If you’re paying attention to the presidential campaign and checking polls every half-hour you may want to check a decent predictor of the outcome, lobbyist shuffling on K Street. Comcast recently fired their Republican lobbyist Kerry Knott, a former Dick Armey aide, and replaced him with Melissa Maxfield, a former aide to former Sen. Tom Daschle. Daschle is, of course, a top aide to Sen. Barack Obama and noted as a potential White House Chief of Staff or cabinet secretary, in the case that Obama wins the Nov. 4 election. Companies are already girding up for future battles by taking on lobbyists who would have influence in a potential Obama administration.
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In Broad Daylight: Stevens Saga Continues
Sen. Ted Stevens may have been convicted yesterday, but his saga continues. Which occupation saw a 13% rise in wealth over the past year? Congressman! That and more in today’s news:
Yesterday, Sen. Ted Stevens became the first sitting senator to be convicted of a felony since Sen. Harrison Williams in 1981. Despite the seven convictions for filing false statements to the government, Sen. Stevens vowed to fight on and appeal his conviction on the grounds that the prosecution was flawed, “I am innocent. This verdict is the result of the unconscionable manner in which the Justice Department lawyers conducted this trial.” Stevens’ chances in his quest for reelection appear to have dimmed as presidential candidate John McCain, Senate Minority Leader Mitch McConnell, and National Republican Senatorial Committee chairman John Ensign all rebuked the convicted Alaska statesman. Still standing by Stevens is Alaska’s lone representative in Congress, Don Young. Young’s endorsement of Stevens’ innocence was marred by Young’s praise for and comparison of another political figure to Sen. Stevens, “I think he can win. He’s the best thing for that, for the Senate. Alaskans know this. [...] I think that’s going to be, you know, a matter of opinion. I can remember Richard Nixon, you know, his years of service, what he’s done, and everybody were ridiculing him and he ended up being the greatest president in the history of our century.” With friends like these…
Over the past year, members of Congress saw their collective wealth increase by 13%, according to personal financial disclosure data collected by the Center for Responsive Politics. McClatchy reports that 2 out of 3 senators are millionaires, while 39% of the entire body of 535 members are also worth more than $1 million. As the paper points out, “Only 1 percent of all Americans are considered millionaires.”MAPLight.org released a study looking at in-state vs. out-of-state campaign contributions to members of the House of Representatives. The findings are noteworthy, “Virtually all House members, 97%, raised more than half of their funds from out-of-district (408 out of 421 members).” Check out the report and this graphic below (which is interactive at the MAPLight site):
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In Broad Daylight: Stressed Out
Jury deliberations continue in the Stevens ethics case. Rep. Lincoln Diaz-Balart faces questions about an earmark to a company doing business with Venezuela. Today’s news:
Yesterday, the Stevens jury deliberated for the first time and decided to call it a day after 4 hours of what they termed “stressful” negotiations. Today, the jury has already sent three notes to the presiding judge. One note asked for the specifics in the law requiring the reporting of liabilities on financial disclosures. The judge wanted to tell the jury that liabilities with a value of more than $10,000 must be disclosed, but the defense team said that was too specific and asked the jury simply be handed a copy of the requirements. Another note was more serious and could lead to a juror’s removal from the trial. A female juror is identified as “being rude, disrespectful and unreasonable” and engaging in “violent outbursts with other jurors”. If the juror is removed she will be replaced by an alternate, likely a man in his 20s. The Alaska Daily News covers another aspect of the trial: what happens if Sen. Stevens is found guilty and then wins reelection? I have another question, what does the Senate Ethics Committee do if Sen. Stevens is acquitted?
Rep. Lincoln Diaz-Balart earmarked funds to a defense firm that previously shipped surveillance equipment to Venezuela, not exactly the best friend of the United States. Phoenix Worldwide Industries President Esquivel Shuler called the pursuit of the earmark, “a shot in the dark for us.” Diaz-Balart has faced a number of questions regarding earmarks he sought for large campaign contributors.
