Waters has been charged with three counts of violating House ethics rules. Uncharted territory in Waters case

With the decision by the ethics committee to renew its investigation of Rep. Maxine Waters, after the panel has already charged her with three counts of violating House rules, the secretive panel is moving into unchartered and heavily disputed territory.

Several ethics experts said they could not recall any similar action in a previous congressional probe, and they questioned whether the committee even had the authority to do so once it has charged Waters with multiple ethics violations.


The move also means that the Waters’ case is almost certain to extend into the 112th Congress. In order to do so, the ethics committee would have to vote to continue the investigation once it organizes next year.

And the committee will almost assuredly have new leadership in 2011, at least on the Democratic side, raising further doubts about the outcome of the case —- including if and when it will ever come to trial.

Rep. Zoe Lofgren (D-Calif.), who chairs the committee, was appointed by Speaker Nancy Pelosi (D-Calif.) to be ethics chairwoman this Congress and is not expected to serve on the panel in the next Congress. Blake Chisam, the staff director and chief counsel – and a former Lofgren aide – is also likely to depart as well.

Rep. Jo Bonner (R-Ala.), the ranking GOP member of the ethics committee, could serve at least two more terms on the panel, although such duty is seen as difficult and time-consuming for all members who do so.

But, first, Lofgren and Bonner are going to have to deal with a challenge from Waters over whether they can actually order the investigation reopened, as the committee has voted to do.

“I’m not aware of any such precedent,” said Rob Walker, an attorney with the firm Wiley Rein and former staff director and chief counsel at both the House and Senate ethics committees, of the panel’s decision to reopen its Waters’ probe. “That doesn’t mean there isn’t one. I’m just not aware of any.”

“The [ethics] committee has a history of reinventing the wheel whenever they’re confronted with a novel situation like this,” added Elliot Berke, who served as counsel to former Speaker Dennis Hastert (R-Ill.).

Technically, an adjudicatory subcommittee of the ethics committee – which was supposed to begin a trial for Waters on Nov. 29 – referred the matter back to the full ethics committee, which then recommitted the case to the same investigative subcommittee that had issued the charges against Waters in early August.

Sources close to the ethics committee suggest this process is similar to any other committee recommitting a bill to a subcommittee and is thus a matter of routine parliamentary procedure.

But there is no specific language in the ethics panel’s rules granting it the right to do so, and it has not been attempted before. The ethics committee could theoretically close the Waters case and then vote to reopen it, directing the same investigative subcommittee to take up the Waters’ matter, yet that was not done. And even if it was, the California Democrat would have the right to once again appear before and offer exculpatory evidence to the four-member panel.

Ultimately, this path was not chosen, leaving the experts wondering whether the ethics committee was stretching the limits of its power beyond what is outlined in its rules.

“This is not a bill or a resolution, so I don’t see how they do it,” Walker noted. “The specific rules of the [ethics] process that were promulgated for this situation don’t envision that possibility.”

Nothing in the section of committee rules covering adjudicatory subcommittees – the special, eight-member panel that was to oversee the Waters’ trial – refers to such recommittal authority. Lofgren and Bonner, though, are running the adjudicatory subcommittee, as well as chairing the full ethics committee, a dual role that gives them great leeway in how to conduct the proceedings.

Waters has been charged with three counts of violating House ethics rules relating to her involvement with OneUnited, a minority-owned bank, and its efforts to obtain a federal bailout during the 2008 financial crisis. OneUnited eventually received $12 million in TARP funding. Most of the charges related to Waters’ case involved actions taken by her grandson, Mikael Moore, who is also her chief of staff.

Waters, a senior member of the House Financial Services Committee, allegedly brought discredit upon the House, used her office – through Moore’s actions – to benefit herself financially, and violated the Code of Ethics for Government Service.

Waters and Moore have vehemently denied the charges, arguing that Waters has done nothing unethical or improper, and Waters sought an open trial before a special, eight-member “adjudicatory subcommittee” of the ethics committee to contest the charges. Rep. Charlie Rangel (D-N.Y.), whom the ethics committee voted to censure last week, also went through a similar proceeding.

Waters blasted the decision to reopen the investigative phase of the probe, arguing that it shows the “weak case” the panel has against her.

Waters and her attorneys have also argued that the ethics committee blatantly violated its own rules by sending the matter back for further investigation once it has already charged her with wrongdoing.

“I am disappointed that the Committee is once again postponing my hearing and showing a complete disregard for due process and fairness,” Waters said in a statement issued Friday. “For over a year, I have cooperated with the investigation and I have consistently asked for a public hearing on this matter. I remain eager to present my case and demonstrate to my constituents and all Americans that I have not violated any House rules.”

A Waters’ press release added: “There is no provision or authority for the Committee to take this action, but the same body which is charged with interpreting the rules now seems to be guilty of making them up as it goes along. Neither the letter sent to me nor the statement on the Committee website cites any rule or clear rationale for this decision.”

Ethics committee investigators recently turned up a new e-mail from Moore to top aides on the Financial Services Committee on Sept. 28, 2008 – before the TARP program was finalized – asking, among other things, whether “small bank language” was included in the draft of the bill.

This exchange came after Waters was advised by Rep. Barney Frank (D-Mass.), chairman of the Financial Services Committee, to “stay out of it” because of her relationship with OneUnited. Sidney Williams, Waters’ husband, had been on the bank’s board of directors and owned $352,000 in company stock, according to the 'Statement of Alleged Violation' issued against Waters.

Waters had also set up a meeting for OneUnited officials and the National Bankers Association, a minority bank that was going to be chaired by an OneUnited executive, with top Treasury Department officials. OneUnited sought $50 million in federal funds at that meeting, stating that it needed the funding because the U.S. government had taken over Fannie Mae. OneUnited had put most of its assets into Fannie Mae stock, meaning the bank could be wiped out by the government’s action.

OneUnited later was able to receive $20 million in private capital, and then got $12 million in federal funding.