Congress members seen to back rules benefiting them

David S. Fallis / The Washington Post /

WASHINGTON — A California congressman helped secure tax breaks for racehorse owners — then purchased seven horses for himself when the new rules kicked in.

A Wyoming congresswoman co-sponsored legislation to double the life span of federal grazing permits that ranchers such as her husband rely on to feed cattle.

And a Pennsylvania congressman co-sponsored a natural gas bill as Exxon Mobil negotiated a deal that paid millions for his wife’s shares in two natural gas companies founded by her great-great-grandfather.

Those lawmakers were among 73 members of Congress who have sponsored or co-sponsored legislation in recent years that could benefit businesses or industries in which either they or their family members are involved or invested, according to a Washington Post analysis.

The findings emerge from an examination by The Post of financial disclosure forms and public records for all 535 members of the House and Senate.

The practice is both legal and permitted under the ethics rules that Congress has written for itself, which allow lawmakers to take actions that benefit themselves or their families except when they are the lone beneficiaries. The financial disclosure system Congress has implemented also does not require the legislators to identify potential conflicts at the time that they take official actions that intersect or overlap with their investments.

Members of Congress contact the House and Senate ethics offices thousands of times each year to seek legal advice on a range of activities, including their work on legislation that might pose a conflict. Between 2007 and 2011, lawyers for the two committees issued at least 2,800 written opinions to lawmakers, sent 6,500 emails containing advice and provided guidance over the phone 40,000 times, according to records kept by the two committees.

The committees rarely discipline their own, instead providing advisory opinions that generally give support and justification to lawmakers who take actions that intersect with their personal financial holdings, according to interviews with nearly a dozen ethics experts and government watchdog groups. And though Congress has required top executive branch officials to divest themselves of assets that may present a conflict, lawmakers have not asked the same of themselves.

Congressional ethics experts say reforms are needed.

Harvard public policy professor Dennis Thompson said lawmakers should refrain from having narrowly focused legislative agendas that align with their personal investments. Disclosure should also be broadened, he said, so the public is notified by a lawmaker of potential conflicts at the time they are taking official actions, including when bills are introduced.

“Ethics rules are supposed to make things clear and transparent,” Thompson said. “They should not require the public or the media to go digging around to make the connections.”

The legislators, in interviews and through spokesmen, said they saw no conflicts between their legislative actions and holdings. They added that they have a duty to advocate for their constituents, even when those interests align with their own.

Last year, for example, when Republicans attempted to slash funding for public broadcasting, Rep. William Owens, D-N.Y., was among a group of Democrats who fought to stop them. Owens’s wife is an executive at a public television station, one of nine public TV and radio outlets that broadcast into his district in upstate New York. Owens disclosed her job when he spoke briefly on the House floor opposing the proposed cuts.

“From my perspective, I was representing nine entities,” Owens said in an interview. “It wasn’t like I was asking for a specific item for the entity my wife worked for.”

For three years, the horse-racing industry tried but failed to get Congress to pass a bill that would change the way equine investments are tabulated at tax time. But in the spring of 2008, a new path opened up when then-Rep. Dennis Cardoza, D-Calif., was appointed to a conference committee responsible for hammering out the final language of the next farm bill.

Within weeks, the bill emerged with a new provision that handed the industry what it was seeking — a tax depreciation schedule for yearlings that gave owners the ability to recoup the cost of their investments in an average of three years rather than seven. Alex Waldrop, president and chief executive of the National Thoroughbred Racing Association, publicly thanked several lawmakers, including Cardoza, after the new version of the farm bill emerged from the conference committee.

When the new depreciation schedule kicked in the following year, Cardoza entered the industry, buying seven racehorses, including Regrettable Romance, Dad’s Little Man, Flying Spirit and Jade River.

After purchasing his first racehorse, Cardoza said, he and his staff sought opinions from the ethics committee on any actions he took that might affect the industry.

“My staff routinely checked in with the committee to ensure all of my activities and interests were completely without conflict,” Cardoza said in an emailed statement.

The Post asked for copies of any written opinion, but Cardoza declined to say whether the ones he received were written or oral. Such opinions are not subject to public records laws.

He said he did not think his work on the farm bill in 2008 presented a conflict, because he did not own any racehorses at the time. He said the bill he introduced after he began buying racehorses in 2009 would have “treated all bettors the same” and was aimed at helping the bettors, not the horse industry.

When the House and Senate wrote their first set of modern ethics rules in the 1970s, in response to the Watergate scandal, they expressly prohibited members from engaging in legislative activities that would financially benefit them. But both chambers immediately carved out exemptions to the rule.

The greatest latitude was provided to lawmakers whose business interests aligned with major industries within their home states. “If a dairy farmer represented a dairy farming state in the Senate, and introduced, worked for, and voted for legislation to raise or maintain price supports for dairy producers, he would not fall under the strictures of this rule,” the Senate ethics manual says.

Dozens of lawmakers identified in The Post analysis fell into this category.

For example, Rep. Cynthia Lummis, R-Wyo., owns between $1 million and $5 million in her family’s livestock business in Wyoming, where the state animal is the bison and cattle ranches dot the landscape.

She is one of 15 lawmakers co-sponsoring a bill that would double, from 10 years to 20 years, the duration of federal grazing permits for livestock that feeds on publicly held lands. Her husband, records show, holds a permit through 2017 to graze cattle on 675 acres of federal land.

Last year, Lummis also introduced a bill that seeks to change how cattle prices are negotiated to ensure, she says, that ranchers and farmers are fairly compensated. She is also one of the co-sponsors of a bill to exclude livestock manure from being defined as a hazardous substance.

In an interview, Lummis said she did not seek guidance on the bills from the ethics committee, but she thinks her actions present no potential for conflict.

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