Yet another ethics investigation that misses the point

The House Office of Congressional Ethics (OCE) has in yet another instance issued a confusing report about an unfounded attack on the ethics of a single member while ignoring much broader problems with the conduct of other members.

Much of this June 27 2014 report, first released publicly on Sept. 30 by the House Committee on Ethics of an investigation of Rep. Tom Petri (R Wis.), concerns various members’ interference with government contracts.

{mosads}U.S. government contracts are awarded according to a competitive process and statutory procedures implemented in relevant executive branch agencies including the Department of Defense (DOD).  The president is the Commander and Chief of the armed forces, and DOD contracting is carried out under the supervision of officials appointed by him and confirmed by the Senate.

Once a government contract is awarded, it should stand.  Congressional ethics rules should not allow members to intervene to change the result.  This problem is particularly acute in DOD contracts where national defense is at stake.

Congressional ethics rules – perhaps not surprisingly — aren’t written that way.  Thus, after a contract was awarded by DOD to the Oshkosh Corporation, a Wisconsin company, headquartered in Petri’s district, competitor companies in Texas that lost the contract protested the award to Oshkosh.  Then, as the OCE  said in its report “Shortly after the protests were filed, members of the Texas congressional delegation took several actions – including sending a letter to the Secretary of Defense – on behalf of one of the losing bidders, a company based in Sealy, Texas, to raise concerns with the [contract] award to Oshkosh.” 

The OCE or the House Ethics Committee apparently sees nothing wrong with this.  Helping companies in their district is what members do, even if this means trying to influence DOD contracts.  Concerns about members’ lack of relevant expertise and the trillion dollar defense budget are secondary.  Politics comes first, and House ethics rules won’t prohibit politics as usual.

As the OCE observed, Oshkosh then sought assistance from the Wisconsin congressional delegation, including Petri, to counter the efforts of the Texas congressional delegation.  Sensible ethics rules would have prohibited Petri’s involvement in the defense contract just as sensible ethics rules would have prohibited the Texas delegation from interfering with the contract to begin with.  Taxpayers would save money if members of Congress were to stand down and let the Defense Department do its job.

But if one side can play, both sides can play.  At least Petri – unlike his Texas colleagues – was seeking to support a decision that DOD had already made on the merits.  And his involvement, along with the entire Wisconsin delegation, in fending off the Texas delegation’s efforts may have saved taxpayers hundreds of millions of dollars on a major DOD contract.

The House Ethics Committee’s concern about Petri, however, is that he also owned stock in Oshkosh.  In other words, he actually believed enough in a company in his own district to invest in it. 

That does not mean that he lost the right to advocate for Oshkosh.  Such a rule would make little sense – among other things it would force family business owners to sell their businesses and farmers to sell their farms before going to Congress to advocate for businesses and farms in their districts. 

And the rules don’t provide that a member has to stand down from advocating for a company because he owns stock in the company.  The House Ethics Manual simply provides that “A Member who considers advocating on a matter that may affect his “personal financial interest . . . should first contact the Standards Committee for guidance.” In other words the member has to ask for “guidance” – some would say “permission” – from other members on the committee before proceeding.  Those members then make an “ethical” (political?) decision about whether he can proceed.

Such an open-ended rule is of course open to various interpretations, but that is exactly what Petri did. He went to the House Ethics Committee for guidance on what to do, and at no point was he told to stop advocating for Oshkosh.

And now the Ethics Committee, instead of dismissing the findings of the OCE that ignored Petri’s following the advice he received from the Ethics Committee itself, issued a statement saying it wants to continue the investigation of Petri, a retiring member who has served his district for thirty five years.  Neither the Committee’s statement or the OCE report cites any rule prohibiting Petri from advocating for Oshkosh because there is no such rule, only the vague rule requiring consultation with the Committee and the Committee’s concerns with the quality of the consultation.  This, along with similarly vague allegations about Petri’s advocacy for other [Wisconsin] companies in which he owned stock, comprise the entirety of its investigation of Petri. 

While the Committee continues this hapless investigation, the House fails to address the real problem, which is its members meddling in government contracts, a political game that costs taxpayers billions of dollars and in the case of DOD contracts potentially jeopardizes the safety of men and women in our armed forces who use the equipment that DOD contracts to buy.  Whether the reason be stock ownership, or more likely campaign contributions (a sacred cow that the House Ethics Committee almost never touches) or any other reason, Congress should not interfere.  At least Petri defended DOD’s contracting decisions against colleagues (some of his own Party) who tried to interfere.   The House and the Senate both need to tell their Members to stop playing politics with government contracts and allow our troops and the civilian DOD personnel who are charged with protecting them to do their jobs.

Painter is  S. Walter Richey Professor of Corporate Law, University of Minnesota, fellow, Harvard University Safra Center for Ethics, 2014-2015, and former associate counsel to the President and chief White House ethics lawyer for President George W. Bush 2005-2007.