FACT: Request To Investigate Rep. Alan Grayson

FACTDC
Jul 6, 2015
3 min read

Honorable David Skaggs

Office of Congressional Ethics

U.S. House of Representatives

P.O. Box 895

Washington, DC 20515-0895

Re: Request to Investigate Representative Alan Grayson

Dear Co-Chairman David Skaggs and Committee Members:

The Foundation for Accountability and Civic Trust (FACT) is a nonprofit organization dedicated to promoting accountability, ethics, and transparency in government and civic arenas. We achieve this mission by hanging a lantern over public officials who put their own interests over the interests of the public good. We write today to request that the Office of Congressional Ethics immediately investigate Representative Alan Grayson’s reported obvious breach of House Ethics Rules. According to a recent report in Politico, Representative Grayson manages multiple “hedge funds that use his name in their title, a practice prohibited by congressional ethics rules.” Matt Dixon, Alan Grayson Hedge Funds Skirt Ethics Rule, Politico, June 30, 2015 (attached as Exhibit A). This is not simply a technical violation, but rather is a violation that implicates fundamental goals of the ethics rules—to ensure that Members fulfill the public trust inherent in the office by prohibiting Members from profiting by virtue of their office and being improperly influenced.

Pursuant to the ethics rules, Members are prohibited from engaging in certain outside activities and employment. These prohibitions are enforced in part because of the citizen perception that Members are able to “cash in” on their position of influence and the appearance of impropriety, but also because of the actual serious conflict of interest and impropriety that may arise. House Ethics Manual, at 213, 215. Specifically, “Members are prohibited from engaging in professions that provide services involving a fiduciary relationship,” which includes financial services. House Ethics Manual, at 213-14 (citing House Rule 25(2) & 5 U.S.C. app. 4 § 502(a)), 216 (emphasis added). This prohibition is wide ranging. Not only does the rule explicitly ban members from receiving “compensation for affiliating with or being employed by such an entity in any capacity,” but it also prohibits a Member’s name to be used by such an entity “regardless of whether the organization compensates the Member.” House Ethics Manual, at 220 (emphasis in original). Further, in determining whether the prohibition applies, the term fiduciary should not be applied in the narrow technical sense, but in a broader representative capacity meaning. House Ethics Manual, at 215-216.

Representative Grayson admittedly manages three funds that use his name in the title—a practice that is prohibited by the letter of the ethics rules. See Dixon, Alan Grayson Hedge Funds Skirt Ethics Rule, Politico, June 30, 2015 (attached as Exhibit A). When questioned about his actions, Representative Grayson reportedly claimed this ethic rule did not apply to him based upon his own interpretation of the term fiduciary, an interpretation that is contrary to law and was described as “complete nonsense.” Id. Representative Grayson’s interpretation is also contrary to the ethics rules, which do not permit a Member to use a “narrow technical reading” of the rules in order to avoid the intent and spirit behind their adoption. House Ethics Manual, at 17. Moreover, the House Ethics Manual specifically explains that the terms fiduciary should not be applied in a narrow technical sense. Id. at 216.

This is exactly the type of behavior that erodes public trust—a Member who appears to commit a clear violation of the ethics rules along with an implausible excuse that those rules don’t apply to him. In order for the ethics rules to be effective, they must be reliably enforced. The Office of Congressional Ethics is respon

sible for ensuring each Representative fulfills the public trust inherent to the office and complies with the House’s ethical standards. Therefore, we urge the Committee to immediately investigate and take appropriate action in response to this apparent violation of the House of Representatives ethical guidelines.

To the best of my knowledge and ability, all evidence submitted was not obtained in violation of any law, rule, or regulation. Further, I am aware that the False Statements Act, 18 U.S.C. § 1001, applied to information submitted to the Office of Congressional Ethics.

Respectfully submitted,