Congressional Ethics Committee’s Report on Marcy Kaptur’s involvement in PMA Scandal

APPENDIX B: REPORT AND FINDINGS OF THE OFFICE OF CONGRESSIONAL ETHICS REGARDING REPRESENTATIVE MARCY KAPTUR (Review No. 09-9064) CONFIDENTIAL Subject to the Nondisclosure Provisions of H. Res. 895 of the 110th Congress as Amended OFFICE OF CONGRESSIONAL ETHICS UNITED STATES HOUSE OF REPRESENTATIVES REPORTReview No. 09-9064 The Board of the Office of Congressional Ethics (hereafter the “Board”), by a vote of no less than four members, on November 20, 2009, adopted the following report and ordered it to be transmitted to the Committee on Standards of Official Conduct of the United States House of Representatives.SUBJECT: Representative Marcy Kaptur NATURE OF THE ALLEGED VIOLATION: Representative Marcy Kaptur authored several fiscal year 2009 earmarks for clients of PMA Group, Inc. (hereafter “PMA”). During campaign cycles 2008 and 2010, Representative Kaptur received contributions to her campaign committee from PMA’s PAC, PMA employees, the PACs of PMA clients for whom she authored earmarks, and the employees of those clients. If Representative Kaptur solicited or accepted contributions or other items of value in exchange for or because of an official act, or solicited or accepted contributions or other items of value in a manner which gave the appearance that the contributions were linked to an official act, then Representative Kaptur may have violated 18 U.S.C. § 201(b) (Bribery), 18 U.S.C. § 201(c)(Illegal Gratuities), 5 U.S.C. § 7353 (Gifts), and House Rules and Standards of Conduct. RECOMMENDATION: The Board of the Office of Congressional Ethics recommends that the Committee on Standards of Official Conduct dismiss the above allegations.VOTES IN THE AFFIRMATIVE: 6 VOTES IN THE NEGATIVE: 0 MEMBER OF THE BOARD OR STAFF DESIGNATED TO PRESENT THIS REPORT TO THE COMMITTEE ON STANDARDS OF OFFICIAL CONDUCT: Leo Wise, Staff Director & Chief Counsel.1CONFIDENTIAL Subject to the Nondisclosure Provisions of H. Res. 895 of the 110th Congress as Amended FINDINGS OF FACT AND CITATIONS TO LAWReview No. 09-9064 Table of Contents I.INTRODUCTION .............................................................................................................. 3A.Summary of Allegations ................................................................................................... 3B.Jurisdictional Statement ................................................................................................... 3C.Procedural History ............................................................................................................ 4D.Summary of Investigative Activity .................................................................................. 4II.THE OCE UNCOVERED NO EVIDENCE THAT REPRESENTATIVE KAPTUR REQUESTED EARMARKS FOR PMA CLIENTS IN CONNECTION WITH CAMPAIGN CONTRIBUTIONS THAT SHE RECEIVED ......................................... 8A.Applicable Law, Rules, and Standards of Conduct .......................................................... 8B.Representative Kaptur’s Evaluation of Earmark Requests ............................................ 11C.Representative Kaptur’s Campaign Fundraising ............................................................ 13D.Representative Kaptur’s Relationship with PMA .......................................................... 14E.Perception of Corporate Donors ..................................................................................... 15F.Contributions Linked to Official Acts by Outside Entities ............................................ 16III.CONCLUSION ................................................................................................................. 17IV.INFORMATION THE OCE WAS UNABLE TO OBTAIN AND RECOMMENDATIONS FOR THE ISSUANCE OF SUBPOENAS ......................... 182CONFIDENTIAL Subject to the Nondisclosure Provisions of H. Res. 895 of the 110th Congress as Amended OFFICE OF CONGRESSIONAL ETHICS UNITED STATES HOUSE OF REPRESENTATIVES FINDINGS OF FACT AND CITATIONS TO LAWReview No. 09-9064 On November 20, 2009, the Board of the Office of Congressional Ethics (hereafter the “Board”) adopted the following findings of fact and accompanying citations to law, regulations, rules and standards of conduct (in italics). The Board notes that these findings do not constitute a determination of whether or not a violation actually occurred. I.INTRODUCTIONA. Summary of Allegations1. There is not substantial reason to believe that Representative Kaptur solicited or accepted contributions or other items of value in exchange for or because of an official act, or solicited or accepted contributions or other items of value in a manner which gave the appearance that the contributions were linked to an official act. 1B. Jurisdictional Statement 2. The allegations that are the subject of this review concern Representative Kaptur, a Member of the United State House of Representatives from the 9th District of Ohio. The Resolution the United States House of Representatives adopted creating the Office of Congressional Ethics (hereafter the “OCE”) directs that, “[n]o review shall be undertaken … by the board of any alleged violation that occurred before the date of adoption of this resolution.” The House adopted this Resolution on March 11, 2008. Because the conduct under review occurred after March 11, 2008, review by the Board is in accordance with the Resolution. 1 Rule 9 of the OFFICE OF CONGRESSIONAL ETHICS, RULES FOR THE CONDUCT OF INVESTIGATIONS 11 (2009) provides that “[t]he Board shall refer a matter to the Standards Committee for further review if it determines there is a substantial reason to believe the allegation based on all the information then known to the Board.” 3CONFIDENTIAL Subject to the Nondisclosure Provisions of H. Res. 895 of the 110th Congress as Amended C. Procedural History 3. The OCE received a written request for a preliminary review in this matter signed by at least two members of the Board on July 6, 2009. The preliminary review commenced on that date.2 The preliminary review was scheduled to end on August 5, 2009. 4. At least three members of the Board voted to initiate a second phase review in this matter on August 5, 2009. The second phase review commenced on August 6, 2009.3 The second-phase review was scheduled to end on September 20, 2009. 5. The Board voted to extend the 45-day second phase review by an additional 14 days on September 17, 2009, as provided for under H. Res 895. The extension was scheduled to end on October 5, 2009.46. The Board voted to refer the matter to the Committee on Standards of Official Conduct for further review and adopted these findings on November 20, 2009. 7. This report and findings in this matter were transmitted to the Committee on Standards of Official Conduct on December 2, 2009. D. Summary of Investigative Activity 8. Due to the nature of the allegations in this review, the OCE’s investigation required the collection of information from a number of sources. 9. The OCE reviewed publically available records of campaign contributions to the campaign committees of Members of the House Appropriations Subcommittee on Defense (hereafter “Defense Subcommittee”) from recipients of earmarks during the 2008 and 2010 campaign cycles. The review included campaign contributions to the leadership political action committees (hereafter “PACs”), if any, of these Members. 10. Specifically, the OCE reviewed campaign contributions to these Members from donors that were affiliated with the lobbying firm of PMA Group, Inc. (hereafter “PMA”), i.e.,2 A preliminary review is “requested” in writing by members of the Board of the OCE. The request for a preliminary review is “received” by the OCE on a date certain. According to H. Res. 895 of the 110th Congress (hereafter “the Resolution’), the timeframe for conducting a preliminary review is 30 days from the date of receipt of the Board’s request. 3 According to the Resolution, the Board must vote on whether to conduct a second-phase review in a matter before the expiration of the 30-day preliminary review. If the Board votes for a second-phase, the second-phase begins when the preliminary review ends. The second-phase review does not begin on the date of the Board vote. 4 Id. at § 1(c)(2)(A)(ii) (2008). 4CONFIDENTIAL Subject to the Nondisclosure Provisions of H. Res. 895 of the 110th Congress as Amended contributions from the PMA PAC, PMA employees, the PACs of corporate clients of PMA (hereafter “PMA clients”) and employees of PMA clients. 11. The OCE also reviewed campaign contributions to Members of the Defense Subcommittee from PACs of non-PMA clients, and employees of non-PMA clients.12. Beyond Members of the Defense Subcommittee, the investigation included a review of campaign contributions from PMA clients and non-PMA clients to Representatives who are not on the Defense Subcommittee, but authored defense earmarks PMA clients and non-PMA clients.13. The OCE requested information from forty PMA clients that received earmarks from Members of the Defense Subcommittee for fiscal years 2008 to 2010. 14. All of the PMA clients that the OCE contacted cooperated with the investigation, except for two. 15. Aeroflex and Kimball and Associates are the only PMA clients that refused to cooperate with the investigation. 16. Thirty-eight PMA clients and Representatives’ offices produced documents totaling approximately 200,000 pages. These PMA clients also made witnesses available for interviews upon request of the OCE. 17. Based on the information discovered during the review of the produced documents, the OCE interviewed twenty-six individual PMA client witnesses. 18. In addition, the OCE interviewed six witnesses who were formerly employed as lobbyists with PMA during the 2008 and 2010 campaign cycles. 19. In sum, the OCE requested and received documentary, and in some cases testimonial, information from the following sources: (1) 21st Century Systems, Inc.; (2) AAR Composites; (3) Advanced Acoustic Concepts; (4) Advanced Concepts & Technologies Intl.;(5) Aircraft Interior Products; (6) Applied Global Technologies; (7) Argon ST; 5CONFIDENTIAL Subject to the Nondisclosure Provisions of H. Res. 895 of the 110th Congress as Amended (8) Boeing Corporation; (9) Carnegie Mellon University; (10) Coda Octopus Group; (11) Concurrent Technologies Corporation; (12) Conemaugh Health Systems; (13) Cryptek;(14) DDL OMNI Engineering; (15) DRS Technologies; (16) EM Solutions; (17) General Atomics; (18) General Dynamics; (19) Goodrich Corporation; (20) Innovative Concepts, Inc.; (21) ITT Corporation; (22) Lockheed Martin Corporation; (23) MobilVox;(24) NuVant Systems, Inc.; (25) Optimal Solutions & Technologies; (26) Parametric Technology Corporation; (27) Planning Systems Inc.; (28) Profile Systems; (29) Prologic, Inc.; (30) QTL Biosystems; (31) RaySat Antenna Systems; (32) Rockwell Collins; (33) Samueli Institute; (34) Sierra Nevada Corporation; (35) Teledyne Continental Motors, Inc.; (36) Teledyne Controls; 6CONFIDENTIAL Subject to the Nondisclosure Provisions of H. Res. 895 of the 110th Congress as Amended (37) Windber Research Institute; (38) Xunlight Corporation; (39) Vice President, 21st Century Systems, Inc.; (40) Chief Administrative Officer, 21st Century Systems, Inc.; (41) Vice President for Communications, 21st Century Systems, Inc.; (42) PAC Treasurer, 21st Century Systems, Inc.; (43) General Manager, AAR Composites; (44) Chief Operating Officer, AAR Composites; (45) Chief Executive Officer, Applied Global Technologies; (46) Vice President, Applied Global Technologies; (47) PAC Treasurer, DRS Technologies; (48) President, DRS Technologies; (49) Chief Operating Officers, Optimal Solutions & Technologies; (50) Chief Executive Officer, Optimal Solutions & Technologies; (51) Director, Optimal Solutions & Technologies; (52) CEO, Samueli Institute; (53) Vice President, Sierra Nevada Corporation; (54) Congressional Affairs Director, Sierra Nevada Corporation; (55) Assistant to Business Development Director, Teledyne Continental Motors, Inc.; (56) Business Development Director, Teledyne Continental Motors, Inc.; (57) PAC Treasurer, Teledyne Controls; (58) General Manager, Teledyne Controls; (59) Vice President, Teledyne Controls; (60) Director of Contracts, Teledyne Controls; (61) Contract Administrator, Teledyne Controls; (62) Legislative Affairs Director, Teledyne Controls; (63) Associate General Counsel, Teledyne Controls; (64) President, Teledyne Controls; (65) PMA Lobbyist 1; 7CONFIDENTIAL Subject to the Nondisclosure Provisions of H. Res. 895 of the 110th Congress as Amended (66) PMA Lobbyist 2; (67) PMA Lobbyist 3; (68) PMA Lobbyist 4; (69) PMA Lobbyist 5;(70) PMA Lobbyist 6; (71) Representative Kaptur; (72) Representative Kaptur’s Chief of Staff; and (73) Representative Kaptur’s Deputy Chief of Staff. II. THE OCE UNCOVERED NO EVIDENCE THAT REPRESENTATIVE KAPTUR REQUESTED EARMARKS FOR PMA CLIENTS IN CONNECTION WITH CAMPAIGN CONTRIBUTIONS THAT SHE RECEIVED A. Applicable Law, Rules, and Standards of Conduct20. 18 U.S.C. § 201(b) - Bribery of public officials and witnesses“(b) Whoever- (2) being a public official or person selected to be a public official, directly or indirectly, corruptly demands, seeks, receives, accepts, or agrees to receive or accept anything of value personally or for any other person or entity, in return for:(A) being influenced in the performance of any official act . . . .”21. 18 U.S.C.A. § 201(c) - Illegal Gratuities“(c) Whoever- (1) otherwise than as provided by law for the proper discharge of official duty—(B) being a public official, former public official, or person selected to be a public official, otherwise than as provided by law for the proper discharge of official duty, directly or indirectly demands, seeks, receives, accepts, or agrees to receive or accept anything of value personally for or because of any official act performed or to be performed by such official or person . . . .”8CONFIDENTIAL Subject to the Nondisclosure Provisions of H. Res. 895 of the 110th Congress as Amended 22. “An illegal gratuity . . . may constitute merely a reward for some future act that the public official will take (and may have already determined to take), or for a past act that he has already taken.”523. House Rules and Standards of Conduct“[T]he scope of the House standards of conduct in this area is broader than that of the criminal bribery statute . . . the House standards of conduct generally preclude any link between the solicitation or receipt of a contribution and a specific official action.”6“Put another way, there are fundraising activities that do not violate any criminal statute but well may violate House standards of conduct.”7“[T]here are certain proffered campaign contributions that must be declined, and certain fundraising opportunities that must be forgone, solely because they create an appearance of improper conduct.”8“[N]o solicitation of a campaign or political contribution may be linked to an action taken or to be taken by a Member or employee in his or her official capacity.”9 In addition, a Member may not accept any contribution that is linked with any specific official action taken or to be taken by that Member.”10“It is probably not wrong for the campaign managers of a legislator…to request contributions from those for whom the legislator has done appreciable favors, but this should never be presented as a payment for the services rendered. Moreover, the possibility of such a contribution should never be suggested by the legislator or his staff as the time the favor is done. Furthermore, a decent interval of time should be allowed to lapse so that neither party will feel that there is a close connection between the two acts. The Standards Committee has long advised Members and staff that they should always exercise caution to avoid even the appearance that solicitations of campaign contributions are connected in any way with an action taken or to be taken in their official capacity.”115 House Ethics Manual (2008) at 79. See also United States v. Sun-Diamond Growers, 526 U.S. 398, 404 (1999). 6 Memorandum of the Chairman and Ranking Minority Member, Recommendations for disposition of the complaint filed against Representative DeLay. Accessed online on June 24, 2009 at http://ethics.house.gov/Investigations/Default.aspx?Section=18. 7 Id. 8 Id. 9 House Ethics Manual (2008) at 147. 10 Memorandum of the Chairman and Ranking Minority Member, Recommendations for disposition of the complaint filed against Representative DeLay. Accessed online on June 24, 2009 at http://ethics.house.gov/Investigations/Default.aspx?Section=18. 11 Id. 9