California Rep. Maxine Waters Accused of Three Ethics Violations

Richard Simon, Los Angeles Times, August 9, 2010

Even as Democratic Rep. Maxine Waters of California was warned by a colleague against interceding on behalf of a troubled bank with ties to her husband, her chief of staff, who also is her grandson, was “actively involved” in working to help the bank, according to a House Ethics Committee report released Monday that accuses the longtime Los Angeles political figure of three ethics violations.

Around the same time that Waters set up a September 2008 meeting between U.S. Treasury Department officials and representatives of minority-owned banks, her chief of staff, Mikael Moore, sent an e-mail to the staff of Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee. According to the report, the subject of the e-mail was: “O[ne] U[nited] is in trouble.'”

Three months later, Boston-based OneUnited, with branches in Massachusetts, Florida and Los Angeles County, received $12 million in bailout funds.

If OneUnited had not received the aid from the Troubled Asset Relief Program, Waters’ husband’s financial interest in the bank would have been worthless, according to the House Ethics Committee’s 10-page statement of alleged violations.

The report accuses the 10-term congresswoman of violating three House rules: one that requires its member to “behave at all times in a manner that shall reflect creditably on the House”; a second that prohibits lawmakers from using their influence for personal benefit; and a third forbidding the dispensing of favors.

The report referred to Frank’s advice to Waters to “stay out of it” and refrain from advocating on behalf of OneUnited because of her husband’s ties to the institution. {snip}

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Waters, who has vowed to fight the charges in a trial, has defended her efforts as in keeping with her longtime work to promote opportunity for minority-owned businesses and lending in underserved communities such as her South Los Angeles district.

Documents released by the House Ethics Committee on Monday also offer insight into Waters’ defense, asserting that the committee has been treating the congresswoman differently than it has treated other lawmakers for similar conduct. The documents also contend that the charges against her run counter to a precedent that “actions taken by a member that may affect her interests as part of a larger class of shareholders do not violate House rules or ethical standards.”

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Her attorneys also challenged the assertion that Waters’ husband benefited from the bailout.

“Further, although the statement of alleged violation notes that the value of Rep. Waters’ husband’s stock was $175,000 in September 2008–before the TARP funding–it fails to acknowledge that the value was unchanged after OneUnited received the TARP funds in December,” her attorneys argued. “Thus, if TARP funding neither saved OneUnited nor increased its stock value, this committee cannot establish that Rep. Waters received any financial benefit as a result of her alleged actions.”

Waters sought the report’s release, saying it would help her clear her name and help her constituents evaluate the case against her. The documents are on the committee website, http://ethics.house.gov.

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