Skip to content
 

Is this Really Legal? (Part 2)

           As noted in my prior post, Representative Cleaver’s office defends Scaglia’s lobbying business on the grounds that “he does not contract with, or lobby on behalf of, a client on federal matters.”    Scaglia himself told a Kansas City newspaper that he lobbies only on local issues. 

            This is fortunate because it is a crime for a federal employee to represent the interests of others in their dealings with the United States (18 USC § 205).  Thus, for example, it would be a criminal offense for a low-level employee in one federal agency to assist a friend or relative (even on an uncompensated basis) by negotiating a contract with a completely unrelated part of the government.  The fact that a senior congressional staffer is refraining from lobbying the federal government on behalf of private clients is therefore not exactly evidence of a desire to avoid any appearance of impropriety. 

            In order to avoid violating 18 USC § 205, it is not enough that Scaglia confine his lobbying to local issues.  He has to be exceedingly careful that his clients do not present him or his work product to any federal agency or entity.  He also must be careful that none of the fees that he receives from his clients are themselves derived from federal lobbying because, another statutory provision, 18 USC § 203, prohibits any federal employee from accepting compensation from federal representational activities conducted either by the employee or someone else.  This could be a particular problem to the extent that Scaglia represents clients, such as the Overton Group, which themselves engage in lobbying activities. 

            Even if Scaglia has been successful in structuring his activities so as to avoid violating any statutory prohibition, this does not mean that his outside employment is consistent with the ethical standards mandated by House Rules.  As the House Ethics Manual states, “[i]n addition to statutory restraints limiting particular types and amounts of outside income, general ethical standards and rules restrict any outside activities that are inconsistent with congressional responsibilities.”  The Manual also notes that outside employment limitations are designed to “avoid any possible conflict between the narrow interests of private employers and the broader interests of the general public.”  Among the reasons for the outside employment limitations are the concerns that a Member or employee receiving from a private company would be vulnerable to overt attempts to curry favor or “subtle distortions” of judgment on particular issues, the “time conflict” between congressional duties and the demands of outside employment, and the appearance of impropriety which can result from such private employment. 

            Judged by these standards, it is difficult to see how Scaglia’s lobbying practice could  pass muster.   At the outset, if as indicated by the articles Scaglia functions as Cleaver’s chief of staff, the fact that he is paid less than the statutory minimum does not in any way reduce the potential for an actual or apparent conflict of interest.  The salary cutoff is intended as a rough means of identifying the most influential congressional staffers, but no one on the Hill thinks that salary and influence are the same.  As Cleaver’s chief of staff, Scaglia should be assumed to have considerable influence over the congressman’s activities and thus his personal financial interests pose a greater risk of conflict of interest than would those of a more junior staffer.  

            There are at least two types of potential conflicts from Scaglia’s lobbying activities.  The first is that his clients will have an advantage, or be perceived to have an advantage, should they seek support or favors from Representative Cleaver or his staff.  The fact that Scaglia does not lobby on federal issues does not mean that his clients have not lobbied Cleaver, or will not seek to lobby him in the future.  It does not mean that the Overton Group, or the Overton Group’s clients, have not or will not engage in such lobbying.  Even if Scaglia were to recuse himself in such situations (which one would certainly hope and expect that he would), the fact of his financial relationship could very well lead these clients to expect special treatment from Cleaver or his staff, or create the appearance that they enjoyed undue influence with this congressional office. 

            The second type of potential conflict relates to the state legislators and other state or local officials that Scaglia lobbies on behalf of his private clients.  Many of these officials certainly deal with Cleaver’s office on a regular basis, seeking federal support on various state and local matters.  Common sense suggests that these officials have an incentive to assist Scaglia’s clients in the hope or expectation that this will benefit them when they are dealing with Cleaver’s office.  At a minimum, the arrangement creates the type of appearance
of impropriety that the ethics rules were designed to prevent. 
 

As the Roll Call article indicates, an internet search will turn up a record of a meeting Scaglia attended for one of his clients: 

According to the minutes of a November 2005 meeting of the city council of Sugar Creek, Mo., Mayor Stan Salva opened the meeting with a discussion of Cleaver’s willingness to help the town obtain funding for an expressway.

Later in the meeting, according to the minutes, “Phil Scaglia of American Traffic Solutions” responded to questions about the town’s plan to install red-light enforcement cameras. American Traffic Solutions makes the cameras, and is listed as one of Scaglia’s clients.

This illustrates the problem.  The very people Scaglia is lobbying on behalf of a private client are also seeking the support of his boss for funding of an expressway.  It is difficult to imagine how the conflict of interest could be any more apparent.  No matter how diligent Scaglia is in attempting to separate his lobbying and congressional work, any reasonable person would expect that his congressional position gives him an advantage in lobbying for his private clients.

           

            According to Cleaver’s spokesman, Scaglia’s lobbying work has been “cleared” by the House Ethics Committee.  If so, there is a written opinion that Cleaver’s office can release to demonstrate this clearance.  It would be interesting to know what it says.

Leave a Reply