Is this Really Legal?

This is the sort of thing that breeds cynicism about “congressional ethics.”  Roll Call reported this week that a high-ranking staffer for Representative Emmanuel Cleaver (D-Mo.) is a lobbyist “on the side.”  The staffer, Phil Scaglia, who made nearly $100,000 last year, is Cleaver’s highest paid staffer, and functions essentially as his chief of staff.  Although he evidently has a full-time congressional position, Scaglia also represents private clients, such as the American Diabetes Association, American Traffic Solutions and L-S Commercial Real Estate, as a paid lobbyist in Missouri.  He also represents an entity called the Overton Group, Inc., which is itself run by a lobbyist named Glen Overton, who represents major clients like the Corrections Corporation of America and Great Plains Energy.

 Both statute and House rules sharply limit the amount of outside income that Members, officers and certain senior staffers can earn, and prohibit them from receiving any compensation from the performance of most professional services.  As the House Ethics Manual explains, these restrictions were enacted in order to prevent outside compensation from being used a subterfuge for the reemergence of “honoraria” and  “because these professional activities were believed to pose a particular risk of conflict of interest.”  The House Ethics Committee has construed the ban on professional services broadly to cover generally activities such as law practice, insurance, accounting, real estate, consulting and even medicine.  The practice of lobbying, which on its face seems more problematic than any of those examples, is surely also covered.

 Nonetheless, a spokesman for Representative Cleaver maintains that Scaglia is not subject to these rules because he does not earn enough to qualify as an employee covered by the statute and rule.  Although all House Members and officers are subject to these restrictions, only employees making over a certain amount (currently about $111,000 per year) are covered.  Thus, while most other congressional chiefs of staff would be subject to these rules (a quick check of Legistorm indicates that all of the identified chiefs of staff in the Missouri delegation earned more than the required amount), because Cleaver and Scaglia chose to set his salary at a lower rate (presumably with full knowledge of the implications for his lobbying practice), he is not.  Very clever.

 Or maybe not so clever.  Because while it is true that Scaglia earned less than the requisite annual amount for all of 2006, he was paid $28,769 for the period October 1, 2006 through December 31, 2006 (according to Legistorm).  House Rule XXV defines a covered employee as one who is paid “at a rate equal to or greater than [specified amount]” and is “so employed for more than 90 days in a calendar year.”  Scaglia’s salary for the 92 days comprising the last quarter of 2006 annualizes to more than $115,000 and therefore would seem to qualify him for the prohibition.

 It is likely, however, that a portion of Scaglia’s salary for the final quarter of 2006 was in the form of a lump sum payment, which, according to a October 15, 1999 advisory opinion of the House Ethics Committee, is not generally to be counted in an employee’s salary for purposes of the outside earned income limitation and restrictions.  Thus, assuming that a lump sum payment was properly made to Scaglia, this payment would not cause him to be subject to the rule.

Even if Cleaver and Scaglia have successfully evaded the prohibitions of the statute and rule, however, serious questions remain.  As the Committee’s advisory opinion notes, Members and staff are required “to adhere not only to the letter, but also the spirit, of the Rules of the House.”  Allowing one’s staff to engage in outside professional activities which pose a low risk of conflict of interest, like the practice of medicine, might be consistent with the spirit of the rules, but it is difficult to imagine a situation more antithetical to the spirit of the rules than for any congressional employee, even one less senior than Scaglia, to conduct a private lobbying practice.

 In my next post I will consider the contention by Representative Cleaver’s spokesman that the lobbying practice is permissible because it is limited to state and local officials.

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