Senate Panel Holds the Privilege Against Self-Incrimination Does Not Apply to an Impeachment Trial

Yesterday the Senate panel charged with conducting the impeachment trial of federal district judge G. Thomas Porteous issued an order disposing of certain pretrial motions.   Of particular note was the panel’s decision to reject Porteous’ motion to suppress his immunized testimony given before a special Fifth Circuit committee which investigates misconduct by federal judges.

The question presented, the Senate panel notes, is one of first impression, namely whether an impeachment trial is a “criminal case” within the meaning of the Fifth Amendment’s prohibition on compelled self-incrimination.  It is a difficult question because the Constitution is notably ambiguous on this point.

On the one hand, a reader of the original Constitution would likely conclude that impeachment is a type, albeit a unique type, of criminal proceeding.  Impeachable offenses are defined in terms of “treason, bribery or other high crimes and misdemeanors.”   Impeachment is implicitly treated as a criminal proceeding in article II, where the President is granted power to “grant reprieves and pardons for offences against the United States, except in cases of impeachment,” and in article III, where it is stated that the “trial of all crimes, except in cases of impeachment, shall be by jury.”  These exceptions would be unnecessary if impeachment were not, at least in some sense, a criminal proceeding.

On the other hand, it is difficult to square this conclusion with the language of the Bill of Rights.  The Sixth Amendment guarantees the right to a jury trial in “all criminal prosecutions,” which, if applicable to impeachment, would nullify the impeachment process explicitly set forth in the original Constitution.  Similarly, though somewhat less clearly, the double jeopardy clause of the Fifth Amendment has been construed to apply to all criminal offenses, and would therefore be applicable to impeachment if it were considered a criminal proceeding.

In his book on impeachment, Raoul Berger surveyed these competing provisions and concluded that “the Framers might well have overlooked some lack of harmony in detail.”  In short, he believes that the Framers utilized the criminal terminology of the English impeachment process, but, by limiting the consequences of impeachment to the nonpenal ones of removal and disqualification, created a new type of proceeding that is essentially non-criminal in nature.  Michael Gerhardt and Charles Black argue that the impeachment process should be viewed as a hybrid or quasi-criminal type of proceeding.

The conclusions of these impeachment scholars inform the discussion, but do not necessarily answer the specific question presented to the Senate impeachment committee:  should impeachment be considered a criminal proceeding for purposes of the self-incrimination clause of the Fifth Amendment?  The committee seems to assume that Senate precedent rejecting the application of double jeopardy to an impeachment proceeding necessarily means that the self-incrimination clause is likewise inapplicable.  This does not necessarily follow.

Nonetheless, I tend to agree that the committee reached the correct result here.  Berger suggests the analogy between impeachment, designed to remove an unfit officer, and deportation, designed to remove an alien who is not entitled to remain the country.  Although the latter may entail painful consequences, it is not a criminal proceeding to which the self-incrimination privilege applies.  Similarly, to the extent that the privilege is designed to protect against coerced confessions or wrongful convictions in ordinary criminal cases, it would seem to have little relevance to an impeachment proceeding.  The Senate is entitled to consider Porteous’ immunized testimony.

An Analogy that Won’t Hold Water

Before leaving the subject of the ethics case against Representative Waters, a final comment with regard to her attempt to have the charges dismissed.  Her defense team based its motion to dismiss almost entirely on the claim that Waters’ conduct was “nearly identical to” that of Representative Sam Graves.  I have blogged about the ethics charges against Graves, which were dismissed last year. 

            The attempt to equate the two cases is frankly ridiculous.  True, they both involve a Member’s spouse who had an ownership interest in a company that was part of an industry that the Member dealt with in the course of performing official activities.  The similarity ends there, however.   

In Graves’ case, he invited a witness to testify at a committee hearing as a representative of the biofuels industry.  The witness, whom Graves knew, owned stock in two biofuels companies in which Graves’ wife was also invested.  However, there was no indication, either objective or subjective, that this co-investor relationship had any bearing on the invitation to testify.  Any conceivable benefit that Graves might have received from the hearing was (a) remote and speculative, since no legislative or executive action was pending or expected; (b) entirely derivative of the interests of the biofuels industry as a whole, since there was no specific interest of the two companies at stake; and (c) completely unrelated to the fact of this particular witness testifying. 

In Waters’ case, the company in question, OneUnited, was seeking immediate action, both legislative and executive, for its own benefit.  Because OneUnited stated that the action was necessary to save it from insolvency, there was also an imminent and direct connection between the action sought and a financial benefit to Waters (because her husband’s stock would have been worthless if OneUnited had become insolvent).  Under these circumstances, a reasonable person might suspect that Waters’ actions were motivated by a desire to protect her financial interests.  In Graves’ case, such a suspicion would have been entirely unreasonable. 

As the investigative subcommittee points out in rejecting the motion to dismiss, the Waters’ case would have been similar to Graves’ if she had simply invited a OneUnited executive to testify, as the representative of the minority-owned banking industry, at a committee hearing discussing the overall interests of the industry as a whole.  In fact, this did happen—at a 2007 hearing of a House Financial Services subcommittee—and no one has suggested that it violated any ethics rules. 

The case against Waters is a borderline one, and there are strong arguments that she can make in her defense.  Comparing her case to that against Graves is not one of them.

Further Analysis of the Waters Case

As discussed in my prior posts (see here and here), the ethics investigative subcommittee does not allege that Representative Waters violated any rules simply by arranging the initial meeting with Treasury officials to discuss the a bailout of OneUnited and other minority-owned banks.  Instead, the subcommittee alleges that Waters violated the rules by her actions—or, more precisely, her inaction—following the meeting.  Specifically, the subcommittee states that Waters should have, but failed to, instruct her chief of staff to refrain from assisting OneUnited following the meeting.  (see Statement of Violation ¶ 47).

This claim appears to be based on two premises.  The first is that “all other actions [taken by Waters’ office], other than the initial request for a meeting with Treasury, were on behalf of OneUnited, not the NBA.”  (Subcommittee Memorandum of 7-15-10, at n. 51).  Exactly how the subcommittee determined who the actions were “on behalf of” is not clear.  Is this based on OneUnited’s motives (i.e., that its requests to Waters’ office were for its own benefit, not for the benefit of minority-owned banks generally), or on the motives of Waters and her staff, or on an objective assessment that OneUnited was the primary or sole beneficiary of the legislative efforts that were made to obtain a bailout?

The second premise is that Waters herself came to the conclusion, sometime after the Treasury meeting, that she “should not be involved” with OneUnited’s requests for assistance.  This is based on Representative Frank’s recollection of a conversation he had with Waters sometime after the Treasury meeting.  The subcommittee interprets Waters’ statement as a “determin[ation] that it would be ethically improper for her to advocate on behalf of OneUnited.”

Based on these premises, the subcommittee concludes that it was improper for Waters’ staff to continue to assist OneUnited in its efforts to obtain legislation that would allow it to receive a bailout from the government.  Although the subcommittee does not contend that Waters herself did anything further for OneUnited, or that she was even aware of what her staff was doing in this regard, it holds her responsible for failing to prevent these efforts from occurring.  Specifically, in its Memorandum of 7-15-10 at pp. 3-4, it states:  “Despite previously instructing her Chief of Staff to work with the OneUnited executives, [Waters] failed to instruct her Chief of Staff that he should not advocate on behalf of the bank.”

The subcommittee’s theory is not as cut and dried as it appears to believe.  In the first place, it fails to draw a distinction between efforts to assist OneUnited in dealing with the Treasury Department or other executive agencies, which is casework, and efforts to assist OneUnited with obtaining legislation.  For the reasons discussed in my last post, it would have been inappropriate for Waters’ chief of staff to “advocate” on behalf of OneUnited with respect to executive agencies.  It is less clear, however, that Waters or her staff were required to recuse themselves entirely from involvement with OneUnited’s proposed legislative solution.

Under House rules and precedents, the circumstances under which a Member is supposed to refrain from voting on a legislative matter because of a personal financial interest are extremely limited, and it is largely up to the Member to determine when it is appropriate to do so.  If Waters was permitted to vote on matters related to OneUnited’s legislative solution (and the subcommittee has not suggested she was not), it would seem that her staff could properly monitor and discuss the status of the legislation with other congressional staff.

Moreover, the Ethics Manual suggests that a Member who faces a conflict of interest with regard to a legislative matter may be advised to refrain from taking an active role in the legislation, such as sponsoring a bill, even though she is ethically permitted to vote on questions regarding the particular matter.  It might be argued, therefore, that Waters’ statement to Frank that she “should not be involved” in the OneUnited matter was merely a recognition that she should not personally play a lead role in sponsoring or pushing the legislation, rather than an acknowledgment that her staff should have no involvement either.

No doubt it would have been preferable, from the standpoint of avoiding the appearance of impropriety, had Waters instructed her staff to avoid or at least limit any involvement in matters relating to OneUnited.  If the investigative subcommittee had merely admonished Waters for failing to take this course (or, alternatively, for failing to seek specific guidance from the Ethics Committee), it would be hard to quibble with its findings.  One could make a similar (indeed, perhaps stronger) argument that Waters ought to have done greater due diligence regarding OneUnited’s interest before agreeing to set up the initial meeting with Treasury.

Whether these are the types of ethical mistakes that merit formal charges, however, is another question.  For example, the subcommittee cites the Caribe News case, in which Representative Charles Rangel was held responsible for the actions of his chief of staff.  In that case, Rangel had authorized his chief of staff to sign travel forms on his behalf, and the chief of staff had submitted forms containing information that he knew, and Rangel knew or should have known, was false.  The Ethics Committee found under those circumstances that Rangel could not escape responsibility for the clear ethics violation committed by his chief of staff.

Rangel’s case is distinguishable from Waters’ situation.  Rangel had delegated a personal ethical responsibility to his staff; Waters did not.  Moreover, Rangel’s case involved a clear cut ethical duty, ie, to disclose any corporate sponsors of the event which he was attending, and there was strong evidence to suggest that Rangel knew or should have known both that there were corporate sponsors of the event and that it could not be approved if there were corporate sponsors.  On the sparse record before the Waters subcommittee, there is little comparable evidence of “deliberate ignorance” with respect to her staff’s activities.  It is not clear that Waters expected her staff to remain involved in the OneUnited matter, much less that she knew or should have known that they would be active advocates for OneUnited (or, for that matter, that they in fact were).

Finally, in Rangel’s case the investigative subcommittee did not press formal charges, but merely recommended that the Ethics Committee admonish him in its final report.  I have to assume that Waters was offered a similar deal by the investigative subcommittee, but declined to take it.  This may explain why the subcommittee felt obligated to proceed with formal charges.  Nevertheless, this strikes me as a borderline case at best.

Waters and Casework Considerations

To evaluate the charges against Representative Waters, discussed in my last post, we should begin with the meeting that she arranged in her September 2008 telephone call to then-Treasury Secretary Paulson.  Although the ethics investigative subcommittee did not find that this meeting itself violated any House rules, the Statement of Alleged Violation devotes its first section to this meeting, and it seems that the meeting is somehow integral to the charges against Waters.

In arranging the meeting, Waters was engaged in what is commonly described as “casework.”  The House Ethics Manual describes casework generally as “act[ing] as a ‘go-between’ or conduit between the Member’s constituents and administrative agencies of the federal government.”  Quoting the late Senator Paul Douglas, it states that “there is a ‘sound ethical basis for legislators to represent the interests of constituents and other citizens in their dealings with administrative officials and bodies.’”

The Ethics Manual provides broad guidance on performing casework, but it sets forth few hard and fast rules.  As Dennis Thompson notes, referring to the seminal House advisory opinion which forms the basis for both the House and Senate’s guidance on casework, it “advises against very little and prohibits even less.”  (see Ethics in Congress p. 91).

Nevertheless, there are a few basic principles.  As the Ethics Manual states, “a Member’s obligations are to all constituents equally, and considerations such as political support, party affiliation, or one’s status as a campaign contributor should not affect either the decision of a Member to provide assistance or the quality of help that is given to a constituent.”  Thus, Members can perform casework for campaign contributors, so long as they would perform the same services for non-contributors, but must “take care not to show favoritism to them over other constituents.”

There is also no absolute prohibition against performing casework on matters where a Member has a personal financial interest.  While the rules explicitly prohibit a senior House employee from contacting a federal agency regarding “nonlegislative matters . . . in which the employee has a significant financial interest” (absent written permission from the Member or other employing authority for whom the employee works), no such prohibition applies to the Member.  The Ethics Manual cautions, however, that Members should “refrain” from performing casework that “would serve their own narrow, financial interests as distinct from those of their constituents.”

These principles would have made it problematic for Waters to have arranged a meeting with Treasury officials for the purpose of discussing a bailout of OneUnited.  Exactly where one draws the line between a merely incidental financial interest shared in common with many others (as, in the example given by the Ethics Manual, where a Member who happens to be a farmer represents constituents in discussions of farm policy with the Department of Agriculture), on the one hand, and a “narrow, financial interest,” on the other, is not clear, but Waters’ significant stock ownership in a small financial institution seems to fall closer to the latter.

In this case, however, the impropriety of intervening on behalf of OneUnited is apparent for a different reason.  OneUnited was not a constituent of Waters.  Generally speaking, the Ethics Manual states that Members are not supposed to perform casework for non-constituents. This is not an absolute rule, but, combined with Waters’ personal financial interest in OneUnited, it would seem to justify a finding that performing casework for OneUnited constituted at least a prima facie violation of the ethics rules.

The investigative subcommittee did not allege such a violation, however, because it found that Waters had arranged the meeting not on behalf of OneUnited, but on behalf of the National Bankers Association (NBA), a trade association of minority-owned financial institutions. Moreover, the subcommittee was probably correct that performing casework for NBA did not violate the rules, even if Waters knew that the casework would advance OneUnited’s interests along with those of other NBA members.  As the chair of the Subcommittee on Housing and Community Opportunity of the House Financial Services Committee, Waters had a legitimate interest in ensuring that the NBA’s concerns were addressed.  Had it not been for her ties to OneUnited, it certainly would not have been considered unusual or improper for her to set up a meeting on behalf of NBA.

There are a number of facts about the meeting which remain unknown.  For example, what did Waters understand about the relative interests of OneUnited and other members of the NBA with respect to the meeting?  Clearly, Waters must have understood that OneUnited had a significant interest in getting a bailout from the Treasury Department, but the record does not reflect what she knew or was told about the interests of other NBA members.  If she understood that OneUnited’s interests were the primary motivation for the meeting, it would make her actions more problematic under the ethics rules.

Another question is whether Waters’ response to the meeting request suggests favoritism on her part.  Certainly it cannot be common for her to telephone a cabinet secretary to set up a meeting.  The memorandum of her interview with OCE states:  “When asked about other conversations with Sec. Paulson, Rep. Waters stated that ‘you don’t use your chits for nothing, you call when there is an important issue.’”  On the other hand, as Waters’ counsel points out, there is no evidence that she took other actions, such as importuning Treasury officials, beyond setting up the meeting.  This would cut against a finding of favoritism.

In the absence of any additional evidence on these issues, which the subcommittee decided not to explore, I would say that Waters’ action in setting up the meeting with Treasury, though it may come close to the ethical line, did not cross it.  The subcommittee was therefore justified in concluding that this meeting did not violate the rules.

In my next post I will consider the subcommittee’s conclusion that Waters’ conduct after the meeting violated the rules.

The Waters Case

An investigative subcommittee of the House Ethics Committee has charged Representative Maxine Waters (D-Ca.) with three counts of ethics violations stemming from efforts that she and her staff made to assist OneUnited Bank, a Boston-based, minority-owned financial institution which sought and obtained a TARP bailout in the fall of 2008.  These efforts were improper, according to the subcommittee because of Waters’ close personal, political and financial ties to OneUnited.  To wit, the bank’s chairman and CEO had contributed to and raised funds for Waters, Waters’ husband had served on the bank’s board of directors from 2004 to the spring of 2008, and, most significantly, Waters’ husband owned stock in OneUnited that was valued, prior to the financial crisis, at about $350,000.


The relevant events began in late summer 2008, when the value of Fannie Mae and Freddie Mac fell sharply, threatening the viability of OneUnited, which had invested heavily in these companies.  According to Representative Barney Frank, who turns out to be a key witness in this case, “OneUnited had overbought preferred shares in Fannie Mae and Freddie Mac and was therefore at a greater risk of collapse than any other bank” from the insolvency of these companies.


On or about September 7, 2008, the day that the federal government placed Fannie Mae and Freddie Mac into conservatorship, executives from OneUnited approached Waters and asked her to set up a meeting with the Treasury Department to discuss a proposal under which Treasury would bail out minority-owned banks by purchasing from them, at above market prices, Fannie Mae and Freddie Mac shares that they owned.  Although the request was ostensibly on behalf of the National Bankers Association (NBA), a trade association of minority-owned banks, it appears that the OneUnited executives were the driving force behind the request and that the bank’s need for a bail out was the primary, if not exclusive, reason for it.


Waters then telephoned Treasury Secretary Hank Paulson and asked for the meeting, and he agreed to her request.  The meeting was attended by Waters’s chief of staff (who also happens to be her grandson), some other congressional staffers, and senior Treasury officials.  Attending for the NBA were OneUnited’s counsel who was also the chair-elect of the NBA, the chairman and CEO of OneUnited, and another senior official of the bank.  No other NBA members were represented at the meeting.  During the meeting, the OneUnited officials specifically discussed their bank’s financial situation and asked Treasury to provide them with $50 million to protect the bank against collapse.  The Treasury officials demurred, saying they lacked legal authority to grant this request.


Following the meeting, OneUnited realized that it was unlikely to get relief directly from Treasury.  Accordingly, it began working with allies in Congress, including Representative Waters’ office, to obtain legislative language that would require the federal government to repurchase Fannie Mae and Freddie Mac shares owned by any “Community Development Financial Institution,” i.e., banks such as OneUnited.


At around this time, Waters approached Barney Frank to discuss OneUnited’s problem.  According to Frank’s interview with the Office of Congressional Ethics, Waters told him “that she was in a predicament because [her husband] had been involved in the bank, but OneUnited people were coming to her for help.  She knew that she should say no, but it bothered her.”  Although Waters did not tell Frank about her husband’s stock ownership, it was still clear to Frank that “this was a conflict of interest problem.”


Frank told Waters that she should “stay out of it.”  He indicated that he would handle OneUnited’s concerns since he had representational interests (OneUnited was a Boston bank) and was sympathetic to OneUnited’s situation (he had a “commitment to minority banks”).  As the chairman of the Financial Services Committee (a committee on which Waters also served), it made sense for Frank to be involved in the issue.  He instructed his staff to take over the OneUnited matter from Waters’ staff.


Following her discussion(s) with Frank, Waters told her chief of staff words to the effect that Frank would be handling the minority bank issue so he should “not worry about it.”  However, according to the Ethics subcommittee, Waters never instructed her staff to stop assisting OneUnited.  Although Waters herself apparently had no further involvement in the OneUnited issue, her chief of staff continued to be involved in the OneUnited matter, primarily by monitoring and to some extent assisting OneUnited efforts to obtain a legislative fix.  OneUnited was successful in obtaining a provision in the TARP legislation that authorized and encouraged the Secretary of the Treasury to bail out banks in OneUnited’s specific situation, a provision that Frank indicated was crafted with OneUnited in mind.  Ultimately, OneUnited received more than $12 million in TARP funding in December 2008 and was also able to raise significant amounts of private capital to keep itself afloat.


Based on these facts, the Ethics subcommittee has charged Waters with several violations.  It is important, however, to first note what Waters is not charged with.   The subcommittee does not allege that Waters’ actions in arranging the meeting with the Treasury Department or speaking to Frank regarding OneUnited themselves violated the ethics rules.  The subcommittee does not allege that Waters or her staff used improper means to advance OneUnited’s interests (e.g., by threatening or pressuring executive agencies).  Finally, the subcommittee does not allege that the actions by Waters or her staff on behalf of OneUnited were motivated by Waters’ financial interest in the bank (claims, by the always understated CREW, that Waters “abused her office for personal financial gain” notwithstanding).


So what is the basis for the ethics charges against Waters?  The lynchpin is the personal financial interest that Waters had in OneUnited.  Because the failure of OneUnited would have resulted in Waters, through her husband, losing a very substantial investment, the subcommittee alleges that Waters had an obligation to avoid actions that would create the appearance of acting for her own personal benefit, or of receiving a personal benefit (the preservation of her husband’s investment) from the exercise of her official influence, or of dispensing special favors to OneUnited.  Waters allegedly violated this obligation by failing to instruct her chief of staff not to assist OneUnited, even after she acknowledged to Frank that she should not be involved in the OneUnited matter.


It seems undeniable that OneUnited’s requests to Waters and her office created a conflict of interest situation.  But the ethics rules do not require Members of Congress to avoid taking official actions merely because a conflict of interest is presented.  The ethics subcommittee purported to derive, from rather vague and general ethics rules, a specific line which Waters impermissibly crossed.  In my next post I will consider whether this line makes sense under the circumstances presented to the subcommittee.





Lobbyist Fundraising and the Second Circuit

Perhaps the most significant aspect of the Second Circuit’s decision in Green Party of Connecticut v. Garfield, discussed in my last post, involves Connecticut’s ban on soliciting of campaign contributions by contractors and lobbyists.  In contrast to the ban on direct contributions, which the court found to be a peripheral First Amendment activity subject to the more lenient “closely drawn” level of scrutiny, the Second Circuit stated “a limit on the solicitation of otherwise permissible contributions prohibits exactly the kind of expressive activity that lies at the First Amendment’s ‘core.’”  Accordingly, it held that the ban on solicitations was subject to strict scrutiny, i.e., the restriction could only be upheld if it was “narrowly tailored” to further a “compelling interest.”  

            The district court had found that the government had a compelling interest in combating the threat posed by “bundling” of campaign contributions by contractors or lobbyists, particularly with respect to contributions from their employees or clients.  The danger is that “contractors and lobbyists will promise to deliver large number of coordinated contributions to a state official in exchange for political favors.”


            The court of appeals expressed some skepticism as to whether there was a compelling interest in stopping bundling.  The court seemed to feel that it was unlikely that bundling would lead to “quid pro quo” corruption (in other words, an actual agreement to exchange political favors for bundled contributions).  Instead, the court apparently viewed bundling as more analogous to independent expenditures, where the indirect benefit received by the candidate is viewed as insufficient to justify curtailment of First Amendment rights. 

            Even assuming the threat of bundling implicated a compelling interest, however, the Second Circuit concluded that the solicitation ban was not “narrowly tailored” to address that interest.  Without holding that any of these methods would necessarily survive strict scrutiny, the court identified several less restrictive alternatives to “address the perceived bundling threat.”  These included: (1) a direct ban on bundling itself; (2) a ban on large-scale efforts to raise funds, such as “a ban on state contractors organizing fundraising events of a certain size;” and (3) a ban on soliciting money only from certain individuals, such as banning contractors from soliciting money from employees and lobbyists from soliciting money from clients. 

            Accordingly, the court held that the solicitation ban violated the First Amendment with respect to both contractors and lobbyists.  It should be noted that this ruling, if it is followed by other circuits, would mean that federal laws to ban lobbyist fundraising face a high constitutional hurdle.  

The Second Circuit, Lobbying Regulation, and the “Appearance of Corruption”

In Green Party of Connecticut v. Garfield, decided last month, the Second Circuit considered a First Amendment challenge to Connecticut’s Campaign Finance Reform Act, a law that prohibited campaign contributions and fundraising solicitations by (1) state contractors and prospective contractors and (2) lobbyists.  The law also covered certain individuals, such as family members, associated with contractors and lobbyists. There are two aspects of this decision that I find of interest.  The first, which I will discuss today, involves the court’s application of the “appearance of corruption” standard to the ban on campaign contributions.  The court begins its analysis by finding that limitations on campaign contributions are not subject to the most exacting standard of review, strict scrutiny, but only the more relaxed “closely drawn” standard (under which a law will be upheld if it is closely drawn to match a sufficiently important governmental interest).  This is based on the theory that campaign contributions, while they implicate a First Amendment interest, are “closer to the edges than to the core of political expression.” Finding that CFRA was passed in response to several corruption scandals in Connecticut involving bribes paid to public officials by contractors and prospective contractors, the court had little difficulty in finding a sufficiently important public interest in limiting contractor campaign contributions.  The court had more trouble, however, justifying Connecticut’s total ban on such contributions.  The panel noted that a complete ban was a “drastic measure” and expressed skepticism that allowing small contributions by contractors would lead to actual corruption. Nevertheless, it concluded that the state had a strong interest in preventing even the appearance of corruption.  Noting that “Connecticut’s recent corruption scandals were widely publicized, and corruption involving contractors became a political issue,” it found the ban on contractor contributions “an appropriate response to a specific series of incidents that have created a strong appearance of corruption with respect to all contractor contributions.” Moreover, the Second Circuit upheld the contribution ban as applied to contactor “principals,” defined to include a wide range of officers, directors, shareholders and managerial employees, and family members, despite the absence of evidence that such individuals had been involved in the corruption scandals.  Although the court expressed reservations as to whether the bans on these individuals were in fact “closely drawn,” it decided that it should give the legislature leeway to define broadly the category of individuals who might be used as a conduit or means of circumventing the ban on contractor contributions.  It justified this decision on the grounds that “the recent corruption scandals in Connecticuthave shown that contractors are willing to resort to varied forms of misconduct to secure contracts with the state.” Turning to the ban on lobbyist contributions, the court observed that this prohibition was “markedly different” because “the recent corruption scandals in Connecticut in no way involved lobbyists.”  It therefore concluded that “there is insufficient evidence to infer that allcontributions made by state lobbyists give rise to an appearance of corruption.” It acknowledged that the public may distrust the lobbyists because of the perception that they wield undue influence over public officials.  However, the court rejected the proposition that such influence amounts to corruption: Influence and access, moreover, are not sinister in nature.  Some influence, such as wise counsel from a trusted advisor—even if that advisor is a lobbyist—can enhance the effectiveness of our representative government. Accordingly, the court held that the ban on lobbyist contributions was not “closely drawn” and therefore violated the First Amendment. The court’s differing treatment of contractors and lobbyists illustrates the vagaries of an “appearance of corruption standard.”  The court allows the public to jump to the erroneous conclusion that small contributions by contractors or prospective contractors are corrupting because some such entities have actually corrupted state officials in the past (albeit not through small contributions).  The court will also allow the public to jump to the erroneous conclusion that small contributions by principals or family members of contractors are indirect means of corruption, even though there is little or no evidence of such indirect means being used in the past.  But the court will not allow the public to jump to the erroneous conclusion that small contributions by lobbyists (or lobbyists’ families) are corrupting because, unbeknownst to the public, what it perceives as corruption is merely influence-peddling. It is worth noting that the Second Circuit’s ruling with respect to lobbyist contributions is in considerable tension with the Fourth Circuit’s 1999 opinion in North Carolina Right to Life v. Bartlett,  where the court upheld a North Carolina statute prohibiting lobbyists from contributing to state legislators while the legislature was in session.  Although the cases are distinguishable on the grounds that the North Carolina ban was much narrower than the one in Connecticut, the Fourth Circuit recognized a compelling state interest in preventing corruption and the appearance of corruption in restricting lobbyist contributions.  In doing so it explicitly rejected the notion that it needed to wait for a specific North Carolinascandal: While lobbyists do much to inform the legislative process, and their participation is in the main both constructive and honest, there remain powerful hydraulic pressures at play which can cause both legislators and lobbyists to cross the line. State governments need not await the onset of scandal before taking action. Thus, the court rejected the First Amendment challenge to North Carolina’s (more limited) ban on lobbyist contributions.