A seemingly innocuous letter sent to the Clerk of the House of Representatives last Thursday by President Obama's Secretary of Labor nominee Hilda Solis raises serious and troubling legal questions about her nomination and apparent violation of House ethics rules. Not only was she involved with a private organization that was lobbying her fellow legislators on a bill that she has cosponsored, but she apparently kept her involvement secret and failed to reveal a clear conflict of interest.
Solis was a co-sponsor in 2007 of the so-called "Employee Free Choice Act," the card check legislation that would effectively eliminate the secret ballot and destroy the ability of employees to make an anonymous decision (without fear of retribution) on whether they want to join a union. She was also a co-sponsor of the Public Safety Employer-Employee Cooperation Act, legislation that would force states to allow public safety officers to form unions. At the same time, however, Solis was a board member of a pro-union organization, American Rights at Work, that has been lobbying Congress on both of these bills. According to a letter filed by Solis with the House Clerk on January 29, 2009, she was not just a director of the ARW, along with fellow travelers like David Bonior, Julian Bond, and John Sweeney, she was actually the treasurer. In other words, she is the official legally charged with the fiduciary duty of approving and signing off on all spending by the organization. And to make matters worse, she did not reveal to her colleagues in the House of Representatives that membership on her financial disclosure forms, which may constitute a separate ethical violation.
According to the Center for Responsive Politics and a review of the lobbying disclosure forms filed with Congress, ARW spent $110,000 in 2007 and $120,000 in 2008 on lobbying expenses. And what were the "[s]pecific lobbying issues" listed on the forms? They included the "Employee Free Choice Act (H.R. 800/S. 1041)" and the "Public Safety /Employer-Employee Cooperation Act of 2007 (H.R. 980)." As treasurer of ARW, Solis would have approved the spending by ARW on lobbying other members of Congress on both of these bills she was sponsoring for passage.
The Ethics Manual of the House of Representatives quite properly restricts the lobbying of members, stating on page 352 that they should not "take an active role in lobbying Congress on behalf of a private organization since that would conflict with a Member's general obligation to the public." That rule may be murky in some instances, but the role Solis played in ARW's lobbying efforts was not passive. In answering written follow-up questions from the Senate about ARW, Solis tries to cloud the real issue by arguing that members of Congress are allowed to serve without compensation on the boards of nonprofit organizations and that the lobbying prohibition only applies if she was "personally" supervising the lobbying.
However, the House rule turns on whether Solis was an active participant in the lobbying effort. With regard to that question, Solis admitted that she is not merely a board member of ARW. Treasurers and general counsels have special fiduciary duties that differentiate them from mere directors. The treasurer of a nonprofit organization is responsible for actively supervising and approving the financial obligations and spending of the organization. In fact, the amended by-laws of ARW filed with its 2006 form 990 tax return specify that the treasurer must "ensure that there is [a] full and accurate account of the receipts and disbursements of the corporation" and must render to the President and the Board of Directors "an accounting of all transactions." This means that Solis was specifically charged with reporting all of the funds spent by ARW to lobby Congress. That is not the passive role of other Board members.
Solis apparently did not consult the House Ethics Committee about the propriety of serving as the treasurer of ARW. Worse, she didn't list ARW on her financial disclosure forms. She belatedly sent her letter of January 29 to the Clerk of the House attempting to amend her financial statements to add her membership in ARW. She claimed that she had "incorrectly answered" the question on membership in such outside organizations. Solis told the Clerk that she should have answered "yes" and that she was both a board member and the treasurer of ARW from 2004 -2007. She is still listed as a board member at the ARW website.
Barack Obama made a big show at the White House on his first day in office when he signed an executive order supposedly restricting the ability of former lobbyists hired by his administration from working on issues that they had previously lobbied on. Of course, he almost immediately ignored those principles when he nominated William Lynn, a Raytheon lobbyist, to be deputy secretary of the Department of Defense, named William Corr, an anti-tobacco lobbyist, to be deputy secretary at Health and Human Services, and allowed newly installed Treasury Secretary (and tax defaulter) Timothy Geitner to hire a former Goldman Sachs lobbyist to be his new chief of staff.
Now he has a nominee for Labor Secretary who apparently broke House ethics rules by lobbying for legislation that she sponsored, but who did not admit that she failed to reveal that fact on her financial disclosure forms until after her nomination became an issue. Even if the House tries to paper over this ethical lapse, the blatant conflict of interest will remain. Solis has been nominated to head a cabinet department that would directly oversee the very issues that the legislation that she sponsored would affect if it passes Congress -- and the card check legislation alone is considered the number one priority of American labor organizations.
Throughout his Presidential campaign, Barack Obama claimed the moral high ground on everything from campaign finances to lobbying, and he has continued to talk that way in the first month of his presidency. But actions speak louder than words, particularly when your actions are in direct conflict with the supposedly "high ethical standards" you keep claiming you are implementing. If President Obama does not recognize the serious ethical lapses committed by his nominee for the Labor Department, then it will be proof positive that for all of his talk of bringing change to Washington, the only change will have been in the wrong direction.
Hans A. von Spakovsky is a former Commissioner on the Federal Election Commission and a Justice Department official.