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96th CONGRESS : : : : 1st SESSION 

JANUARY 15. 1979-JANUARY 3. 1980 



HOUSE DOCUMENTS 



Vol. 16 

MISCELLANEOUS DOCUMENTS 



UNITED STATES 

GOVERNMENT PRINTING OFFICE 

WASHINGTON : 1979 



CONTENTS 



No. 

134. Ethics manual for Members and employees of House of Representatives. 

135. Release of budget authority and review of deferrals. 

136. Report of Clerk of House, Jan. 1-Mar. 31, 1979. 

137. Extend Jackson-Vanik waiver authority. 

138. Supplemental appropriations and budget amendments. 

139. Progress in Cyprus negotiations. 

m 



96th Congress, 1st Session ... - House Document No. 96-134 



ETHICS MANUAL FOR MEMBERS 

AND EMPLOYEES OF THE 

U.S. HOUSE OF REPRESENTATIVES 



Prepared at the Direction of 

THE COMMITTEE ON STANDARDS OF 
OFFICIAL CONDUCT 

96th Congress, First Session 




U.S. GOVERNMENT PRINTING OFFICE 
37-680 WASHINGTON : 1979 



COMMITTEE ON STANDARDS OF OFFICIAL CONDUCT 

CHARLES E. BENNETT, Florida, Chairman 
LEE H. HAMILTON, Indiana FLOYD D RPFNrrw U.M. - .• 

s A M R r C K p i Y t E v Ri North carouna ?^ ^sassw*^ 

MOROAM ifippirv JT B ° B LIVIN QSTON ( Louisiana 

JOHN P MARTHA P ? • WILLIAM M " TH0MAS ' CaU '<™** 

JOHN P. MURTHA, Pennsylvania F. JAMES SENSENBRENNER, Jr., Wisconsin 

RICHARD B. CHENEY, Wyoming 

John M. Swanner, Staff Director 

William F. Arboqast, Assistant Staff Director 

(H) 



INTRODUCTION 



The purpose of this manual is to provide Members and employees 
of the House of Representatives with a reference to the major stand- 
ards of conduct, rules, regulations and statutes which are applicable 
to Members of Congress and to activities of House staffers, and to 
some questions which may be encountered in engaging in those duties 
or activities. The manual will provide a highlighting and a brief 
discussion of selected ethical and conflict of interest provisions appli- 
cable to the subject matter covered, and will refer to relevant decisions 
and opinions in that area. 

This publication is intended as an overview and a reference tool, 
and not as an all-inclusive compilation of ethical or conflict provisions, 
nor an exhaustive study of points and authorities in the areas discussed. 
Employees of the House are advised to note and consider any general 
practice or specific rules of conduct of their employing office or 
committee, and to seek assistance on questions of ethical conduct 
from appropriate supervisory personnel. 

Opinions and advice on conflicts of interest and in the general 
area of congressional ethics may be requested by Members or em- 
ployees from the House Committee on Standards of Official Conduct. 
Questions concerning regulations on official allowances, expenses, 
official employment and compensation matters specifically, for exam- 
ple, might be directed to the House Administration Committee or 
tjbe Office of the Clerk of the House, as appropriate. Specific questions 
oh the frankability of mail matter may be directed to, and advisory 
opinions on these matters sought from, the House Commission on 
Congressional Mailing Standards. 

Inquiries relative to certain prohibited nongovernmental activities 
in House office buildings may be directed to the House Office Building 
Commission. 

The manual was prepared and written by Jack Maskell, legislative 
attorney, American Law Division of the Congressional Research 
Service, Library of Congress. 

Members and employees are cautioned that the laws, rules, or 
standards of conduct upon which this manual is based, are subject 
to change, and notice of any such change should be taken. 

(in) 



H. Res. 258 



In the House of Representatives, U.S., 

May -8$,1979. 
Resolved, That there shall be printed as a House document tt\e pub- 
lication titled ''Ethics Manual for Members and Employees of the U.S. 
House of Representatives". In addition to the usual number, there shalj 
be printed one thousand additional copies for the use of the Committee 
on Standards of Official Conduct. 
Attest : 

Edmund L. Henshaw, Jr., 

Clerk. 



CONTENTS 



Chapter 1. GENERAL ETHICAL STANDARDS: *«*• 

Highlight 1 

Conduct Reflecting Creditably on the House 3 

The Spirit and Letter of House Rules 5 

Refraining from Congressional Activity After Conviction. 6 

Code of Ethics for Government Service 7 

Rules of Supervisors, Committees, Members and Officers. 9 

Violations of Ethical Standards ■__ 9 

Chapter 2. OFFICIAL EMPLOYMENT AND COMPENSATION OF 
STAFF: 

Highlight 11 

General Employment and Compensation Provisions 13 

Nepotism 14 

Discrimination 14 

Bribes, Political Activities or Contributions for Jobs 15 

Salary Kickbacks i ; 15 

Performance of Official Duties 16 

Chapter 3. OFFICIAL ALLOWANCES: 

Highlight 21 

Allowance for Official Expenses 22 

False Claims, Fraud 23 

Recommended Accounting Procedure 24 

Unofficial Office Accounts 24 

Chapter 4. COMMUNICATIONS TO ADMINISTRATIVE AGEN- 
CIES ON BEHALF OF CONSTITUENTS, INCLUD- 
ING REFERRALS AND RECOMMENDATIONS FOR 
FEDERAL EMPLOYMENT: 

Highlight 27 

Compensation 30' 

Private Representational Activities by Staff 3f 

Prohibited Ex Parte Communications 32* 

Undue Influence, Fraud 33; 

Congressional Standards 35 

Recommendations for Employment in the Competitive 

Service 36 

Recommendations for Employment in the Postal Service. 37 

General Statutory Prohibitions _ __ 38 

Chapter 5. THE FRANKING PRIVILEGE: 

Highlight 39 

Authorization to Use the Frank 41 

General Standards of Frankability 41 

Summary of Guidelines Under the Frank 42 

Mass Mailings '. 44 

Postal Patron Mail 44 

Commission on Congressional Mailing Standards 44 

Chapter 6. GIFTS, ENTERTAINMENT AND FAVORS: 

Highlight 47 

Gifts from Lobbyists, Persons With Direct Interest in 

Legislation, and Foreign Nationals 50 

Gifts from Foreign Governments 54 

Fundraisers and Testimonials 55 

Appearances of Influence 57 

Bribery 57 

Financial Disclosure 58 

(V) 



VI 

Chapter^. OUTSIDE EMPLOYMENT AND COMPENSATION OF 

MEMBERS: Paw 

Highlight 59 

Outside Employment and Official Activities 61 

Earned Income Limitation 62 

Services Before Federal Agencies 65 

Contracting With the Federal Government 67 

Private Foundations 69 

Foreign Governments 69 

Honorarium Restrictions 70 

Practice of Law 73 

Financial Disclosure. •_ 79 

Chapter 8. OUTSIDE EMPLOYMENT AND COMPENSATION OF 
HOUSE EMPLOYEES: 

Highlight 81 

Performance of Congressional Duties 82 

Professional Staff of Committees 83 

Dealings With the Federal Government 84 

Dual Government Employment 86 

Foreign Interests 86 

Honorarium Restrictions 87 

Private Foundations 88 

Financial Disclosure Reports 88 

Chapter 9. FINANCIAL INTERESTS AND FINANCIAL DIS- 
CLOSURE: 

Highlight 89 

Use of Office for Personal Gain ,. 92 

Voting on Matters of Personal Interest ', 94 

Interests in Corporations with Government Contracts 97 

Financial Disclosure 97 

Blind Trusts 100 

Chapter 10. CAMPAIGN FUNDS AND PRACTICES: 

Highlight 105 

General Campaign Finance Requirements 106 

Restrictions on the Receipt of Contributions 107 

Political Contributions from Federal Employees 108 

Use of Campaign Funds 109 

Use of Excess Campaign Funds 114 

Campaign Activities by House Employees; Use of Con- 
gressional Staff on Campaigns 115 

Political Contributions by House Employees 116 

Campaign Activity in a Federal Building 118 

List of Prohibited Campaign Activities 120 

APPENDIX 

Texts "of Selected Rules, Regulations, Opinions and Statutes Relating to 

Conduct Standards: 123 

1. House Rules: 

House Rule XLIII, the "Code of Official Conduct" 123 

House Rule XLV, Prohibition on Unofficial Office Accounts.. 124 

House Rule XLVI, Limitations on the Use of the Frank 125 

House Rule XLVII, Limitations on Outside Earned Income. 126 

House Rule VIII, section 1, Duties Of the Members 127 

2. Regulations of the House Committee on Standards of Official 

Conduct — Regulations for the Acceptance of Decorations and 
Gifts, Including Travel or Expenses for Travel, by Members, 
Officers, or Employees of the House of Representatives from 

Foreign Governments 127 

3. Advisory Opinions of the House Committee on Standards of 

Official Conduct: 

Advisory Opinion No. 1, On the Role of a Member of the 
House of Representatives in Communicating with Execu- 
tive and Independent Federal Agencies 130 

Advisory Opinion No. 2, On the Subject of a Member's Clerk 

Hire 133 

Advisory Opinion No. 3, On the Subject of Foreign Travel by 
Members and Employees of the House of Representatives 

at the Expense of Foreign Governments 134 



vn 

Texts of Selected Rules, Regulations, Opinions and Statutes Relating to 
Conduct Standards — Continued 

3. Advisory Opinions of the House Committee on Standards of 
Official Conduct — Continued 

Advisory Opinion No. 4, On the Propriety of Accepting Pane 

Certain Nonpaid Transportation 135 

4. Advisory Opinions of the Select Committee on Ethics, U.S. House 

of Representatives, 95th Congress: 

Advisory Opinion No. 1 137 

Advisory Opinion No. 2 137 

Advisory Opinion No. 3 139 

Advisory Opinion No. 4 140 

Advisory Opinion No. 5 142 

Advisory Opinion No. 6 143 

Advisory Opinion No. 7 145 

Advisory Opinion No. 8 148 

Advisory Opinion No. 9 150 

Advisory Opinion No. 10 152 

Advisory Opinion No. 11 155 

Advisory Opinion No. 12 156 

Advisory Opinion No. 13 160 

5. Code of Ethics for Government Service, 72 Stat Part 2, B12 167 

6. 2 U.S.C. § 86 (division of salaries) 167 

7. 2 U.S.C. §87 (subletting duties) 167 

8. 2 U.S.C. §101 (subletting duties) 168 

9. 2 U.S.C. §441i (honoraria limits) 168 

10. 2 U.S.C. § 701 et. seq. (financial disclosure) 169 

11. 5 U.S.C. § 557(d) (ex parte communications) 181 

12. 5 U.S.C. §3110 (nepotism) 182 

13. 5 U.S.C. § 3303 (recommendations for employment) 183 

14. 5 U.S.C. § 5533 (dual Government pay and employment) 183 

15. 5 U.S.C. § 7342 (foreign gifts and decorations) 184 

16. 18 U.S.C. §201 (bribery) 189 

17. 18 U.S.C. § 203 (compensation in matters affecting the Govern- 

ment) 191 

18 U.S.C. § 204 (practice in Court of Claims by Members) 191 

18. 18 U.S.C. § 205 (representation in matters affecting the Govern- 

ment) 192 

19. 18 U.S.C. § 211 (solicitations to obtain public office) 193 

20. 18 U.S.C. § 286 (conspiracy to defraud the United States) 193 

21. 18 U.S.C. §287 (false claims) 193 

22. 18 U.S.C. §§ 431-433 (contracting with Federal Government, ex- 

ceptions) 194 

23. 18 U.S.C. § 597 (expenditures to influence voting) 195 

24. 18 U.S.C. § 598 (coercion by means of relief appropriations) 195 

25. 18 U.S.C. §599 (promise of appointment by candidate) 195 

26. 18 U.S.C. § 600 (promise of employment for political activity) __ 195 

27. 18 U.S.C. §601 (deprivation of employment for political activity)- 196 

28. 18 U.S.C. § 602 (solicitations from Federal emplovees) 196 

29. 18 U.S.C. § 603 (solicitation in a Federal building) 197 

30. 18 U.S.C. S 604 (solicitation from persons on relief) 197 

31. 18 U.S.C. $ 605 (disclosure of names of persons on relief) 197 

32. 18 U.S.C. § 606 (intimidation to secure political contributions) __ 197 

33. 18 U.S.C. § 607 (making political contributions by Federal em- 

ployees) 198 

34. 18 U.S.C. §641 (embezzling, stealing public money) 198 

35. 18 U.S.C. §1001 (false statements) 198 

36. 18 U.S.C. § 1719 (franking privilege) 199 

37. 26 U.S.C. §§ 4941 and 4946 (taxes on dealings with foundations).. 199 

38. 31 U.S.C. §§231-232 (false claims) 204 

39. 31 U.S.C. § 628 (use of appropriated funds) 207 

40. 39 U.S.C. § 1002 (political recommendations for the postal 

service) 207 

41. 39 U.S.C. § 3210 (franking privilege) 208 

42. 41 U.S.C. § 22 (interest of Members in Federal contract) ._ 212 

Index... 213 



Chapter 1. GENERAL ETHICAL STANDARDS 

Highlight 

Members and employees of the House are instructed by ethical 
rules to: 

— conduct themselves at all times in a manner which reflects 

creditably on the House ; 
— abide by the spirit as well as the letter of House rules, that is, 
generally speaking, not to attempt to do something indirectly 
which they are specifically barred from doing directly; 
— abide by the broad ethical standards expressed in the 1958 
"Code of Ethics for Government Service". 
Members of the House are requested by House Rules to refrain 
from certain congressional activity after conviction of some crimes 
until the Member's presumption of innocence is reinstated or until 
the Member is reelected to the House after conviction. 

In addition to the general ethical standards noted, and the specific 
standards discussed later in this manual, employees of the House 
should be aware of and note any additional rules, regulations, stand- 
ards or practices which may be in existence for the specific office for 
which the employee works. 

(1) 



Chapter 1. GENERAL ETHICAL STANDARDS 

Conduct Reflecting Creditably on the House. Members and em- 
ployees of the House are subject to broad ethical standards adopted 
m the Code of Official Conduct of the Rules of the House of Repre- 
sentatives. Clause 1 of that Code, House Rule XLIII, states that 
"A Member, officer, or employee of the House of Representatives 
shall conduct himself at all times in a manner which shall reflect 
creditably on the House of Representatives." 

In interpreting clause 1 of the Code of Official Conduct recom- 
mended by the Standards of Official Conduct Committee of the 90th 
Congress, the Committee in its report noted that although "this 
standard probably would remain untested", it was included within 
the Code to deal with "flagrant" violations of the law which reflect 
on "Congress as a whole", and which might otherwise go unpunished: 

Since the Constitution quite clearly makes the House 
the judge of its own membership, it seems appropriate to 
summarize in a single standard a tentative description of 
conduct, by which the House through referral from this 
committee, can treat promptly with a given act or an ac- 
cumulation of acts of a Member which it determines to have 
reflected discredit on the Congress. 

It is possible that a flagrant violation of law reflecting on 
the Congress as a whole could go unpunished if the virtually 
unlimited power of law enforcement officials to prosecute 
were not exercised. In such circumstances, the legislative 
branch would find it difficult to assert the right to be the 
judge of its own membership. 

A contrary situation might well find an investigation by 
this committee establishing that there exists no "probable 
grounds" for a particular complaint. Under such conditions, 
this finding would have some appearance to enforcement 
officials as invocation of the "judge of its own membership" 
doctrine. While conceding that this standard probably would 
remain untested, the committee feels that it should be a part 
of a code of standards in the interest of, and as a safeguard 
for the whole. 1 

During the floor debates preceding the adoption of the Code of 
Official Conduct in the 90th Congress, Representative Price of 
Illinois, chairman of the then Select Committee on Standards of 
Official Conduct, noted that the committee under clause .1 of the 
Code could deal with "any given act or accumulation of acts." 2 
Such statement was qualified by the chairman, however, in his 
explanation that the committee, in rejecting the notion that viola- 
tions of law are simultaneous violations of the Code, has not intended 



' House Report No. 1176, 90th Cong., 2d sess., March 14, 1968, p: 17: 
2 114 Congressional Record 8778, April 3, 1968. 

(3) 



to have the Code deal with violations of a minor nature or purely 
personal complaints, and that such "acts" with which the committee 
may deal under clause 1 must "be severe enough to reflect discredit 
on the Congress": 

The committee endeavored to draft a code that would 
have a deterrent effect against improper conduct and at the 
same time be capable of enforcement if violated. Initially 
the committee considered making violations of law simul- 
taneous violations of the code, but such a direct tie-in was 
eventually ruled, out for the reason that it might open the 
door to stampedes for investigation of every minor complaint 
or purely personal accusation made against a Member. At 
the same time there was a need for retaining the ability to 
deal with any given act or accumulation of acts which, in the 
judgment of the committee, are severe enough to reflect dis- 
credit on the Congress. Stated purposefully in subjective 
language, this standard [paragraph 1] provides both 
assurances. 3 

Later in the floor discussion of the Code of Official Conduct, a 
member of the 90th Congress Select Committee on Standards of 
Official Conduct, Mr. Arends of Illinois, noted that the committee did 
try to keep the focus of the proposed rules on official, rather than 
personal, conduct: | 

The second fundamental to be recognized is that the 
Congress has the constitutional right to determine its own 
rules. And this right, too, has its limitations. The rules are 
applicable only in connection with the operation of the 
Congress itself. Somehow a line must be drawn as between 
what is personal conduct and what is official conduct. 4 

As to the practical operation of this ethical standard, it should be 
noted that the House Committee on Standards of Official Conduct 
in the 95th Congress recommended disciplinary measures to the full 
House concerning the conduct of three Members of the 95th Congress. 
The Committee found that certain conduct alleged had violated 
clause 1 of the Code of Official Conduct as conduct not reflecting 
creditably on the House as a whole. The conduct cited in the reports 
by the Committee as sustaining the charges of violations of clause 1 
of the Code of Official Conduct dealt generally with the Korean 
influence investigation, and specifically referred to alleged statutory 
violations in some instances. Included among the alleged statutory 
violations cited as constituting violations of clause 1 were failure to 
report campaign contributions 5 and perjury. 6 As to conduct violating 
clause 1 where no specific statutory violation was cited, the Com- 
mittee reports charged a Member with making false writings to the 
Committee. 7 The Committee in an earlier Statement of Alleged 



*Id. 

* 114 Congressional Record 8785, April 3, 1968. 

« House Report No. 95-1742, 95th Cong., 2d sess., to accompany H. Res. 1115, 95th Congress, pp. 2-3 
(see count 1), referring to Public Law 92-225, section 304(b)(2); House Report No. 95-1743, 95th Cong., 
2d sess., to accompany H. Res. 1416, 95th Congress, pp. 2-3 (count 1), referring to Public Law 92-225, 
sections 302(b) and 304. 

• H. Rpt. No. 95-1743, supra at pp. 3-4 (count 3; see also count 4 not sustained by the committee), referring 
to 18 U.S.C. §1621. 

7 House Report No. 95-1741, 95th- Cong., 2d sess., to accompany H. Res. 1414, 95th Cong., pp. 4-5. 



5 

Violations had cited: tWreceipt of favors or benefits "under circum- 
stances which may be construed by reasonable persons as influencing 
the performance of Governmental duties" in violation of rule 5 of 
the Code of Ethics for Government Service, 8 as conduct which 
violates clause 1 of the Code of Official Conduct of the House Rules 
as not reflecting creditably on the House. 9 However, the Committee 
found that this specific charge was not sustained by clear and con- 
vincing evidence in the case presented. The three Members of the 
House who were the subjects of the Committee's recommendations 
for disciplinary action were officially reprimanded by the House of 
Representatives on October 13, 1978. 10 None of the three Members 
subject to the disciplinary action was, at the time of the Committee 
and House action, under indictment for the specific conduct alleged. 

The Spirit and Letter of House Rules. Clause 2 of the Code of 
Official Conduct, House Rule XLI1I, provides that "A Member, 
officer, or employee of the House of Representatives shall adhere to 
the spirit and the letter of the Rules of the House of Representatives 
and to the rules of duly constituted committees thereof." 

The original purpose of this provision, as noted in the report of the 
Committee on Standards of Official Conduct of the 90th Congress in 
recommending its adoption, was apparently aimed at dealing with 
questions of decorum and legislative practices: 

It is also unlikely that the above standard will ever have 
to meet the tests of enforcement. Its purpose in the code is to 
restate and reemphasize the importance of the precedents of 
decorum and consideration that have evolved in the House 
over the years. These precedents are more than mere polite- 
ness; they are the essence of the order of the House. 

The Committee heard recommendations that it draw 
standards to reduce the number of time-consuming quorum 
calls, govern attendance on the floor and in committee 
meetings, and deal with seemingly unfair and dilatory legisla- 
tive tactics. Such proposals were considered, but proposed 
drafts illustrated the greater impracticality of this approach 
in comparison with a more general admonition to observe 
the spirit of existing and adequate rules and practices. 11 
In the debates preceding the adoption of this provision, however, 
it was apparently contemplated that this rule might provide an 
actionable standard for congressional discipline. As summarized by 
Representative Price, the Chairman of the Committee on Stand- 
ards of Official Conduct of the 90th Congress : 

This standard was drafted also in general terms rather 
than attempting to deal more specifically with such things as 
unfair and dilatory legislative tactics. It did not appear prac- 
ticable to the committee to attempt to regulate these areas 
more closely. This standard should provide the House 
the means to deal with infractions that rise to trouble it 



« 72 Stat, part II, B 12 (1958). 
t H. Rpt. No. 95-1742, supra at pp. 3-J. 

"> See Congressional Record, October 13, 1978, at H 12820— H 12828; H 13249— H 13253; H 13253—13261 
(dailved.). 

" House Report Xo. 1176, 90th Congress, 2d Session, March 14, Hrt'8, p. 17. 



6 

without burdening it with defining specific charges that would 
be difficult to state with precision. 18 

The practical effect of clause 2 of the Code of Official Conduct 
has apparently been to provide a device for interpretation and con- 
struction of other provisions of the Code of Official Conduct and the 
House Rules. Generally, it has been suggested that this Rule should 
be interpreted to mean that a Member or employee may not do 
indirectly what the Member or employee would be barred from doing 
directly. The Select Committee on Ethics of the 95th Congress cited 
this provision to show that a narrow technical reading of a House 
Rule should not overcome the "spirit" of the rule and the intent of the 
House in adopting the particular rule. 13 The Select Committee thus 
looked into the legislative history of a Rule to find the legislative 
purpose and intent in determining the "spirit" of a House Rule. 14 
Stated simply, this provision apparently means that the House Rules 
should be construed and applied broadly. 

Refraining from Congressional Activity After Conviction. On 
April 16, 1975, the House adopted an amendment to the Code of 
Official Conduct pertaining to a Member of Congress who has been 
convicted of a crime. That provision, now clause 10 of House Rule 
XLIII, the Code of Official Conduct, provides that a Member of the 
House who pleads guilty to or is convicted of a crime for which the 
sentence could be two or more years imprisonment should refrain 
from committee business and from voting m the House until judicial 
or executive proceedings reinstate the Member's presumption of 
innocence, or until he is reelected to the House after his conviction. 

The report on this measure from the Standards of Official Conduct 
Committee noted that the Committee will not, as a rule, take action 
on a complaint of a statutory violation by a Member where such con- 
duct is known to, and is being acted upon by, the appropriate au- 
thorities. However, in the case of allegations of abuses of official 
authority or position to which no statute specifically applies, or in the 
case of alleged statutory violations where no "expeditious" action 
from law enforcement authorities is apparent, the committee will 
"concern itself forthwith", and not necessarily defer action on the 
matter: 

To the question of when to act, the committee adopted a 
policy which essentially is: where an allegation is that one 
has abused his direct representational or legislative position^— 
or his "official conduct" has been questioned — the commit- 
tee concerns itself forthwith, because there is no other im- 
mediate avenue of remedy. But where an allegation involves 
a possible violation of statutory law, and the committee is 
assured that the charges are known to and are being expe- 
ditiously acted upon by the appropriate authorities, the pol- 
icy has been to defer action until the judicial proceedmgs 
have run their course. This is not to say the committee 
abandons concern in statutory matters — rather it feels it 
normally should not undertake duplicative investigations 
pending judicial resolution of such cases. 15 



ia H4 Congressional Record 8778, April 3, 1968, see also comments by Mr. Teague of Texms, member of the 
Standards of Official Conduct Committee of the 90th Congress, 114 Cong. Rec. 8799. 

« See Advisory Opinion No. 4, April 6, 1977, of the Select Committee on Ethics, U.S. House of Representa- 
tives, 95th Congress. 

»* See Advisory Opinion No. 6, May 9, 1977, of the Select Committee on Ethics, 95th Congress, p. 3. 

«• House Report No. 94-76, 94th Congress, 1st Session p. 2. 



The Committee report noted that this new provision would amend 
this procedure and practice to some degree. That is, even if the judicial 
process has not entirely run its course, such as when appeals are pend- 
ing, the legislative branch will take cognizance of certain guilty pleas 
or verdicts against a Member in the manner expressed in the Rule 
until the Member's presumption of innocence is reinstated or until the 
Member is reelected to the House subsequent to his conviction: 

The implementation of this policy has shown, through 
experience, only one need for revision. For the House to 
withhold any action whatever until ultimate disposition of 
a judicial proceeding could mean, in effect, the barring of 
any legislative branch action, since the appeals processes 
often do, or can be made to, extend over a period longer 
than the two-year term of the Member. 

Since Members of Congress are not subject to recall and 
in the absence of any other means of dealing with such 
cases short of reprimand, or censure, or expulsion (which 
would be totally inappropriate until final judicial resolution 
of the case), public opinion could well interpret inaction as 
indifference on the part of the House. 

The committee recognizes a very distinguishable link in 
the chain of due process — that is, the point at which the 
defendant no longer has claim to the presumption of inno- 
cence. This point is reached in a criminal prosecution upon 
a plea of guilty or upon conviction by a jury or by a judge 
(or judges) if jury trial is waived. It is to this condition, and 
only to this condition, that the proposed resolution is 
directed. 16 

Code of Ethics for Government Service. Broad ethical guidelines 
for "all Government employees, including officeholders" are expressed 
in the "Code of Ethics for Government Service" adopted by the 85th 
Congress in 1958. 17 The specific guidelines and conduct standards are 
expressed as follows : 

Code of Ethics for Government Service 

Resolved by the House of Representatives (the Senate con- 
curring) , That it is the sense of the Congress that the follow- 
ing Code of Ethics should be adhered to by all Government 
employees, including officeholders: 

Code of Ethics for Government Service 

Any person in Government should : 

1. Put loyalty to the highest moral principles and to 
country above loyalty to persons, party, or Government 
department. 

2. Uphold the Constitution, laws, and legal regulations 
of the United States and of all governments therein and 
never be a party to their evasion. 

« 72 Stat, part II, Bit. • i 



3. Give a full day's labor for a full day's pay; giving to 
the performance of his duties his earnest effort and best 
thought. 

4. Seek to find and employ more efficient and economical 
ways of getting tasks accomplished. 

5. Never discriminate unfairly by the dispensing of special 
favors or privileges to anyone, whether for remuneration or 
not; and never accept, for himself or his family, favors or 
benefits under circumstances which might be construed by 
reasonable persons as influencing the performance of his 
governmental duties. 

6. Make no private promises of any kind binding upon the 
duties of office, since a Government employee has no private 
word which can be binding on public duty. 

7. Engage in no business with the Government, either 
directly or indirectly, which is inconsistent with the con- 
scientious performance of his governmental duties. 

8. Never use any information coming to him confidentially 
in the performance of governmental duties as a means for 
making private profit. 

9. Expose corruption wherever discovered. 

10. Uphold these principles, ever conscious that public 
office is a public trust. 

Passed July 11, 1958. 

The Code of Ethics was adopted as a concurrent resolution 18 ex- 
pressing the "sense of Congress", and thus in itself did not have any 
legally binding effect. Generally, a concurrent resolution expires at 
the end of the Congress which adopted it and does not continue to have 
force and effect beyond that Congress. 19 However, the ethical con- 
siderations expressed in this Code have been found to remain as 
established standards of conduct by which Members, and apparently 
employees, of the House should abide. With respect to the applica- 
ability of the Code to the conduct of present Members of the House, 
the House Committee on Standards of Official Conduct has concluded 
that even if the resolution may have technically expired at the end of 
the 85th Congress, the ethical precepts expressed in it "represent con- 
tinuing traditional standards of ethical conduct to be observed by 
Members at all times * * *." 20 

As to the practical applicability and enforcement of these provisions 
as actionable standards for congressional discipline, the Committee 
on Standards of Official Conduct has noted that they are of a broad 
general nature "not delineated with any great exactitude", and thus 
would require an evaluation of the circumstances of a particular matter 
on a case-by-case basis to determine legitimate charges of unethical 
conduct: 

The Committee is cognizant of the fact that these tradi- 
tional standards of conduct as expressed in the Code of 
Ethics for Government Service, and as revealed in House 
precedents, are not delineated with any great exactitude and 

i«H. Con. Res. 175, 85th Congress. 

" Riddick, "The United States Congress, Organization and Procedure.," 1949, .p. 21; "Desehler's Pro' 
eedure," 1974, ch. 17 § 4.4; "Hinds' Precedents of the House of Representatives," Vol. V, sec. 7053, p. 1023- 
para. 1. 

-» House Report Xo. 94-1364, 94th Congress, 2d Session, July 23, 1976, p. 3, 7-8. 



9 

may therefore prove difficult in enforcement. The Committee 
is likewise aware that because of the generality of these 
standards their violation is easily alleged, and that this may 
be subject to some abuse. However, the Committee believes 
it was for the very purpose of evaluating particular situations 
against existing standards, and of weeding out baseless 
charges from legitimate ones, that this Committee was 
created. 21 

The ethical standards of this Code of Ethics have, in fact, provided 
the basis for official charges against Members of the House. In one 
instance charges concerning the use of a Member's .official position 
for pecuniary gain and the receipt of benefits under circumstances 
which may be construed as influencing one's official duties were heard 
before the Standards of Official Conduct Committee, resulting event- 
ually in an official reprimand of the Member by the full House of 
Representatives. 22 In another instance these standards of the Code 
provided the basis of a count against a Member of the House in a 
Statement of Alleged Violation issued by the Commit tee on Standards 
of Official Conduct. Although reprimanded for another count recom- 
mended by the Committee to the full House, the particular count 
concerning violation of this Code was not forwarded to the full House 
since the Committee found that the count had not been sustained by 
the evidence presented. 23 

Rules of Supervisors, Committees, Members and Officers. Al- 
though not compiled in this material, it is important for staff em- 
ployees of the House of Representatives to check any additional rules, 
regulations or practices which may be in existence for the specific 
office or unit for which the employee works. Employing Members or 
committees may have established rules and practices for their em- 
ployees which are additional to the restrictions and rules generally 
applicable to employees of the House. 

Violations of Ethical Standards. There are various penalties or 
consequences which may arise for a violation of an ethical standard 
depending, in the first instance, on the source of the standard of con- 
duct. Thus, violations of standards expressed in a criminal statute 
may incur a specific fine or imprisonment, or both. Such penalty 
is generally provided within the specific language of the statutory 
provision, or, as in the case of campaign law violations, in a penalties 
section applicable to violations of provisions of a certain chapter of 
the Code. In some instances, such as in conversion or use of Govern- 
ment funds or property to one's own use, or other misappropriations 
or false claims concerning expenses or allowances, an action might be 
instituted against a violator for recovery of the funds misappropriated. 
Even where no specific penalties are provided, such as in the House 
Code of Official Conduct or the Code of Ethics for Government Service, 
for example, an employee of the House could be removed from his 
position in the House for such misconduct by an employing Member 
at his discretion, 24 by the employing committee by majority vote, 25 

21 Id. at p. 8. 

» H. Rpt. No. 94-1364, supra. 

» H. Rpt. No. 95-1742, supra, see count 3 at pp. 3-1. 

2 «2 U.S.C. J 92. 

« See House Rule XI, cl. 6(a)(4) and 6(b)(3), 



45-837 O - 79 - 2 



10 

or by an officer of Congress having responsibility for supervision of an 
employee. 26 

The House Committee on Standards of Official Conduct is specifically 
authorized by the House Rules to recommend to the House "adminis- 
trative actions" deemed appropriate to enforce standards of conduct 
for both Members and employees of the House ; to investigate alleged 
violations of any law, rule or regulation pertaining to official conduct 
of an employee or Member and to recommend to the House action as 
the Committee deems appropriate ; and may report, with the approval 
of the House, apparent violations of law uncovered in investigations to 
the appropriate law enforcement authorities. 27 Each House of Congress 
is specifically authorized under the Constitution to "punish its Mem- 
bers for disorderly Behaviour, and, with the concurrence of two thirds, 
expel a Member." 28 Under the authority to punish a Member for 
disorderly behavior, precedents have shown that the House, in addi- 
tion to expelling a Member, may punish a Member by censure, rep- 
rimand, fine, condemnation, suspension or by demanding an apology 
from such Member because of misconduct. 29 



« 2 U.S.C. § 60-1; see also 2 U.S.C. § 90. 

" House Rule X(e). 

2 8 United States Constitution, Art. I, Section 5, cl. 2. 

29 "House of Representatives Exclusion, Censure, and Expulsion Cases from 1789 to 1973," committee 
print Joint Committee on Congressional Operations, 93d Congress, 1st Session; See H. Rpt. No. 94-1304, 
Committee on Standards of Official Conduct, 94th Congress, 2d Session. 



Chapter 2. OFFICIAL EMPLOYMENT AND 
COMPENSATION OF STAFF 

Highlight 

An officer, employee, or Member of Congress may not : 

— hire, promote, or recommend for promotion a relative; 

— discriminate on the basis of race, color, religion, sex, or na- 
tional origin in hiring, pay or working conditions; 

— prevent someone, or threaten to prevent someone, from 
getting a Federal job or benefit in order to obtain a political 
contribution or to coerce political activity. 
An employee of the House may not be required to : 

— divide or share his salary; 

— "kickback" a portion of his salary to a Member or an aide; 

— spend personal money to benefit the Member or the operations 
of a Member's office; 

— agree to apply part of his salary in the future to some indebted- 
ness or obligation of the Member. 
A Member or an employee of the House should note that: 

— there are no formal job descriptions for those on the clerk 
hire rolls of a Member and for those on committee staffs; 

— a House employee is.paidjrom United States Treasury funds 
for the regular performance of official duties which are com- 
mensurate with the compensation received; 

— employees are not compensated to perform non-official, per- 
sonal, or campaign duties on behalf of the Member or anyone 
else; 

— once employees fulfill the official duties which they are re- 
quired to perform, they may generally engage in non-official, 
personal or campaign activities on their free time. 

(11) 



Chapter 2. OFFICIAL EMPLOYMENT AND 
COMPENSATION OF STAFF 

The subject of employment, compensation, and utilization of staff 
employees of the Congress has in recent years become an area of 
increased concern in the field of congressional ethics. 1 Several Members 
and congressional aides have become involved in prosecutions, suits 
and allegations concerning such problems as nepotism, discrimination 
in hiring, salary "kickbacks", and the "padding" of congressional 
payrolls with persons who do not perform any congressional duties. 

It has been noted that although Congress has enacted numerous 
laws to deal with certain employment and compensation issues and 
problems of employee-employer relations in the private sector (and in 
some instances in the Federal sector) such as the provisions of the 
Fair Labor Standards Act, the Occupational Safety and Health Act, 
the National Labor Relations Act, and the Age Discrimination Act, 
the Congress itself does not, as of this date, generally come within the 
coverage of such legislation. 2 Specific statutes, regulations, and rules, 
however, have been adopted relating to some potential problems in 
the area of employment and compensation in the House, such as the 
ones discussed in this manual covering restrictions on nepotism and 
discrimination in hiring and compensation, regulations on minimum 
and maximum rates of pay for clerk hire individuals, protection against 
employees being required to share or divide their salary with another, 
and the protection of employees from "kickback" schemes or salary 
assessments. 

In the area of utilization of congressional staff, one of the important 
factors is that for most employees of the House, that is, those on the 
clerk hire roles of a Member and those on the staff of a committee, 
there are no formal job descriptions or uniform work standards. Such 
matters relating to the general terms, conditions and the specific 
duties of employment have traditionally been within the discretion of 
the Member or the employing committee. 

As to the duties required of staff employees in general, however, it 
should be noted that the basic standard for compensation of employees 
of the House is that the employee has regularly performed official 
duties reflecting the compensation he receives. 3 Thus, although there 
are no formal job descriptions apparent under House Rule or statute 
for those on the clerk-hire rolls of a Member or for committee staff, 
employees of the House are paid from funds from the United States 

' See: Washington Post, July 1, 1976, p. D 3; January 25, 1976, p. A2; October 10, 1073, p. Al; September 19, 
1973. p. D 17: see series of five articles appearing on February 16, 1975, to February 20, 1975, pp. Al; also 
Febmavv 7, 1975, p. D 19; New York Times, February 16, 1975, p. 41; October 3, 1976, p. 42. 

2 See: 29 U.S.C. §§ 201-219, 203(e)(2)(A)(iii): 29 U.S.C. 5§ eil-378, 652(5); 29 U.S.C. §| 151-166, 152(2); 29 
U.S.C . §§ 621-034, 630(b) and 633a; see also lit le 7 of the Civil Rights Act of 1964 (Equal Employment Oppor- 
tunity Act) 42 U.S.C. § 2000e et seq., at § 2000e(b) and 2000e-16(a). 

3 Regulations of the House Administration Committee: "Regulations and Accounting Procedures for 
Allowances and Expenses of Committees, Members and Employees of the U.S. House of Representatives"', 
95th Cong., January, 1978, p. 88, para. 2(a) and p. 29, para. 2(a): see also; House Rule XLI1I (8); see Code 
of Ethics for Government Service, 72 Stat, part 2, p. B12, para. 3. 

(12) 



13 

Treasury to perform public duties, that is, to assist a Member in his 
official responsibilities 4 or to work on official committee business. 5 
Such employees are therefore not compensated from public funds to 
perform non-official, personal, or campaign duties on behalf of the 
Member. 

General Employment and Compensation Provisions. Regulations 
governing the Member's clerk hire allowance and the employment of 
committee staff have been promulgated by the House Administration 
Committee. These regulations, entitled "Regulations and Accounting 
Procedures for Allowances and Expenses of Committees, Members, 
and Employees of the U.S. House of Representatives," should be 
referred to for requirements and regulations in this area. Some of the 
pro\-isions of those regulations are briefly discussed in this section 
below. 

The clerk-hire allowance of a Member of the House is available for 
the employment of up to 18 persons for the Member's staff. 6 The 
regulations issued by the House Administration Committee establish 
the total amount of allowance for clerk-hire, the maximum monthly 
payout from that allowance, and fix the maximum and minimum an- 
nual rates of employee's salaries. 7 The regulations of the House Ad- 
ministration Committee note the requirement that compensation from 
the clerk-hire allowance is available only for services performed in 
Washington, D.C., or in the state or district which the Member 
represents, and also provide guidelines for minimum length of employ- 
ment, reemployment rules, and provisions regarding leave. 8 

The rules concerning the appointment of committee staff are gen- 
erally set out in the Rules of the House of Representatives at Rule 
XI, clause 6. These provisions establish the number of professional 
and clerical staff which may be employed by the standing committees 
of the House, 9 and set a limit on rates of pay for such employees. 10 
Regulations and guidelines for employment and compensation of 
committee staff are also set out in the House Administration regula- 
tions at Part II, C. 

The regulations of the House Administration Committee provide 
for the certification of an employee's salary for official duties on a 
monthly basis. These regulations state that salaries will be disbursed 
to employees only upon a monthly certification by the appropriate 
Member, committee and subcommittee chairman or officer of the 
House "as to the amount of said salary, the physical location of each 
employee, the regular performance of official duties, and the relation- 
ship of each employee to any current Member of Congress." u It 
would appear then that compensation may only be received for official 
duties performed by the employee within the preceding month, and 
thus advance payment to an employee would be contrary to these 
regulations. 12 



« See, for example, Legislative Appropriations Act of 1978, P.L. 95-94, 91 Stat. 653. 
s House Rule XI, cl. 6(a)(3) and (b). 

* House Administration Committee Regulations, supra at p. 88 para. 5(a). 

7 Id. at 5 (a), (b) and (d). 

8 Id. at 5 (c), (e), (f) and 8. 

8 House Rule XI, cl. 6, see also cl. 5. 

* See House Rule XI, cl. 6(c), see also House Administration Regulations, supra at p. 29, "Employment 
of Stall". 

11 See note 3, infra. 

12 Id. 



14 

Under provisions of Federal statutory law employees of the House 
may not be required, and are not allowed, to share a House position 
with another or to divide their House salary with another person. 13 
Further, House employees are required to perform their own duties 
for which they are compensated, as they are specifically prohibited 
under Federal law from subletting:, or being required to sublet to 
another any portion of their official duties. 14 

Nepotism. Provisions of Federal law generally prohibit a Federal 
official from hiring or promoting one of his relatives. The statute, at 
5 U.S.C §3110, prohibits a Federal official, including a Member of 
Congress, from appointing, promoting, or recommending for appoint- 
ment or promotion any "relative" of the official to any agency or 
department over which the official exercises authority or control. The 
statute specifically lists those relations of a public official which come 
within the provision as a "relative" of the official: 

"relative" means, with respect to a public official, an indi- 
vidual who is related to the public official as father, mother, 
son, daughter, brother, sister, uncle, aunt, first cousin, 
nephew, niece, husband, wife, father-in-law, mother-in-law, 
son-in-law, daughter-in-law, brother-in-law, sister-in-law, 
stepfather, stepmother, stepson, stepdaughter, stepbrother, 
stepsister, half brother or half sister. 

It should be noted that certification as to an employee's relationship 
to a Member of Congress must be made on payroll authorizations by 
the employing Member, or committee and subcommittee chairman. 
The antinepotism law as applied in the House would thus prohibit 
the employment of a relative of a Member on that Member's staff 
or on the staff of a committee or a subcommittee of which the Member 
is chairman. 

The antinepotism statute was upheld by a lower Federal court 
against the challenge that the provision is unconstitutionally over- 
broad by finding that the statute is limited in its applicability to 
only "specified kinship relationships." 1S The statute would therefore 
not cover "relatives" who are not specifically listed in the statute as 
those within the prohibited class. Thus, for example, under common 
legal usage, and as construed by the Civil Service Commission in 
interpreting this provision, although the "niece" and "nephew" of 
an official, that is the children of the official's brothers or sisters, are 
within the prohibition, the niece or nephew of an official's spouse (the 
children of the brother or sister of an official's spouse) would appar- 
ently not be included in the prohibited class. 16 

Discrimination. The Rules of the House of Representatives, at 
Rule XLIII(9), specifically forbid a Member or an employee of the 
House to discharge or refuse to hire any individual, "or otherwise 
discriminate against an individual with respect to compensation, 
terms, conditions, or privileges of employment, because of such 
individual's race, color, religion, sex, or national origin." House Rules 
on the hiring of staff members of the standing committees of the 
House, Rule XI, cl. 6(a)(3), also provide that professional staffers 

"2 U.S.C. §86. 
><2 U.S.C. §§87 and 101. 
'« Lee v. Blount, 345 F. Supp. 585, 588 (1952). 

i» Black's Law Dictionary, 4th Ed., 1968; Ballentine's Law Dictionary, 3rd., Ed., 1969; Federal Personnel 
Manual, United States Civil Service Commission, ch. 310, subch. 1, Sec. 102(c). 



15 

shall be appointed "without regard to race, creed, sex, or age, and 
solely on the basis of fitness to perform the duties of their respective 
positions", and that the clerical staff of the committee shall likewise 
be appointed "without regard to race, creed, sex, or age." 17 In addition 
to House Rules against discrimination, it should be noted that a 
Member of Congress may be subject to suit and liability concerning 
discriminatory employment practices in violation of the equal protec- 
tion component of the Fifth Amendment of the United States Con- 
stitution. 18 

Bribes, Political Activities or Contributions for Jobs. Criminal 
statutes within the United States Code prohibit a range of activities 
concerning the use of Federal jobs for inducing political activities, 
bribes, contributions or the receipt of anything of value. Specifically, 
federal law prohibits the receipt of something of value in return for 
promising support or use of influence in obtaining someone a federal 
post, at 18 U.S.C. §211. As to political activities, section 599 of 
title 18, United States Code, prohibits candidates from promising 
appointment or use of influence or support in obtaining someone 
"any public or private position or employment" in return for political 
support, while section 600 of title 18 prohibits anyone from promising 
a Federal job or benefit to a person as consideration or a reward for 
political support or opposition to any candidate or party. It is also 
prohibited under 18 U.S.C. § 601 to deprive or threaten to deprive 
any Federal job or benefit as a way to induce political contributions 
for a candidate or a party. 

Salary Kickbacks. Salary "kickback" schemes may involve a proc- 
ess whereby a staff employee will remit or "kickback" a portion of his 
salary to the employing Member or to an influential aide, or apply a 
portion of his salary for goods or services for the Member's benefit, 
agreed to by the staffer under coercion as a condition for employ- 
ment. Other schemes which may be called "kickbacks" may involve 
the designation of certain persons as employees on the congressional 
payroll by the Member or an aide. Such persons designated perform 
no congressional duties and then turn their salary checks over to, or 
their checks are delivered directly to, the Member or aide involved 
in the scheme. 

There is no statutory provision under Federal law which expressly 
describes and is exclusively aimed at the specific conduct involved 
in the various "kickback" schemes. Although there is no specific "anti- 
kickback" statute as such, several Members of Congress and congres- 
sional aides involved in such "kickback" schemes have been indicted 
and prosecuted under a general fraud statute of Federal law at 18 
U.S.C. § 100 1. 19 This criminal statute is intended to prevent false 
statements to the Government which further a fraudulent scheme. 
The statute specifically prohibits the making of any false, fictitious or 

17 House Rule XI, cl. 6(b)(1). 

18 Davis v. Passman, 544 F.2d 865 (5th Cir. 1977), rehearing en banc 571 F.2d 795 (5th Cir. 1978). Petition 
for certiorari was filed on July 17, 1978 (Docket No. 78-5072), by complainant seeking monetary damages 
for discrimination found by lower court. 

" See, for example, reports of indictments and/or convictions appearing in the press concerning Repre- 
sentative Bramblett, Washington Post, Feb. 4, 1954, p. 17 and New York Times, Feb. 10, 1954, p. 1: Repre- 
sentative J. Parnell Thomas, Washington Post, November 11, 1948, pp. 1 & 9; New York Times, December 6, 
1948, p. 1; Representative J. Irving Whalley, Washington Post, August 1, 1973, p. Cl; George A. Haag, 
aide to Representative Collins of Texas, Washington Post* June 14, 1975, p. A3; Representative James 
Hastings, Washington Post, Dec. 18, 1976, and New York Times, Dec. 17, 1976; Representative Charles 
Diggs, see Washington Post, October 8, 1978, p. Al ; indictment of Michael McPherson, aide to Representative 
William Clay, see Wall Street Journal, Sept. 22, 1976, and Washington Post, Sept. 22, 1976, p. A2. 



16 

fraudulent statements, or knowingly covering up or concealing by 
any trick or scheme a material fact, concerning matters in the juris- 
diction of any Federal department or agency. The Supreme Court 
has found that making false or fraudulent statements or falsifying or 
concealing a material fact on payroll vouchers or certifications to a 
disbursing officer in the House of Representatives to further a "kick- 
back" scheme was that type of false statement or entry "in any matter 
within the jurisdiction of any Department or agency of the United 
States" within the prohibition of the statute. 20 

In addition to convictions under the false statements and Federal 
fraud provision, a violation of the Federal mail fraud statute may 
occur when the mails are used to distribute the payroll checks or 
other funds in furtherance of the "kickback" scheme. 21 

As to a scheme whereby the salaries of congressional employees are 
applied for the benefit of a Member or a Member's office, the Com- 
mittee on Standards of Official Conduct has noted in an advisory 
opinion the following: 

* * * [lit is improper to levy, as a condition of employ- 
ment, any responsibility on any clerk to incur personal 
expenditures for the primary benefit of the Member or of the 
Member's congressional office operations, such as subscrip- 
tions to publications, or purchase of services, goods or 
products intended for other than the clerk's own personal 
use. 

The opinion clearly would prohibit any Member from re- 
taining any person from his clerk-hire allowance under either 
an express or tacit agreement that the salary to be paid 
him is in lieu of any present or future indebtedness of the 
Member, any portion of which may be allocable to goods, 
products, printing costs, campaign obligations, or any other 
nonrepresentational service. 22 

Performance of Official Duties. There are generally no uniform job 
descriptions or specific work standards appearing in the House Rules 
or regulations which are applicable to the duties of those on the 
clerk hire rolls of a Member or for committee staff. Some House 
employees, generally those under the employ of an officer of the 
House, will be subject to the House Employees Position Classifica- 
tion Act (2 U.S.C. § 291 et seq.) and the regulations on applicable 
employment standards issued by the House Administration Commit- 
tee. However, in any case, regulations issued by the House Adminis- 
tration Committee provide as a general standard of compensation 
that the salary of a House employee will only be disbursed by the 
Clerk of the House upon a monthly certification by each Member, 
committee and subcommittee chairman, or officer, as to the "regular 
performance of official duties" by such employee. 23 

Furthermore, the provisions of the legislative appropriations 
for clerk hire allowance provide that such allowance is for secur- 
ing staff to provide assistance to Members in the discharge of official 

2 <> United States v. Bramblett, 348 U.S. 503 (1955). 

21 IS U.S.C. § 1341 et seq.: note trial court conviction of Member on this charge, see report in Washington 
Post, October 8, 1978, p. Al; see also indictment of United States v. Frank M. Clark. Criminal No. 78-207 
(D.C. W. Pa. 1978). 

22 House Committee on Standards of Official Conduct, Advisory Opinion No. 2, July 11, 1973. 

23 See note 3, infra. 



17 

and representational duties. 24 In addition to the provisions applicable 
to clerk hire, the House Rules state that professional staff members 
of the standing committees of the House are to engage only in work 
of "committee business; and shall not be assigned any duties other 
than those pertaining to committee business." 25 The House Rules 
further provide that the clerical staff of the House standing commit- 
tees shall work on "matters related to committee work." x 

A general ethical standard recognized by the House instructs all 
employees to: "Give a full day's labor for a full day's pay; giving to 
the performance of his duties his earnest effort and best thought." ** 
Finally, the Rules of the House specifically provide that a Member 
"shall retain no one from his clerk hire allowance who does not per- 
form duties commensurate with the compensation he receives." 28 

Thus, the underlying standard for the receipt of compensation by 
an employee of the House under these provisions is that the employee 
has regularly performed official duties which are commensurate with 
the compensation he receives. Employees of the House are therefore 
paid from funds from the United States Treasury to perform public 
duties, that is, to assist a Member in his official legislative and repre- 
sentational duties, to work on committee business, or to perform other 
official congressional duties, 29 and are thus not compensated from 
public funds to perform non-official, personal or campaign activities 
on behalf of the Member or anyone else. 

It should be noted that as a general appropriations principle, a 
Federal statute provides that appropriated funds, unless otherwise 
provided by law, are to be used solely for the purposes for which they 
were appropriated (31 U.S.C. § 628). Thus, funds appropriated for 
congressional staff to perform "official" duties should not be used to 
compensate such staff for the performance of activities or duties 
related to non-official business. 

Under these appropriations principles and the general theory of 
misuse of appropriated funds, and fraud, various legal actions have 
been initiated against Federal office holders. Some civil suits have 
been filed by private individuals against Members of Congress under 
the provisions of the False Claims Act for claiming Federal salaries 
for staff employees who were allegedly providing non-official personal 
services for the Member in return for their compensation from public 
funds. 30 These cases by private individuals have generally proved 
unsuccessful on procedural grounds, when the Justice Department 
has not pursued the matter on behalf of the Government. 31 However, 
criminal indictments have been obtained by the Justice Department 
in two separate matters against a present and a former Member of 
the House for allegedly placing persons on their respective congres- 
sional payrolls who did not regularly perform official congressional 
duties, but rather performed personal services or duties for or on 

2 * See note 4, infra. 

J » House Rule XI, cl. 6(a)(3). 

» House Rule XI, cl. 6(b;(l). 

« Code of Ethics for Government Service, 72 Stat, part 2, B 12, para. 3. 

28 House RuleXLIII(8). 

«See2 U.S.C. §85. 

*> See United States ex rel. Thompson v. Hays, Civ. Nos. 76-1078, 76-1132, 76-1140 (D.D.C Oct. 26, 1977); 
Joseph v. Cannon, Civ. No. 77-0452 (D.D.C. filed March 15, 1977): 

3 ' But see United States ex rel. Hollander v. Clay, 420 F. Supp. 853 (D.D.C.) pertaining to use of Fderal 
funds when Justice Department entered suit. 



18 

behalf of the Member. 32 The indictments involved include charges 
of fraud, mail fraud, and perjury. A conviction has been handed 
down by the trial court on all counts of the indictment in one in- 
stance/ 3 while the charges in the other matter are still pending against 
the former Member as of this writing. 

The various provisions discussed above, which work to require 
House employees to regularly perform official congressional duties 
commensurate with the public compensation they receive, are ap- 
parently not to be interpreted as imposing regulations of unreasonable 
rigidity in relation to activities of congressional staff. Thus, a "rule of 
reason" should generally apply to questions of personal activities, 
occasional favors, or errands performed by the staff which may be 
ordinary or typical in an office situation or in an employee-employer 
relationship. 

Additionally, as discussed in the section on campaign activities of 
House employees, the House Committee on Standards of Official 
Conduct has stated with respect to the performance of official duties 
by those on the clerk hire rolls: 

. . . [D]ue to the irregular time frame in which the Con- 
gress operates, it is unrealistic to impose conventional work 
hours and rules on congressional employees. At some times 
these employees may work more than double the usual work 
week — at others, some less. These employees are expected to 
fulfill the clerical work the Member requires during the hours 
he requires and generally are free at other periods. 34 

Thus, in summary, for House employees on the clerk hire rolls of a 
Member and for committee staff there are no formal job descriptions 
in statutes, rules or regulations comparable to those under civil 
service law. The specific duties of a Member's staff or a committee 
staff have traditionally been within the discretion of the employing 
Member or committee to best meet the specific needs and requirements 
of that Member and his constituents or the employing committee. 
The apparent restraints from appropriations provisions and rules for 
all House employees are that appropriated funds are to be used to 
secure persons to perform official congressional duties commensurate 
with the compensation they receive. Committee staff are employed to 
perform duties related to committee work. As for staff employees of a 
Member, such persons are to be retained to assist the Member in the 
discharge of his "official and representational duties." 

There is no conclusive listing of what a Member's "official and 
representational duties" entail. However, the Supreme Court dis- 
cussed such concept in a different context and noted that "legitimate" 
activities of a Member include things said or done in the House relating 
to official duties and include "legitimate 'errands' performed for 
constituents, the making of appointments with Government agencies, 
assistance in securing Government contracts, preparing so-called 
'newsletters' to constituents, news releases, and speeches delivered 
outside Congress." 35 The opinion of the Standards of Official Conduct 



33 See reports on indictments of Representative Charles C. Diggs, in Washington Post, March 24, 1978, 
p. Al; and indictment of former Representative Frank Clark, Washington Post, September 6, 1978, p. A6 
« See report in Washington Post, October 8, 1978, p. Al. 
84 See footnote 22, infra. 
35 United States v. Brewster, 408 U.S. 501, 512 (1972). 



19 

Committee provides that an employee must complete those "official" 
duties which the Member requires him to perform, and for which he is 
compensated from public funds. As long as the employee completes 
such duties, he is generally free to engage in personal, campaign, or 
other non-official activities on behalf of the Member or on behalf of 
someone else. 



Chapter 3. OFFICIAL ALLOWANCES 
Highlight 

Members and their staff should note that: 

— allowances made available to an office are for defraying the 

"official expenses" of operating a congressional office; 
— official allowances received for a congressional office may not 

be converted for one's own personal use ; 
— in misusing official allowances employees or Members might be 
involved in conduct which constitutes making "false claims" 
against the Government in violation of Federal law; 
— only official allowances and appropriated funds may be used to 
defray official office expenses in the House of Representatives. 
For required certifications, documentations, and regulations on the 
use and accounting for allowances and expenses, Members and their 
staff should consult the regulations of the House x^dministration Com- 
mittee entitled "Regulations and Accounting Procedures for Allow- 
ances and Expenses of Committees, Members and Employees of the 
U.S. House of Representatives". 

The prohibition on unofficial office accounts bars the use of private 
funds from outside sources to defray official office expenses in the 
House of Representatives. 

(21) 



Chapter 3. OFFICIAL ALLOWANCES 

Various allowances are authorized for Members of Congress to 
defray the official expenses incurred in holding congressional office. 
Many of the statutory authorizations for an allowance will specifically 
note that such allowance or reimbursement is for expenses of an 
"official" or "strictly official" nature. 1 Even when such specific 
limitation in an original statutory authorization is not present, the 
regulations of the House Administration Committee note that the 
general allowance authorized for a Member's office use has been 
appropriated for "official expenses" and for the "conduct of the 
official and representational duties of the office.". 2 

The major legal and ethical problems which arise concerning official 
allowances, and the ones with which this report generally deals, 
relate to the use of these allowances for other than "official expenses", 
including the conversion of money or property to one's own personal 
use. Related problems may concern what has been called "double 
billing", that is, attempts to receive reimbursement more than once 
for the same expense, or may concern the claiming of reimbursements 
for non-existent expenses. 

Allowance for Official Expenses. The general allowance for a Mem- 
ber for the "conduct of the official and representational duties" of his 
office, as stated in the regulations of the House Administration Com- 
mittee, is to be used for certain specified expenses of a congressional 
office and for "other official expenses." "Other official expenses", as 
defined in the regulations of the House Administration Committee, 
are "ordinary and necessary business expenses incurred in the support 
of the official and representational duties of the Member, unless such 
expense has been specifically prohibited elsewhere in the regulation." 3 

The regulations of the House Administration Committee pertaining 
to the "allowance for official expenses" provide examples of those 
items of expenses for which this allowance may be used, and list 
examples of those items for which the official expense allowance 
may not be used. Included in the permissible uses are expenses for: 
travel, office equipment lease, district office lease, stationery, tele- 
communications, mass mailings* ^postage, computer services, and 
other official expenses. 

Listed as items excluded from those payable from the official 
expenses allowance are: 

(1) Expenses relating to the hiring and employment of individ- 
uals, including, but not limited to, employment service fees, 
transportation of interviewees to and from employment interviews 
and cost of relocation upon acceptance or termination of em- 
ployment. 

« See, for example, 2 U.S.C. §§ 42c, 43b, 46g, 46g-l, 56, and 122a. 

2 Regulations and Accounting Procedures for Allowances and Expenses of Committees, Members and 
Employees of the U.S. House of Representatives, 95th Congress, Jan. 1978, Committee on House Adminis- 
tration, p. Ill, D. para. 1. 

3 Regulations and Accounting Procedures, supra at p. 127, M "Provision Relating to Other Official 
Expenses". 

(22) 



23 

(2) Items purchased from other than the House stationery 
store which have a useful life m excess of the current term of the 
Member, and which would have a residual value of more than 
$25 upon the expiration of the current term of the Member. 

(3) Holiday greeting cards, flowers, and trophies. 

(4) Personal advertisements (other than meeting or appearance 
notices) . 

(5) Donations of any type. 

(6) Dues or assessments other than to legislative support 
organizations approved by the Committee on House Admin- 
istration. 

(7) Educational expenses for courses of study, information 
and training programs, unless the benefit accrues primarily to 
the House and the skill or knowledge is not commonly available. 

(8) Purchases of radio and television time. 

(9) Parking for Member and employees at district offices, 
except when included as an integral part of the lease or occupancy 
agreement. 

False Claims, Fraud. As an initial statutory consideration, con- 
cerning the use of official funds generally, Federal law provides that 
funds appropriated by the Federal Government are to be used, 
unless otherwise provided by law, only for the purposes for which 
appropriated. 4 When funds are used other than for their intended 
purposes, the misused funds may arguably be recoverable by the 
Government for repayment to the United States Treasury. 

The use of official allowances for other than official purposes, 
including double billing and claims for nonexistent expenses, might 
involve conduct which could subject a Member or an aide to civil 
litigation under the False Claims Act. 5 Such a suit may be brought in 
the name of the United States by an individual citizen, with the 
potential for the Department of Justice taking over the prosecution 
under the provisions of the Act when false, fraudulent, or fictitious 
claims are allegedly made against the Government. 6 

Citizen suits under the False Claims Act, it should be noted, are 
often unsuccessful on procedural grounds, since the suit will be dis- 
missed if it is shown that the evidence upon which the suit was based 
was in the possession of the United States prior to the initiation of the 
suit. 7 Many of the law suits against Members of Congress for false 
claims, particularly those charging the Member with use of official 
staff for personal purposes, were apparently based on information from 
newspaper reports or other press revelations and have, therefore, been 
dismissed on these grounds. 8 However, in the case of United States 
ex rel Hollander v. Clay, 9 the Department of Justice took over prosecu- 
tion of the case from the private plaintiff. In that case the Justice De- 
partment charged the Member of Congress with false claims and unjust 
enrichment at the expense of the United States for allegedly submitting 
vouchers and receiving payments for trips which were not taken, and 

* 31 U.S.C. § 628. 
»2U.S C. §231. 
•2 U.S.C. §232. 
'Id. 

8 See United States ex rel. Thompson v. Hays, Civil Actions No. 76-1078, 1132, and 1140, dismissed by the 
court; United States ex rel. Martin- Trigona v. Daley, Civil Action No. 76-1164 (D.D.C.), dismissed: United 
States ex rel. Joseph v. Cannon, No. 77-0452 (D.D.C.) dismissed, appeal filed, No. 78-1618 (D.C Cir.). 

9 Civil Action No. 76-493 (D.D.C), see 420 F. Supp. 853 (1976): see also Committee Print of the House 
Select Committee on Congressional Operations and the Senate Committee on Rules and Administration, 
94th Congress, 2d Session, "Identifying Court Proceedings and Actions of Vital Interest to Congress", 
final report, pp. 90-94. 



24 

for allegedly claiming reimbursements for one particular mode of 
transportation, when another was actually used, which entitled the 
Member to less reimbursement than claimed. The Government and 
the Member of Congress settled the suit on October 27, 1976, at a 
compromise figure to be repayed by the Member, and the case was 
dismissed on October 29, 1976. 

The regulations which have been promulgated by the House Ad- 
ministration Committee on allowances for official expenses specifically 
provide that the "allowance will be disbursed, upon proper certifica- 
tion and documentation, for the official expenses of the Member, the 
Member's employees or the Member's congressional office." 10 The 
regulations note that such documentation "shall include invoices, 
receipts or other evidences of expenses incurred." u When such 
documentation and certification by voucher of "official" expenses is 
required, the use of money received, or the supplies or services secured 
by such allowances, for other than the official expenses certified, may 
involve a fraud against the Government. The general fraud statute, 
18 U.S.C. § 1001, prohibits the making of any false, fictitious, or 
fraudulent statements, or usino- false writings, documents, or entries, 
concerning any matter within the jurisdiction of an agency or depart- 
ment of the United States. As noted in the preceding section, the 
Supreme Court has found that this section applies to false statements, 
writings or representations made to a disbursing officer of the House 
of Representatives in the furtherance of a fraudulent scheme. 12 

It should also be noted that criminal provisions of the United 
States Code prohibit the making of false or fictitious claims upon the 
United States, 13 and prohibit a conspiracy to defraud, the Government 
or an agency by obtaining or aidmg in obtaining the payment of 
false claims. 14 Criminal liability in some fact situations may potentially 
be present if an officer or employee knowingly steals or "converts to his 
use or the use of another * * * any money, or thing of value of the 
United States", under the provisions of a Federal criminal statute at 
18 U.S.C. §641. 

Recommended Accounting Procedure. As to the accounting for 
allowances and expenses, and general management of official funds, 
it. should be noted that the regulations of the House Administration 
Committee set out an accounting procedure "designed to provide 
Members with a standard and uniform method for tracking authorized 
allowances and related expenses." 15 Reference should be made to the 
regulations for instructions, illustrations and procedures of the ac- 
counting method suggested. Additionally, reference should be made 
to the regulations for information on the permissible transferability 
of allowances among various accounts and categories of expenses. 

Unofficial Office Accounts. The Rules of the House of Representa- 
tives, Rule XLV, now prohibit unofficial office accounts, commonly 
referred to in the past as "slush funds". Thus, outside private con- 
tributions, funds, campaign contributions, or in-kind contributions pf 
goods or services, may net be used to support the activities of, or 
pay the expenses of, a congressional office. Rather, only appropriated 
funds and official allowances may be used for that purpose. 

"> House Administration Regulations, supra at p. Ill, para. 3(a). 
"Id. at para. 3(b). 

« United States v. Bramblelt, 348 U.S. 503 (1955); see also United States ex rel. Hollander v. Clay, 4C0 F. 
Supp at 850. 
'M8 U.S.C. §287. 

« 18 U.S.C. § 28<>, see also 18 U.S.C. { 371. 
's House Administiation Regulations and Accounting Procedures, supra at p. 130. 



25 

The intent of the rule against unofficial office accounts was, as ex- 
plained by the House Commission on Administrative Review of the 
95th Congress, to build a wall between private funds and official al- 
lowances. 16 The recommendations of the House Commission on Admin- 
istrative Review, which were substantially adopted on March 2, 1977, 
as revisions to the House Rules on conduct (H. Res. 287, 95th Con- 
gress), set forth reasons for requiring that official expenses of a Mem- 
ber be paid exclusively from official, appropriated funds: 

The Commission strongly believes that private funds 
should be used only for politically related purposes. Official 
allowances should reflect the necessary cost of official ex- 
penses. Increasing official allowances ... to eliminate 
reliance on private sources represents a small cost to the public 
for the benefits to be derived. To suggest otherwise would be 
to accept or condone the continuation of the present system 
which, at the very least, allows for the appearance of impro- 
priety, and, at worst, creates a climate for potential "in- 
fluence peddling" through private financing of the official ex- 
penses of Members of Congress. 17 

Thus, private funds, such as campaign contributions, may be used 
only for political campaign purposes and not for cfficial uses. No 
specific definition cf "political campaign purposes" for which private 
funds may be used is provided in the rules or the legislative history 
of the provision; and what would be considered a bonafide campaign 
expense as opposed to an "official" expense would depend on the 
particularized facts of a specific situation. 18 For example, as noted in 
the discussion on the floor of the House during the adoption of the rule 
on unofficial office accounts and the rule restricting the use of campaign 
funds (see House Rule XLIII(6)), a Member's travel to his home 
district might be considered a political expense for which private 
campaign funds may be used if the purpose of the trip were politically 
related, 19 and that taking certain individuals out to dinner, if such 
were a political meeting rather than one relating to official duties, 
could be reimbursed or paid from campaign accounts. 20 

The legislative history of the unofficial office account prohibition reveals 
that the injunction against a Member maintaining or having main- 
tained an unofficial account for his use goes as well to accounts 
maintained for a Member's benefit, even if such is not maintained for 
a Member's direct use; and extends also to "a process whereby funds 
are received or expended" as well as to the maintenance of an actual 
account or repository. 21 

In an interpretation of the unofficial office account prohibition, the 
95th Congress Select Committee on Ethics in the House, in an Ad- 
visory Opinion, found that the private in-kind contribution of goods or 
services for official purposes is prohibited under Rule XLV in a similar 
manner as is the private contribution of funds for official purposes. 22 

> 6 House Document No. 95-73, 95th Congress, 1st Session, "Financial Ethics", Communications from the 
Chairman, House Commission on Administrative Review, February 14, 1977, p. 18. 
17 id 

is See Congressional Record, March 2, 1977, p. H 1581 (daily ed.), comments by Mr. Frenzel. 
' 9 Cong. Rec, supra at 1581. 

20 Cong. Rec, supra at 1589. 

21 Cong. Rec, supra at 1621. 

22 Advisory Opinion No. 6, May 9, 1977. 



293-587 O - 79 - 3 



26 

The Select Committee found, however, that services from govern- 
mental agencies, the occasional use of a private meeting room to meet 
with constituents, and certain intern programs for a Member's office 
when the Member or his staff is not involved in any of the financial 
arrangements of the program, would not violate Rule XLV as pro- 
hibited in-kirjd contributions of services or facilities from private 
sources for a Member's official use. The Select Committee's Advisory 
Opinion No. 6, of May 9, 1977, summarized its findings as follows: 

For purposes of House Rule XLV, the private contribu- 
tion of in-kind services for official purposes is prohibited. 
However, Rule XLV does not apply to service provided by 
federal, state and local government agencies or to the occa- 
sional use of privately-owned meeting space where no public 
accommodations are reasonably available for meeting with 
constituents. Nor does Rule XLV apply to interns or volun- 
teers in a Member's office, based on the understanding that 
such intern programs are primarily of educational benefit to 
the intern and do not give undue advantage to special interest 
groups. However, Members and their staffs may not personal- 
ly raise, receive or disburse any private contributions for in- 
tern programs associated with their offices. 

In addition, the final report of the Select Committee notes that Rule 
XLV "is not intended in any way to restrict the Member's use of his 
personal funds." Thus, for example, a Member may establish a petty 
cash fund out of his personal monies to pay for miscellaneous office 
expenses. 23 

The House Rules also specifically prohibit sending under the frank 
of a Member any mass mailings, such as newsletters or postal patron 
mail, which are not paid for exclusively from official funds (House 
Rule XLVI(4)). Thus, private funds may not be used to prepare, 
print, or distribute any material for a mass mailing (500 or more 
substantially identical pieces of mail) under the franking privilege of a 
Member of the House. 

The rationale behind the restriction on the use of campaign funds, 
or other private funds, for defraying the cost of mass mailings under 
the frank was explained by the House Commission on Administrative 
Review : 

The Commission believes that since the franking privilege 
is reserved for "official materials," it is inappropriate for 
franked mass mailings to be printed and prepared with 
private or political funds. 

The Commission believes that it is necessary to make a 
clear separation between the public purpose and private 
interest in the use of the frank, and, therefore, private funds 
should not be used to print "official documents." 24 



23 House Report 95-1837, 95th Congress, 2nd session, Final Report of the Select Committee on Ethics. P. 25. 

24 House Document No. 95-73, supra at 19. 



Chapter 4. COMMUNICATIONS TO ADMINISTRATIVE 
AGENCIES ON BEHALF OF CONSTITUENTS, INCLUD- 
ING REFERRALS AND RECOMMENDATIONS FOR FED- 
ERAL EMPLOYMENT 

Highlight 

Assisting constituents in their dealings with administrative agencies 
is generally considered a typical and useful function of a congressional 
office. 

However, in communicating to a Federal agency on behalf of a 
constituent, a Member and his staff may not: 

— make prohibited off-the-record contacts to an agency consider- 
ing a matter under a formal proceeding; 
— receive money or things of value (other than one's salary) in 
return for helping someone. 
It should be noted that ethical standards instruct Members and 
employees that: 

— communications to agencies on behalf of constituents may 
properly be made: 

requesting information or status reports, urging prompt 
consideration of a matter, arranging for interviews or 
appointments, expressing judgments on a matter (subject 
to ex parte communications rules), asking for reconsidera- 
tion based on law or regulation ; 
— Members and employees may not make fraudulent repre- 
sentations to agencies of the Government; 
— Members and employees should not place undue or improper 
pressure upon administrators, such as by suggestions or threats 
of favoritism or reprisals. Such conduct has been characterized 
as an "un warranted abuse of the representative role." 
Staff employees of a Member may not represent someone before the 
Government in a private capacity, that is, other than in the perform- 
ance of official congressional duties. 

In recommending someone for Federal employment, it should be 
noted that: 

— there are no specific restrictions applicable to Members and 
staff making recommendations and referrals for general 
employment in the civil service ; 
— however, selection in the civil service is intended to be on merit, 
and an appointing officer in the Government may only consider 
a recommendation based on the character and residence of the 
applicant ; 
— recommendations for the postal service may only be made on 
the basis of character or residence of the applicant. 

(27) 



Chapter 4. COMMUNICATIONS TO ADMINISTRATIVE 
AGENCIES ON BEHALF OF CONSTITUENTS, INCLUD- 
ING REFERRALS AND RECOMMENDATIONS FOR FED- 
ERAL EMPLOYMENT 

It is often suggested that one important aspect of a Congressman's 
representative function is to act as a go-between or conduit between his 
constituents and the bureaucracies of the administrative agencies of 
the Federal Government. One survey in the early 1970's concerning 
congressional office work found that 24.7 percerit of staff time and 27.6 
percent of a House Member's time are devoted to "constituency 
service." 1 

The House Committee on Standards of Official Conduct has noted 
that "It is our duty, directly or through our staffs, to assist constit- 
uents with their problems before the agencies of the Federal Govern- 
ment." 2 Such activity, in the opinion expressed by the late Senator Paul 
H. Douglas, serves a useful function in our governmental process by 
helping "legislation" and "administration" perform their respective 
jobs adequately through the interest of one in the work of the other. 3 
In a committee print entitled "Ethics in Government", a subcom- 
mittee headed by Senator Douglas stated that legislators performing 
casework functions can "legitimately serve as an informal board of 
inspectors" of administrators; "can prevent the administrators from 
flagging in their zeal , and can detect and check abuses in the conduct 
of public business." 4 Douglas concluded in his own study of ethics in 
Government 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." 5 

Even though the casework function may be an important congres- 
sional duty, it is not left totally unrestricted under Federal law. 
Although no statutory provision flatly prohibits all such activity, 
Federal law does work to specifically prohibit certain communications 
on the merits of a matter, known as ex parte communications, from 
a congressional office to an executive or independent agency when a 
matter is being adjudicated or is in a formal proceeding within the 
agency. 6 As that statute prohibits oft* the record arguments on the 
merits by any person in any formal decisionmaking situation, the 
expression of a judgment on the merits would seem best put in writing, 
with the express request that it be made a part of the record available 
to all interested parties and to the public. 

Members of Congress and their staff also are specifically prohibited 
by law from receiving compensation for any services rendered someone 



> Survey by John S. Saloma, reprinted in Congressional Quarterly "Guide to the Congress of the United 
States." Congressional Quarterly Service, Washington, 1971, p. 532. 

2 Letter from House Committee on Standards of Official Conduct March 14, 1974. 

8 Douglas, Paul H., "Ethics in Government," Cambridge 1952, p. 87. 

4 "Ethical Standards in Government," Committee Print, Subcommittee of the Committee on Labor and 
Public Welfare, United States Senate, 82d Congress, 1st Session, p. 28. 

6 Douglas, supra at p. 87. 

6 5 U.S.C § 557(d). 

(29) 



30 

before a Federal department, bureau or agency. 7 Additionally, con- 
gressional staffers may not represent persons in a private capacity 
before the Government or in court concerning a matter affecting the 
United States, but may engage in such representational activities only 
in connection with performing and fulfilling official congressional 
duties. 8 In addition to specific statutory proscriptions, ethical stand- 
ards and guidelines exist concerning the permissible scope of such 
activities to prevent abuses of office and to prevent undue or improper 
influence or pressure upon administrative officials and the adminis- 
trative process. 

Compensation. Federal criminal law, 18 U.S.C. § 203, prohibits a 
Member of Congress and any officer or employee of the Government 
from asking for or receiving compensation for "services rendered" in 
relation to any matter or proceeding in which the United States is a 
party or has an interest, before any Government agency, department, 
or bureau. Thus, no funds or things of value, other than one's official 
salary, may be received by a Member or his staff for interceding or 
for other dealings with an administrative agency on behalf of a con- 
stituent. Caution should be exercised in this regard to avoid the 
appearance that solicitations of campaign contributions or the receipt 
of gifts or entertainment from constituents are connected in any way, 
as a quid pro quo, with a legislator's intervention in the administrative 
process on behalf of the constituent. A discussion of this problem and 
suggestions was offered by Senator Douglas in his book "Ethics in 
Government": 

It is probably not wrong for the campaign managers of a 
legislator before an election to request contributions from 
those for whom the legislator has done appreciable favors, 
but this should never be presented as a payment for the 
services rendered. Moreover, the possibility of such a con- 
tribution should never be suggested by the legislator or his 
staff at the time the favor is done. Furthermore, a decent 
interval of time should be allowed to lapse so that neither 
party will feel that there is a close connection between the 
two acts. Finally, not the slightest pressure should be put 
upon the recipients of the favors in regard to the campaign. 
It should be clearly understood that any gift they make is 
voluntary and there will be no question of reprisals or lack 
of future help by the legislator if the gift is withheld. In 
other words, any contribution should be not a quid pro quo 
but rather a wholly voluntary offering based upon personal 
friendship and a belief in the effectiveness of the legislator 
sharpened perhaps by individual experience. 9 

Under the forerunner of section 203, a Federal court in the case of 
May y. United States, 175 F. 2d 994 (1949), held that even though 
the acts of the defendant Congressman in personally contacting a 
Federal agency on behalf of a constituent and bringing "his official 
prestige and influence to bear upon those officers" may have been 
lawful activity and within the "scope of his official duties as a Congress- 
man", the gist of the offense was the receipt of compensation for such 

'18 U.S.C. §203. 

8 18 U.S.C. §205. 

9 Douglas, supra at 89-90. 



31 

action. The court noted that "it is immaterial that those acts were 
patriotic, legitimate, and within the scope of his official duties as a 
Congressman", holding that a "Congressman cannot legally receive 
compensation from a private person for doing his duty in respect to 
something in which that person and the United States have interest." 10 

In the case of United States v. Johnson, 419 F. 2d 56 (4th Cir. 1969), 
a Court of Appeals upheld the conviction of a Congressman for receiv- 
ing compensation in connection with his attempt to have the Justice 
Department dismiss a mail fraud indictment against the officers of a 
savings and loan association. The court there noted, however, that 
"Congress did not intend to punish a Congressman for receiving a 
gift, contribution, or remuneration for a service not prohibited by 
the statute." " As to a service by a Member, which might not come 
within the prohibition, a Federal District Court in the case of United 
States v. Quinn, 141 F. Supp. 622 (D.N.Y. 1956) held that mere 
inquiries by a Member of Congress concerning the status of a matter 
pending before a Federal bureau, without discussion of the merits of 
the case, did not constitute prohibited "services rendered" within the 
statutory framework. 

It should be noted that a Member of Congress who is found in viola- 
tion of 18 U.S.C. section 203, for taking compensation for services 
rendered before Federal agencies, may be liable for repayment of the 
amount of compensation unlawfully received under a theory of breach 
of fiduciary duty and trust by the Member. In the case of United 
States v. Podell, 436 F. Supp. 1039 (1977) aff'd 572 F. 2d 31 (1978), 
the court granted a summary judgment for the United States against 
a former Member of Congress in the amount which the former Mem- 
ber had earlier pleaded guilty to receiving for his assistance rendered, 
while a Member of Congress, to an airline company before Federal 
agencies concerning the company's request for approval to operate 
a certain air route. The District court in the Podell case found that a 
violation of section 203 "unquestionably demonstrates a breach of 
trust, for in order to fall within its prohibition, a Member of Congress 
must shed the duty of disinterested advocacy owed the government 
and his constituents in favor of championing private interests poten- 
tialty inconsistent with this charge." 12 

Private Representational Activities by Staff. A statutory provision 
under Federal law, 18 U.S.C. § 205, prohibits legislative employees 
(but not Members of Congress) from representing private parties, even 
if not for compensation, before the Federal agencies or a court in 
matters affecting the United States unless in the discharge of official 
governmental duties. Thus, § 205 generally prohibits congressional 
staff employees from acting as agent or attorney for someone before a 
Federal agency or in court in matters affecting the United States 
unless the activity is in the proper discharge of the staffer's official 
congressional duties, that is, in assisting a Member in his official legisla- 
tive and representational duties. 13 

The issue of representation under § 205 has arisen in relation to the 
filing of a law suit against the United States and specified officers by a 
legislative aide to a Representative on behalf of the Member and cer- 
tain constituents. The suit concerned the alleged illegality of the im- 

'» 175 F.2d 994, at 999, 1006. 
» 419 F.2d 56, 60. 

12 436 F. Supp. 1039, 1042. 

13 See, for example, Legislative Appropriations Act of 1978, P.L. 95-94, 91 Stat. 653. 



32 

poundmeiit of certain funds designated for use within the Congress- 
man's district. According to a report in the press, the congressional 
aide was warned by an Assistant Attorney General of the United States 
that he was "under investigation for possible violation of a law against 
government officials bringing claims against the government", 14 that 
is, 18 U.S.C. § 205. Seeking clarification of the issue, the Congressman 
requested an opinion from the House Committee on Standards of 
Official Conduct. In response to this request the Committee issued an 
advisory letter which dealt generally with the representative respon- 
sibility of a Member of the House to his constituents, and which was 
specifically of the opinion that the activities of the legislative aide were 
"in the proper discharge of his official duties" since such were under the 
direction of the Member to assist him in guaranteeing representation 
of his constituents. The letter stated specifically : 

Research into the legislative history of 18 U.S.C. § 205 
indicates to us that the statute prohibited private representa- 
' tional activity. Since you directed [your legislative assistant] 
to file suit for yourself as a Congressman and to guarantee 
representation of your constituents, it is clear that [the 
legislative assistant] was not acting in a private manner. He 
was acting in a manner to assist you in representing your 
district. This is no different than your staff acting as agents 
for your constituents to assist them in obtaining other vested 
benefits. We regard this as entirety proper. 15 

Prohibited Ex Parte Communications. The "Government in the 
Sunshine Act" 16 enacted in 1976 contains a provision which prohibits 
in certain circumstances "ex parte communications" with administra- 
tive agencies. Ex parte communications are oral or written communica- 
tions made without proper notice to all parties and not on the public 
record, from an interested person outside of the agency to a member of 
the agency, an administrative law judge, or to an employee involved 
in the decision-making process. 17 This provision works to prohibit a 
congressional office from making an ex parte communication to an 
agency on behalf of a constituent concerning the merits of an issue 
which is subject to formal agency proceedings, 18 basically those of a 
"quasi-adjudicatory" nature or those rule making proceedings which 
must include formal hearings and a decision on the record. 

The legislative history of the Government in the Sunshine Act 
shows that "the prohibition only applies to formal agency adjudica- 
tion. Informal rulemaking proceedings and other agency actions that 
are not required to be on the record after an opportunity for a hearing 
will not be affected by the provision." 19 Thus, congressional offices 
may apparently make communications to an agency on behalf of a 
constituent concerning those matters not subject to formal agency 
proceedings. However, it should be noted that some communications, 
even if related to matters not in a formal agency proceeding, may 
become part of a public record concerning that matter in the interest 

" See Washington Star, March 19, 1974, p. A3. 
'« Note No. 2, infra. 
M Public Law 94-409, Section 4. 
"5 U.S.C. §551(14). 

•» Proceedings subject to 5 U.S.C. § 557(a). 

»• 8. Rpt. No. 94-354, 94th Congress, 1st Session, p. 35; see also Conference Report, S. Rpt. No. 94-1178, 
94th Congress, 2d Session, p. 29. 



33 

of fairness under various agency regulations, and under a recent deci- 
sion by a United States Court of Appeals. 20 

The statutory proscription on communicating to agencies concerning 
a formal agency proceeding applies to communications on the merits of 
the issue in question, and thus would not extend to inquiries on the 
status of a proceeding 21 nor to "general background discussions about 
an entire industry which do not directly relate to specific agency 
adjudication involving a member of that industry, or to formal rule- 
making involving the industry as a whole." 22 As stated in the House 
Report on the Government in the Sunshine Act: "While the prohibi- 
tions on ex parte communications relative to the merits apply to 
communications from Members of Congress, they are not intended to 
prohibit routine inquiries or referrals of constituent correspondence." a 

It should be noted, however, that both the House and Senate re- 
ports recognized the possibility that background information or a 
request for a status report "may in effect amount to an indirect or 
subtle effort to influence the substantive outcome of the proceedings", 
and thus in doubtful cases should be treated by agency personnel as an 
ex parte communication "to protect the integrity of the decision- 
making process." 2i 

To meet the requirement of the statutory provisions against ex 
parte (one-sided) presentations to agencies, the safest procedure is to 
put the arguments in writing and request that they be made a part 
of the record and open for the information of all interested parties and 
the public. 

Undue Influence, Fraud. Undue influences upon the administrative 
process may result from some congressional interventions into ongoing 
administrative proceedings. Early in the 1950's the late Senator Paul 
Douglas, in discussing general ethical considerations in congressional 
interventions in administrative proceedings, noted that a legislator 
"should not try to intimidate the officials involved and he should 
make it clear that the final decision is in their hands." 25 Lower Federal 
court cases have held that certain congressional interference with an 
ongoing administrative proceeding may so unduly influence the pro- 
ceeding that the decision reached by the agency will be nullified by 
the court because of considerations of due process and fairness towards 
the parties to the proceeding. 26 The congressional interference which 
led to the court's nullification of an agency decision in the case of 
PUlsbury v. F.T.C., 354 F. 2d 952 (5th Cir. 1966), concerned the 
questioning of agency officials in congressional hearings regarding 
the reasons or rationale for deciding an issue still pending before the 
officials in a formal setting. 

There is no statutory provision stating a specific prohibition against 
the use of undue or improper influence or pressure upon a Federal 
agency. However, in more extreme cases one's conduct could possibly 
result in an indictable offense. In 1970 a United States District Court 
sustained an indictment against two individuals, one a congressional 



=o Home Box Office v. F.C.C., 567 F. 2d 9 (1977), cert. den. 46 LW 3190 (1977); but see also Action For Chil- 
dren's Television v. F.C.C., 564 F. 2d 458 (1977). 

»i 5 U.S.C. § 551(14); see S. Rpt. 94-1178, supra at p. 29. 

" H. Rpt. No. 94-380, Part I, at pp. 20-21. 

*» Td. at 21-22. 

2 « Id. at 20-21; see S. Rpt. 94-354, supra at p. 37. 

25 Douglas, supra at d. 90. 

28 PUlsbury v. F.T.C., 354 F. 2d 952 (5th Cir. 1986): see also DC. Federation of Civic Associations v. Volpe, 
459 F. 2d 1231 (D.C. Cir. 1971), cert. den. 405 U.S. 1030 (1972). 



34 

aide, for conspiracy to defraud the United States concerning the 
exertion of "dishonest, unlawful, impaired and undue pressure and 
influence" upon Federal administrators. The court in the case of 
United States v. Sweig, 316 F. Supp. 1148 (1970), sustained count one 
of a grand jury indictment charging the defendants with a violation 
of the Federal conspiracy statute, 18 U.S.C. § 371. The indictment 
specifically charged that defendants conspired: 

with each other and with other persons to the grand jury 
known and unknown, to defraud the United States and 
agencies thereof, in connection with its lawful governmental 
functions hereinafter described, to wit: (a) its lawful function 
to have its business and affairs conducted honestly and im- 
partially as the same should be conducted, free from fraud, 
improper and undue influence, dishonesty, unlawful impair- 
ment and obstruction; (b) its lawful right to have its officers 
and employees, free to transact the official business of the 
United States unhindered, unhampered, unobstructed, unim- 
paired and undefeated by the exertion upon them of dis- 
honest, unlawful, impaired and undue pressure and influence. 

The indictment charged that defendants had misused the office and 
influence of the Speaker of the House and had pressured various 
Federal agencies and their employees by stating that they represented 
the Speaker, and the Speaker was personally interested in a certain 
matter pending before the agency. As stated by Count One of the 
Grand Jury indictment : 

: 5. Among the means by which defendants and their co- 
conspirators would carry out their unlawful purpose were the 
following : 

(a) The defendants, Nathan Voloshen and Martin Sweig 
would and did make telephone calls from the office of the 
Speaker of the House and elsewhere to various officers and 
employees of the United States of America expressing the 
interest of the office of the Speaker of the House in said 
matters pending before said agencies. 

(b) Nathan Voloshen and Martin Sweig the defendants, 
would and did visit personally the offices of various officers 
and employees of the United States of America and express 
the interest of the office of the Speaker of the House in said 
matters pending before said agencies. 

Nathan Voloshen pleaded guilty to one count of conspiracy and 
three counts of perjury. Martin Sweig, who, unlike Voloshen, was 
actually in the employ of the office of the Speaker, was acquitted by a 
jury on the "influence peddling" conspiracy charges, but was found 
guilty on one charge of perjury. As reported by the press on July 10, 
1970: 

The verdict was a personal triumph for defense counsel 
Smith, who argued that Sweig's efforts in contacting federal 
agencies were a customary practice on Capitol Hill and not 
unlawful even if the jurors might find the practice unfair. 27 



« See Washington Post, July 10, 1970, p. Al, 



35 

Earlier, the press had quoted Sweig's defense attorney concerning 
the Congressional ethics of intervening for individuals before a Federal 
agency : 

Congress has never made criminal the acts alleged against 
Sweig, says Smith. It would be presumptuous in the ex- 
treme and in clear violation of constitutional separation of 
powers for the judiciary to impose standards of conduct on 
legislative employees when the Congress has declined to 
do so. 28 

Congressional Standards. Although it may have been argued that 
there were no apparent congressional standards of conduct concerning 
contacts with agencies at the time of the alleged activities of Sweig 
and Voloshen, the House Standards of Official Conduct Committee 
issued an advisory opinion on January 26, 1,970, specifically setting 
guidelines and standards of conduct for communicating with executive 
and independent agencies of the Federal Government. The opinion 
basically states that an appropriate course of conduct would be to 
introduce an individual to an agency and arrange interviews and meet- 
ings for the individual; to provide a character reference for the 
individual or parties involved; and to urge prompt and fair considera- 
tion of the matter on the merits of the case. Inquiries as to the status 
of a proceeding or ruling may be directed to an agency or department, 
and reconsideration, arguably supported by an interpretation of Fed- 
eral law, regulation, or legislative intent, may be requested. If a 
Member has a strong feeling about a particular case, judgment' upon 
the merits of the case may be expressed or argued, subject, of course, 
to the prohibitions and restrictions on ex parte communications con- 
cerning formal agency proceedings. If arguments are presented, no 
direct or indirect threat of reprisal, or promise of favoritism or benefit 
should be suggested or inferred. 

The standards expressed by the Committee on Standards of Official 
Conduct state specifically as follows: 

REPRESENTATIONS 

This Committee is of the opinion that a Member of the 
House of Representatives, either on his own initiative or at 
the request of a petitioner, may properly communicate with 
an Executive or Independent Agency on any matter to: 
request information or a status report; 
urge prompt consideration; 
arrange for interviews or appointments; 
express judgment; 

call for reconsideration of an administrative response 
which he believes is not supported by established law, Fed- 
eral Regulation or legislative intent; 

perform any other service of a similar nature in this area 
compatible with the criteria hereinafter expressed in this 
Advisory Opinion. 



a Sen Washington Post, February 25, 1970, p. A 10. 



36 



PRINCIPLES TO BE OBSERVED 



The overall public interest, naturally, is primary to any 
individual matter and should be so considered. There are also 
self-evident standards of official conduct which Members 
should uphold with regard to these communications. The 
Committee believes the following to be basic : 

1. A Member's responsibility in this area is to all his 
constituents equally and should be pursued with diligence 
irrespective of political or other considerations. 

2. Direct or implied suggestion of either favoritism or re- 
prisal in advance of, or subsequent to, action taken by the 
agency contacted is unwarranted abuse of the representative 
role. 

3. A Member should make every effort to assure that 
representations made in his name by any staff employee con- 
form to his instruction. 29 

The Committee's Advisory Opinion noted as a "clear limitation" 
on representation, the acceptance of compensation for such service as 
prohibited at 18 U.S.C. §|J03. Additionally, it should be noted that 
after the issuance of the Aavisory Opinion another "clear limitation" 
has been enacted into law, that is, the prohibition on ex parte com- 
munications from interested persons to an agency concerning the 
merits of a matter subject to formal agency proceedings, as stated 
within 5 U.S.C. § 557(d). 

Recommendations for Employment in the Competitive Service. 
Members of Congress are often requested to recommend a constituent 
for employment in the Federal Government. The regulatory and stat- 
utory framework of the merit system does not work to prohibit the 
making of recommendations or referrals by a congressional office on 
behalf of a Federal job seeker. However, although such referrals may 
be made, the statutes and regulations relating to merit selection in 
the competitive service specifically prohibit a Federal officer with 
authority to appoint persons in the service from considering the 
political affiliation of an applicant in his decision to hire, 30 or from 
considering the recommendation made by a Member of Congress 
except as to the character or residency of the applicant. 31 

Employment in the competitive service of the Federal Government 
is intended to be based upon the "merit system." 32 Briefly, a register 
of eligibles is maintained by the Office of Personnel Management 
consisting of the names of all applicants who have qualified in examina- 
tions for competitive service. 33 in general, an appointing officer of an 
agency or department may exercise his own discretion to a great degree 
in choosing an "eligible" from the register to fill a vacancy within 
that agency. 34 The appointing officer, however, may exercise this 
discretion, and make his choice, solely on the basis of merit and fitness 
of the applicant. 35 Further, such discretion may not be exercised in an 
arbitrary or capricious manner. 36 

« House Committee on Standards of Official Conduct, Advisory Opinion No. 1, issued January 28, 1970. 
m See Executive Order No. 10577, section 4.2, see now 5 U.S.C. §2301, 5 U.S.C. § 2302(b) (1), (3), P.L. 
95-4.54. 
*i 5 U.S.C. § 3303; see also 5 U.S.C. § 2302(b)(2), P.L. 95-154. 
3- See 5 U.S.C. § 2301, P.L. 95-154. 
33 5 U.S.C. § 3313; see 5 U.S.C. § 3304. 
M5C.F.R. §330.101; 5 U.S.C. §3318. 
35 5C.F.R. §330.101,332.404. 
»« Blackman v. United States, 354 F. 2d 340 (1965). 



Compliance with the general regulations concerning appointments 
and selections into the Government service by an appointing officer 
would apparently rule out the selection of an applicant on a basis 
other than merit and fitness, such as on the basis of a personal recom- 
mendation by a Member of Congress. These regulations apparently 
do not, however, rule out the consideration of a "character reference" 
as one factor in determining the fitness of an applicant. Undue 
pressure or influence upon a hiring authority concerning a recommenda- 
tion or a referral may, however, entail an unlawful circumvention of 
the merit system. 

The statutory provision on congressional recommendations into the 
competitive service, 5 U.S.C. § 3303, states simply that "An individual 
concerned in examining an applicant for or appointing him in the com- 
petitive service may not receive or consider a recommendation of the 
applicant by a Senator or Representative, except as to the character 
or residence of the applicant." The effect of this statute on recom- 
mendations given by and received from congressional offices was 
summarized by the Civil Service Commission in its "Report on Alleged 
Political Influence in Personnel Actions at the General Services 
Administration", September, 1973: 

To put these findings and conclusions in proper perspective, 
it is necessary to understand that there is nothing wrong in 
the act of a member of Congress or any other' partisan source 
referring an individual to a Federal agency for possible 
employment. This is so whether the referred individual is 
Republican or Democrat, constituent or stranger, and regard- 
less whether referrer and referred are or are not members of 
the same political party. 5 U.S.C. 3303 states "An individual 
concerned in examining an applicant for or appointing him in 
the competitive service may not receive or consider a recom- 
mendation of the applicant by a Senator or Representative, 
except as to the character or residence of the applicant." 
This provision is not a ban on referrals, and actually antici- 
pates that referral will be made. What this statute restricts 
is not communications or referrals, but the reception the 
appointing official is free to give to referrals. Accordingly, the 
simple use of a political party label to condemn the otherwise 
innocent activities of the referrer who bears that label cannot 
be substituted for a demonstration that politics influenced 
or was intended to influence any of those activities. 

Recommendations for Employment in the Postal Service. Guide- 
lines have also been established by statute with respect to the selection 
of employees for the Postal Service. In addition to prohibiting the 
receipt or consideration of congressional recommendations as in the 
competitive service provisions, the Postal Service statute at 39 U.S.C. 
§ 1002 also prohibits Members of Congress from "making or trans- 
mitting" recommendations to the Postal Service other than statements 
as to the character or residence of the applicant, except upon the 
request of the Postal Service or upon request of an authorized repre- 
sentative of the Government for purposes of determining loyalty or 
character. 



38 

General Statutory Prohibitions. In regard to Federal employment 
or appointment, statutory law prohibits generally any candidate from 
promising the appointment or the use of his influence in appointing 
someone to any public or private post in return for the support of 
one's candidacy; 37 prohibits anyone from promising employment or 
other benefit, or special consideration in obtaining such employment 
or benefit provided for or made possible in whole or in part by an act 
of Congress, in return for political activity or support; 38 prohibits 
the denial or the threatening of any Federal employment or employ- 
ment made possible through Federal funds as a means of securing 
political contributions from any person; 39 and prohibits the receipt 
of anything of value in return for the promise of support or use of 
influence in obtaining someone a Federal post. 40 

"18U.S.C. §599. 

'«18U.S.C.§600. . - . . 

"18U.S.C.§601. 

"18U.S.C. §211. 



Chapter 5. THE FRANKING PRIVILEGE 

Highlight 

A Member's frank is to be used only to mail material relating to 
the official duties, activities, and business of a congressional office. 
The frank may be used for such items as: 
— constituent mail relating to public issues ; 
— press releases, newsletters, and questionnaires; 
— mail to other legislators or government bodies; 
— Federal publications, laws, regulations, the Congressional 
Record. 
The frank may not be used for such items as : 
— political or personal maij matter )•- ;•*' •/ 
— the solicitation of any funds ; ' " ; 

— holiday greeting cards, greetings from og reports on a Member's 
family. j; *• . • 

A Member's frank may not, be loaned to x any person or organization 
other than official congressional' "committees as authorized in the 
franking law. 

A Member's staff engaged in sending out mail matter should: 
— be familiar with the franking regulations issued by the House 

Commission on Congressional Mailing Standards; 
— seek advice and consultation on questions of frankability of 
mail matter from the Commission on Congressional Mailing 
Standards ; 
— submit a sample of proposed "postal patron" mail to the 
Commission on Congressional Mailing Standards for an advi- 
sory opinion; 
— Observe the restrictions on the timing, source of financing, 
number, and permissible geographical area covered concerning 
mass mailings and postal patron mailings. 

(39) 



Chapter 5. THE FRANKING PRIVILEGE 

Members of Congress, each of the elected officers of the House, and 
the Legislative Counsel of the House are authorized to send as 
"franked" mail, material relating to the official business, duties, 
and activities of their office. 1 The term "frank", which is derived from 
the latin word "francus" meaning "free", 2 denotes the autograph or 
facsimile signature of a person authorized to transmit matter through 
the mail without prepayment of postage. 3 

Criminal penalties are provided in the United States Code for 
misuse of the franking privilege, that is, for using a franked envelope 
or endorsement to avoid paying postage on a private letter or package. 4 
Additionally, a misuse of the frank of a Member by a staff employee 
may be imputed to the Member, 5 which may result in a complaint 
against the Member and/or the payment of restitution to the Treasury 
for the cost of an intentional or negligent improper use of the franking 
privilege. 6 

The House Commission on Congressional Mailing Standards, which 
is authorized to give advisory opinions on the frankability of mail 
matter, as well as to issue regulations and hear complaints on the 
franking privilege in the House, suggests that each Member of the 
House "assign a staff member familiar with the franking laws and 
regulations to supervise preparation of the mailing so that obvious 
violations of the franking laws are avoided before submitting the 
material for an advisoiy opinion." 7 As to the responsibilities of staff 
members concerning the franking privilege of a Member, the Com- 
mission on Congressional Mailing Standards has stated the following 
in its published regulations: 

RESPONSIBILITY OF MEMBER'S STAFF 

The actual determination of whether or not to send a 
particular piece of mail under a Member's frank probably 
will be made by his staff who prepare his mail for delivery. 
An improper use of the frank by a staff member, ranging 
from an inadvertent mistake or a willfull abuse on a single 
letter or a mass mailing, will be imputed to his Member, 
under most circumstances. To help avoid these violations of 
the franking law, with all of their resultant possible penalties 
and the reflections on the effective administration of his office, 
a Member should reasonably assure that his staff knows what 
kinds of mail are frankable by providing for the training 



139U.S.C. § 3210(b)(1). 

2 Black's Law Dietionery, 4th Ed. 1968, p. 787. 

3 39 U.S. C. §3201. 
* 18 U.S.C. § 1719. 

5 Regulations of the House Commission on Congressional Mailing Standards, Feb. 1979 (Hereinafter 
referred to as "Regulations"), Chapter 1, para. 8. 
9 Regulations, Chapter 2, para. 19. 
7 Franking Regulations, p. 23, Pursuant to Rule XLVI, Rules of the House, as Contained in H. Res. 287. 

(40) 



41 

a.nd supervision of these employees and their familiarization 
with these regulations. Members should encourage their staff, 
especially in the case of mass mailing, to consult with and seek 
the advice of the commission to the greatest extent possible. 8 

Authorization to Use the Frank. In addition to the grant of the 
franking privilege to Members of Congress, House officers, and the 
House Legislative Counsel, the surviving spouse of a Member, if the 
Member dies during his term of office, is authorized to use the frank 
for up to 180 days following the Member's death. 9 Members of Con- 
gress and others who have been granted the franking privilege may 
use the frank for 90 days following the date on which they leave 
office to close the official business of the congressional office. 10 

Material relating to the official business of a committee of the House 
may be sent under the frank of the chairman of the committee, the 
ranking minority member of the committee, subcommittee or congres- 
sional commission. 11 As noted in the regulations of the Commission on 
Congressional Mailing Standards, the authorization to use the franking 
privilege of a Member extends to "official" committees created by 
Congress and made up exclusively of Members, but does not extend 
to "informal" or "ad hoc" groups of Members, "whose business 
relates to political, party policy, or special interest matters." 12 

The franking law specifically prohibits the loaning of a Member's 
frank to any group, organization, or person ether than the official 
congressional committees noted above or the Republican conference 
or Democratic caucus of the House. 13 The regulations on the frank 
also note, under the rules concerning the prohibition of loaning of the 
frank, that there is no authorization for providing a franked envelope 
to members of the public for return mail to a Member or committee 
of Congress. 14 

General Standards of Frankability. Basically, the congressional 
franking privilege is available only for the transmittal of material of 
an official legislative nature, and material which is purely personal or 
political may not be sent under the frank of the Member or congres- 
sional officer. The franking statute expresses Congress' intent to allow 
mail matter to be sent under the frank which concerns "the official 
business, activities, and duties of the Congress", entailing all matters 
which "directly or indirectly pertain to the legislative process or to any 
congressional representative functions generally." 15 

The franking law and the regulations promulgated under it by 
the Commission on Congressional Mailing Standards note that the 
usual and customary newsletter, news release, or questionnaire, 
relating to official activities or public issues, are those types of items 
which may be sent under the franking privilege. The regulations of the 
Commission go into some detail on guidelines and requirements as to 
the permissible contents of newsletters and news releases. The regula- 
tions caution Members, for example, on the excessive use of per- 
sonally phrased references (Member's name, "I", "me", "the Con- 
gressman") in newsletters and other mass mailings, recommending 

8 Regulations, Chapter 1, para. 8. 

9 39 U.S.C. §3218. 

i»39 U.S.C. 13210(b)(3). 

11 Regulations, Chapter 1, para. 4. 

« Id. 

'3 39 U.S.C. §3215. 

M Regulations, Chapter 1, para. 5. 

'=39 U.S.C. § 3210(a)(2). 



42 

that such phrases generally be limited to an average of eight times in 
the text of a page. 16 The regulations further provide guidelines on the 
permissible number and size of pictures or sketches of the Member in 
newsletters, releases, meeting notices or other mass mailings, stating 
that a photograph may be part of the masthead of a mailer, but that it 
should not cover more than 6 percent of the page, up to a maximum of 
six square inches. 17 Further, the regulations provide that newsletters 
should contain not more than two pictures on any one page, not 
exceeding 20 percent of the page, 18 and that the pictures should relate 
to the text of the material rather than merely to advertise the 
Member. 19 

The Commission's regulations provide examples of items which are 
frankable (voting records, Member's positions, itineraries, statements 
of financial disclosure) and those which are non-frankable (auto- 
biographical material, political material such as references to future or 
past campaigns, announcements of filing for reelection, campaign 
schedules, or personal reports of a Member or his family) in a news- 
letter or news release. 20 

In addition to the mailing of official material relating to congres- 
sional business or public concerns under the frank, the laws and regu- 
lations note that biographical material or pictures of the Member may 
be sent under the frank when specifically requested, or when part of a 
Federal publication. 21 Non-partisan voting information may also be 
sent under the frank. 22 Another common item which may be sent under 
the frank is congratulations on an achievement or condolences. 23 
However, holiday greetings are specifically prohibited from being 
sent as franked mail. 24 It should be noted that legislation is pending 
in the 96th Congress that would eliminate the specific authorization 
to send under the frank mail expressing condolences or congratulations. 

Summary of Guidelines Under the Frank. Following is a summary 
listing of those items noted in the franking statutes as examples of 
either frankable on non-frankable mail matter. 25 As noted above, the 
regulations promulgated by the Commission on Congressional Mailing 
Standards have established detailed requirements and guidelines 
concerning some of the items listed below, and have provided examples 
of permissible or non-permissible items under the various headings. 

FRANKABLE MAIL MATTER 

1. Mail to any person and to any government agency relating to 
matters and programs of public concern and Congressional actions 
(39 U.S.C. § 3210(a) (3) [A]). 

2. Newsletters and press releases dealing with the impact of laws 
on governments and the public, official action of Members, discus- 
sions of proposed or pending legislation, and positions of Members 
on, and arguments for and against such matters (39 U.S.C. § 3210 
(a)(3)[B]); see regulations of Commission on Congressional Mailing 
Standards for examples of frankable and non-frankable items in 

'« Regulations, Chapter 2, para. 4. 

17 Regulations, Chapter 2, para. 4(c). 

is Id. 

i»Id. 

20 Regulations, Chapter 2, para. 4(b). 

si 39 U.S.C. § 3210(a) (3) (J). 

22 39 U.S.C. § 3210(a)(3)(H). 

23 29 U.S.C. § 3210(a)(3)(F). 
2*39 U.S.C. §3210(a)(5)(iii). 

2 « See H. Rpt. No. 93-98, 93d Congress, 1st Session. 



43 

newsletters, guidelines on use of personal references to the Membe- 
and pictures or sketches of Member in newsletters). 

3. Questionnaires seeking public opinion (39 U.S.C. § 3210(a)(3)[C]). 

4. Mail between a Member's various Congressional offices (39 
U.S.C. §3210(a)(3)[D]). 

5. Mail to other Members of Congress and all other legislators 
(39 U.S.C. §3210(a)(3)[E]). 

6. Mail expressing condolences or congratulations to a person who 
achieved some personal or public distinction (39 U.S.C. § 3210(a) 

(3)[F1). 

7. Mail consisting of Federal regulations, or other publications 
containing general information (39 U.S.C. § 3210(a) (3)[G]). 

8. Mail containing non-partisan voter registration or election 
information (39 U.S.C. § 3210(a) (3) [HJ). 

9. Mail containing biographical material in Federal publications 
or in response to specific requests and not included in newsletters or 
other mass mailings (39 U.S.C. § 3210(a) (3)[I]). 

10. Mail consisting of pictures in Federal publications or in response 
to a specific request therefor, and, if in a newsletter, not of such size 
and frequency which would advertise the Member rather than to 
illustrate the accompanying text (39 U.S.C. § 3210(a) (3) [J]); see 
regulations of Commission on Congressional Mailing Standards as to 
guidelines and requirements for pictures and sketches of Member in 

11. The Congressional Kecord (39 U.S.C. § 3212a). 

12. Excerpts from the Congressional Record if such material in- 
dependently meets the test of frankability (39 U.S.C. § 3212b). 

13. Mailgrams, if the contents meet the test of frankability . (39 
U.S.C. §3219). 

14. Reprints, copies, reproductions, facsimiles or recordings of 
frankable matter may be sent under the frank (39 U.S.C. § 3210(c)). 

15. Public documents printed at the order of Congress (39 U.S.C. 
§3211). 

16. Seeds and agricultural reports (39 U.S.C. § 3213). 

NONFRANKABLE MAIL MATTER 

1. Mail matter containing laudatory and complimentary articles or 
texts concerning Members on a personal basis rather than based on 
official duties or activities of a Member (39 U.S.C. § 3210(a) (5)[AJ). 

2. Mail matter containing greetings from a Member's family (39 
U.S.C. § 3210(a) (5) (B)[ij). 

3. Any card expressing holiday greetings (39 U.S.C. § 3210(a) 
(5)(B)[iii]). 

4. Mail matter containing reports of a Member or his family's 
activities other than in connection with official functions and activities 
of the Member (39 U.S.C. § 3210(a) (5) (B)[ii]). 

5. Mail matter containing solicitations for political support for the 
sender or any person or party or a vote or financial assistance for any 
candidate (39 U.S.C. § 3210(a) (5)[C]); see regulations of the Com- 
mission on Congressional Mailing Standards concerning references to 
upcoming campaigns, filings for reelection, expressions of gratitude for 
election, etc. as nonfrankable items in newsletter or news releases. 

6. Mail matter which is purely personal to the sender or to any other 
person (39 U.S.C. § 3210(a)[4]). 

7. Any solicitations of funds. (2 U.S.C. § 439b). 



44 

Mass Mailing. Special requirements and regulations are applicable 
to franked mailings which are to be sent out in a "mass mailing." The 
term "mass mailing" is defined to mean a mailing of 500 or more pieces 
which are substantially identical in content. 26 

Rules of the House of Representatives require that the cost of 
preparing and printing a mass mailing may be defrayed only from 
appropriated funds. 27 The House Rule also restricts the sending of 
franked mass mailings by a Member who is a candidate for a state- 
wide office only into the area constituting the congressional district 
from which the Member was elected. 28 

Restrictions are also in effect concerning the timing of mass mailings 
under the frank. The Rules of the House of Representatives now 
prohibit the sending of any mass mailings under the frank during the 
sixty days immediately before any primary or general election in which 
the Member making the mailing is a candidate. 29 

Postal Patron Mail. Mass mailings are often sent out under a 
simplified form of address which is known as postal patron mail. When 
a postal patron mailing is made under the frank, such mailing may be 
sent only into the congressional district from which the Member was 
elected, or into a congressional district which has been redistricted by a 
legislative body or by judicial decision, so long as some portion of the 
old district from which a Member was elected is included in the new 
district. 30 

Additional restrictions have been placed upon franked postal 
patron mailings by the Rules of the House of Representatives. Under 
the House Rules, a Member is restricted in the amount of mail he may 
send under the frank with a simplified form of address. The total 
number of pieces which may be franked in this form during a calendar 
year cannot exceed an amount equal to six times the number of 
addresses to which such mail may be delivered in the area from which 
the Member was elected. 31 Exceptions are made to this limit for notices 
of appearances or a scheduled itinerary of -a Member in the district 
(but not appearances of staff employees only). Such notices or itinerar- 
ies will not be counted against a Member's limit for postal patron 
mailing. 32 

Finally, before a postal patron mailing is made, the House Rules 
require that a sample or description of the material to be mailed be 
submitted to the Commission on Congressional Mailing Standards 
for an advisory opinion and determination on the frankability of the 
material. 33 

Commission on Congressional Mailing Standards. The revision of 
the franking laws passed in 1973 established the Commission on Cong- 
gressional Mailing Standards in the House. 34 This Commission is 
available to staff for questions and consultation concerning the frank- 
ing privilege, and is authorized to give advisory opinions concerning 
the frankability of particular mail matter. 35 In fact, the Rules of the 

2«39U.S.C. § 3210(a)(5)(D). 
=' House Rule XLVI(4). 
^ House RuleXLVI(5). 
2« House Rule XLVI(6). 
3»39 U.S.C. § 3210(d). 
3' House RuleXLVI(2). 

32 Id. 

33 House RuleXLVI(3). 
3< P.L. 93-191, Sec. 5(a). 
35 P. L. 93-191, Sec. 5(d). 



45 

House of Representatives presently require, as noted above, that 
before any "postal partron" mailing is made into a congressional dis- 
trict, a sample or description of the material to be mailed must be 
submitted to the Commission for an advisory opinion on the frank- 
ability of the material. 

The Commission on Congressional Mailing Standards has issued 
regulations on the use of the frank in the House. These regulations go 
into detail concerning the guidelines and requirements for franked 
mail and provide examples of permissible or impermissible items or 
mailings, citing and summarizing decisions and advisory opinions of 
the Commission. The "Regulations on the Use of the Congressional 
Frank by Members of House of Representatives" are available from 
the Commission and should be examined and consulted by congres- 
sional employees involved in mailing material under the franking 
privilege. 

Complaints on abuses of the franking privilege are to be made to 
the Commission for investigation and possible hearing on the matter. 39 
The franking statute provides that no court may entertain a civil suit 
on abuses of the frank except as judicial review of the decisions of the 
House Commission on Congressional Mailing Standards. 37 

*> P.L. 93-191, Sec. 5(e). 



Chapter 6. GIFTS, ENTERTAINMENT, AND FAVORS 

Highlight 

Members and employees of the House may not: 
—receive gifts totalling over $100 in a year from anyone, such as 
.a lobbyist, who has a direct interest in legislation before. Con- 
gress, or from a foreign national or his agent. Gifts of over $35 
will be included for the aggregate yearly limit; 
. .-—receive any gift from a foreign government, unless it is a souve- 
nir or mark of courtesy of minimal value ($100 or less), or 
meets other special circumstances approved by the Congress; 
. — receive favors or benefits in circumstances that might raise 
.,. suspicions and create the appearance of influencing the per- 
formance of official duties; 
— rreceiye any bribe, that is, anything of value in return for being 
influenced in, or as a reward for, performing official duties. 
Members of the House may not treat receipts from fundraisers or 
testimonials as unrestricted personal gifts ; but rather must treat such 
receipts as campaign contributions which may not be used for personal 
or official congressional purposes. 

Members and employees of the House have generally been cau- 
tioned to: 

— be wary of any gifts, entertainment, or favors offered to them 
by persons who are not relatives, or personal friends, but which 
are apparently offered solely because of one's employment or 
position in the Congress; 
— be aware of the identity of any gift giver, his relationship to 
the Member or any official business, and his possible motives; 
— be particularly cautious concerning the receipt of gifts over 
$35 in value, or gifts from any one source during a year which 
total over $100 in value. 
Members and certain House employees must: 

—file annual financial disclosure reports which will reveal the 
source and value of certain gifts received over specified amounts 
by the employee, his spouse and dependent children. 

(47) 



Chapter 6. GIFTS, ENTERTAINMENT, AND FAVORS 

Considering the representative nature of congressional office, it is 
natural that pressures and influences will be exerted upon Members 
and employees of Congress by concerned constitutents and interest 
groups exercising their powers of political persuasion, explanation, 
or argument on the merits of an issue to further a particular cause or 
concern. Aside from such legitimate pressures from persuasion, argu- 
ment and political realities, however, there are types of conduct and 
activities tending to influence governmental officers or employees 
which raise serious ethical and legal questions. Such suspect activities 
include the bestowing of gifts, entertainment, and special favors upon 
governmental decision-makers and their advisors by those with special 
interests in governmental decisions. Ethical problems may be en- 
countered in these situations even when the tender or receipt of things 
of value would not rise to the level of a technical "bribe" under Federal 
statutory law. 

In a committee print entitled "Ethical Standards in Government", 
a Senate subcommittee headed by the late Senator Paul H. Douglas, 
in 1951, discussed general ethical considerations concerning the pro- 
priety of the receipt of gifts by public officials : 

The line between the proper and improper begins to be less 
certain when one looks for a consensus of opinion as to favors, 
gifts, gratuities, and services. The exchanging of gifts and 
favors is reported to be rather general in the business com- 
munity. What is it proper to offer public officials and what 
is it proper for them to receive? A cigar, a box of candy, a 
modest lunch (usually to continue discussing unfinished 
business)? Is anyone of these improper? It is difficult to 
believe so. They are usually a courteous gesture, an expres- 
sion of good will, or a simple convenience, symbolic rather 
than intrinsically significant. Normally they are not taken 
seriously by the giver nor do they mean very much to the 
receiver. At the point at which they do begin to mean some- 
thing, however, do they not become improper? Even small 
gratuities can be significant if they are repeated and come 
to be expected. But here, too, convention must be con- 
sidered : gifts to school teachers a^e now generally forbidden 
by law, but a Christmastime present for the postman, usually 
on engraved green paper, is almost as well established as 
holly. 

Expensive gifts, lavish or frequent entertainment, paying 
hotel or travel costs, valuable services, inside advice as to 
investments, discounts and allowances in purchasing are in an 
entirely different category. They are clearly improper. On 
this, there is substantial agreement in the governmental 
community, and any one who thinks them proper must have 

(48) 



49 

already lost his perspective. The difficulty comes in drawing 
the line between the innocent or proper and that which is 
designing or improper. At the moment a doubt arises as to 
propriety, the line should be drawn. Innocence is perhaps lost 
when one is conscious that it exists. 1 

Congress has recognized the general premise that "public office 
is a public trust." 2 Members of Congress thus hold office to represent 
the interests of the "beneficiaries" of their trust, that is, the general 
public whom they were elected to serve. Similarly, Government 
employees, such as employees of the House, paid from funds of the 
United States Treasury, are retained to represent the interests of 
the general public rather than personal, private or special interests. 
As. public servants, Members of Congress and congressional employees 
are expected to exercise impartial judgment in performing their public 
duties. 3 The receipt of gifts, entertainment, favors and things of 
value by Members or employees of Congress from certain persons or 
special interests may interfere with the impartial judgment and per- 
formance of official duties, and may derogate from that public trust 
inherent in a Government position, in two fundamental ways. 

Initially, a gift to a Member or an employee may create a conflict 
of interest for the recipient. This may be the case of a gift of stocks 
or othei interests in a business to the Member or employee or to the 
Member's or employee's spouse or dependent children, or the sale of 
stock to such persons at discount or bargain prices. When matters 
affecting the donor's business or industry arise in an official capacity, 
the recipient Member or employee may then be favorabty influenced 
in his official conduct towards that industry because of his personal 
financial holdings. As noted in a study of congressional ethics: "The 
giver's purpose is usually to create a situation in which the Member 
has a personal economic stake in common with the giver. Self-interest 
can then take its course." 4 

This type of ethical problem in gift giving and receiving was the 
basis for an early congressional scandal when stocks of the Credit 
Mobilier Corporation were distributed at considerably below market 
value to several congressmen during the 1860's. The major congres- 
sional participants in the scheme were subject to disciplinary pro- 
ceedings in the Congress. 5 

The receipt of gifts by Members or employees of Congress raises 
another ethical problem because of the normal sense of gratitude and 
appreciation in the recipient of a gift, and the expectations of favorable 
treatment or consideration which may arise in the giver. This is the 
more common ethical problem in gift giving and may arise with even 
token gifts, favors or entertainment, particularly those that are given 
with some frequency or regularity. Even when no immediate or 
specific "quid pro quo" is sought by a gift giver, the sense of gratitude 
or appreciation in the recipient-Member or employee may pre-dispose 
him to act more favorably towards the gift giver in some future 

1 Report of a Subcommittee of the Committee on Labor and Public Welfare, United States Senate, 82d 
Congress, 1st Session, "Ethical Standards in Government", p. 23. 

2 72 Stat, part 2, p. B 12, H. Con. Res. 175, July 11, 1958, "Code of Ethics for Government Service." 

8 Id. at para. 5; see also United States v. PodeU, 436 F. Supp. 1039, 1042 (S.D.N.Y. 1977), affd 572 F. 2d 3 
(2d Cir. 1978). 

4 "Congress and the Public Trust," Association of the Bar of the City of New York, James C Kirby, Jr., 
Executive Director, New York 1970, p. 179. 

5 See: House of Representatives Exclusion, Censure and Expulsion Cases from 1789 to 1973, Committee 
Print prepared for the Joint Committee on Congressional Operations, 93rd Congress, 1st Session, pp. 
123-125. 



50 

situation or be influenced by a sense of obligation or loyalty to his 
"benefactors" and "friends" who have done him favors. 6 

Regardless of any actual corruption or undue influence upon a 
Member or employee of Congress, the receipt of gifts, entertainment, 
or special favors by Members or staff from private or special interests 
may affect the public confidence in the integrity of the institution 
of the Congress as a whole, and in government in general, as well as 
the integrity of the individual Member involved. Legitimate concerns 
of partiality or favoritism, or abuse of one's public position or in- 
fluence,, may be raised by constitu tents who discover that a Member 
or his staff has been given expensive gifts by lobbyists or other rep- 
resentatives of special interests. 

Members and employees of the House have thus been cautioned to 
exercise discretion concerning the receipt or acceptance of any gifts, 
favors and entertainment from persons who are not family members 
or personal friends, particularly from those persons representing 
special interests. It has been suggested that recipients of gifts be par- 
ticularly sensitive to, and cognizant of, various factors concerning 
gifts or entertainment, such as the source and value of the gift, the 
frequency of gifts from that source, the relationship of the gift giver 
to the Member, committee, or to any official business or legislation 
pending, and the possible motives of the donor of the gift. The Select 
Committee on Ethics in the 95th Congress emphasized in an advisory 
opinion that Members and employees should be "alerted to the need 
to exercise care ... in accepting gifts from all sources." 7 

In addition to the general ethical problems raised by gift giving as 
discussed above, specific rules and restrictions on the receipt of gifts 
and entertainment by Members and employees of the House are in 
force. 

Gifts From Lobbyists, Persons With Direct Interest in Legislation, 
and Foreign Nationals. Taking into consideration the ethical problems 
arising from the receipt of gifts by Members and employees, the 
House of Representatives has promulgated rules establishing clear 
limitations on certain gifts. The House Rules at Rule XLIII(4), 
presently prohibit Members and employees from receiving gifts 
aggregating $100 or more a year from lobbyists or others with direct 
interest in legislation before Congress, or from a foreign national or 
agent of a foreign national. Gifts of $35 or less, or gifts of personal 
hospitality of an individual are not included in the $100 aggregate, 
and gifts from relatives are excluded from the prohibition. 

Exemptions stated in Rule. — The report by the Commission on 
Administrative Review (popularly known as the Obey Commission) 
in recommending changes in the Code of Official Conduct of the House 
Rules in the 95th Congress, noted that such exemptions in Rule 
XLIII(4) were provided to "identify items which do not cause con- 
flicts of interest and/or which impose unreasonably stringent limita- 
tions if not excluded." 8 As noted in the debate preceding the enact- 
ment of the amendments to the House Rules in the 95th Congress 
(H. Res. 287), gifts valued at $35 or less will not be counted toward the 
$100 aggregate. 9 One of the predominant reasons for providing the $35 

9 See discussion in "Ethics in Government," by Paul H. Douglas, Cambridge, 1952, pp. 48-49. 

7 House Select Committee on Ethics, Advisory Opinion No. 10, May 11, 1977, p. 3. 

8 House Doc. No. 95-73, 95th Congress, 1st Session, "Financial Ethics", p. 14; see also House Select Com- 
mittee on Ethics, 95th Congress, Advisory Opinion No. 9, May 11, 1977, p. 2. 

9 Congressional Record, March 2, 1977, H. 1578 (daily ed.). 



51 

exemption was apparently to relieve a Member of the responsibility 
and burden of accounting for his specific "share" of an event, attribut- 
able to him, when attending such events as House receptions and 
the like. 10 

As to the "personal hospitality" exemption, the Report of the 
Commission on Administrative Review stated : 

In this regard, it should be noted once again that the 
Commission understands personal hospitality to mean 
hospitality extended for a non-business purpose by an 
individual, not a corporation or organization, on property 
or facilities owned by that individual or his family." 

During the debate on H. Res. 287, 95th Congress, it was expressed that 
the personal hospitality exemption applied to things such as dinner 
(exceeding $35) in an individual's own home, but not if the individual 
took the Member or employee to dinner at a restaurant. 12 (If a dinner 
were valued at $35 or less, even if the Member or employee were taken 
to a restaurant, such gift would be exempt from the Rule under the 
$35 exclusion.) Further, it was intended that the "personal hospitality" 
exemption would not apply if the individual providing the personal 
hospitality were being reimbursed by a corporation or an organiza- 
tion. 13 Questions arose during the debate as to how a Member would 
know whether an individual were being reimbursed or receiving com- 
pensation for such hospitality from a corporation or an interest group. 
The reply was made that a Member must "exercise due care" in 
receiving gifts of personal hospitality from those who have, or who 
represent those who have, an interest in legislation before Congress. 14 

Persons with direct interest in legislation. — The prohibition on gifts 
in Rule XLIII(4) goes to those gifts "from any person (other than a 
relative) having a direct interest in legislation before the Congress or 
who is a foreign national." The Rule notes that such "interested" 
persons include registered lobbyists, officers or directors of registered 
lobby groups, and employees of registered lobby groups who attempt 
to influence legislation before Congress. Both the debate preceding the 
enactment of H. Res. 287, and the report by the Commission on 
Administrative Review, made clear that the inclusion of "lobbyists" 
and officers and directors of lobby organizations within the Rule as 
those deemed to have a "direct interest" in legislation, was not 
intended to be an all-inclusive, limiting definition of that term. 15 

Thus, pursuant to its authority under H. Res. 383, 95th Congress, 
to issue advisory opinions on the amended Code of Official Conduct, 
the Select Committee on Ethics in an advisory opinion found that 
any person, group or organization which hires a lobbyist would be an 
"interested" person; and that any corporation, labor organization, or 
other group which maintains a separate segregated fund for political 
purposes, known as a political action committee, and the affiliates, 

10 Congressional Record, supra at H. 1577, remarks by Congressman Obey; see also Advisory Opinion 
No. 9, supra at p. 2. 
" House Doc. No. 95-73, supra at p. 14. 
12 Congressional Record, supra at H. 1578. 
>»Id. 

14 Id., remarks by Representative Brown and Hamilton. 

15 Congressional Record, supra at 1615. 



52 

and officers or directors of such organizations, would be considered 
to be persons with a direct interest in legislation before the Congress. 16 
As a general rule concerning "interested" persons, the Select Ethics 
Committee was of the opinion that to conform to this House Rule, 
Members of the House should not accept gifts aggregating over $100 
from "any individual or organization which the Member or employee 
knows has a distinct or special interest in influencing or affecting the 
federal legislative process which sets such individual or organization 
apart, from the general public." 17 Thus, for example, the Select Com- 
mittee in an earlier advisory opinion found that airline carriers, since 
they are regulated by the Federal Government, are considered to have 
a direct interest in legislation before the Congress. 18 In summing up, 
the Select Committee emphasized the need for Members and employees 
to exercise care in accepting gifts from all sources. 19 

However, in its final report, the Select Committee also stated that if 
the Member does not believe that the donor of the gift has a direct 
interest in legislation, as so defined, then he should feel free to accept 
such gifts. The Select Committee emphasized that "the gifts limita- 
tion is not intended to interrupt or interfere with normal social 
relationships," and noted that gifts over $100 would be subject to 
disclosure requirements. 20 

Items not included as gifts. — Since the limitation in House Rule 
XLIII(4) is upon "gifts", this restriction would apparently not apply 
to compensation received for "services rendered." The Select Commit- 
tee in another advisory opinion found, for example, that as for trans- 
portation, food, and lodging expenses for a Member or employee and 
the Member's or employee's spouse in connection with a conference or 
similar event, such expenses would not be considered "gifts" if the 
Member or employee substantially participated in the conference and 
performed services to the extent that such services constituted "equal 
consideration" for the expense received. 21 Additionally, the Select 
Committee, in its final report, noted that the payment of travel ex- 
penses and waiver of an entrance fee for a Member of the House to 
participate in celebrity or Pro-Am golf tournaments would not be 
considered a gift to the Member "since the Member is, in effect, render- 
ing a service on behalf of the foundation sponsoring the tournament." 22 

It should be noted that in a later opinion the Select Committee found 
that necessary expenses (not entertainment) for a "fact-finding" tour, 
even when no services were rendered by an employee or Member, might 
not be a prohibited gift when the narrowly defined "fact-finding event" 
is "directly related to official duties", and is not for the personal plea- 
sure or entertainment of the employee or Member, but rather to allow 
them "to become better informed regarding subject matters closely 
related to their official duties" * The Select Committee noted in this 
opinion that a "fact-finding" event for educational purposes might in- 

18 House Select Committee on Ethics, Advisory Opinion No. 10, May 11, 1977. 

"Id. 

18 House Select Committee on Ethics, Advisory Opinion No. 3, April 6, 1977. 

" Advisory Opinion No. 10, supra. 

20 House Report No. 95-1837, 95th Congress, 2nd Session, Final Report of the Select Committee on Ethics, 
P. 11. 

21 House Select Committee on Ethics, Advisory Opinion No. 2, April 6, 1977. 

22 House Report 95-1837, 95th Congress, 2d Session, Final Report of the Select Committee on Ethics, p. 9. 

23 House Select Committee on Ethics, Advisory Opinion No. 8, May 11, 1977. 23. Id. at p. 1. 



53 

elude such items as an oil company sponsoring "an inspection tour of its 
off shore oil drilling platform," a lumber compan}^ arranging "a demon- 
stration of new logging methods in a remote area", or a foreign founda- 
tion inviting Members to attend a program "designed to promote better 
understanding and improve U.S. relations with that country." 2i The 
Select Committee emphasized, however, that the term "fact-finding" 
event is intended to be interpreted narrowly in the "spirit" of the 
House Rules and thus would not cover such things as "free transporta- 
tion on a corporate jet or commercial flight from Washington to [a 
Member's] district, on grounds that he would 'tour' the corporate 
facilities there" (since Members are provided official travel allowances 
to their own districts) ; "travel expenses provided by representatives 
of the maritime industry to attend a ship-launching"; 25 or inaugural 
flights of airlines. 26 The Select Committee also noted that the expenses 
of a Member's or employee's spouse in an overseas "fact-finding" 
event may properly be accepted under this opinion since it may be 
desirable for a spouse to attend such a function for protocol and 
diplomatic reasons. However, the acceptance of expenses of a Mem- 
ber's or employee's spouse for a domestic "fact-finding" tour would 
probably not be permissible under the exclusions allowed in the Select 
Committee's advisory opinion. 27 

The House Select Committee defined generally the term "gift" for 
purposes of the House Rule, and provided general exceptions as to 
what items would not be considered gifts for purposes of the pro- 
hibition in Rule XLIII (4). The summary of the Committee's opinion, 
as amended in its final report follows : 

For purposes of Rule XLIII, clause 4, a gift is defined as follows: 

A payment, subscription, advance, forbearance, render- 
ing, or deposit of money, services, or anything of value, in- 
cluding food, lodging, transportation, or entertainment, and 
reimbursement for other than necessary expenses, unless con- 
sideration of equal or greater value is received by the donor. 

The Select Committee found, based on the language of new Rule 
XLIII, clause 4, the Rule's legislative history, the absence of conflict 
of interest issues, and/or public policy considerations, that the follow- 
ing items are not gifts for purposes of Rule XLIII, clause 4 : 

(1) Bequests and other forms of inheritance; 

(2) Loans made in a commercially reasonable manner (includ- 
ing requirements that the loan be repaid and that a reasonable 
rate of interest be paid) ; 

(3) Political contributions as defined by the Federal Election 
Commission and otherwise reported as required by law ; 

(4) Food, lodging, transportation, and entertainment provided 
on an official basis by federal, state, and local governments or 
political subdivisions thereof; 

(5) Food, lodging, transportation, and entertainment provided 
by a foreign government within a foreign country; 

2 « Id. at p. 1. 

"Id. at p. 3. 

M House Select Committee on Ethics, Advisory Opinion No. 3, April 6, 1977. 

27 Advisory Opinion No. 8, supra at p. 2. 



54 

(6) Communications to a Member's offices in Washington and 
his district, including subscriptions to newspapers, magazines, 
and other periodicals; 

(7) Bona fide awards presented in recognition of public service 
and available to the general public; 

(8) Suitable mementos of a function honoring the Member, 
officer, or employee ; 

(9) Consumable products provided by home-state businesses 
to a Member's office that are primarily intended for consumption 
by persons other than the Member and his staff; 

(10) Food and beverages consumed at banquets, receptions or 
similar events. 28 

Valuation of certain gifts. — The House Select Committee on Ethics 
of the 95th Congress noted in its final report certain guidelines for the 
valuation of some gifts which might be offered to Members and staff. 
The Committee noted that the gift of a ticket to a political fund- 
raising dinner (such as a $500-per plate fundraiser), should be valued 
at the cost of the dinner rather than the cost of the ticket to the pur- 
chaser. The Committee also found that the value of a courtesy pass 
to an amusement park would be determined by the number of times 
the pass was actually used. Similarly, the Committee noted that an 
honorary membership to a country club is valued according to the 
actual use. Thus, if the membership were never used, it would have 
no value. However, if the Member or employee and their family 
regularly enjoyed the benefits of the country club, the membership 
gift would be valued at the rate of normal dues to that club On the 
other hand, however, a gift of a season ticket to an athletic event or 
the theatre is valued at the cost of the tickets, regardless if actually 
used, "since it is readily transferable." 29 

Gifts to spouse or dependents. — House Rule XLIII(4) prohibits 
Members from receiving gifts from "interested" persons or foreign 
nationals either "directly or indirectly." The Select Committee on 
Ethics noted that although the term "indirectly" may apply to gifts 
from agents of those persons who would be prohibited from giving 
directly to employees and Members, such term refers mainly to 
gifts to the spouse or dependents of a Member or an employee. 
The Select Committee noted that, generally, gifts to a spouse or 
dependent of a Member or employee would be considered an 
"indirect" gift to that Member or employee. However, when 
circumstances make it clear that a gift is truly independent of 
a spouse's or dependent's relationship to the Member or employee, 
then such a gift will not be considered a gift to the Member or 
employee under House Rule XLIII(4). 30 The Committee also found 
in this opinion that simultaneous gifts such as dinner or reception 
invitations to a Member and his spouse and dependents should be 
treated as separate gifts, and need not be aggregated for purposes of 
the $35 exclusion or the $100 maximum within Rule XLIII(4). Thus, 
for example, dinner invitations valued at approximately $20 each 
extended to a Member and his spouse, would be considered two $20 
gifts (thus falling under the $35 exemption), rather than one $40 gift. 

Gifts From Foreign Governments. Members and employees of 
Congress are prohibited by the provisions of the United States 
Constitution (at Article I, Sec. 9, clause, 8), from receiving a gift or 

28 House Select Committee on Ethics, 95th Congress, Advisory Opinion No. 7, May 9, 1977. 

29 House Report 95-1837, supra at p. 9. 

30 House Select Committee on Ethics, 95th Congress, Advisory Opinion No. 9, May 11, 1977. 



55 

"present * * * of any kind whatever" from a foreign state or a repre- 
sentative of a foreign government without the consent of the Congress. 
Congress has consented, in the form of the Foreign Gifts and Decora- 
tions Act, 31 to the acceptance of gifts from foreign governments of 
minimal value 32 ($100 or less) when tendered as a souvenir or mark 
of courtesy, and other gifts from foreign governments under special 
circumstances. 

In addition to gifts of minimal value, the Foreign Gifts and Decora- 
tions Act allows the acceptance (but not the retention) of a gift of more 
than minimal value when refusal of the gift would cause offense or 
embarrassment or otherwise adversely affect United States foreign 
relations. 33 Such gifts, however, within 60 days after acceptance, must 
be turned over to the United States for use or disposal. 34 Additionally, 
a Member or employee may accept gifts from foreign governments in 
the form of educational scholarship or medical treatment ; 35 in connec- 
tion with an approved cultural exchange program; 36 and may accept 
payments for foreign travel expenses outside of the United States 
when in the interest of the United States and approved by the House 
Committee on Standards of Official Conduct. 37 

The Committee on Standards of Official Conduct has issued regu- 
lations concerning the prohibited and permissible receipt of gifts from 
foreign governments by Members, officers, and employees of the 
House. 38 Concerning travel or expenses for travel outside of the United 
States, the Committee has approved the acceptance of such travel or 
expenses when it relates "directly to the official duties of the Member, 
officer, or employee." 39 The regulations allow the acceptance of the 
gift of travel or expenses by the spouse or dependent of the Member 
or employee (which would otherwise have been prohibited under the 
provisions of the Foreign Gifts and Decorations Act) when accom- 
panying such Member or employee on a trip. The committee regula- 
tions specifically note, however, that travel or expenses for travel 
"may not be accepted merely for the personal benefit, pleasure, 
enjoyment or financial enrichment of the individual or individuals 
involved." Any gift of travel or travel expenses accepted by a Member 
or employee must be disclosed in a disclosure statement within 30 days 
after acceptance, and tangible gifts of more than minimal value must 
be disclosed at the time of deposit of such gift with the Government. 

Fundraisers and Testimonials. The Rules of the House, at Rule 
XLIII(7), now provide that any proceeds from testimonial dinners or 
other fund raising events for a Member are to be treated as campaign 
contributions, subject to all the restrictions on campaign funds. Thus, 
any proceeds from testimonials or other fund raisers may only be used 
by the Member for bona fide campaign purposes, 40 and may not be 
treated as unrestricted personal gifts to the Member. Specifically, 

si 5 U.S.C. § 7342, as amended by P.L. 95-105. 

"5 U.S.C. 5 7342(c)(1)(A), and (a)(5). 

33 5 U.S.C. § 7342(c)(1)(B). 

M 5 U.S.C. §7342(c)(2). 

«5 U.S.C. § 7342(c)(1)(B). 

38 22 U.S.C § 2458a. 

37 5 U.S.C. § 7342(c) (l)(B)(ii). 

38 See regulations published in Congressional Record, January 23, 1978, H 112 (daily ed.). 

38 House Committee on Standards of Official Conduct, Regulations for the Acceptance of Decorations 
and Gifts, Including Travel or Expenses for Travel, by Members, Officers, or Employees of the House of 
Representatives from P'oreign Governments, Section 6(e). 

<o House Rule XLIII(6). 



56 

campaign funds under the Rules of the House may not be converted 
to personal use, 41 nor be used for official congressional purposes. 42 

The restriction of Rule XLIII(7) in its present form derived from 
H. Res. 287, 95th Congress, 1st Session, revising the former House 
Rule which had allowed Members to use such proceeds for other 
than campaign purposes if advance notice had been given to the 
participants of the fund raiser. In recommending the change to the 
more stringent Rule, the Commission on Administrative Review of 
the 95th Congress stated simply: "Proceeds from testimonial dinners 
should not be converted to funds for personal use under any cir- 
cumstances." 43 

In an Advisory Opinion, the House Select Committee on Ethics 
found that a direct mail solicitation by a Member of the House or 
the spouse of a Member constitutes a "fund-raising event" for pur- 
poses of House Rule XLIII(7), and thus proceeds from such a solicita- 
tion must be treated as campaign contributions which may not be 
converted to personal use by the Member. Finding such, the Select 
Committee noted that a major purpose of the revisions of the Code 
of Official Conduct was to prevent Members from "cashing in" on 
their official position in the Congress : 

But in view of the widespread use of mass mailings to 
raise funds (direct mail solicitation has become a principal 
fund raising technique since 1968), it would appear that the 
proposal under consideration constitutes a fund-raising event. 
In the age of computerized mass mailings, it is unnecessary 
for people to gather together in a common place on a partic- 
ular date to constitute a "fund-raising event." 

A major thrust of the provisions contained in the new 
House Rules adopted March 2, 1977, was to severely limit 
the potential for Members to "cash in" on their positions of 
influence for personal gain. Therefore, a limitation on outside 
earned income was proposed and adopted. A proposal to 
abolish unofficial office accounts was offered and adopted. A 
proposal to prohibit the conversion of political funds to 
personal use was adopted. And the proposal discussed 
above to treat all proceeds from fundraising events as cam- 
paign contributions was also adopted. Therefore, it would 
appear that a proposal to solicit funds for personal use 
would be contrary to the "spirit" of the House Rules 
adopted pursuant to H. Res. 287 [see: H. Rule XLIII(2)]. 44 

The House Select Committee on Ethics also found, in Advisory 
Opinion No. 11, May 11, 1977, that a Member may not accept 
proceeds for his unrestricted personal use from a fundraiser which 
is conducted by a group which is independent from the Member. The 
Committee stated : 

A major thrust of the provisions contained in the new 
House Rules was to severely limit the potential for Members 
of Congress to use their positions of influence for personal 



<i House Rule XLIIIffO 

« House Rules XLV, XLVI(4). 

43 House Doc. No. 95-73, supra at p. 14. 

tl Advisory Opinion No. 4, April 6, 1977. 



57 

fain. In this context, therefore, it is irrelevant whether the 
lember himself solicits these funds, or whether the Member 
accepts funds for personal use that are solicited on his behalf 
by an independent committee. 

Certain exceptions to this rule were, however, noted by the Select 
Committee on Ethics in its final report. The Committee found that 
a fundraiser may be held to help a Member pay for the medical 
expenses resulting from a catastrophic illness of a family member 
when the Member does not participate in the fundraising or disburse- 
ment of the funds and where the proceeds of the fundraiser are applied 
directly to pay for medical costs and are not used for other purposes. 
Additionally, the Select Committee was of the opinion that a Member 
could use the proceeds of a fundraiser for a legal defense fund for 
the Member to pay legal expenses incurred in "defending a court 
action arising out of either a contested election or performance of 
official duties." a 

Appearances of Influence. In addition to specific prohibitions on 
amounts and sources of gifts, a general ethical standard recognized by 
the House notes that Members and employees should not accept 
favors or benefits for themselves or their families "under circumstances 
which might be construed by reasonable persons as influencing the 
performance of [their] governmental duties." 46 This rule would 
apparently take into consideration the nature of the gift or benefit as 
to possible conflicts of interest with the official duties of the employee 
or Member, as well as the source and amount of the gift as to possible 
influences upon the employee or Member and favoritism towards the 
donor. This standard of conduct would thus encompass the general 
ethical principles discussed above concerning the receipt of gifts in 
general and would require caution and discretion by a Member and an 
employee of the House in accepting any gift, favor, or benefit which 
would not have been offered "but for" the individual's position in 
Congress. 

Bribery. When gifts, money, or other things of value are received 
by a public official, such as a Member or an employee of the House, in 
return for being influenced in the performance of official duties, or for 
or because of any official act done by him, then a violation of the 
Federal bribery statute may be present. There are two applicable 
clauses within the bribery statute which specifically prohibit Federal 
officials from "corruptly" receiving or asking for "anything of value 
for himself or for any other person or entity, in return for being 
influenced in his performance of any official act", at 18 U.S.C. § 201 (c) ; 
and from receiving "otherwise as provided by law" anything of value 
"for or because of any official act performed or to be performed by 
him" at 18 U.S.C. § 201(g). The distinguishing features of the 
"bribery" section (§ 201(c)), and the "illegal gratuity" section of 
§ 201(g) were discussed by the United States Court of Appeals for 
the District of Columbia: 

The bribery section makes necessary an explicit quid pro 
quo which need not exist if only an illegal gratuity is in- 
volved; the briber is the mover or producer of the official 



« House Kept. 95-1837, supra at pp. 14-15. 

»72 Stat., part 2, p. B. 12, paragraph 5; note H. Rpt. No. 94-1364, 94th Congress, 2d Session. 



293-587 O - 79 



58 

act, but the official act for which the gratuity is given might 
have been done without the gratuity, although the gratuity 
was produced because of the official act. 47 

The two applicable clauses within the bribery statute both require 
as an element of the offense that the thing of value received or solicited 
by the official be related in some manner to an official act done or to 
be done by the officer or employee, that is, either "in return for being 
influenced in", or "for or because of", an official act. This element of 
the two offenses, that the thing of value received relate to some 
official act, distinguishes the "bribe" of subsection (c) or the "illegal 
gratuity" of subsection (g) from a mere "gift" which, as generally 
defined, is a "voluntary transfer of personal property * * * made 
gratuitously, and not upon any consideration * * *." 48 The receipt 
of a gift by a Member, therefore, as opposed to a bribe or an illegal 
gratuity, would not be shown to have been received with the requisite 
connection or relation to any official act done or to be done by the 
Member. 49 

Somewhat akin to the bribery statute at 18 U.S.C. § 201 is a pro- 
hibition at 18 U.S.C. § 203 which works to prohibit House Members 
and employees from receiving anything of value as compensation for 
"services rendered" anyone before a Federal agency, department, or 
bureau. Thus, even if the acts before the Government agency were 
proper or within the official capacity of the Member or employee, the 
offense would arise in the receipt of compensation, other than one's 
congressional salary, for such acts. 50 A statutory provision at 18 
U.S.C. §211 specifically prohibits the receipt of things of value for 
supporting someone for, or using one's influence in obtaining someone 
a Federal job. Thus, caution should be exercised in the receipt of 
gifts, favors, contributions or entertainment from persons whom the 
Member or his staff has assisted with job applications or other deal- 
ings with the agencies of the Federal Government. 

Financial Disclosure. Under legislation entitled the "Ethics in 
Government Act of 1978", P.L. 95-521, Members of the House, 
employees of the House earning a salary of a GS-16 or more, and 
at least one principal assistant to a Member if no one on the Member's 
staff has a salary of a GS-16 or more, must disclose in annual financial 
statements the source and amount of gifts aggregating over $100 from 
a single source; and gifts of transportation, lodging, food or entertain- 
ment aggregating $250 or more from a single source. 51 Additional 
information on certain gifts received by the spouse or dependent of the 
Member or covered employee may also need to be filed." Additionally, 
as noted above, tangible gifts of over minimal value which may be 
received from foreign governments must be disclosed at the time such 
gifts are required to be turned over to the United States, that is, 
within 60 days after receipt ; and gifts of travel or expenses for travel, 
from foreign governments must be disclosed and reported within 30 
days of receipt. 53 

« United State* v. Brewster, 506 F.2d 62, 72 (1974). 
« Black's Law Dictionary, 4th Ed., p. 817. »' . j. '•• 

«• United State* v. Brewster, supra. 
» May v. United States, 175 F.2d 994 (1949); 
« Public Law 95-521, Sec. 102(a)(2), 2 U.S.C. { 702(a)(2). 
« Public Law 95-521, Sec. 102(d)(1)(B) and (c), 2 U.S.C. 5 702(d)(1). 

M House Committee on Standards of Official Conduct Regulations pertaining to receipt of foreign gifts,. 
supra. 



Chapter 7. OUTSIDE EMPLOYMENT AND COMPENSATION 

OF MEMBERS 

Highlight 

Generally, regulations, rules and opinions concerning outside com- 
pensation or employment of Members are concerned with potential 
conflicts of interest; potential influences on the Member's official 
conduct; the possible distraction from the time and attention which 
a Member is expected to devote to his official congressional responsi- 
bilities; and the possible appearance that a Member is "cashing in" 
on his position in the Congress. 

Specifically, as to outside employment and compensation, a Mem- 
ber of the House may not: 

— earn more than $8,625 in outside earned income in a calendar 
year, under present limits on outside earned income of 15% 
of a Member's annual congressional salary; 
— accept an honorarium of more than $1,000 for one appearance, 
speech or article, or more than a total of $8,625 in honorariums 
or other earned income in one year; and may not accept hono- 
rariums in excess of the customary amount for a particular 
appearance, article, or speech; 
— use one's official position in Congress as a means for making 

personal gains; 
— receive compensation for services rendered by himself or by 

anyone else before Federal agencies or departments; 
— contract directly or indirectly with the Federal Government; 
— participate in "self-dealings" with a private foundation with- 
out incurring specific tax penalties; 
— receive "emoluments", or compensation, of any kind from a 
foreign government. 
House Rules, ethical standards, and statutory provisions work to 
greatly restrict the private practice of law by Members of the House, 
particularly the continued affiliation with a law firm, although the 
practice of law by House Members and a Member's affiliation with a 
firm are not strictly prohibited. 

Members of the House are required to file annual financial disclosure 
statements detailing specific information on certain income received, 
in addition to other financial information required to be disclosed. 

(5«J) 



Chapter 7. OUTSIDE EMPLOYMENT AND COMPENSATION 

OF MEMBERS 

The discussion of the regulations governing outside employment and 
compensation of Members of the House relates generally to personal 
services by the Member and the receipt of what is commonly referred 
to as "earned" income, that is, compensation received for personal 
services and employment, as opposed to income from investments or 
other financial assets. 

Members of the House of Representatives are under numerous 
restrictions concerning their permissible outside employment and the 
receipt of outside earned income. These restrictions are generally 
addressed to various problems which may arise because of a Member's 
private employment, that is, a possibility of a conflict between the 
narrow interests of a private employer and the broader interests of 
the general public; possible influences upon the judgment of a Member 
in performing his official duties because of employment with and the 
receipt of compensation from a private source; a possible distraction 
from the time and attention to which the Member, as a full-time 
legislator, is expected to devote to his congressional duties; and the 
appearance of impropriety which might occur in the eyes of the public 
to the effect that the Member is "cashing-in" on his position of in- 
fluence in receiving additional income and compensation from private 
sources. 

A general ethical principle in the House of Representatives is that a 
Member should not use the prestige and influence of his position in 
Congress for his own personal gain. In attempting to realize this 
principle, and to deal with the problems which may arise in relation 
to conflicts of interest and "time" conflicts, the House of Representa- 
tives has adopted various standards of conduct in addition to the statu- 
tory restraints on outside employment and income. Most significantly, 
the Rules of the House limit the total amount of outside earned in- 
come which a Member may receive in a year. Under the present salary 
structure in the House, a Member may not receive more than a total 
of $8,625 in earned income from all outside employment in any 
calendar year. 1 

The House Commission on Administrative Review of the 95th 
Congress, which recommended the changes in the House Rules adopt- 
ing the overall earned income limitation, noted basic reasons for focus- 
ing on and restricting earned income from outside employment activi- 
ties of a Member, rather than income from assets or investments: 

Earned income creates a variety of more serious potential 
conflicts of interest than does investment income, ranging 
from overt attempts to curry favor by private groups to 
subtle distortions in the judgment of Members on particular 

1 Rules of the House of Representatives, Rule XLVTI. 

(60) 



61 

issues. * * * The Member who has stock holdings can trans- 
fer his holdings at any time to another company, and thus, 
is not subject to the same degrees of potential conflict as a 
Member whose * * * salary [from a private company] could 
be cut off arbitrarily. 

Outside earned income also presents a "time conflict" 
between the Member's private interest and the public in- 
terest. Supplementing salary with outside earned income 
can detract from a Member's full-time attention to his 
official duties and creates subtle distortions in judgment as 
how Members should use their time. * * * 

Moreover, many citizens perceive outside earned income 
as providing Members with an opportunity to "cash in" on 
their positions of influence. Even if there is no actual impro- 
priety, such sources of income give the Appearance of impro- 
priety and, in so doing, further undermine public confidence 
and trust in government officials. 2 

In addition to the limit on overall earned income and the rules 
barring the use of one's official position for personal gain, Members 
of the House are restricted in particular areas of outside employment 
and compensation. For example, Members of Congress are prohibited 
from receiving compensation for services rendered before Federal 
agencies; are prohibited from contracting with the Federal Govern- 
ment; are restricted in their "self -dealings" with private foundations;; 
are prohibited from receiving any compensation from foreign govern- 
ments; are limited in the amount of honorariums they may accept^ 
are restricted in some areas of the practice of law; and are required to 
make annual financial disclosure statements with respect to income 
and compensation received, among other items of financial information. 

Outside Employment and Official Activities. There is no statutory 
provision or Rule of the House which states a specific prohibition 
against a Member of the House engaging in outside private employ- 
ment which "conflicts" with or is "inconsistent" with the Member's 
official duties. Conflicting or inconsistent private employment might 
occur when, for example, the interests of a private employer or client 
are at odds with the interests of the general public on a particular 
matter, or where specific matters involved in private outside employ- 
ment would be before the Member in an official congressional capacity,' 
It may be noted that conflicting or inconsistent outside employment 
for compensation by Members of the Senate is specifically prohibited 
by the Standing Rules of the Senate. 3 

Although no rule in the House specifically prohibits Members, 
from engaging in conflicting outside employment, ethical standards and 
rules restrict Members in certain aspects of outside employment, that 
is, in the relationship between the Member's receipt of outside com- 
pensation, benefits or employment and the Member's performance of 
official congressional duties and responsibilities. The "Code of Ethics 
for Government Service", 4 in addition to stating generally that a 

* House Document No. 95-73, 95th Congress, 1st Session, "Financial Ethics", Communication from the 
Chairman, Commission on Administrative Review, U.S. House of Representatives, p. 10. 

» Standing Rules of the Senate, Rule XLVC2). 

* 72 Stat., part 2, B12 (195S), H. Con. Res. 175, 85th Congress; see House Rpt. No. 94-1364 as to continuing 
applicability of ethical standards. 



62 

"public office is a public trust", 5 specifically provides that a Member 
should never accept "benefits under circumstances which might be 
construed by reasonable persons as influencing the performance of his 
governmental duties." 6 The provisions of the Code of Ethics would 
therefore look to the relationship between the receipt of compensation 
or other benefits from a private source and the official functions of a 
Member of the House as to appearances of possible improprieties, 
undue influences, or breaches of the public trust. 

Thus, for example, if a Member seeks benefits from an organization 
or firm when the Member, in his official congressional capacity, had 
actively promoted the establishment of that organization, then a 
possible violation of this provision barring appearances of influence 
might occur. 7 Additionally, if the Member sponsors legislation which 
specifically deals with and affects a specific organization or interest 
from which the Member is receiving compensation or other benefits, 
then there may exist a possible violation of the ethical principles 
embodied in the Code of Ethics for Government Service which, as 
discussed by the House Committee on Standards of Official Conduct, 
work to "prohibit conflicts of interest and the use of official position 
for any personal benefit". 8 

Members of the House are further instructed by the House Rules, 
at Rule XLIII(3), not to receive any compensation or allow any 
compensation to accrue to one's beneficial interest from any source, 
the receipt of which would occur by virtue of influence improperly 
exerted from the Member's position in the Congress. This provision 
would again necessitate an examination into the circumstances sur- 
rounding the receipt of outside compensation and the relationship of 
that receipt to official acts or influences exerted by the Member to 
determine, as noted in the debate preceding the adoption of this rule 
.in 1968, if a Member has "used his political influence, the influence 
of his position as a Member, to make pecuniary gains". 9 Finally, 
.along similar lines, Members of the House are prohibited from using 
-confidential information received in the performance of their official 
s/duties as a means for making private profit. 10 

Earned Income Limitation. The House of Representatives adopted 
House Rule XLVII on March 2, 1977 (H. Res. 287, 95th Congress, 
1st Session), which places restrictions upon the outside earned in- 
come of Members of the House. This provision, effective January 1,- 
1979, specifically limits the amount of aggregate outside earned in- 
come (including honorariums) which a Member may receive in a 
calendar year to 15% of the Member's yearly congressional salary. 
At present congressional salaries, this would put a cap of $8,625 on 
the total outside earned income which a Member may receive in a 
year. 

The limitation in this rule applies to income earned for personal 
services, rather than moneys received from ownerships or other invest- 

8 Id. at para. 10. 

• Id. at para. 5. 

7 See; House Report No. 94-1364, 94th Congress, 2d Session, "Tn the Matter of a Complaint Against Repre- 
sentative Robert L. F. Sikes", Report by the Committee on Standards of Official Conduct, pp. 3-4. 

8 Id. at p. 4 

• Congressional Record, April 3, 1968, p. 8807, comments by Representative Price. 

19 Code of Ethics for Government Service, supra at para. 8; see 7 U.S.C. § 13(e) as to use of inside informa- 
tion from the Commodity Futures Trading Commission; and 50 App. U.S.C. § 2160(f), (extended to Sep- 
tember 30, 1979, 50 App. U.S.C. § 2166, Public Law 95-37) as to the use of any confidential information 
received by virtue of public position in speculating in any commodity exchange. 



63 

ments or equity. As discussed in the floor debate on this rule, "[t]he 
determination is whether one earned it by the sweat of his brow, in 
which case it would be earned income, or because of ownership" in a 
firm or business which would not be within the limitation. 11 In an 
advisory opinion of the House Select Committee on Ethics in the 95th 
Congress, the Committee emphasized that the facts of a particular 
case would control as to whether moneys received were earned income, 
rather than any characterization of such moneys. That is, money 
received for personal services, earned income, "by any other name", 
would still be earned income for purposes of the rule. As stated by the 
Committee : 

[T]he label or characterization placed on a transaction, 
arrangement or payment by the parties may be disregarded 
for purposes of the Rule. Thus, if the amounts received or 
to be received by a Member are in fact attributable to any 
significant extent to services rendered by the Member, the 
characterization of such amounts as partnership distributive 
share, dividends, rent, interest, payment for a capital asset, 
or the like, will not serve to prevent the application of Rule 
XLVII to such amounts. 12 

In personal service businesses where capital is not a material income 
producing factor, such as in the practice of one's profession as a doctor, 
lawyer, insurance broker, or real estate agent, the House Select Com- 
mittee on Ethics has noted that the entire share of the profits for the 
Member will generally be considered earned income, unless it can be 
shown that some income actually derives from a return on an invest- 
ment. 13 Even where the Member performs no personal services, it 
will be presumed, absent a strong showing to the contrary, that his 
share of the profits from a service business is for attracting or retaining 
clients, and thus earned income. 14 As to law practices specifically, the 
Committee noted that "buy-out" arrangements are permitted and 
will not be counted toward the earned income limit when fair and 
reasonable in relation to comparable practices. 15 If a Member does 
retain an interest in a law firm, the Member "may treat as unearned 
income a portion of his share of the profits from the law firm, as from 
any other personal service business, equal to interest computed at 
10 percent per annum on his investment in the business assets". 16 

In business corporations, only consideration to the Member for 
services performed will be considered earned income, and an increase 
in the value of the firm's stock or profits distributed will not be con- 
sidered earned income for the Rule. 17 This, however, cannot be used 
as a subterfuge to have compensation for a Member's personal services 
directed to a corporation and then distributed to the Member as 
"profits", such as where a Member would incorporate for purposes of 
making speeches or writing articles and have all fees directed to the 
corporation which then in turn distributes "profits" and "dividends" 
to the Member. 18 



11 Congressional Record, March 2, 1977, H 1582 (daily ed.). comments by Mr. Frenzel. 

12 House Select Committee on Ethics, 95th Congress, Advisory Opinion No. 13. See: Final Report of 
House Select Committee on Ethics, H. Rept. No. 95-1837, p. 82. 

"Id. 

« Id. at p. 83. 

"Id. 

'• Id. at p. 84. 

"Id. 

aid. 



64 

As for closed corporations, partnerships and unincorporated businesses, 
where a Member has an ownership interest and also performs some 
services, some of the profit realized from the business might result 
from the personal services of the Member and therefore would be 
considered earned income. As noted by the Select Committee, "the 
determining factor is whether the Member's personal services generate 
significant income for the business." 19 The Member may protect his 
interest and investments in the business through general oversight 
and management of his investments without generating earned income. 
However, fees, compensation, or salaries from such a business are 
earned income, and where the Member's principal function is to refer 
clients or help retain clients, then "the Member would be deemed to 
be rendering income-producing services, even though the actual time 
involved might be minimal." 2 ° 

The rules on income-producing services for a business in which the 
Member has an ownership interest would also apply generally to a 
family business or farm. 21 As provided in Rule XLVII, the term 
"outside earned income" means "wages, salaries, professional fees, 
honorariums, and other amounts (other than copyright rc^alties) 
received or to be received as compensation for personal services 
actually rendered", but, however, does not include (1) the Member's 
congressional salary; (2) compensation from services rendered prior 
to becoming a Member or before the effective date of this rule; (3) 
amounts received from a qualified pension, profit-sharing, or stock 
bonus plan; and (4) in the case of a family controlled business or farm, 
amounts received in connection with protecting or managing one's 
investment as long as the personal services rendered by a Member 
do not in themselves generate a significant amount of income. 

The Commission on Administrative Review in the 95th Congress 
offered an explanation concerning the family business or farm exemp- 
tion from the personal earned income limitation: 

In interpreting what constitutes earned income for per- 
sonal services, the Commission believes that Members 
should be able to render pergonal services to manage or pro- 
tect their equity in a family trade or business without having 
to allocate these personal services toward the 15-percent 
limitation. However, if the personal services, in and of them- 
selves, generate any significant amount of income, the result- 
ing income should be subject to the 15-percent limitation. 
Conversely, the Commission believes that in implementing 
this limitation care should be taken to prevent Members from 
circumventing it by incorporating themselves into a "family 
business" and then withdrawing what in reality are fees for 
personal services in the form of dividends or profits. 22 

Similarly, as discussed in the debate preceding the adoption of this 
Rule, personal services which generate income will not come within 
this exemption and would thus be subject to the 15 percent limit: 

The crucial element in determining whether the limitation 
applies, the 15-percent limitation, is this: If the personal serv- 
ices produce the income, then it does not matter whether it is 

n Id. at p. 85. 

»«Id. 

»'Id. 

a House Document No. 95-73, supra at p. 11* 



65 

a family business or whether it is not a family business or 
whether it is a law firm, or anything else. It those personal 
services actually produce the income, then it comes under the 
limitation. 

On the other hand, if the Member is merely acting to pro- 
tect his investment, to protect his equity, to protect his capi- 
tal, then it is not services rendered to produce income; and 
that income is not subject to the limitation. 23 

Additionally, the Select Committee stated the following with re- 
spect to the "family business" exemption in the rule: 

The definition of earned income in Rule XLVII, which ex- 
cludes amounts received by a Member from a family con- 
trolled business "so long as the personal services actually 
rendered by the Member ... do not generate a significant 
amount of income," 24 was simply intended to assure Members 
that they could continue to make decisions and take actions 
necessary to manage or protect their equity in a family trade 
or business, and would not be forced to divest themselves of 
their f amily business interests. As with any business, a Mem- 
ber would not be required to allocate his share of the profits 
of the business as outside earned income when the facts and 
circumstances show that the income is in reality a return on 
investment. 25 

Income generally comes within the limitation for that year and that 
time when the Member earns it, that is, "when the Member's right to 
receive it becomes certain". 26 A Member may therefore not earn in* 
come and have it deferred to another year or when he leaves Congress 
to avoid the income limitation. As for honorariums, however, the 
Select Committee was of the opinion that the Member would have the 
limited option (for example, at the end of the year) of treating hon- 
orariums received on the "accrual" basis as discussed above, that is, 
when earned, or may treat such honorariums on a "cash" basis, that 
is, applicable to the year when received. 27 

Services Before Federal Agencies. Members of Congress are spe- 
cifically prohibited by a Federal criminal statute at 18 U.S.C. § 203 
from receiving compensation, directly or indirectly, for any "services 
rendered" in relation to any matter or proceeding in which the United 
States is a party or has an interest, before any Government agency, 
department or bureau. Thus, as discussed in the chapter dealing with 
communications to Federal agencies on behalf of constituents, a 
Member may not receive compensation or things of value, other than 
his congressional salary, for interceding, representing, or for other 
dealings with an administrative agency on behalf of a constituent or 
on behalf of any other person or organization. The terms of this 
statutory prohibition, although applicable to matters before "any 
department, agency, courtmartial, officer, or any other civil, military, 
or naval commission", do not apply and were not intended to apply to 
matters or proceedings before a court of law. 28 

M Congressional Record, March 2, 1977, H 1577 (daily ed.), comments by Representative Hamilton; see 
also H. 1631 comments by Representative Obey. 

M Home Rule XLVII. 

>« See H. Rot. No. 95-1837, supra, at p. 85. 

a « See: H. Rpt. No. 95-1837, supra at p. 81. 

« Id. at p. 87. 

a Compare 18 U.S.C. § 203 with 18 U.S.C. § 205; see legislative history of provision, House Report No. 
748, 87th Congress, 1st Session (to accompany H.R. 8140), p. 20; also Memorandum of Attorney General 
Regarding Conflict of Interest Provisions of Public Law 87-849, Feb. 1, 1963, 28 F.R. 985 (see 18 U.8.O. 
i 201, note). 



66 

In interpreting this provision Federal court cases have found that 
even if the acts of a Member in contacting a Federal agency on behalf 
of a private individual or organization were within the "scope of his 
official duties as a congressman", the gist of the offense is accepting 
additional compensation for such services rendered. 29 As to activities 
which might not be considered the requisite "services rendered" under 
the provision, a Federal District Court has found that mere inquiries 
by a Member of Congress concerning the status of a pending matter 
before a Federal bureau, without discussion of the merits of a case, did 
not constitute prohibited "services rendered" within the statutory 
framework. 30 If a Member is found in violation of this statutory pro- 
vision for receiving compensation for services rendered to private 
individuals or groups before Federal agencies, it should be noted, the 
Member may be liable for repayment of compensation unlawfully 
received under a theory of breach of fiduciary duty and trust by the 
Member. As held by a Federal court in finding a former Member of 
Congress liable for such repayment, a violation of section 203 : 

unquestionably demonstrates a breach of trust, for in order 
to fall within its prohibition, a member of Congress must shed 
the duty of disinterested advocacy owed the government and 
his constituents in favor of championing private interests 
potentially inconsistent with this charge. 31 

The prohibition within section 203 extends to the receipt of com- 
pensation "directly or indirectly" for services before Federal agencies. 
Therefore, if a Member is in a partnership arrangement or otherwise 
shares in fees from services rendered before Federal agencies, a viola- 
tion of this provision may occur even if the Member did not personally 
perform services before the agencies. 32 Although most relevant to 
Members who practice law, and therefore discussed in some detail in 
the section concerning congressional law practices, it should be noted 
here that the Department of Justice has stated in an informal letter 
opinion that section 203 "bars a partner in a law firm from sharing 
in any fees received by the firm before any Federal department or 
agency during the time he is or was a Federal employee." 33 Although 
such fee sharing or partnership arrangements concerning Federal 
agency practice would be prohibited, section 203 as interpreted by the 
Justice Department would apparently allow a Member to receive a 
fixed salary from a firm or organization which derives some revenue 
from Federal agency practice. The Justice Department letter cited 
above noted that "this Office has interpreted § 203 not to apply to a 
person who receives a fixed salary as an employee of a firm (as opposed 
to someone who shares in the firm's profits), even though some of the 
firm's overall income may be attributable to service covered by § 203." 

Provisions of Federal law at 5 U.S.C. § 501, also provide that a 
firm, business, or organization which practices before the Federal 
Government may not use the name of a Member of Congress to 
advertise the busmess. As for dealings in general with the Government, 
ethical standards adopted in the Code of Ethics for Government Service 
state that all officers of the Government, including Members, may not 

»• May v. United States, 175 F. 2d 944 (1949). 
*» United States v. Quinn, 141 F. Supp. 622 (D.N.Y. 1956). 

« United States v. Podell, 436 F. Supp. 1039 (1977), aff'd 572 F. 2d 31 (2d Cir. 1978). 
■ See: House Committee on Standards of Official Conduct, Advisory Opinion No. 1, January 26, 1970. 
*» Letter of March 14, 1978. from Leon Ulman, Deputy Assistant Attorney General, Office of Legal 
Counsel, Department of Justice. 



67 

engage in any business with the Government, either directly or indi- 
rectly, "which is inconsistent with the conscientious performance of 
his governmental duties." Finally, as discussed below, a Member of 
Congress may not contract with the Federal Government, or receive 
benefits arising from a Government contract. 

Contracting With the Federal Government. A federal criminal 
prohibition, at 18 U.S.C. § 431, provides a penalty for any Member of 
Congress who "undertakes, executes, holds or enjoys" a contract or 
agreement entered into with the United States. Further, a Federal 
statute at 41 U.S.C. § 22, requires that all Government contracts 
contain a clause providing that no Member of Congress may share in 
the benefits arising from such contract. In addition to the prohibition 
on a Member contracting with the Government, 18 U.S.C. § 432 
penalizes any officer or employee of the United States who "makes or 
enters into any contract, bargain or agreement" with a Member of 
Congress on behalf of the United States. 

The statute provides that a Member may not "directly or indi- 
rectly" hold, execute, undertake, or enjoy "in whole or in part" any 
contract with the Government. No specific interpretation of the terms, 
"directly or indirectly" was found as to their specific intent concern- 
ing the requisite relationship of a Member to the benefits of a Govern- 
ment contract for a violation to occur. An opinion of the Attorney 
General found, however, that a partnership, of which a Member of 
Congress is a member, is prohibited from entering into a contract 
with the Federal Government. 34 There are no definitive rulings as to 
whether a Member of Congress may receive compensation as an 
employee rather than a partner from a firm or organization holding 
a Government contract, although some state decisions in this area 
have found that such a connection to and benefit arising from a gov- 
ernment contract would be prohibited a legislator. 35 Further, although 
section 431 is a criminal statute and thus must be interpreted nar- 
rowly, a Member of Congress receiving compensation or fees from an 
organization's or firm's Government contract either as a salary, 
honorarium, or subcontract, might be considered to be benefiting 
from that Federal contract in violation of the standards expressed in 
41 U.S.C. sec. 22, even if arguably not committing an indictable 
criminal offense under 18 U.S.C. §431. The provisions of public 
contract law at title 41 are apparently only "directory" in nature. 3 * 
However, they arguably establish a standard of conduct to be observed 
by Members of the House. 

One relationship of a Member of Congress to a Government con- 
tract has been specifically exempt from the statutory prohibition, 
that is, any contract made, entered into, or accepted by an incorpo- 
rated company for the general benefit of the corporation. Thus, under 
18 U.S.C. § 433 a Member of Congress may apparently be a stock- 
holder, even a principal stockholder, or an officer of a corporation 
which holds a Government contract without a violation of the statu- 
tory provision at 18 U.S.C. § 431. It would appear that the exception 
for contracts with corporations contained in the criminal provision 

" 4 Op. Atty Gen. 47 (1842). 

'« See: 47 Virginia Law Review 1034, 1050-1051 (1961). 

»• United States v. Certain Land Situated in St. Charles County, Mo., 46 F. Supp. 1921 (D.C. Mo. 19042), 
reversed 139 F.2d 661, reversed 324 U.S. 49. 



68 

at 18 U.S.C. § 433 would likewise apply to the contract law provi- 
sions at title 41 U.S.C. § 22. The provision in title 41 and the criminal 
provisions discussed, and the exceptions to them, were all originally 
passed as part of the same Act, 87 thus suggesting that the exceptions 
■from that Act for corporate contracts were intended to apply to the 
provision now codified at title 41. 

The benefit which accrues to a Member of Congress from a Govern- 
ment contract because a Member is a shareholder or officer of the 
-corporation has been specifically exempt from the statutory prohibi- 
tion since the inception of this provision. As noted in an Opinion of 
the Attorney General as to provisions of the former Criminal Code 
At Sections 114, 115, and 116 (now codified at 18 U.S.C. 431, 432, and 
433), concerning a "substantial" stock interest of a United States 
Senator in an incorporated cattle company which secured Federal 
Agency loans to cattle finance companies : 

The provision of section 116, specifically excepting from 
the operations of sections 114 and 115 contracts made, 
entered into, or accepted by any incorporated company, 
where such contract or agreement is made for the benefit of 
such incorporation or company, has been an integral part 
of this legislation sincfl its origmal enactment * * * and is 
entirely clear in its provisions. 38 

A later opinion of the Attorney General dealt with a Government 
contract to a firm in which the Member of Congress not only held 30% 
of the outstanding stock, but of which the Member was also presi- 
dent, "and presumably, therefore, the active head." 39 In this opinion, 
the Attorney General found that the exemption applies in such a case 
rsince Congress had not qualified the exemption on corporate contracts 
sand had made "no distinction between corporations whose officers 
; are Members of the Congress and those whose officers are not such 
; Members, nor does [the statute] distinguish between corporations in 
'which Members of the Congress hold a substantial interest in the capi- 
tal stock and those in which they do not hold such interest." 40 

The Attorney General in this opinion noted that although "It may 
be that at the time of [the statute's] enactment the Congress did not 
.contemplate the present widespread use of the corporate form and 
therefore did not have in mind situations such as the one now pre- 
sented", nevertheless the Congress had reenacted and amended those 
provisions a number of times, extending and enlarging the exemptions 
contained in them, and therefore apparently "acquiesced" m the 
■"construction placed thereon by the Attorneys General and the 
•Courts * * *." 41 It was recognized by the Attorney General, how- 
ever, that the possibility for abuse exists within this exemption. 
"Further, the auestion of whether the act of incorporation for the 
obvious purpose of circumventing the statute's prohibition would 
give rise to a cause of action under these provisions, and justify a 
"piercing of the corporate veil", was left open by the Attorney 
General. 42 



»' See Revised Statutes §§ 3739-3741, April 21, 1808, 2 Stat. 484, C. 48. 

« 33 Op. Atty. Gen. 44, 48, October 29, 1921. 

■»• 39 Op. Atty. Gen. 165, 167, May 19, 1938. 

<• Id. at 167-168. 

« Id. at 170. 

« Id. at 170-171. 



69 

In addition to exempting contracts made with a corporation from 
the prohibition of a Member contracting with the Government, the 
statutory provision at 18 U.S.C. § 433 also specifically provides that 
the prohibition will not apply to contracts, loans or other agreements 
made or entered into under: 

The Reconstruction Finance Corporation Act, the Agri- 
cultural Adjustment Act, the Federal Farm Loan Act, the- 
Emergency Farm Mortgage Act of 1933, the Farm Credit 
Act of 1933, or the Home Owners Loan Act of 1933, the- 
Farmers' Home Administration Act of 1946, the Bankhead- 
Jones Farm Tenant Act, or to crop insurance agreements or 
contracts or agreements of a kind which the Secretary of 
Agriculture may enter into with farmers. 

Other statutory provisions of Federal law specifically note that 
the requirement of excluding Members of Congress from benefits 
arising from a Federal contract, stated at 41 U.S.C. § 22, is applicable 
to the acquisition of land by the Government under flood control 
policies and procedures, 43 but is not applicable to contracts entered 
into under the .United States Information and Educational Exchange 
Program. 44 , 

Private Foundations. Tax penalties may arise if Members of the 
House engage in acts of "self-dealing" with a "private foundation"^, 
Provisions of the Internal Revenue Code at 26 U.S.C. § 4941 prohibit 
certain dealings, such as those involving the receipt of compensation 
or certain expenses, with a "private foundation" by some government 
officials, including elected officials in the legislative branch. The tax 
sanctions include an imposition of an excise tax on both the sell- 
dealer and the manager of the foundation, which increase in size i! 
the original matter is not rectified within a certain time, or for re- 
peated or willful and flagrant violations. 

Foreign Governments. Members of the House are prohibited,, as are 
other Federal officials and employees, by the United States Consti- 
tution at Article I, Section 9, clause 8, from receiving an "emolument" 
of "any kind whatever" from a foreign government or a representative 
of a foreign state, without the consent of the Congress. An "emolu- 
ment" is generally defined as "any profit, gain, or compensation 
received for services rendered." 45 

This provision was introduced during the debates of the Constitu- 
tional Convention in August of 1787 by Mr. Pinckney of South Caro- 
lina. As noted in "Elliot's Debates": "Mr. Pinckney urged the 
necessity of preserving foreign ministers, and other officers of the 
United States, independent of external influence," and introduced 
this provision which passed without objection. 46 

The general principle behind this constitutional prohibition was 
stated briefly by Justice Joseph Story in his historic work, "Com- 
mentaries on the Constitution of the United States": "The other 
clause, as to the acceptance of any emoluments, title, or office, from 
foreign governments, is founded in a just jealousy of foreign influence 

«33 U.S.C. $ 702m. 

« 22 U.S.C. § 1472. 

«49 Comp. Gen. 819, 820 (1970); B-180472, March 4, 1974; B-180472, May 9, 1974. 

« "Elliot's Debates," Volume V, p. 467. 



70 

of every sort." 47 As noted by the Comptroller General, "it seems clear 
from the wording of the constitutional provision that the drafters 
intended the prohibition to have the broadest possible scope and 
applicability." 48 

Thus, congressional consent, generally in the form of private or 
public bills, would be required before an honorarium or other income 
or compensation may be accepted by a Member of Congress from 
foreign governments, or organizations or persons representmg or act- 
ing as an instrumentality of a foreign state. Under this provision, for 
example, the Comptroller General has found that transportation, or 
expenses for travel given a Member of Congress by a foreign govern- 
ment, if gratuitously given, would constitute a gift to that Member 
and fall within the regulations promulgated on the receipt of foreign 
gifts. However, if such transportation or expenses for travel were of- 
fered a Member by a foreign government in return for and in connec- 
tion with some service which the Member has provided or will be 
performing, such as a speech, article or appearance, then such travel 
or expenses may constitute "compensation" and thus an "emolument" 
to the Member. 49 Although Congress has consented by statute to the 
acceptance of certain "gifts" or "decorations" of minimal value, and 
other gifts under special circumstances, from foreign govmments by 
Federal officers and employees, no such general consent for the receipt 
of emoluments or other compensation from foreign governments was 
granted by Congress to present Federal officials or employees under 
the provisions of the Foreign Gifts and Decorations Act or any other 
statute. 50 

Members of Congress are therefore prohibited from receiving any 
payment for their services rendered to official foreign interests, such 
as from ambassadors, embassies or agencies of a foreign government, or 
apparently from multinational organizations made up of foreign govern- 
mental units. 51 Members should thus be cautious in accepting ex- 
penses or other compensation from foreign foundations or other 
foreign organizations which receive support from a foreign government, 
or have such a relationship to the foreign government through spon- 
sorship, funding or licensing to be considered an official arm or an 
instrumentality of that government. It should be noted that the 
Comptroller General of the United States has ruled, for example, that a 
Member of Congress could not accept a fee from the British Broad- 
casting Corporation for participation in a television program to 
discuss the American Presidency since the BBC, because of its funding 
relationship and regulation by the British Government, would be 
considered an instrumentality of the British Government and thus a 
"foreign state" under the constitutional ban. 52 

Honorarium Restrictions. Members of the House are generally 
permitted to accept honorariums for their personal appearances, 
articles, speeches and similar services. Provisions of the House Rules, 

* Story, "Commentaries on the Constitution of the United States," Vol. HI, p. 215-210. 

« 49 Comp. Gen. 820 (1970). 

«• Opinion of the Comptroller General, B-180472, May 9, 1974. 

»»5 U.S.C §7342, as amended hy P.L. 95-105; see, however, P.L. 95-105, Section 509 (37 U.S.C. §801, 
note) as to employment of retired military members and members of the reserve by foreign governments. 

« Note E.0. 11446, January 16, 1969, concerning decorations from multi-national organizations; 5 U.S.C. 
8 7342(a) (2), as amended by P.L. 95-105, concerning gifts from multinational organizations. 

* Opinion of the Comptroller General, B-180472, March 4, 1974. 



71 

and Federal statutes, however, restrict the amount of honorariums 
which may be accepted by a Member for a single event, and as an 
aggregate in one calendar year. 

The House Rule pertaining to honorariums, controlling for Members 
of the House beginning January 1, 1979, specifically limits the amount 
of honorarium a Member may receive to $1,000 in value, excluding re- 
lated transportation, food, and lodging expenses, for any appearance, 
speech or article. 63 The Rule further limits the amount of aggregate 
outside earned income, including honorariums, which a Member may 
receive in a calendar year to 15% of the Member's yearly congres- 
sional salary. At present congressional salaries, this would limit 
Members to earning a total of $8,625 in honorariums or other outside 
earned income in a year. 54 

The term "honorarium" within the House Rules is defined as follows: 

The term "honorarium" means a payment of money or 
anything of value to a Member for an appearance, speech, or 
article, by the Member; but there shall not be taken into ac- 
count for purposes of this paragraph any actual and necessary 
travel e xpenses incurred by the Member to the extent that 
such expenses are paid or reimbursed by any other person, 
and the amount otherwise determined shall be reduced 
by the amount of any such expenses to the extent that they 
are not paid or reimbursed. 

A Federal statutory provision also limits the amount of honor- 
ariums which may be accepted for one event and as a yearly aggregate 
by officers and employees of the Federal Government, including 
Members of Congress. 65 This statute, however, allows for the accept- 
ance by a Member of a larger amount of honorariums than does the 
House Rule. Therefore, the more restrictive amount provided in the 
House Rule would control as to Members of the House after January 1, 
1979, as adopted by each new Congress. 66 

The statutory provision at 2 U.S.C. § 441i, it should be noted, 
prohibits Federal officers and employees from accepting "excessive" 
honorariums. The statute presently limits the amount of an honorar- 
ium to $2,000, excluding amounts for travel and subsistence expenses 
and amounts incurred for agents fees or commissions, which may be 
accepted for any appearance, article or speech; and limits aggregate 
yearly honorariums to $25,000. 

The term "honorarium" is not specifically denned within the statute 
prohibiting excessive honorariums. However, under the regulations of 
the Federal Election Commission, the agency authorized to promul- 
gate regulations on this statute, 57 the term "honorarium" is defined to 
mean the payment of something of value "accepted as consideration 
for an appearance, speech, or article." 68 The regulations note that an 
honorarium does not include payment for agents' fees or commissions, 
or payment or provision for actual travel or subsistence, "including 

«» House Rule XLVTK2). 
» House Rule XLVII(l). 
« 2 U.S.O. 5 441i. 

M "Hinds' Precedents of the House of Representatives," Volume 5, chapter CXLl, "The Rules", p. 
889-890 

« See 2 U.S.C. § 437d, 438. 
»11 C.F.R. 5110.12(b). 



72 

transportation, accommodations, and meals for the officer or employee 
and spouse or an aide * * *." 69 The regulations further define the 
terms "appearance", "speech", and "article". 60 

The regulations of the Federal Election Commission additionally 
provide a description of what an "honorarium" is not. The regulations 
exclude from the definition of honorarium "an award", which is a 
gift in recognition for some religious, educational, scientific, civil, etc., 
achievement which is given by means of a selection process with estab- 
lished criteria, for which the recipient is not required to apply or to 
take any specific action in competition for the award, and which does 
not require the recipient to make a speech, appearance or to write an 
article as a condition for receiving the award. 61 Further, an honorarium 
does not include "a gift", which is described as "a voluntary convey- 
ance of real or personal property which is made gratuitously, and is 
not supported by consideration, and is not made to serve in place of 
an honorarium or a contribution." 62 Also excluded and distinguished 
from an honorarium is "a stipend", defined as "payment for services 
on a continuing basis, including a salary or other compensation paid 
by news media for commentary on events * * *." M 

In an advisory opinion by the Federal Election Commission, the 
Commission distinguished between an "honorarium" and a "stipend" 
by noting that money received by a Federal official "is .considered a 
'honorarium', regardless of whether it is offered gratuitously or as a 
fee, if it is accepted as consideration for an appearance, speech or 
article" and if such money is "accepted as a payment for a single event 
or transaction and under circumstances which do not imply a contin- 
uing compensatory relationship between the parties for similar 
services." A "stipend", on the other hand, would be money which "is 
accepted in the form of fixed or regular compensation intended as 
consideration for the rendering of services, e.g., a salary." M 

Thus, money received by a Member or employee of the House for an 
award, a gift, a stipend, or as proceeds from the publication of a book, M 
is not considered to be an honorarium under the statutes and therefore 
would not be subject to this statutory limitation upon honorariums. 

It should be noted that the 1976 Amendments to the Federal Elec- 
tion Campaign Act, (P.L. 94-283), specifically exempt money re- 
ceived as "honorariums" under 2 U.S.C. § 441i, from the definition of 
political "contributions". 66 Thus, honorariums received within the 
statutory limits, including "related expenses" which cover actual 
expenses (see: Regulations of F.E.C., 11 C.F.R. § 100.4(b) (10)), 
would not be considered political contributions to a Member/candi- 
date, 67 and therefore would not incur the various statutory regulations 
concerning the receipt of "political contributions." 

In addition to the specific dollar limit on honorariums, House 
Rule XLIII, the "Code of Official Conduct", at paragraph 5, prohibits 

»Id. 

«Id. 

« 11 C.F.R. § 110.12(c). 

«Id. 

••Id. 

m AO 1976-46, 40 F.R. 57756, December 11, 1975 (note modification by 1976 amendments to F.E.C.A., 41 
F.R. 46416, October 20, 1976). 

« Federal Election Commission Advisory Opinion, AO— 1975— 77, 40 FR 51611, November 5, 1976; see 
also Congressional Record, daily ed., October 8, 1974, at page S 18526. 

« 2 U.S.C. § 431 (e)(5) (I). 

« Federal Election Commission Opinion Request, re AOR 1976-59, October 27, 1976. 



73 

Members, officers, and employees of the House from receiving honora- 
riums "in excess of the usual and customary value" for the services 
involved. 

Moneys received as honorariums by Members of the House would be 
considered income or compensation to that Member, and therefore 
would incur the general restrictions on outside income and compensa- 
tion by Members of Congress. Thus, moneys received as honorariums 
would be subject to ethical restrictions on the use of official position 
for personal gain, the earned income limitation on aggregate yearly 
earnings, the restrictions on contracting or enjoying a contract with 
the Federal Government, restrictions on self dealing with private 
foundations, and prohibitions on the receipt of compensation from 
foreign governments. Members of Congress should therefore be con- 
cerned with the identity of a sponsoring person, group or organization 
and the source of its funds, in the acceptance of honorariums for 
speeches, articles or appearances. 

Practice of Law. The practice of law by Members of Congress may 
raise ethical and conflict of interest problems beyond those involved in 
other outside employment undertakings. Because of the loyalty and 
trust owed a client by an attorney, 68 the conflict of interest problem 
of "serving two masters" may be particularly relevant in a congres- 
sional law practice when the narrow private interests of a specific 
client of the Member are inconsistent with the broader public in- 
terests of the Member's constituency or the natiom It has been argued 
that Members of Congress who engage in the outside practice of law 
are susceptible to being influenced in the performance of their official 
duties in Congress to favor the interests of important and lucrative 
private clients, and voting records have been offered to arguably 
support this contention. 6 * 

When the interests of a private client are in fact inconsistent with 
the interests of the general public on a particular matter, the attorney/ 
congressman may be in an ethical dilemma in choosing between the 
public interest for which he was elected to serve or the private in- 
terests which he is retained to represent. As to an attorney's loyalty 
to the interests of a private client, the American Bar Association's 
"Code of Professional Responsibility" states: 

The professional judgment of a lawyer should be exercised, 
within the bounds of the law, solely for the benefit of his 
client and free from compromising influences and loyalties. 
Neither his personal interests, the interests of other clients, 
nor the desires of third persons should be permitted to dilute 
his loyalty to his client/ 

The judgment of a Member of Congress in performing his official 
congressional duties concerning certain legislation or other matters, 
therefore, may be influenced by this required loyalty to the interests 
of a private client so as not to "compromise" those interests. 

However, a Member of Congress at the same time owes a duty to 
represent the interests of the general public, rather than personal, pri- 
vate or special interests. As stated by the Congress: "Public office is 

"American Bar Association "Code of Professional Responsibility" (hereinafter referred to as ABA Code)* 
Canon 6, Ethical Consideration 5-1. 
" Drew Pearson and Jack Anderson, "The Case Against Congress," 1968, pp. 117-125. 
* See note 68. 



293-587 O - 79 - 6 



74 

a public trust", and thus a Member of Congress is expected to exercise 
his judgment on behalf of the beneficiaries of that trust, that is, the 
general public. 71 A Federal court has specifically noted that a particu- 
lar criminal restriction on the practice of law by Members of Congress, 
barring representation of a private client before the Government, is 
intended to protect against a "breach of trust" which occurs when a 
Member "shed[s] the duty of disinterested advocacy owed the 
government and his constituents in favor of championing private 
interests potentially inconsistent with this charge." 72 

Faced with such ethical questions and potential conflicts of interest, 
many Members of Congress have voluntarily refrained from the prac- 
tice of law. 73 More significantly, the permissible practice of law by 
present Members of Congress has been severely limited by the adoption 
of new ethical rules and conduct standards in both Houses of Congress. 

The Standing Rules of the Senate, it may be noted, now prohibit 
a Senator from affiliating with a firm or association for the practice of 
law, prohibit a Senator from allowing a firm to use his name, and per- 
mit a Senator to practice law as a sole practitioner only during non- 
official time. 74 

Members of the House are still permitted to practice law and to 
affiliate with law firms, but are restricted in the amount of income 
which may be earned from their outside practice (and all other outside 
earned income) to a total of 15% of their congressional salary, or 
$8,625 per year. This earned income limitation, and other statutory 
and ethical restraints, will work to severely limit the private practice 
of law by Members of the House, and to limit the Member's con- 
tinuing affiliation with a private law firm during his term of office. 

Practice by Member — Certain statutory provisions restrict specific 
representations or practice by Members of the House. Thus, Members 
are specifically prohibited from practicing in the Court of Claims, 78 
from practicing before the Indian Claims Commission, 76 or from being 
employed as an attorney by contractors or charterers holding contracts 
under the ^Merchant Marine Act. 77 

As noted previously, Members are prohibited by a Federal criminal 
statute at 18 U.S.C. § 203 from receiving any compensation, directly or 
indirectly, for services before Federal agencies rendered by them- 
selves or any other person. Thus, Members may not receive compensa- 
tion for legal practices before Federal regulatory agencies or depart- 
ments, precluding the receipt of compensation for such practices as 
before the National Labor Relations Board, the Internal Revenue 
Service, the Federal Trade Commission, the Interstate Commerce 
Commission, the Federal Communications Commission, and other 
departments, agencies, and officers of the Federal Government. The 
statutory provision at 18 U.S.C. § 203, however, does not preclude the 

™ Code of Ethics for Government Service, 72 Stat, part II, B 12, paragraphs 10, 5 ; See 
H. Rpt No. 95-1837 supra at p. 3. 

« United States v. Podell, supra at p. 1042. 

» U.S. News and World Report vol. 83, p. 39, "Putting a Lid on Lawyers 1b Congress,' 
Sept 12, 1977. Reportedly there were approximately 38 Members In the House practicing 
law In 1976. ' . 

. ■>* Senate Rule XLV( 6). 

*■ 18 U.S.C. « 204. .... 

w 25 U.S.C. I 70. 

"46 U.S.C. 11223(e). 



75 

receipt of compensation for legal practice before a court of law, even 
when the United States is a party or is interested in the proceeding. 78 
The prohibition within section 203, upon receiving compensation for 
any service rendered before a Federal agency, and other statutory and 
ethical provisions, bears directly on the propriety and efficacy of a 
Member of the House retaining his affiliation with and interest in a 
private law firm during his term of office. 

Affiliation with firm — As to retaining an interest in a private law 
firm, it should be noted initially that the American Bar Association 
"Code of Professional Responsibility" has promulgated disciplinary 
rules on what have been called "facade" law practices. This would be 
where a member of the firm, a Member of Congress for example, ac- 
tually does little or no practice in the firm but retains his name in the 
title, letterhead and announcements of the firm, often for purposes of 
prestige of the firm in attacting clients. The etlucs of receiving com- 
pensation merely for the use of a Member's name by a law firm for 
prestige purposes, rather than for actual services performed, have been 
questioned by congressional sources. In addition to possibly misrepre- 
senting a Member's actual participation in the activities of the firm, or 
misleading the public as to the firm's influence because of the Member's 
affiliation, such an arrangement may give the appearance that the 
Member is receiving compensation or benefits merely because of the 
influence and prestige of his position in Congress, rather than for any 
•services performed. 79 

Even where no compensation is received by the Member for his 
affiliation with a firm, the American Bar Association has prohibited 
the "facade" of retaining a Member's name in the firm when the 
Member is not actively and regularly practicing as a member of the 
firm: 

A lawyer who assumes a judicial, legislative, or public 
executive or administrative post or office shall not permit 
his name to remain in the name of a law firm or to be used 
in the professional notices of the firm during any significant 
period in which he is not actively and regularly practicing law 
as a member of the firm, and during such period other mem- 
bers of the firm shall not use his name in the firm name or 
in professional notices of the firm. 80 

Additionally, Ethical Consideration 2-12 of the "Code of Professional 
Responsibility" states : 

A lawyer occupying a judicial, legislative, or public execu- 
tive position who has the right to practice law concurrently 
may allow his name to remain on the name of the firm if he 
actively continues to practice law as a member thereof. 

The continued affiliation of a Member with a law firm may there- 
fore raise another dilemma for the Member. The Member, under ethical 
rules promulgated by the American Bar Association, must regularly 
and actively practice law with the firm to prevent the problems of the 

» See note 28. 

* Report of a Subcommittee of the Committee on Labor and Public Welfare, United States Senate, 
■"Ethical Standards in Government", Committee Print, 82d Congress, 1st Session, p. 25. 
l » ABA Code, DR 2-102(B). 



76 

prohibited "facade" law practice. However, such time and attention 
to an outside law practice may create a "time" conflict with the 
Member's official position and duties in the Congress, which is under- 
stood to be a full time commitment by the Member, requiring a 
"Member's full-time attention to his official duties". 81 

In some instances the American Bar Association has noted that 
persons who are to serve in a governmental post temporarily may take 
a leave of absence from the firm and maintain their name in the 
firm. Thus, if a person intends to hold office only temporarily and then 
return to his position in the firm, his name may apparently be retained 
if he is not precluded from practice by law or regulation and "proper 
precautions are taken not to mislead the public as to his degree of 
participation in the firm's affairs". 82 

A Federa 1 statutory provision, it should be noted, bars an individual 
firm, or corporation practicing before a Federal agency from using- 
the name of a Member of Congress in "advertising" the business. 83 It 
appears, however, that the listing of an individual's name on the letter- 
head of a law firm's stationery and the inclusion of an individual's 
name in the name of a firm would not be "advertising" in violation 
of the statute as far as the term "advertising" is generally used in 
relation to attorneys. 84 The statutory provision, at 5 U.S.C. §501, 
was derived with little change from a 1916 provision which referred ta 
"advertising" in the commercial sense and was specifically intended to 
prevent the practice of individuals or firms, particularly those prac- 
ticing before the patent office, from soliciting complimentary state- 
ments from Members of Congress and then using such statements for 
the purpose of endorsing and advertisting the individual's or firm's 
business. 85 However, even though participation by a Member of Con- 
gress or the retention of a Member's name in a legal partnership, firm, 
or corporation which practices before Federal agencies may not tech- 
nically violate 5 U.S.C. § 501, such an arrangement may encounter 
difficulties under Federal criminal law at 18 U.S.C. § 203. 

Federal Practice by Partners, Firm— The statutory provision at 18 
U.S.C. §203, which, as discussed above, prohibits a Member of 
Congress from receiving compensation for services rendered before 
a Federal agency, department or commission, also prohibits a Member 
from directly or indirectly receiving compensation for services rendered 
by himself or another before such bodies. Thus, if a Member of 
dongress has an arrangement with a partner or legal firm where comp- 
ensation for activities by partners or the firm would accrue to the 
Member of Congress as a participating partner or member of the firm, 
such an arrangement, where compensation accrues to the Member of 
Congress for services by the firm before a Federal agency, may be in 
violation of the criminal provision of Federal law at 18 U.S.C. § 203. 
Recently, it may be noted, a former Member of Congress has been 
indicted for allegedly receiving compensation from a client/hospital 
for services rendered before Federal agencies by law firms with whklk 
the Member was affiliated or connected in some way. 86 

" H. Doc. 95-73, supra at p. 10; see also H. Rpt. No. 95-1837, supra at p. 29. 

n ABA Opinion No. 318 (1967). 

m 5 tJ.S.C; § 501. - 

m AB A Code, Cannon 2, E.C. 2-9, 2-10, and t) R 2-101, 2-102. 

» House Report No. 364, 64th Congress. 1st Session; Congressional Record, April 17, 1916, pp. 6312-6314^ 

« United Statu v. Eilberg, Criminal No. 78-311, (D.C E. Pa. 1978). 



77 

As to the practice of law before Federal agencies by law firms with 
which a Member of Congress is affiliated, the House Committee on 
Standards of Official Conduct in Advisory Opinion No. 1, January 26, 
1970, advised Members concerning the prohibition of 18 U.S.C. § 203: 

The Committee emphasizes that it is not herein interpret- 
ing this statute but notes that the law does refer to any 
compensation, directly or indirectly, for services by him- 
self or another. In this connection, the Committee sug- 
gests the need for caution to prevent the accrual to a Member 
of any compensation for any such services which may be per- 
formed by a law firm in which the Member retains a residual 
interest. 

The Department of Justice has also noted in an informational letter 
that section 203 "bars a partner in a law firm from sharing in any fees 
received by the firm for representational activities performed by the 
firm before any department or agency during the time he is or was a 
Federal employee" or official. Although such a fee sharing or partner- 
ship arrangement might be violative of section 203 when the firm 
participates in a Federal practice, the Department of Justice was of 
the opinion that an arrangement other than one where the Federal 
officer or employee shares in the profits of the firm, such as where he 
receives a fixed salary, may be permitted under the law even when the 
firm receives some fees for Federal practice. The Justice Department 
stated that "this office has interpreted § 203 not to apply to a person 
who receives a fixed salary as an employee of a firm (as opposed to 
someone who shares in the firm's profits), even though some of the 
firm's overall income may be attributable to service covered by 
§ 203." 87 

In addition to a Member of Congress receiving compensation as a 
salaried "employee", rather than as a partner in a law firm with a 
TTederal practice, other devices might be employed in an attempt to 
circumvent the problem of the receipt of compensation by a Member 
■of Congress for services rendered by partners before Federal agencies. 
Since the receipt of compensation for such services is a necessary 
element of the offense, 88 a firm might attempt to establish a separate 
iDookkeeping arrangement where the Member of Congress would only 
share in the fees received for non-Federal matters, and not share in the 
compensation the firm receives for its Federal practice. Question may. 
arise in this situation, however, as to the effectiveness or "tightness" 
of an internal bookkeeping system to prevent the Member from sharing 
in the firm's compensation received from its Federal practice. Argu- 
ments could be raised that general revenues to a firm from its Federal 
practice, although not accruing directly to the Member, are benefit- 
ting the firm as a whole and thus the Member in particular as a partner 
who shares in the general success or failure of his firm. 
t Another device employed to circumvent the problem of compensa- 
tion accruing to a Member for a firm's Federal practice has been the 
establishment of a "dual partnership", that is, one "non-Federal 
practice" partnership with which the Member of Congress is associ- 
ated, and one partnership which excludes the Member of Congress 

" See note 33. 

• May v. United States, supra. 



7S 

and which engages in practice before Federal agencies. Although such 
dual partnership arrangements might in some instances technically 
circumvent the § 203 problem, 89 the ethics of such a situation has 
been increasingly questioned, particularly with regard to the American 
Bar Association "Code of Professional Responsibility." That Code,, 
at Disciplinary Eule 5-105 (D) states specifically : 

If a lawyer is required to decline employment or to with- 
draw from employment under DR 5-105 [conflicts of interest], 
no partner or associate of his firm may accept or continue such 
employment. 

Thus, since a Member is prohibited from such "employment" before- 
Federal agencies (that is, barred from receiving compensation for 
such services), it may be argued that a Member's partners and associ- 
ates are likewise barred from such employment and compensation. 
The apparent reasoning behind such a prohibition concerning the- 
avoidance of conflicts of interest by an attorney or his partners was 
expressed in an opinion of the American Bar Association Committee- 
on Professional Ethics: "The relations of partners in a law firm are 
so close that the firm, and all the members thereof, are barred from 
accepting any employment, that any one member of the firm is 
prohibited from taking." 90 

Discussing the ethics of such arrangements, the Association of the 
Bar of the City of New York in its work "Congress and the Public 
Trust," offered the following observations and conclusions: 

While the use of two firms allows a Member's partners to 
accept Federal matters without violating Section 203, the 
ethics of such arrangements pose a different question. For 
conflict-of-interest purposes, it is well settled that neither 
a firm nor any member may accept employment which any 
member of the firm cannot properly accept * * *. 

Under this reasoning, individual partners of a Member 
of Congress and other firms to which they belong should 
be precluded from any employment forbidden to the Member 
as a conflict of interest. Federal law supplies the conflict 
rule which disqualifies the Member [18 U.S.C. § 203], and 
the legal profession, basing its attitude upon its knowledge 
of the partnership relation, follows a principle which dis- 
qualifies his partners. [See DR5-105(D), ABA Code of 
Professional Responsibility] 

It must be admitted, however, that the legal profession has 
never moved against such dual arrangements of lawyers in 
Congress * * *. 

Whether or not such dual arrangements technically 
comply with formal rules of ethics their appearances are 
damaging to the public, the Congress, and the legal pro- 
fession. Under the higher-than-market-place standards which 
lawyers and Members of Congress should follow, we strongly 
recommend that those law firms which include Members of 



»»40 Op. Atty. Gen. 287 (1943); New York City Bar Association, Committee on Professional Ethics,, 
'nions, No. 803, 19 The T 
Opinion No. 33 (1931). 



Opinions. No. 803, 19 The Record 424 (1964) 



79 

Congress who continue to practice for any reason terminate 
any such dual arrangements and accept no employment 
forbidden to the Member of Congress * * *. 

The Federal agencies before which a Congressman's 
partners practice are creatures of Congress. The Member 
of Congress votes on their appropriations and writes the 
statutes they administer. Federal officials may be influ- 
enced by a Congressman's partner's appearance in much the 
same way they would be influenced by the Member himself. 91 

Other General Rules. — If a Member does engage in the practice of 
law during his term in office, the Member should be aware that in 
addition to the limitation on outside earned income and the restrictions 
on particular practices discussed above, the general regulations on out- 
side compensation by Members would generally apply. That is, in 
addition to barring the receipt of compensation for services before 
Federal agencies, the Member should not accept compensation because 
of influence improperly exerted from his position in Congress; may not 
accept compensation from foreign governments; and may not hold or 
enjoy contracts with the United States Government. Further, the 
American Bar Association has promulgated ethical standards and 
Disciplinary Rules which would be applicable to attorneys who hold 
public positions. 

Canon 9 of the American Bar Association "Code of Professional 
Responsibility" provides generally that: "A lawyer should avoid even 
the appearance of professional impropriety." More specifically, Dis- 
ciplinary Rule 8-101 provides: 

DR8-101 ACTION AS A PUBLIC OFFICIAL 

(A) A lawyer who holds public office shall not: 

(1) Use his public position to obtain, or attempt to 
obtain, a special advantage in legislative matters for 
himself or for a client under circumstances where he 
knows or it is obvious that such action is not in the 
public interest. 

(2) Use his public position to influence, or attempt 
to influence, a tribunal to act in favor of himself or of a 
client. 

(3) Accept anything of value from any person when 
the lawyer knows or it is obvious that the offer is for 
the purpose of influencing his action as a public official. 

Financial Disclosure. Under the provisions of the "Ethics in Gov- 
ernment Act of 1978", 92 Members of Congress must file annual 
personal financial disclosure statements with the Clerk of the House 
by May 15 of each year. In addition to various information required 
to be disclosed (which is discussed in a later chapter), Members must 
disclose information concerning income and compensation. The source, 
type, and amount of all income (other than dividends, interest, rent, 
and capital gains which are listed separately) from any source must be 
listed. Income from current employment by the United States Govern- 
ment need not be reported. Honorariums aggregating $100 or more 

M Association of the Bar of the City of New York, Special Committee on Congressional Ethics, "Congress 
and the Public Trust", New York 1970, James C Kirby, Jr., Executive Director, pp. 112, 113, and 115. 
« P.L. 95-521. 



80 

from any source in the preceding year must be included as to the 
source, date, and amount. 93 

Income in the form of dividends, interest, rent, and capital gains 
exceeding $100 is to be listed as to the source and type and the cate- 
gory of amount into which it falls: not more than $1,000; greater than 
$1,000 but not more than $2,500; greater than $2,500 but not more 
than $5,000; greater than $5,000 but not more than $15,000; greater 
than $15,000 but not more than $50,000; greater than $50,000 but 
not more than $100,000; or greater than $100,000. M 

« 2 U.S.C. 5 702(a)(1)(A). 
h 2 U.S.C. §702(a)(l)(B). 



Chapter 8. OUTSIDE EMPLOYMENT AND COMPENSATION 
OF HOUSE EMPLOYEES 

Highlight 

As to outside employment, House employees should note generally: 
— they must not allow an outside job to interfere with fulfilling 
and performing their official congressional duties, and so must 
restrict outside employment ^o .their "free" time; 
— in addition to a possible' "time"'" conflict, there may be an 
inherent conflict of interest between the "substance" of one's 
outside employment and one's congressional job; 
— advice and opinions on*; t^te ethics-j or possible conflicts of 
interest concerning outside employment should be sought from 
one's supervisory personnel and from the Committee on 
Standards of Official Conduct. 
Employees are restricted in some specific areas of employment, and 
in some areas of receiving compensation. For example, employees 
may not: 

— receive compensation from foreign governments; 
— represent persons in a private capacity before the Federal 
Government, or in a court on matters affecting the Federal 
Government; 
— receive honoraria in excess of specified limits, or in excess of 

the usual and customary amount; 
— act as an agent of a foreign principal ; 

—use the influence of their position improperly to receive com- 
pensation or benefits ; 
— receive compensation over a certain amount for more than one 

Government position; 
— engage in "self -dealings" with private foundations without 
incurring tax penalties. 
Certain House employees are required to file annual financial dis- 
closure statements detailing specific information on certain income 
received, in addition to other financial information required to be 
disclosed. 

(81) 



Chapter 8. OUTSIDE EMPLOYMENT AND COMPENSATION 
OF HOUSE EMPLOYEES 

There is no statutory provision under Federal law, nor Rule of the 
House of Representatives, which flatly prohibits all outside or addi- 
tional employment of employees of the House. General ethical stand- 
ards and House Rules, however, require House employees to fulfill 
their congressional duties for which they are paid, and thus would work 
to allow an employee to engage in outside employment activities only 
on one's "free" time. 1 Additionally, questions may arise as to an in- 
herent conflict with one's official duties in relation to certain outside 
employment, even if such employment is not prohibited by specific 
statute or rule. 

Although no general prohibition on outside employment exists, 
several provisions of Federal law and House Rules work to regulate and 
restrict particular outside employment activities of House employees. 
"Thus, for example, House employees may not receive compensation 
from foreign governments; 2 may not represent persons in a private 
capacity before the Government or in court in matters affecting the 
Government ; 3 are limited in the amount of honoraria which may be 
received for services rendered ; 4 are prohibited from acting as an agent 
for a foreign principal; 6 may not use the influence of their official 
position improperly to receive compensation ; 8 and may be restricted 
in dealings with private foundations. 7 Finally, certain outside compen- 
sation and business transactions must be disclosed in annual personal 
financial disclosure reports to be filed by employees compensated at a 
rate of a GS-16 or more, and by at least one principal assistant to a 
Member if no staff employee of that Member receives a GS-16's 
•salary or more. 8 

Performance of Congressional Duties. House employees who en- 
gage in private employment activity may not do so to the neglect of 
official congressional duties, nor on "official time" for which salary is 
received from the United States Treasury. The Rules of the House of 
Representatives specifically require that a Member not retain anyone 
on his clerk hire allowance "who does not perform duties commen- 
surate with the compensation he receives." 9 Additionally, the "Code 
of Ethics for Government Service" states that any person in Govern- 
ment service should "Give a full day's labor for a full day's pay; giving 
to the performance of his duties his earnest effort and best thought." 10 

1 See; "Code of Ethics for Government Service", 72 Stat, part 2, p. B12, paragraph 3; Rules of the House of 
-Representatives, Rule XLIII(8). 

2 United States Constitution, Art. 1, Sec. 9, cl. 8. 
U8 U.S.C. §§203,205. 

« 2 U.S.C. § 441i; House Rule XLIII(5). 

• 18 U.S.C. §219. 

• House Rule XLIII(3). 
7 28 U.S.C. §§ 4941, 4946. 

» P.L. 95-521, 2 U.S.C. § 701 et seq. 

•House RuleXLIII(8). 

10 72, Stat, part 2, B12, para. 3. 

(82) 



83 

These provisions recognize that a House employee is hired for and is 
paid from United States Treasury funds for the performance of official 
•congressional duties, 11 rather than private or personal activities. Out- 
side employment which detracts from the performance of, or from the 
time and attention to one's Government job, would thus apparently 
be contrary to these standards. 

Several ethical standards apply to the relationship between one's 
•congressional duties and outside compensation or employment. Gen- 
erally, House employees may not improperly use their official position 
to receive compensation or benefits for themselves. The Rules of the 
House of Representatives specifically prohibit a House employee 
from receiving compensation or allowing compensation to accrue to the 
employee's beneficial interest "the receipt of which would occur by 
virtue of influence improperly exerted from his position in Congress." u 
Along similar lines, the Code of Ethics for Government Service pro- 
hibits the use of confidential information one receives in the course of 
public employment "as a means for making private profit." 13 

Certain employment activities may raise questions of an inherent 
■conflict of interest with one's congressional duties. Although there is no 
specific statute or rule which prohibits outside employment activities of 
House staffers which "conflict" with official duties, an inherent conflict 
may arguably arise when an employee's official duties are directly 
related to matters in which a private employer is interested, or when 
an employee's private interests otherwise influence his public duties. 
This principle of conflict of interest was discussed by the New York 
■City Bar Association's Special Committee on Congressional Ethics 
which stated: "The risk, then, is risk of impairment of impartial 
judgment, a risk which arises whenever there is a temptation to serve 
personal interests." 14 Although no rule specifically prohibits "con- 
flicting" employment (as in the Senate Rules), 15 in drafting the Code 
of Ethics for Government Service it was apparently recognized that 
•outside compensation or employment may have an effect upon the inde- 
pendence of, and the general performance of, official duties by Govern- 
ment employees. The Code thus states specifically that an employee 
should "never discriminate unfairly by the dispensing of special favors 
•or privileges to anyone, whether for remuneration or not", and further 
prohibits the receipt of any "benefits" by an employee "under circum- 
stances which might be construed by reasonable persons as influencing 
the performance of his governmental duties." 18 

Professional Staff of Committees. Professional staff members of the 
standing committees of the House are instructed by House Rules not 
to "engage in any work other than committee business". Further, the 
House Rule provides that such professional staff members "shall not 
be assigned any duties other than those pertaining to committee 
business." 17 Since no official interpretation or ruling on the provision 

" See; Regulations of the House Administration Committee; "Regulations and Accounting Procedures 
•for Allowances and Expenses of Committees, Members and Employees of the U.S. House of Representa- 
tives", 95th Congress, January 1978, P. 88, paragraph 2(a), and p. 29, paragraph 2(a). 

■a House rule XLIII (3). 

! » 72 Stat, part 2. B 12 paragraph 8. 

" "Congress and the Public Trust", James C Kirby, Jr., Executive Director, New York 1970, p. 39. 

's See: Senate Rule XLV(2). 

»• 72 Stat, part 2, B 12, paragraph 5. 

« House Rule XI, cl. 6(a)(3). 



84 

is apparent, questions may arise as to whether the prohibition upon 
engaging in "any work other than committee business" would pre- 
clude professional staff employees from holding any outside or addi- 
tional employment from their congressional job. Research into the 
legislative history of this Rule, which originated from the Legislative 
Reorganization Act of 1946, 60 Stat. 812, however, has failed to reveal 
specific congressional intent to apply the prohibition in question to 
"moonlighting" or off hours employment activity by professional 
staffers. Rather, it appears that the provision was intended to insure 
that professional stair members of committees would work exclusively 
on committee business during their congressional working hours, as 
opposed to performing "other congressional office duties". 18 As noted 
in the floor debates on the provision, this was to insure a continuing 
full time professional staff of experts for the standing committees. 19 

Thus, absent future rulings from the House to the contrary, it 
would appear that professional staff members of congressional com- 
mittees are generally under similar regulations as staff employees of 
House Members and other House employees with respect to outside 
employment. It should be noted that the standing committees of the 
House are apparently authorized to determine certain terms and con- 
ditions of employment of their professional staff, 20 other than those 
established or governed by specific statute or rule, and thus might 
establish more stringent or restrictive regulations concerning the out- 
side or additional employment of its own professional staff as the com- 
mittee deems necessary for its efficient operation. Regulations of the 
committees should be examined, therefore, for further guidance on 
standards of conduct for the committee's employees. 

Dealings With the Federal Government. Congressional employees 
are generally prohibited from private representational activities on 
behalf of another before the agencies of the Federal Government, or 
in a court in a matter in which the United States is a party or is 
interested. Criminal provisions at 18 U.S.C. § 203 prohibit employees 
from receiving compensation, directly or indirectly, for any "services 
rendered" before agencies of the Federal Government; and 18 U.S.C. 
§ 205 prohibits employees from acting as "agent or attorney" for 
someone, with or without compensation, before a Federal agency or 
in court concerning a matter affecting the Government. 

As to the prohibition on receiving compensation for services rendered 
before a Federal agency in 18 U.S.C. § 203, it should be noted that 
the prohibition extends to the receipt of such compensation "directly 
or indirectly". Therefore, if a congressional employee is in a partner- 
ship arrangement or otherwise shares in the fees from services rendered 
before Federal agencies, a violation of this provision may occur even 
if the employee did not personally perform services before the agency. 21 
As noted in an informal letter opinion from the Department of Justice, 
this section "bars a partner in a law firm from sharing in any fees 
received by the firm before any Federal department or agency during 

m Report of the Joint Committee on the Organization of Congress, pursuant to H. Con. Res. 18, "Organi- 
sation of Congress", 79th Congress, 2d Session S. Rept. No. 1011, March 4, 1946, p. 10; See also Senate Rept. 
No. 1015, 90th Congress, 2d Session, pp. 4-5. 

» 92 Congressional Record 6442, 79th Congress, 2d Session, June 6, 1946. 

M See House Rule XI, cl. 6. 

21 See: Advisory Opinion of the House Committee on Standards of Official Conduct, Advisory Opinion- 
No. 1, January 20, 1970. 



85 

the time lie is or was a Federal employee." 22 Although such fee 
sharing or partnership arrangements concerning Federal agency prac- 
tice would be prohibited, the statute as interpreted by the Justice De- 
partment would apparently allow a congressional employee to receive 
& fixed salary from a firm or organization which derives some revenue 
from Federal agency practice. The Justice Department letter cited 
above noted that "this Office has interpreted § 203 not to apply to a 
person who receives a fixed salary as an employee of a firm (as opposed 
to someone who shares in the firm's profits), even though some of 
the firm's overall income may be attributable to service covered by 
§ 203." 

As noted above, the provisions at 18 U.S.C. § 205 would generally 
prohibit a congressional employee from acting as agent or attorney 
for someone before a Federal agency or a court in a matter affecting 
the United States, even if the employee receives no compensation 
for such activity. Although the proscribed conduct under § 205, 
that is, acting as agent or attorney, might require more than mere 
•"service rendered" as in § 203, it does not appear that an individual 
must actually be an attorney or have a strict common law agency 
relationship with another for such person's conduct to fall within the 
statute. 23 Thus, House employees should avoid private representation 
of persons before the Government except for those activities which 
are specifically exempt from the statute, such as uncompensated 
work in disciplinary or personnel proceedings, or the representation of 
certain family members or persons to whom the employee acts as 
personal fiduciary in certain matters not connected with the employee's 
governmental duties. 

Although Federal employees under § 205 may not represent another 
before the Government, such employees may be permitted to represent 
themselves before the Government without violating the provisions 
of 18 U.S.C. § 205. 24 Thus, congressional employees would apparently 
be permitted to represent themselves before agencies of the Govern- 
ment for grants, aid, supply contracts or procurements, although 
they could not represent others without a violation of section 205. 
As to the Government entering into contracts with Federal employees 
in general, the Federal Procurement Regulations state that contracts 
between the Government and Federal employees, or firms substan- 
tially owned or controlled by Federal employees, should not knowingly 
be entered into "except for the most compelling reasons", such as 
where the needs cannot otherwise be reasonably fulfilled. 25 Addition- 
ally, it should be noted that the general ethical standards in the 
Code of Ethics for Government Service state that an employee 
"Should engage in no business with the Government, either directly 
or indirectly, which is inconsistent with the conscientious performance 
of his governmental duties." 26 After such a contract, grant, or employ- 
ment has been negotiated by an employee for himself, the conflict 

n Letter of March 14, 1978, from Leon Ulman, Deputy Assistant Attorney General, Office of Legal 
Counsel, Department of Justice. 

a United Siales v. Sweig, 361 F.Supp. 1148 (D.C.N.Y. 1970). 

"< See: 14 Op. Atty. Gen. 483(1874); Memorandum of Attorney General, January 28, 1963, 18 U.S.C. 
i 201 note, re: 18 U.S.C. §§ 203 and 205. 

"41 C.F.R. §1-1.302-3. 

» 72 Stat, part 2, B12, paragraph 7. 



86 

of interest and ethical restrictions on "time" and "subject matter" 
conflicts, as well as the restrictions on dual Government pay and 
employment discussed below, would of course come into effect if 
the employee remains in the employ of the House. 

Dual Government Employment. Problems arise if a congressional 
employee seeks outside income from additional Government employ- 
ment. Provisions of the United States Code dealing with dual pay and 
dual employment in the Federal Government prohibit individuals 
paid by the Clerk of the House from holding another Government 
position if the salary of the two positions combined exceeds $7,724 per 
year. 27 This provision also prohibits the receipt of pay from two posi- 
tions, both paid by the Clerk of the House, if the aggregate salary 
from the two House positions exceeds the maximum per annum rate 
of pay authorized to be paid out of the clerk hire allowance of a Mem- 
ber. 28 The dual pay provisions allow receipt of more than the $7,724 
■limit for multiple employment when the positions involved are expert 
or advisor positions and pay is received on a "when-actually-em- 
ployed" basis for different days. 29 

This limitation on receiving pay for more than one Government job- 
applies specifically to more than one "position", defined in the statute 
to mean "a civilian office or position (including a temporary, part- 
time, or intermittent position), appointive or elective, in the legisla- 
tive, executive, or judicial branch of the Government * * *." 30 When 
one is hired or retained as an independent contractor for services by 
the Government rather than appointed to a civilian office or position 
then, the restriction on the dual employment would arguably not 
apply. 31 The relationship involved in such a situation would not be- 
one of employer-employee, but rather a contractual one ba,sed on an 
independent contract, and thus such employment would not involve a 
"civilian office or position" subject to the dual compensation pro- 
visions. 32 The elements of an emplo3 r er-employee relationship, as op- 
posed to an independent contractor status, have been noted by the 
Comptroller General and the Civil Service Commission to include 
"first, performance of a Federal function, second, appointment or 
employment by a Federal officer, and third, supervision and direction 
by a Federal officer." 33 

Foreign Interests. Employees of the House are prohibited, as are 
other Federal employees, by the provisions of the United States Con- 
stitution from receiving an "emolument" of "any kind whatever" 
from a foreign government or a representative of a foreign state, 
without the consent of the Congress. 34 An "emolument" is generally 
defined as "any profit, gain, or compensation received for services 
rendered." 35 Although Congress has consented by statute to the ac- 
ceptance of certain minimal "gifts" or "decorations" from foreign 
governments by Federal employees, no such general consent for the 
receipt of any emoluments or other compensation from foreign govern- 

"5 U.S.C. § 5533(c)(1). 

M5U.S.C. 15533(c)(2). 

»5 U.S.C. §5533(c)(4). 

M 5 U.S.C. §5531. 

»• See: Metcalf & Eddy v. Mitchell, 269 U.S. 514, at 518, 519-521 (1925); "Federal Personnel Manual", Civil) 
Service Commission, CK. 304, subchapter 1, section 1-4. 

« See: 26 Comp. Gen. 188 (1946); 26 Comp. Gen. 442; 42 Comp. Gen. 395 (1963); Comp. Gen. Decision. 
B- 174226, January 12, 1972; 27 Comp. Gen. 695 (194S). 

a Federal Personnel Manual, supra. 

** United States Constitution, Art. 1, Sec. 9, cl. 8. 

* 49 Comp. Gen. 819, 820 (1970); B-180472, March 4, 1974; B-180472, May 9, 1974. 



87 

ments was granted by Congress to present Federal employees in the 

Srovision known as the Foreign Gifts and Decorations Act. 38 Thus, 
[ouse employees are generally prohibited from receiving any payment 
for their services rendered to official foreign interests, such as from 
ambassadors or embassies of a foreign government, or agencies or 
instrumentalities of a foreign nation. This constitutional ban on com- 
pensation from foreign governments apparently has been interpreted 
to extend as well to multinational organizations made up of foreign 
governmental units. 37 

In addition to the prohibition on compensation from foreign govern- 
ments, House employees are prohibited by statute from acting as an 
agent or attorney for a foreign principal who is required to register 
under the Foreign Agents Registration Act of 1938, that is, generally, 
those engaged in propaganda, politics, or lobbying. 33 It should be 
noted that as well as restrictions on compensation from foreign in- 
terests, statutes and House Rules regulate or restrict the receipt of 
gifts or campaign contributions from any foreign national. 39 

Honorarium Restrictions. Employees of the House are generally 
permitted to accept honorariums for their personal appearances, 
articles, speeches and similar services. Federal statutory provisions, 
however, restrict the amount of honorariums which may be accepted 
by Federal employees for a single event, and as an aggregate in one 
calendar year. 

The statute at 2 U.S.C. § 441i prohibits Federal officers and em- 
ployees from accepting "excessive" honorariums. The statute presently 
limits the amount of an honorarium to $2,000, excluding amounts for 
travel and subsistence expenses and amounts incurred for agents' fees 
or commissions, which may be accepted for any appearance, article 
or speech; and limits aggregate yearly honorariums to $25,000. 

The term "honorarium" is not specifically defined within the statute 
prohibiting excessive honorariums. However, under the regulations of 
the Federal Election Commission, the agency authorized to promulgate 
regulations on this statute, 40 the term "honorarium" is defined to 
mean the payment of something of value "accepted as consideration 
for an appearance, speech, or article. 41 " The regulations note that an 
honorarium does not include payment for agents' fees or commissions, 
or payment or provisions for actual travel or subsistence, "including 
transportation, accommodations, and meals for the officer or employee 
and spouse or an aide * * *." " The regulations further define the 
terms "appearance", "speech", and "article". 43 

The regulations of the Federal Election Commission additionally 
provide a description of what an "honorarium" is not. The regulations 
exclude from the definition of honorarium "an award", which is a 
gift in recognition for some religious, educational, scientific, civil, etc., 
achievement which is given by means of a selection process with 
established criteria, for which the recipient is not required to apply 
or to take any specific action in competition for the award, and which 

m 5 U.S.C. § 7342, as amended by P.L. 95-105. 

17 Note E.O. No. 11446. January 16, 1969 concerning decorations from multinational organizations, 5 U.S.C. 
5 7342(a)(2), as amended by P.L. 95-105, as to gifts and decorations from foreign governments. 
» 18 U.S.C. § 219; see Foreign Agents Registration Act, 22 U.S.C. 5 611 et seq. 
* 2 U.S.C. § 441e; House Rule XLIU(4). 
*» 2 U.S.C. §438. 
«> 11 C.F.R. § 110.12(b). 
«*Id. 
« 11 C.F.R. § 110.12(b) (2)-(4). 



88 

does not require the recipient to make a speech, appearance or to 
write an article as a condition for receiving the award. 44 Further, an 
honorarium does not include a "gift", which is described as "a volun- 
tary conveyance of real or personal property which is made gratui- 
tously, and is not supported by consideration, and is not made to 
serve in place of an honorarium or a contribution." 46 Also excluded and 
distinguished from an honorarium is "a stipend", defined as "payment 
for services on a continuing basis, including salary or other compen- 
sation paid by news media for commentary on events * * *." 46 

In an advisory opinion by the Federal Election Commission, the 
Commission distinguished between an "honorarium" and a "stipend" 
by noting that money received by a Federal official "is considered an 
'honorarium', regardless of whether it is offered gratuitously or as a 
fee, if it is accepted as consideration for an appearance, speech or 
article" and if such money is "accepted as a payment for a single 
event or transaction and under circumstances which do not imply a 
continuing compensatory relationship between the parties for similar 
services." A "stipend", on the other hand, would be money which 
"is accepted in the form of fixed or regular compensation intended as 
consideration for the rendering of services, e.g., a salary." 47 

Thus, money received by an employee of the House for an award, a 
gift, a stipend, or as proceeds from the publication of a book, 48 is not 
considered to be an honorarium, and therefore would not be subject to 
this statutory limitation upon "honorariums". 

Private Foundations. Tax penalties may arise if certain employees 
of the House engage in acts of "self -dealing" with a "private founda- 
tion". Provisions of the Internal Revenue Code at 26 U.S.C. §4941 
prohibit certain dealings, such as those involving the receipt of 
compensation or certain expenses, with a private foundation by some 
government officials, including employees of the House who receive 
a salary of at least $15,000 per year. The tax sanctions include an 
imposition of an excise tax on both the self-dealer and the manager 
of the foundation, which increase in size if 'the original matter is not 
rectified within a certain time, or for repeated or willful and flagrant 
violations. 

Financial Disclosure Reports. Employees of the House who receive 
a salary equal to a GS-16 or more, and at least one principal assistant 
to a Member if no staff employee of that Member receives at least a 
GS-16 salary, must disclose certain outside compensation and business 
transactions in annual personal financial disclosure reports filed with 
the Clerk of the House by May 15 of each year. The reports must 
detail financial information for the preceding year concerning several 
specified areas: income; gifts and reimbursements; financial holdings; 
debts; transactions in property or securities; positions held in business- 
es or organizations ; and arrangements or agreements for continuing 
compensation, benefits or future employment. An employee newly 
coming into a covered position must file the required disclosure 
statements within 30 days after assuming his position. 

"11 C.F.R. § 110.12(c)(1). 

«11 C.F.R. §110.12(c)(2). 

"11 C.F.R. § 110.12(c)(3). 

« AO 1975-46, 40 FR 57756, December 11, 1975 (note modification by 1976 Amendments to F.E.C.A., 
41 FR 46416, October 20, 1976). 

n Federal Election Commission Advisory Opinion, AO 1975-77, 40 FR 51611, November 5, 1976; see also 
Cong. Roc., daily ed., Oct. 8, 1974, at page S18526. 



Chapter 9. FINANCIAL INTERESTS AND DISCLOSURE 

Highlight 

Generally, it has been recognized that the financial investments 
and holdings of Members, and to a lesser degree employees, of the 
House may raise conflicts of interest in relation to the performance of 
official duties. However, Members and employees are not required to 
divest assets upon entering their position or employment. Addition- 
ally, Members are not mandatorily disqualified from voting on issues 
affecting personal financial interests. Public financial disclosure was 
seen as the major regulation and deterrent to financial conflicts of 
interest. 

Specifically, as to financial interests, Members and certain House 
employees : 

— must file personal financial disclosure statements by May 15 
of each year detailing specific financial information concern- 
ing themselves and their spouse and dependent children; 
— may establish "blind trusts" to which assets may be trans- 
ferred in an effort to eventually avoid conflicts of interest 
which may arise because of financial holdings ; 
— are prohibited, as are all Members, officers and employees of 
the House, from improperly using their official positions in 
Congress for their own personal gam. 
A Rule of the House concerning abstention from voting because of 
a direct personal or pecuniary interest in a matter might in some 
instances apply to the financial investments of a Member, generally, 
when the Member is affected as an individual rather than as a member 
of a class. 

(89) 



293-587 O - 79 - 7 



Chapter 9. FINANCIAL INTERESTS AND FINANCIAL 
DISCLOSURE 

The private financial interests and investment holdings of employ- 
ees and Members of the House and their families may raise some 
ethical and conflict of interest issues for such employees and Members 
in the performance of their official duties. Circumstances may arise 
where Members of the House must vote on legislation, or where 
Members must make decisions or staff employees give opinions or 
assistance in committee concerning matters which directly affect or 
have substantial impact upon their personal financial interests or 
holdings. Concern is expressed in these instances that a breach of the 
"public trust" might occur, that is, that the personal financial interests 
of the employee or Member would subtly influence his vote, opinion, 
or decision, rather than having the interests of the general public or 
the Member's constituency as the motivating factor or primary 
influence in the decision making process of the public official. 

As discussed by the New York City Bar Association in its work 
entitled "Congress and the Public Trust": 

The evil is not only the possibility or appearance of private 
gain from public office, but the risk that official decisions, 
whether consciously or otherwise, will be motivated by 
something other than the public's interest. The ultimate 
concern is bad government, which always means actual 
harm to the public. 

******* 

The evil, then, is risk of impairment of impartial judg- 
ment, a risk which arises whenever there is a temptation 
to serve personal interests. The quality of specific results 
is immaterial. In this sense, conflict-of-interest regulation 
is true to the fiduciary principle. Like other fiduciaries, such 
as guardians, executors, lawyers, and agents, the public 
trustee has a duty to avoid private interests which cause 
even a risk that he will not be motivated solely by the 
interests of the beneficiaries of his trust. 1 

Federal statutes, regulations or rules of the House, however, do 
not specifically prohibit a Member or an employee of the House from 
holding a financial asset or interest which might "conflict" with or 
influence the performance of the Member's or employee's official 
duties. Even the House Rule limiting the amount of income a Mem- 
ber may receive in a year is applicable only to "earned" income, and 
not income from financial assets, investments, or other equity. 2 

' "Congress and the Public Trust," Report of tho Association of the Bar of the City of New York Special 
Committee on Congressional Ethics, James C Kirby, Jr., Executive Director, New York 1970, pp. 38-39. 
2 Rules of the House of Representatives, House rule XLVII. 

(90) 



91 

Certain House Rules and ethical standards may apply in some 
instances, however, to some particular aspect of outside financial 
interests. Specifically, Members and employees of the House are 
prohibited from using their official position in the Congress for their 
own personal gain. 3 Additionally, in some rare instances, the House 
rule pertaining to abstentions from voting where the Member is 
personally interested might be applicable. 4 

The statutory provisions requiring annual personal financial dis- 
closure by Members and certain employees do relate directly to 
financial interests, investments and assets. 5 Financial disclosure pro- 
visions were seen as the major regulation and monitor on possible 
conflicts of interest due to outside financial holdings, after proposed 
requirements for divestiture of potentially conflicting assets, or 
mandatory disqualifications from voting by Members were rejected 
as impractical or unreasonable. 6 

As for Members of the House, although it was apparent that poten- 
tial conflicts of interest may exist between a Member's official duties 
and his personal financial interests, it was recognized that Members of 
Congress will enter public service owning assets and having private 
investment interests like other citizens in the general public. Members 
of Congress could not be expected to "fully strip themselves of worldly 
goods. 7 " Even a proposed selective divestiture of potentially "con- 
flicting" assets raises problems in the legislative branch because unlike 
many positions in the executive branch of Government which are 
concerned with administration and regulation in a particular area, or 
with regard to a particular subject, e.g., aviation, communication, 
shipping, etc., the area in which a Member of Congress must exercise 
decision making duties concerning legislation covers nearly the entire 
spectrum of business and economic endeavors. Thus, a neat divestiture 
of those interests which may present a conflict with official duties is 
not as practical in the legislative branch as in the executive branch of 
Government. The wisdom of divestiture in general has been ques- 
tioned in some quarters in that it was feared that such divestiture of 
interests and ownerships could isolate or insulate a legislator from the 
personal and economic interests that his constituency or society in 
general has in governmental decisions and policy. 8 

Mandatory disqualification of a Member from voting because of a 
financial interest in a matter under consideration was also rejected as a 
solution to the potential conflict of interest problem raised by outside 
financial interests. In our representative form of government, it was 
felt that such disqualification would constitute an undesired disenfran- 
chisement of a Member's entire constituency. 9 It has been noted that 
a Member may often have a community of interest with his constit- 
uency, may arguably have been elected because of, and to serve such 
common interest, and thus would be ineffectual in representing the 
real interests of his constituents if he were forced to De disqualified 
from voting on issues touching those matters of common interest* 

s House Rule XLIII(3); Code of Ethics for Government Service, 72 Stat, part II, B 12, para. (5). 

'House RuleVHI(l). 

« P.L. 95-521, 2 U.S.C. § 701 et. seq. 

• See House Documents No. 95-73, 95th Congress, 1st Session, "Financial Ethics," Communication from 
the Chairman, Commission on Administrative Review, pp. 9-10. 

7 "Congress and the Public Trust," supra at p. 47. 

« See, for example, Wisconsin Statutes Annotated, § 19.45(1), 1975 Supplement. 

• H. Doc. No. 95-73, supra at p. 9. 



92 

Further, formulas for determining a disqualifying interest in a par- 
ticular entity affected by legislation, or formulas to determine the 
specific degree of interest or the required impact or effect of legislation 
on such entity for disqualification to be required, are difficult to es- 
tablish to any practical degree. 

Thus, public disclosure of assets, financial interests and investments 
was seen as the preferred method for regulating possible conflicts of 
interest of Members of the House, and certain congressional staff. It 
was felt that public disclosure will provide the necessary information 
to allow a Member's constituency to judge his official conduct as to 
possible financial conflicts with his private holdings, and would provide 
necessary information to flag potential conflicts of employees. Review 
of a Member's conduct by way of elections every two years was seen 
as an effective deterrent and regulation on potential conflicts of Mem- 
bers. As stated by the House Commission on Administrative Review 
of the 95th Congress in recommending broader financial disclosure re- 
quirements in lieu of other regulations on investment income : 

In the case of investment income, then, the Commission's 
belief is that potential conflicts of interest are best deterred 
through disclosure and the discipline of the electoral process. 
Other approaches are flawed both in terms of their reason- 
ableness and practicality, and threaten to impair, rather than 
to protect, the relationship between the representative and 
the represented. 10 

Under the disclosure provisions, one method of conflict of interest 
avoidance which has been prof erred is the creation of "blind trusts" 
by Federal officials, including Members and covered employees of the 
House. The theory behind the creation of such blind trusts is that 
officials will place financial assets in the trust under the exclusive 
control of an independent trustee. Eventually, through sale of existing, 
and acquisition of new assets, the identity of the specific assets and 
ownerships of the official in the trust will be unknown to the official 
and will thus be eliminated as a factor in influencing his official 
decision making. 

Use of Office for Personal Gain. One area of outside investments 
and financial interests which is regulated by the House Rules and ethi- 
cal standards is the use of one's position in the Congress for one's 
personal gain. House Rule XLIII(3) provides that a Member or an 
employee may not receive any compensation or allow any compensa- 
tion to accrue "to his beneficial interest from any source, the receipt 
of which would occur by virtue of influence improperly exerted from 
his position in the Congress." The practical effect of this Rule would 
apparently be to examine certain financial transactions and benefits 
received by a Member or an employee to determine if such person 
has "used his political influence, the influence of his position to make 
pecuniary gains." " 

Members and employees of the House are further instructed by the 
provisions of the Code of Ethics for Government Service never to 
"discriminate unfairly by the dispensing of special favors or privileges 
to anyone", nor to accept "benefits under circumstances which might 

'•Id. 

" Congrtstional Record, April 3, 1968, p. 880, comments by Representative Price. 



93 

be construed by reasonable persons as influencing- the performance of 
his governmental duties." 12 Thus, as noted in a preceding chapter, 
this provision would apparently look to the relationship between the 
receipt of benefits from a private source and the official duties or acts 
of a Member or an employee as to any appearances of possible impro- 
prieties, undue influences, or breaches of the public trust in violation 
of this provision which, as noted by the House Committee on Stand- 
ards of Official Conduct, works to "prohibit conflicts of interest and 
the use of official position for any personal benefit." 13 

The Standards of Official Conduct Committee in the 94th Congress 
has found that the ethical standard prohibiting the use of one's official 
position for personal gain, specifically the provision barring the 
receipt of benefits under circumstances which may be construed as 
influencing the performance of one's governmental duties, may be 
violated when a Member seeks benefits froin an organization when 
the Member in his official capacity had actively promoted the estab- 
lishment of that organization. Thus, the Committee found that the 
standard was not observed when a Member of the House "during 
the period of time [the Member] was active in promoting the establish- 
ment of a * * * Bank [on a military base] he approached * * * orga- 
nizers of the Bank and inquired about the possibility of purchasing 
stock [and subsequently purchased 2500 shares of the Bank's privately 
held stock] in the bank in which he had been active in his official 
position in establishing." H As noted by the Committee in its report 
on the matter: "If an opinion had been requested of this Committee in 
advance about the propriety of the investment, it would have been 
disapproved. 15 " This conduct constituted one charge against a 
Member reported by the Standards of Official Conduct Committee 
to the full House, which accepted the Committee's recorninenJii lions 
and officially reprimanded the Member. 

The Standards of Official Conduct Committee further found viola- 
tions of ethical principles forbidding the use of public office for private 
gain when a Member sponsors narrow legislation to specifically deal 
with a personal financial interest of the Member. The Committee 
noted here: 

[The Member] sponsored legislation in 1961 to remove a 
reversionary interest and restrictions on the commercial 
development of land ... in which he had a personal finan- 
cial interest by virtue of his stock ownership in two corpora- 
tions that held leasehold interests in such land, without 
disclosing such interest to Congress at any time during con- 
sideration of the legislation. 

The standard of ethical conduct that should be observed 
by Members of the House, as is expressed in the principle 
in the Code of Ethics for Government Service, and which 
prohibits conflicts of interest and the use of official position 
for any personal benefit, was not observed by [the Member] 
in sponsoring the legislation. 16 



« 72 Stat, part II, B 12. para. 5. 

» House Report No. 94-1364, 94th Congress. 2d Session, "in the Matter of a Complaint Against Representa- 
tive Robert L. F. Sikes,", Report by the Committee on Standards of Official Conduct, p. 4. 
'« Id. at p. 3, 18-21. 
>«Id. at p. 4. 
'« Id. at p. 3-4. 



94 

The Committee did not recommend congressional discipline on this 
particular charge, however, because of the great lapse of time between 
the conduct and the consideration by the Committee. Nevertheless, 
the Committee did state that "If such had occurred within a relatively 
recent time frame and had just now become a matter of public know- 
ledge, the recommendation of some form of punishment would be a 
matter for consideration of the Committee." 17 

Other ethical or statutory restrictions relate to the use of confi- 
dential information received in the performance of one's official duties 
for the purpose of making private financial gains. The Code of Ethics 
for Government Service provides generally that a Member or 
employee should "[n]ever use any information coming to him confi- 
dentially in the performance of governmental duties as a means for 
making private profit." More specifically, statutory provisions pro- 
hibit the use of inside information received from the Commodity 
Futures Trading Commission for trading in commodity futures or in 
actual commodities; 18 and prohibit the use of any confidential infor- 
mation received by virtue of one's public position in speculating on 
any commodity exchange. 19 

Voting on Matters of Personal Interest. As noted above, no provi- 
sions of statute or rule presently require the divestiture of private 
assets or holdings by Members or employees of the House upon enter- 
ing their official position. Since legislation considered by Congress 
affects such a broad spectrum of business and economic endeavors, 
a Member of the House may find himself voting on legislation which 
"would have an impact upon a personal economic interest of the 
Member. This may arise, for example, in a bill authorizing appropria- 
tions for a project for which the Government contract is held by a 
corporation in which the Member is a shareholder, or a bill providing 
Federal guarantees for municipal securities when a Member is among 
those holding such securities. Such interests in legislation, however, 
have not been found under House precedents to be disqualifying 
interests under the Rule of the House which instructs Members to 
vote on each question presented unless "he has a direct personal and 
pecuniary interest in the event of such question". 20 It has generally 
been found that "where legislation affected a class as distinct from 
individuals, a Member might vote". 21 In some cases, it may be noted, 
it was found that the rule might apply when legislation affected one 
specific corporation, rather than a class of corporations or businesses. 
However, House precedents have generally shown that application 
of the disqualification rule is directory, rather than mandatory in 
nature, and one which Members have been expected to apply or not 
to apply for themselves. 

The Rule in question, House Rule VIII, section 1, specifically 
provides : 

Every Member shall be present within the Hall of the 
House during its sittings, unless excused or necessarily pre- 

•' Id. at p. 5. 
"7 TT.S.C. |13(e). 

«» 50 App. U.S.C. §2160(0, extended to Sept. 30, 1979, see 50 App. U.S.C. §2166, P.L. 95-37 
*° House Rule VIIT(l). 

2i See "Rinds' Precedents of the House of Representatives" (hereinafter referred to as Hinds'), volume V, 
| 5952, p. 504. 



95 

vented; and shall vote on each question put, unless he has a 
direct personal or pecuniary interest in the event of such 
question. 

The explanation of this provision within the Rules of the House of 
Representatives, provided as annotations to Rule VIII, section 1, 
states : 

It is a principle of "immemorial observance" that a Mem- 
ber should withdraw when a question concerning himself arises 
(V, 5949) ; but it has been held that the disqualifying inter- 
est must be such as affects the Member directly (V, 5954, 5955, 
5963), and not as one of a class (V, 5952 VIII, 3071, 3072; 
Speaker Bankhead, May 31, 1939, p. 6359-60). In a case where 
questions affected the titles of several Members to their seats, 
each refrained from voting in his own case, but did vote on the 
identical cases of his associates (V, 5957, 5958). And while a 
Member should not vote on the direct questions affecting 
himself, he has sometimes voted on incidental questions 
(V, 5960, 5961). 22 

Thus, as to financial interests of Members and their voting on legis- 
lation affecting those interests, House precedents have held that 
Members holding stock in national banks may vote on legislation 
"providing a national currency and to establish free banking" since 
Members "do not have that interest separate and distinct from a class, 
and, within the meaning of the rule, distinct from the public interest"; 23 
that veterans in the House may vote on questions of pay and pensions 
in the military since such Members "did not enjoy the benefit arising 
from the legislation distinct and separate from thousands of men in 
the country who had held similar positions" 24 ; that the Speaker would 
not rule that a Member owning stocks in breweries or distilleries 
would be disqualified in voting on the proposed amendment to the 
Constitution concerning the prohibition on the manufacture and sale 
of liquor; 25 and that Members who were stockholders in or had inter- 
ests in import businesses may vote on a tariff bill affecting the import 
business smce "the bill before us affects a very large class. . . . The 
Chair would be surprised if there were not hundreds of thousands of 
American citizens who were stockholders in these companies. . . ." 26 

Although the Rule has been found not to apply when a Member is 
affected only as a Member of a class rather than as an individual, 
some precedent in the House has indicated that the Rule might apply 
if legislation affects only one specific corporation or business, rather 
than a class or group of corporations or businesses. Thus, in the 
instance of the vote on the constitutional amendment concerning 
"Prohibition," although the Speaker found that a Member interested 
in breweries or distilleries could vote because it affected a class of 
businesses, the Speaker specifically noted: "Now if there was a bill 
here affecting one institution, if you call it that, the Chair would be 

" Rules of the House of Representatives, 95th Congress, § 659. 
!3 Hinds' supra at § 5952, pp. 503-504. 
3 < Id. 

*» "Cannon's Precedents of the House of Representatives" (hereinafter referred to as Cannon's), Volume 
VIII, § 3071. pp. 620-621. 

"Cannon's supra at § 3072, p. 623. 



90 

inclined to rule that a Member interested in it pecuniarily could not 
vote, but where it affects a whole class he can vote." " Similarly, in 
the instance where the Speaker ruled that Members with interests in 
import businesses could vote on a tariff bill, the Speaker noted that: 
"Certainly it would not be within the power of the Chair to deny a 
Member the right to vote except in the case where the legislation 
applied to one and only one corporation." 28 In the case of an amend- 
ment to a bill specifically relating to the Central Pacific Railroad, the 
Speaker of the House suggested that a stockholder Member should 
disqualify himself from voting, although a ruling disqualifying such 
Member was not made by the Chair: 

In this case if the gentleman from Massachusetts be a 
stockholder in the road the Chair would rule he had no right 
to vote. It differs from the case of national banks, which has 
been brought up in several instances, in the fact that this is 
a single corporation, and is not of general interest held 
throughout the country by all classes of people in all com- 
munities. . . . But if a stockholder in a single railroad cor- 
poration, as in this case, has his vote challenged it would be 
the duty of the Chair to hold, if he is actually a stockholder 
of the road, that he has no right to vote. * * * The Chair so 
decides without any knowledge in this particular case. It is 
for the gentleman from Massachusetts whose delicacy the 
Chair knows and cheerfully recognizes to relieve the House 
from any embarrassment on that question. 29 

As noted by recent applications of the Rule, however, even where 
one corporation or entity is primarily affected by legislation, a Mem- 
ber's interest in such corporation or entity might not be found to be 
a disqualifying interest in the subject matter. In a recent application 
of the Rule, the Speaker of the House found that Members holding 
New York City municipal bonds were allowed to vote on a bill guar- 
anteeing such securities. As noted by the Standards of Official Conduct 
Committee : 

House precedents establish the rule that "where the subject 
matter before the House affects a class rather than individ- 
uals, the personal interest of Members who belong to the 
class is not such as to disqualify them from voting." This 
principle was followed by the House as recently as Decem- 
ber 2, 1975, when the question arose whether House Rule 
VIII (1) would disqualify Members holding New York City 
securities from voting on a bill to provide federal guarantees 
for these securities. Speaker Albert ruled that a point of 
order to disqualify Members holding such securities would 
not be sustained. 30 

Additionally, in a report issued on July 28, 1976, the House Com- 
mittee on Standards of Official Conduct found that a Member's 
ownership of 1,000 shares of common stock in a defense contractor 



17 Cannon's supra at § 3071, p. 621. 
•» Cannon's supra at § 3072, p. 623. 
» Hinds', supra at § 5922, p. 506. 
* H. Rpt. No. 95-1364, supra at p. 15. 



97 

corporation, out of more than 4,550,000 shares outstanding, "was 
not, under House precedents, sufficient to disqualify him from voting 
on" an appropriations bill authorizing funds for a project for which 
the corporation was under contract with the Government to perform. 81 

Finally, the precedents within the House of Representatives have 
shown that the weight of authority "favors the idea that there is not 
authority in the House to deprive a Member of the right to vote", 32 
and that "each individual Member has the responsibility of deciding 
for himself whether his personal interest in pending legislation requires 
that he abstain from voting". 33 

Interests in Corporations with Government Contracts. As noted 
in an earlier chapter dealing with outside compensation and em- 
ployment, the Federal criminal statute which prohibits a Member of 
Congress from contracting with the Federal Government, or "holding 
or enjoying" any Federal contract, 34 does not apply to contracts with 
an incorporated company made for the general benefit of the corpora- 
tion. 35 Thus, a Member of the House may be a stockholder in a 
corporation, apparently even a majority stockholder and head of a 
corporation, which has a Government contract, and no violation of 
the statutory provision barring Members from enjoying Federal 
contracts would arise. 36 

Additionally, as noted in the preceding section, a Member might 
not be found to have a disqualifying personal interest in legislation, 
such as an appropriations bill, because of a small stock ownership in 
a public corporation which has a contract to perform services for the 
Government on a project funded by the bill. 37 

Financial Disclosure. The major deterrent to the potential conflicts 
of interest which might arise because of the personal financial holdings 
of a Member or an employee of the House is the requirement of annual 
public financial disclosure by certain employees and by Members, 
"and the discipline of the electoral process." 38 As noted by the 
House Commission on Administrative Review of the 95th Congress 
in its recommendation of adoption of broader financial disclosure 
requirements: "The objectives of financial disclosure are to inform 
the public about the financial interests of government officials in order 
to increase public confidence in the integrity of government and to 
deter potential conflicts of interest." 39 The annual financial disclosure 
by Members and employees of the House is presently required under 
the provisions of the "Ethics in Government Act of 1978," signed into 
law by the President on October 26, 1978, as Public Law 95-521. 

Basically, Members of and candidates to the House, House employ- 
ees receiving a salary equal to a GS-16 or more, and at least one 
principal assistant to a Member if no staff employee of that Member 
receives at least a GS-16 salary, must disclose certain outside com- 
pensation and business transactions in annual personal financial 

« Id. at pp. 14-16. 

K Rules of the House of Representatives, 95th Congress. § 658; see Hinds, supra at § 5956, p. 506. 

M H. Rpt. 94-1364, supra at pp. 15-16; see Congressional Record, Dec. 2, 1975, H11595 (daily ed)i 

M18U.S.C. §431. 

« 18 U.S.C. § 433. 

"33 Op. Attv Gen. 44, October 29, 1921; 39 Op. Atty Gen. 165, May 19, 1938; 

" H. Rpt. No. 94-1364, supra at pp. 14-16. 

» H. Doc. 95-73, supra at p. 9. 

"Id. at p. 6. 



98 

disclosure reports filed with the Clerk of the House by May 15 of 
each year^ The reports must detail financial information for the pre- 
ceding year concerning several specified areas: income; gifts and 
reimbursements; financial holdings; debts; transactions in property 
or securities; positions held in businesses or organizations; and arrange- 
ments or agreements for continuing compensation, benefits or future 
employment. 

What to file 

The financial disclosure reports to be filed by Members and covered 
officers and employees of the legislative branch are to contain the 
following items for the calendar year preceding the filing date, unless 
otherwise noted. Section numbers refer to the Ethics in Government 
Act of 1978, (P.L. 95-521), as codified at title 2 of the United States 
Code, Section 701 et seq. 

Income. — The source, type, and amount of all income (other than 
dividends, interest, rent, and capital gains which are listed separately) 
from any source must be listed. Honoraria aggregating $100 or more 
from any source in the preceding year must be included as to the source, 
date, and amount (Sec. 102(a)(1)(A)). Income from current employ- 
ment from the United States Government need not be reported. 

Income in the form of dividends, interest, rent, and capital gains 
exceeding $100 is to be listed as to the source and type and the category 
of amoimt into which it falls : not more than $1,000 ; greater than $1,000 
but not more than $2,500; greater than $2,500 but not more than 
$5,000; greater than $5,000 but not more than $15,000; greater than 
$15,000 but not more than $50,000; greater than $50,000 but not 
more than $100,000; or greater than $100,000 (Sec. 102(a)(1)(B)). 

Gifts and reimbursements. — The identity of the source and a brief 
description of any gifts of transportation, lodging, food or entertain- 
ment aggregating $250 or more received in the preceding year, other 
than the personal hospitality of an individual at his residence, must be 
listed. Gifts of this nature valued at less than $35 need not be aggre- 
gated for purposes of reporting (Sec. 102(a)(2)(A)). 

All other gifts received aggregating $100 or more must be listed as 
to the identity of the source, a brief description and the amount. 
Gifts from relatives are not included in the reporting and gifts of under 
$35 need not be aggregated for purposes of reporting (Sec. 102(a)(2) 

CB)). 

The identity of the source and a brief description of reimbursements 
from any source aggregating $250 or more in the preceding year must 
be listed (Sec. 102(a)(2)(C)). 

Financial holdings. — Interests in property held in a trade or busi- 
ness, or for investment or the production of income, which has a 
value exceeding $1,000 must be disclosed as to its identity and category 
of value. Personal savings accounts aggregating $5,000 or less need not 
be disclosed (Sec. 102(a)(3)). The categories of value for reporting of 
financial holdings, stocks, bonds, and other income producing property 
are as follows : 

(A) not more than $5,000; 

(B) greater than $5,000 but not more than $15,000; 

(C) greater than $15,000 but not more than $50,000; 

(D) greater than $50,000 but not more than $100,000; 

(E) greater than $100,000 but not more than $250,000; and 

(F) greater than $250,000 (Sec. 102(c)(1)). 



99 

Debts. — Liabilities owed exceeding $10,000 excluding any mortgage 
on a personal residence, car loans or loans secured by household 
furniture or appliances, must be reported as to the, identity and cate- 
gory of value of the liability. The categories of value are the same as 
the categories for financial holdings listed above (Sec. 102(a)(4)). 

Transactions in property or securities. — A description, the date, and 
the category of value of any purchase, sale or exchange, exceeding 
$1,000, in real property (other than one's personal residence), and in 
stocks, bonds, commodity futures and other securities, must be dis- 
closed (Sec. 102(a)(5)). The categories of value to be listed are those 
categories described above for financial holdings and debts. 

Positions held. — Covered individuals must also report the identity 
of all positions held, up to the date of filing in the current year, as an 
officer, director, trustee, partner, proprietor, representative, em- 
ployee, or consultant of any corporation, company, firm, partnership, 
or other business enterprise, any nonprofit organization, any labor 
organization, and any educational or other institution. The Act does 
not require the disclosure of positions held in any religious, social, 
fraternal, or political entity, or any position solely of an honorary 
nature (Sec. 102(a)(6)). 

Agreements for continuing or future benefits. — Any agreements or 
arrangements concerning future employment, leave of absence during 
one's Government service, continuation of payments from a private 
source, or continued participation in an employee benefit or welfare 
plan of a former private employer must be described as to the parties, 
dates and terms by the reporting individual (Sec. 102(a)(7)). 

Newly covered legislative employees are to file the required infor- 
mation concerning only income, financial holdings, debts, positions 
held, and agreements for continuing compensation, benefits, or future 
employment. Reports filed by such persons as to income are to cover 
the filing year and the preceding calendar year, while reports on the 
other items are to be current up to a specific date no more than 31 
days before the date of filing (Sec. 102(b)). .. 

Spouse and dependent children 

Reports by covered individuals are required to contain financial 
information concerning the spouse and dependent children of the re- 
porting person. The information to be reported by Members and 
covered legislative officers and employees concerning dependent 
children and spouse, other than a spouse living separate and apart 
from the reporting individual with intention of terminating the mar- 
riage, are required to contain the following: 

Income. — The source of items of earned income of the spouse ex- 
ceeding $1,000; and the source, type and category of income exceeding 
$100 received by the spouse and dependent children from any assets 
held by them which are required to be disclosed under "financial 
holdings" (Sec. 102(d)(1)(A)). 

Gifts and reimbursements which are not received totally independent 
of the spouse's relationship to the reporting individual must be dis- 
closed as to the identity of the source and a brief description of gifts 
of transportation, food, lodging, entertainment and reimbursements, 
and as to the value and a brief description of other gifts (Sec. 102(d) 
(1)(B) and (C)). 



100 

Financial holdings, debts, transactions in property or securities. — 
All the information required to be disclosed by the reporting individual 
must also be disclosed in the report concerning the financial holdings, 
debts, and transactions in property or securities of such person's 
spouse and dependent children, other than those items which are 
certified to be the sole financial interest or responsibility of the spouse, 
or child and of which the reporting individual neither derives nor ex- 
pects to derive any financial or economic benefits (Sec. 102(d)(1)(D)). 

Legislative employees newly coming within the provisions, and 
persons becoming candidates to Congress, need only disclose informa- 
tion concerning their spouse and dependent children under this 
provision as to income, financial holdings, and debts (Sec. 102(d)(1)). 

Blind Trusts. As part of the general information required to be 
■disclosed under the Ethics in Government Act, a member or covered 
employee must generally identify and provide the required details 
concerning the specific assets aud holdmgs of any trust benefiting 
himself, his spouse or dependent children. 40 The provisions of the 
Ethics in Government Act, however, provide two exceptions to this 
required disclosure of the assets and holdings within a trust benefiting 
a public official or his family. In the first instance, if a trust is created 
by someone other than the|public official, his spouse or children, and 
the assets and the holdings #f that trust are not known to such persons, 
then only the income from that trust need be reported. 

The second exemption to the required reporting on the holdings 
within a trust specifically allows covered employees, Members and 
most Federal officials to establish what is called a "blind trust" to 
which assets and financial holdings may be transferred. Subsequent 
to the establishment of a blind trust in accordance with the require- 
ments of the Act, only the category of income from the qualified blind 
trust, and not the assets or holdings within the trust, would need be 
reported by the covered official under the financial disclosure pro- 
visions of the Ethics in Government Act of 1978. 

The Ethics in Government Act sets out specific guidelines and 
detailed requirements concerning the creation and maintenance of 
blind trusts in order to insure the unconditional control and 
independence of the trustee over all the assets in the trust; to prevent 
the acquisition of those assets which the official is specifically pro- 
hibited from holding under law or regulation; and to protect the 
""blind" nature of the trust by shielding the official from knowledge 
of the holdings in the trust. The Attorney General of the United 
States is authorized under the Act to enforce the provisions of the 
act concerning the wrongful disclosure of the assets of the blind trust 
by the trustee to a beneficiary, and as to the knowing receipt or solici- 
tation of information about the trust by a reporting individual. 

The general principle behind the blind trust is to shield the offi- 
cial from knowledge of his specific assets or holdings, and thus to 
avoid potential conflicts of interest or undue influence which might 
arise because of particular financial interests of the official or his 
family. Assets and holdings which are originally transferred to the 
trust by the official, and which are thus known to the official, will 
therefore in most cases still be considered financial interests of that 



« Section 102(e)(1) of P.L; 95-521j 



101 

official for purposes of any conflict of interest provisions under Federal 
law until notice is given by the trustee that the asset is disposed of 
or that the asset's value is less than $1,000. 41 Only those assets sub- 
sequently acquired by the trustee for the trust would be really "blind", 
and thus exempt from general conflict of interest laws. In this manner 
an official could not "hide" a known conflicting asset in the trust. 

When an official is prohibited by law or regulation from owning 
specific assets, such assets may not even be obtained by the trustee for 
the trust. This restriction relates to prohibitions on owning specific 
assets, and was not intended to apply to general prohibitions on finan- 
cial conflicts of interest, which would unreasonably require a daj^-to- 
day knowledge by the trustee of the duties and activities of a publie 
official to determine if a conflict arises. 42 

SUMMARY OF REQUIREMENTS OF BLIND TRUSTS 

Following is a summary listing of the requirements for blind trusts 
as set out in the Ethics in Government Act of 1978. These provisions 
appear in the Act at Section 102(e) for legislative branch personnel 
and are codified at 2 U.S.C. § 702(e) (1). 

THE TRUSTEE 

The trustee of the trust must be a financial institution, an attorney, 
a certified public accountant, or a broker. 

The trustee must be independent from and not associated with an 
interested party such that the trustee can not be influenced or controlled 
by an interested party. 

The trustee may not be a past or present employee of, nor an organi- 
zation affiliated with, a partner of, a relative of, or involved in any 
joint venture with, an interested party. 

The proposed trustee must be approved by the reporting individual's 
supervising ethics office. 

ASSETS 

Any asset transferred to the trust must be free of any restriction as 
to its sale or transfer, unless specifically approved by the reporting in- 
dividual's supervisory ethics office. 

Any asset placed in a trust by an interested party will be considered 
a financial interest of the reporting individual for purposes of Federal 
conflict of interest regulations or laws, including 18 U.S.C. sec. 208,. 
until disposed of by the trustee or until the value of such asset is less 
than $1,000. 

The" trust instrument must specifically provide that the trust will 
not contain any assets which an interested party is prohibited from: 
holding under any law or regulation. 

THE TRUST INSTRUMENT 

The trust instrument must provide that the trustee will not consult 
or notify an interested party concerning management and control of 
the trust. 



11 See special provisio ;? and exemptions for certain presidential appointees whose no ni nation is approve* 
by the Senate, section 202(0(4)^ of P-L. 95-521. 
« Senate Report No. 95-639, 95th Congress, 2d Session, "Blind Trusts", p.18. 



102 

The trust instrument must provide that the trust will not contain 
any assets which any law or regulation prohibits an interested party 
from holding. 

The trust instrument must provide that the trustee will notify the 
reporting individual when assets transferred to the trust are disposed 
of or when the value of such is less than $1,000. 

The trust instrument must provide that the tax returns of the trust 
are to be prepared by the trustee and not disclosed to an interested 
party, other than summary information necessary for an interested 
party to complete his personal tax return. 

The trust instrument must provide that an interested party will 
not receive any reports on holdings or sources of income except as to 
•cash value, income or loss, and reports necessary for filing personal 
tax returns and financial disclosure statements. No such reports 
received may identify any asset or holding. 

The trust instrument must provide that there will be no communica- 
tion between an interested party and the trustee concerning the trust 
except for written communications relating to the general financial 
interests and needs of the interested parties ; notification of the trustee 
of any new law or regulation which would prohibit any particular 
holding or asset in the trust; or directions to a trustee to sell all of a 
particular asset transferred to a trust because of a potential conflict 
■of interest. '",. ~>< 

The trust instrument must provide 'that the interested parties will 
make no effort to obtain information on the holdings of the trust. 

The proposed trust instrument must be approved by the reporting 
individual's supervising ethics office. 

NOTIFICATION AND FILINGS 

Within thirty days after a trust is approved the reporting individual 
must file with his supervising ethics office a copy of the trust agree- 
ment and a list of the assets which were transferred to the trust. 

The reporting official must notify his supervising ethics office 
within thirty days after transferring an asset (other than cash) to 
an existiDg blind trust, as to the identity and category of value of the 
asset. 

Within thirty days after dissolution of a trust the reporting official 
must notify his supervising ethics office of such dissolution and must 
file a list of the assets and their value at the time of dissolution. 

When a trustee or an interested party makes any written communi- 
cation to one another concerning the trust, a copy of such communi- 
cation shall be filed by the person initiating it to the supervising 
ethics office of the reporting official within five days of the date of 
the communication. 

PROHIBITIONS AND ENFORCEMENT 

A trustee may not knowingly or negligently disclose information 
to an interested party which may not be disclosed; acquire holdings 
prohibited by the trust agreement; solicit advice from an interested 
party concerning the trust when prohibited by law or the trust agree- 
ment; or fail to file any required document. 



103 

A reporting individual shall not knowingly or negligently solicit 
or receive information concerning the holdings or transactions of the 
trust which he is not allowed to receive under the Act, and shall not 
fail to file any document as required. 

The Attorney General is authorized to bring civil action against 
persons violating the prohibitions listed above. 

EXISTING TRUSTS 

Trusts existing before the Ethics in Government Act's passage may 
be considered blind trusts if the supervising ethics officer finds that 
a good faith effort was made to establish a blind trust; if the trust 
instrument is amended, or an agreement is made in writing, to conform 
the trust to the statutory requirements, and the trustee meets the 
qualifications; and if the trust instrument, list of assets and their 
value originally transferred to the trust, and a list of assets transferred 
and subsequently sold are filed and made available to the public. 



Chapter 10. CAMPAIGN FUNDS AND PRACTICES 

Highlight 

As to general campaign finance requirements, Members of the House 
must abide by the provisions of the Federal Election Campaign Act 
concerning required record keeping, reporting, registration, and 
organization. 

As to the receipt of campaign contributions, ,Members and em- 
ployees should note the numerous restrictions under Federal Cam- 
paign laws, such as, for example, prohibitions on: 

— corporate, labor union, and Government contractor contribu- 
tions ; 
— contributions from foreign nationals; 
— contributions from Federal employees; 
— contributions over specified statutory limits; 
— cash contributions over $100; 

— receiving or soliciting contributions in a Federal building; 
— misrepresenting oneself as working on' behalf of a particular 
candidate, or circulating anonymous campaign literature; 
— failing to report contributions received or expenditures made. 
Concerning the use of campaign funds, rules and regulations pro- 
vide that: 

— campaign funds may not be converted to personal use or used 

for official expenses ; 
— campaign funds may only be used for bona fide campaign 

purposes; 
— funds received in testimonials or other fundraisers are to be 

treated as campaign funds subject to the above restrictions; 
— a Member may generally not use official funds, supplies, or 
equipment merely for campaign activity. 
Concerning participation by House employees in political cam- 
paign activities, Members and employees should note: 

— employees of the House are not covered by the "Hatch Act", 
and may engage in general partisan campaign activity on their 
free time; 
— employees of the House are paid from public funds to perform 
official congressional duties for a Member, committee or officer, 
and are not paid to perform campaign activities on behalf of a 
Member or party; 
— employees may therefore not engage in campaign activities to 
the neglect of their official congressional duties for which they 
are compensated. Once an employee fulfills the official duties 
required of him, he is free to engage, in campaign activities; 
—employees may not make political contributions "directly or 
indirectly" to another Federal employee or to a Member of 
Congress ; 
— Members of Congress are prohibited from soliciting or receiving 
n political contributions from their staff as well as other Federal 

employees. 

(105) 

293-587 O - 79 - 8 



Chapter 10. CAMPAIGN FUNDS AND PRACTICES 

Members of the House of Representatives are under numerous re- 
strictions and regulations concerning the use of campaign funds, and 
campaign finance procedures in general. The regulations and restric- 
tions on campaign financing applicable generally to all candidates for 
Federal office derive predominantly from the Federal Election Cam- 
paign Act of 1971 and the subsequent amendments to that Act. 1 Under 
the provisions of that Act, the Federal Election Commission has been 
established as an independent regulatory agency to oversee Federal 
campaign procedures and practices regulated by the Federal campaign 
laws. 2 The provisions of the Federal Election Campaign Act and the 
regulations promulgated under that Act by the Federal Election 
Commission should be examined closely by Members of the House 
concerning their campaigns for Federal office. 

This report will highlight only briefly the major provisions of the 
large body of Federal campaign laws relating to requirements of report- 
ing, registration and disclosure, and restrictions on campaign contri- 
butions. Specific requirements of Federal campaign finance laws or 
interpretations of specific provisions, including advisory opinions, may 
be requested from the Federal Election Commission. This report will 
deal mainly with those provisions not specifically under the authority 
of the Federal Election Commission, that is, restrictions in the House 
Rules such as those on the use of campaign funds, and other ethical 
or conduct issues such as use of congressional staff or official equip- 
ment or supplies in a congressional campaign. 

As to congressional staff working on campaigns, there are no Federal 
statutes, regulations or rules which specifically prohibit employees 
of the House of Representatives from engaging in general campaign 
activity. The broad prohibition against campaign activity by executive 
branch personnel, known as the "Hatch Act", is not applicable to 
congressional employees. Thus, apart from certain restrictions in the 
area of campaign contributions and solicitations, House employees 
may participate in partisan campaign activities. There do, however, 
exist broad ethical guidelines which direct that House staff fulfill their 
official congressional duties for which they receive compensation from 
the Government. Consequently, congressional employees should not 
engage in campaign activities to the neglect of their official duties; and 
once they have fulfilled their official duties, they are then generally 
free to engage in partisan campaign activity. 

General Campaign Finance Requirements. Briefly, under the Fed- 
eral Election Campaign Act, a Member of the House who is a candi- 
date for Federal office must designate a political committee to serve as 
his principal campaign committee. 3 Such committee, as is generally 

'P.L. 92-225, 86 Stat. 3, Feb. 7, 1972; P.L. 93-443, 88 Stat. 1263, Oct. 15, 1974; P.L. 94-283, May 11, 1976j 

» 2 U.S.C. 5 437C-438. 

»2 U.S.C. § 432(e); Federal Election Commission Regulations (hereinafter FEC Regs) see. 102.11. 

(106) 



107 

the case for all other political committees, must register with the 
Federal Election Commission 4 and be organized and keep records 
according to Federal campaign laws. 5 Each candidate to Federal office 
must also designate one or more national or State banks as his cam- 
paign despositories. 8 

Candidates for the House and political committees supporting them 
must file periodic, detailed reports, on forms provided by the Federal 
Election Commission, to the Clerk of the House as custodian for the 
FEC, concerning the receipt of political contributions and the making 
of political expenditures. 7 Copies of such statements required to be 
filed must also be filed with the Secretary of State, or similar State 
officer, of the appropriate State. 8 

Restrictions on Receipt of Contributions. Members of and candi- 
dates for Congress are prohibited under Federal campaign laws from 
receiving political contributions from the treasury funds of a corpora- 
tion, labor organization or a national bank. 9 Additionally, contribu- 
tions may not be accepted from persons who are Federal government 
contractors. 10 Such corporations, labor organizations, membership 
organizations or cooperatives may, however, even if holding a govern- 
ment contract, establish separate segregated funds, often referred to 
as political action committees or PACs, to which voluntary contribu- 
tions, not solicited by threats of job discrimination or reprisals or by 
dues or assessments required as a condition for employment, are 
made. 11 Such PACs may then make political expenditures and con- 
tributions, and contributions may be received from them by Members 
and candidates for the House, up to contribution limits specified by 
Federal law. 

Federal law restricts the amount of political contributions which 
may be made by, and accepted from, individuals and political com- 
mittees. Multi-candidate political committees which are registered 
for six months with the FEC, receive contributions from 50 or more 
people, and contribute to at least five Federal candidates, may contri- 
bute up to $5,000 to a candidate for every primary, election, or run-off 
■election in which the candidate is involved (and, may contribute up 
to $5,000 to a political committee during one calendar year, and up 
to $15,000 to national political party committees). 12 The political 
action committees of corporations and labor unions are often multi- 
candidate committees, and thus if qualified as described above, con- 
tributions of up to $5,000 per election may be lawfully received from 
such organizations. If a political committee is not a qualified multi- 
candidate committee it may only make contributions of up to $1,000 
per election to a candidate. 13 As to contributions from individuals, 
Federal law restricts the amount of contributions which may be made 
by, or received from, individuals to $1,000 to any candidate or author- 

« 2 U.S.C. | 433; FEC Regs Part 102. 

• 2 U.S.C. I 432(a)- (d); FEC Regs Part 102. 
•2 U.S.C. § 437b; FEC Regs Part 103. 

7 2 U.S.C. |§ 434, 436; FEC Regs Parts 104-106. 

• 2 U.S.C. | 43»; FEC Regs Part 108. 

• 2 U.S.C. } 441b; FEC Regs Part 114. 
10 2 U.S.C. | 441c; FEC Regs Part 115. 

" 2 U.S.C. | 441b(b)(2); 2 U.S.C. | 441c(b); FEC Regs sections 114.6 and 115.3. 
12 2 U.S.C. | 441a(a)(2); FEC Regs section 110.2. 
I' 2 U.S.C. |441a(a)(l); FEC Regs section 110.1. 



108 

ized committee of a candidate for each primary, election or run-off in 
which the candidate is involved. Individuals are further limited in 
making contributions to $5,000 to other political committees per year, 
$20,000 to national political party committees per year, and $25,000 
in total political contributions in a calendar year. 14 

Political contributions are also specifically prohibited from foreign 
nationals not lawfully admitted to the United States for permanent 
residence; 15 from public utility holding companies; 16 from persons in 
the name of another; 17 and are prohibited in cash in amounts over 
$100. 18 

Political Contributions from Government Employees. Members of 
Congress, candidates for Congress, and Federal employees are specific- 
ally prohibited by provisions of Federal criminal law from soliciting 
or receiving political contributions from Federal government em- 
ployees, including employees of the House of Representatives. 19 
Such Federal employees are also prohibited, as discussed later, from 
making political contributions to Members of Congress or to other 
Federal employees. 20 Although no prosecutions are apparent under 
the provision prohibiting employees from making contributions to 
Members, a conviction of a Member for receiving political contri- 
butions from his staff has been upheld by a Federal court. 21 

Members of the House should therefore not receive or be involved 
in the solicitation of political contributions, or any money to be used 
for political purposes, from Federal employees, particularly from 
one's staff. The statute which prohibits such solicitation or receipt 
of contributions prohibits such activity "directly or indirectly''. 
Thus, political contributions should apparently not be received or 
solicited from such employees by a Member's principal campaign 
committee or a committee authorized in writing by the Member to 
receive contributions on his behalf. 

It has been noted in an informal letter from the Department of 
Justice that the Department's enforcement policy as of 1974 concern- 
ing contributions from Federal employees received by a political 
committee "supporting" a Member of Congress is that such receipt 
might not be considered a "prosecutable" violation (although ap- 
parently a technical violation) of the statute where the contribution 
is voluntary and is received by a committee in the normal course 
of its operations. 22 The statement in this 1974 letter, which was. 
written in response to questions concerning contributions by Senate 
employees, was, however, tempered concerning its non-enforcement 
position by noting that "the existence of certain kinds of relation- 
ships between a Senator and a Federal employee-contributor — such 
as an employer-employee relationship — may, in some circumstances, 
give rise to an inference of coercion". Thus, a contribution from a 
congressional employee to one's employer/Member may be "suspect" 
even under this generous enforcement declaration by the Justice 
Department in 1974. 

"Id. 

" 2 U.S.C. § 441e; FEC Regs sec. 110.4(a). 
••15 U.S.C. §79(L). 

" 2 U.S.C. § 441f; FEC Regs section 110.4(b). 
» 2 U.S.C. § 441g; FEC Regs section 110.4(c). 
19 18 U.S.C. §602. 
20 18 U.S.C. §607. 

2i Rrehra v. United States, 196 F. 2d 769 (D.C Cir. 1952), cert. den. 344 U.S. 838 (1952). 
22 Letter from Henry E. Peterson, Assistant Attorney General, Criminal Division, by Thomas J. McTier* 
nan, Chief of the Fraud Section, United States Department of Justice, August 12, 1974. 



109. 

In any event it should be noted that the letter from the Justice 
Department was an informal statement of enforcement policy in 1974 
and thus could be subject to revision by the Department. Further, the 
Federal Election Campaign Act has been amended since 1974 to 
make distinctions between independent political committees which 
merely "support" a Member's candidacy, and those committees which 
are specifically authorized in writing by the candidate to accept 
contributions or make expenditures on his behalf, including the 
candidate's principal campaign committee which the candidate is 
now required to name under campaign law. 23 These new statutory 
distinctions concerning the independence of a political committee from 
a Member or candidate or the connection to or control over a com- 
mittee by a candidate, which could bear on the "indirect" nature of a 
political contribution for a Member made through, a committee, were 
therefore not considered in the 1974 opinion written prior to the statu- 
tory amendments. Finally, in upholding the conviction of a Member 
of the House for receiving political contributions from a staff employee, 
the United States Court of Appeals for the District of Columbia 
did not specifically find in its opinion that evidence of "coercion" 
or a "shakedown" was a necessary element of the offense to uphold a 
conviction under the statute. In fact, although testimony was con- 
flicting, the Court cited testimony presented by the Government to 
the effect that the contribution by the staff employee was voluntary 
and apparently unsolicited. 24 Members should thus be particularly 
wary of accepting political contributions from their staff employees, 
even if voluntary and unsolicited. Under criminal code reforms pro- 
posed in the 95th Congress and passed by the Senate, such voluntary 
unsolicited contributions from congressional employees to a Member's 
committee would be lawful. However, the criminal code reform has 
yet to be enacted into law. 25 

There exist legislative statements to indicate that solicitations 
which are directed to the public at large, but which unintentionally 
reach Federal Government employees who come within the area 
solicited, were not intended to constitute a violation of 18 U.S.C. 
section 602. 26 This was apparently intended to avoid a violation of 
section 602 where a Member or an employee sends out solicitations 
to a boxholder list or a general broad list, which happens to include 
a Federal employee. 

Furthermore, there is legislative history in the form of a resolution 
adopted by the House in 1913 to indicate that the prohibition on solici- 
tation and receipt of political contributions from Federal employees 
was not intended to prohibit and "should not be construed to pro- 
hibit one Senator or Member of Congress from soliciting campaign 
contributions from another Senator or Member of Congress or from 
making such solicitation in the office furnished such Senator or Mem- 
ber of Congress in a Government building." 27 

Use of Campaign Funds. Although Federal law at 2 U.S.C. § 439a 
provides generally that excess campaign funds may be used to defray 

M See 2 U.S.C. §§432(e), 434(a)(2), 441a(a)(7\441d(2). 

-* Brehm v. United States, supra at 770. 

** See S. 1437, 95th Congress, section 1516, S. Rpt. No. 95-605, part 1, at pp. 484-485. 

M See 113 Congressional Record 25703, Sept. 11, 1973. debate concerning proposed revision of § 602. 

37 "Cannon's Precedents of the House of Representatives," Vol. VI, section 401, pp. 571-573. 



110 

the expenses of running a Federal office, or for any other lawful pur- 
pose, the Rules of the House of Representatives, place more restrictive 
regulations on the use of campaign funds by Members of the House. 
The Rules of the House require that Members use campaign funds 
solely for campaign purposes, and specifically prohibit the use of 
campaign funds for personal 28 or official purposes. 29 Campaign funds 
also may not be used, under the provisions of House Rule XLVI(4), 
for defraying the cost of preparing or printing of any mail material to 
be sent in a mass mailing under the Member's frank. Additionally, 
the House Rules provide that any proceeds from testimonials or 
other fund-raising events are to be treated by Members as campaign 
contributions subject to the above restrictions. 30 

Non-incumbent candidates for the House of Representatives, since 
they are not subject to the House Rules on campaign funds, may 
thus use excess campaign funds "for any * * * lawful purpose", as 
provided by a statute at 2 U.S.C. 439a. Such purpose may include, 
as noted by the Federal Election Commission, personal uses such as 
the defraying of personal living expenses while one is a candidate to 
Federal office. 31 The diversion and use of such campaign funds for 
personal purposes by non-incumbent candidates for Federal office 
may, however, result in an additional income tax liability for the 
non-incumbent candidate since such funds diverted for personal use 
would generally be considered personal "income" to such person. 32 
Further tax consequences may arise because of such conversion in 
the form of the loss of a tax deduction for contributors to such a 
candidate who uses political contributions for other than campaign 
purposes. 33 It may be noted that legislation offered in the 95th Con- 
gress would have placed statutory prohibitions upon the use of cam- 
paign funds for personal purposes by non-incumbent candidates for 
Federal office similar to those now placed on incumbent Members of 
Congress by House Rules. 34 However, this legislation was not enacted 
into law. 

No Personal Use. — Members of the House are instructed by House 
Rule XLIII(6) to keep campaign funds separate from personal funds; 
not to convert campaign funds to personal use except for reimburse- 
ments for legitimate, verifiable prior campaign expenses; and not to 
expend campaign funds for other than bona fide campaign purposes. 
This clause of the Code of Official Conduct of the House Rules was 
amended to read in its present form on March 2, 1977, by H. Res. 287, 
95th Congress. 

As discussed in the House during the debate preceding the adoption 
of H. Res. 287, no specific definition of "bona fide campaign purpose" 
is provided in the rules, and what would be considered a legitimate, or 
bona fide political or campaign expense, would depend on the par- 
ticularized facts of a specific situation: 

We sought to make no strict definition of political expenses. 
What is political is a matter of fact rather than of definition. 
We believe that if a Member travels home for a political 

» House Role XLIII(6). 
« House Rule XLV. 
"House RuleXLIII(7). 

" See Federal Election Advisory Opinions 1976-17 and 1978-5. 
*> I.R.S. Proc. 68-19 (1968); Rev. Rul 74-23 (1973). 
83 26 U.S.C. §§ 218, 41, see definition of political contribution. 

* S. 926, 95th Congress, passed Senate 8/3/77; H.R. 11315, 95th Congress, reported from House Admin 
istration Committee 3/16/78. 



Ill 

purpose, and it is covered by his volunteer committee out 
of political accounts, that this is a political expense. 

However, what we have tried to do is to confine expenses 
from political accounts or volunteer committee accounts to 
expenses that are political. By and large, that definition will 
be left up to the Member and to his volunteer committee, 
and as it is broadly defined under the election law. 35 

No Official Use — The 1977 amendments to the Rules of the House of 
Representatives made by H. Res. 287, 95th Congress, specifically 
intended to build a "wall between campaign funds and official allow- 
ances". 36 Thus, the Rules of the House of Representatives, in addition 
to requiring that campaign funds be used only for campaign purposes 
and prohibiting the conversion of campaign funds to personal use, 
have established a specific prohibition against the maintenance or use 
by a Member of an "unofficial office account", that is, the House 
Rules prohibit the use of non-appropriated, private funds such as 
campaign contributions to defray official expenses of the Member. 37 

The recommendations of the House Commission on Administrative 
Review, substantially adopted by Congress on March 2, 1977, as 
revisions to the House rules on conduct (H. Res. 287, 95th Congress), 
set forth reasons for requiring that official expenses of a Member be 
paid exclusively from official, appropriated funds: 

The Commission strongly believes that private funds 
should be used only for politically related purposes. Official 
allowances should reflect the necessary cost of official ex- 

f)enses. Increasing official allowances ... to eliminate re- 
iance on private sources represents a small cost to the 
public for the benefits to be derived. To suggest otherwise 
would be to accept or condone the continuation of the 
present system which, at the very least, allows for the 
appearance of impropriety, and, at worst, creates a climate 
for potential "influence peddling" through private financing 
of the official expense of Members of Congress. 38 

As noted earlier in this discussion, no specific definition of those 
expenses which would be considered "political" (as opposed to "offi- 
cial" for which no campaign funds may be used) was provided in the 
House Rules or the recommendations of the House Commission on 
Administrative Review. During the floor discussion preceding the 
adoption of H. Res. 287, 95th Congress, it was noted on various 
occasions that what would be considered a political expense for which 
campaign funds could be used, rather than an official expense for 
which only appropriated funds could be used, would depend on the 
particular facts of a specific situation, that is, "[w]hat is political is a 
matter of fact rather than of definition". 39 Examples were noted in 
the House debates that a Member's travel to his home district might 
be considered a political expense if the purpose of the trip were 
campaign related ; 40 and that taking certain individuals out to dinner, 

85 Congressional Record, Mar. 2. 1977, H1581 (daily ed.), comments by Representative Frenzel. 
38 House Document No. 9.5-73, 9,5th Congress. 1st Session, "Financial Ethics", Communication from the 
Chairman, House Commission on Administrative Review, Feb. 14, 1977, p. 18. 
37 House Rule XLV. 

88 House Doc. 9.5-73, supra at p. 18. 

89 Cong. Rec. Mar. 2, 1977, H1581 (daily ed). 
40 Cong. Rec. supra at H1581. 



112 

if such were a political meeting rather than one relating to official 
duties, could be reimbursed or paid from campaign accounts. 41 

In the final report of the House Select Committee on Ethics of 
the 95th Congress, which was authorized to issue advisory opinions and 
interpretations of the House Rules amendments adopted by H. Res. 
287, 95th Congress, the Select Committee discussed the intent of the 
Rule restricting the use of campaign funds, and possible "political" 
purposes for which campaign funds might legitimately be used under 
the Rule : 

The intent of this rule is to restrict the use of campaign 
funds to politically-related activities and thus to prohibit 
their conversion to personal use or to supplement official 
allowances. The rule should not be interpreted to limit the 
use of campaign funds strictly to a Member's reelection 
campaign. A retiring Member of Congress, for example, may 
continue to engage in various political activities which of 
course are not campaign-related and also are not in connec- 
tion with his official duties. 

******* 

The Federal Election Commission and the Internal 
Revenue Service define political expenditures as a payment 
or gift of anything of value made for the purpose of in- 
fluencing the selection, nomination, or election of an in- 
dividual to public office. However, the FEC and IRS have 
interpreted this definition broadly to encompass the tra- 
ditional political-related activities of Members of Congress. 
Thus, if a Member determines, for example, that advertise- 
ments in publications of civic organizations, the mailing 
of holiday greetings to constituents, or travel to meetings 
with local party officials, would constitute a political ex- 
penditure, as so defined, or are otherwise politically-related, 
then he may use campaign funds for that purpose. Any such 
political expenditures must be fully disclosed in accordance 
with the reporting requirements of the FEC Act. 42 

Franking. — Although provisions of Federal statutory law provide 
that the frankability of mail matter shall be determined by the type 
and content of the material to be sent, and that such frankable mate- 
rial may be paid for from political contributions, 43 the Rules of the 
House of Representatives place an additional restriction on the use of 
the frank by House Members for any mass mailings, such as news- 
letters or postal patron mail, which are not paid for exclusively from 
official funds. 44 Thus, campaign funds may not be used to prepare, 
print, or distribute any mass mailing (500 or more substantially identi- 
cal pieces of mail) to be made under the franking privilege of a Member 
of the House. 

The rationale behind the restriction on the use of campaign funds, 
or other private funds, for defraying the cost of mass mailings under 

41 Cong. Rec. supra at H1589. 

42 House Report No. 95-1837, 95th Congress, 2d Session, Final Report of the Select Committee on Ethics, 
p. 16. 

♦'39TJ.S.C. § 3210(e). 
« House Rule XLVI(4). 



113 

the frank was explained by the House Commission on Administrative 
Review : 

The Commission believes that since the franking privilege 
is reserved for "official materials," it is inappropriate for 
franked mass mailings to be printed and prepared with 
private or political funds. 

* * * * * * * 

The Commission believes that it is necessary to make 
a clear separation between the public purpose and private 
interest in the use of the frank, and, therefore, private funds 
should not be used to print "official documents." 45 

Testimonials and Fundraisers. — The Rules of the House now provide 
that any funds received from testimonial dinners of other fund raising 
events are to be treated as campaign contributions (House Rule 
XLIII(7)), subject to all the restrictions on campaign funds. Thus, 
such proceeds may be used only for bona fide campaign purposes, 
rather than for personal, or official office uses. This restriction in its 
present form derived from H. Res. 287, 95th Congress, 1st Session. 

In an Advisory Opinion issued by the Select Committee on Ethics 
in the House, the Committee found that a direct mail solicitation by 
a Member of the House or the spouse of a Member constitutes a 
"fundraising event" for purposes of House Rule XLIII(7), and thus 
proceeds from such a solicitation must be treated as campaign con- 
tributions which may not be converted to personal use by the Member. 
Finding such, the Select Committee noted that a major purpose of 
the revisions of the Code of Official Conduct was to prevent Members 
from "cashing in" on their official position in the Congress. 46 

The Select Committee on Ethics also found, in Advisory Opinion 
No. 11, May 11, 1977, that a Member may not accept proceeds for 
his unrestricted personal use from a fundraiser which is conducted 
by a group which is independent from the Member. 

The Select Committee on Ethics, in its final report, however, noted 
certain refinements in its opinions on the use of moneys received from 
testimonials or fundraisers for strictly campaign purposes. In that 
report, the Committee stated that "a fundraising effort to help a 
Member pay medical expenses resulting from a catastrophic illness 
of a family member," where the Member was not involved in the fund 
raising and the moneys were directly applied to the payment of medi- 
cal bills exclusively, would be outside of the prohibition of the Rule 
since the intent of the Rule was to prevent Members from using their 
official position for personal gain, "but certainly not to disadvantage 
the Member more than other individuals living in the community." 47 
Additionally, the Select Committee found that a legal defense fund 
for a Member who does not have the financial resources to pay the 
expenses incurred "in defending a court action arising out of either 
a contested election or performance of official duties" may be estab- 
lished without violation of House Rule XLIII, clause 7. 48 

« H. Doc. 95-73, supra at p. 19. 

w Advisory Opinion of the House Select Committee on Ethics, 95th Congress, Advisory Opinion No. 4, 
April 6, 1977. 
« 7 IT. Rpt. 95-1837, supra at p. 14. 
*> Id. at p. 15. 



114 

The Select Committee noted that the Federal Election Commission 
has ruled that excess campaign funds may be expended to pay legal 
fees in connection with such actions brought against a Member. Thus, 
since such expenditures can be characterized as "campaign-related" 
by the FEC, the Select Committee found that creation of a legal 
defense fund would not be in violation of Rule XLIII(7). 

Use of Excess Campaign Funds. Campaign funds which are in 
excess of amounts needed to defray the cost of campaigning are under 
the same restrictions as campaign funds in general, discussed in the 
preceding section. Thus, although Federal law provides generally 
that excess campaign funds may be used to defray the expenses of 
running a congressional office or for any other lawful purpose, Mem- 
bers of the House, under the provisions of the House Rules, may 
generally use excess campaign funds solely for campaign purposes 
and may not convert excess campaign funds to personal use, or use 
such funds to defray official office expenses. Excess campaign funds 
also may not be used for defraying the cost of preparing or printing 
any mail material to be sent in a mass mailing under the Member's 
frank. 

The statutory provision at 2 U.S.C. § 439a by itself would allow, 
as ruled by the Federal Election Commission, the personal use of 
excess campaign funds, including the defraying of personal living 
expenses while one is a candidate for Federal office. The Federal 
Election Commission has further ruled that upon the death of a 
Member of Congress, the surplus campaign funds held by the late 
congressman's principal campaign committee and other authorized 
campaign committees may be transferred, under the Federal statute 
at 2 U.S.C. § 439a (and absent any Federal or state provisions outside 
of the jurisdiction of the Commission which makes such use unlawful), 
"to a ward organization, to the surviving members of the Congress- 
man's immediate family, to employees on his Congressional or Com- 
mittee payrolls and to a variety of charities," as well as to a specific 
candidate for office, within the campaign contribution limitations of 
applicable Federal or state law. 49 The Commission, however, did not 
offer an opinion as to the possible tax consequences of such transfers, 
and of course, restrictions of House Rules and applicable ethical 
standards must be considered for Members and employees of the 
House. 

Under the provisions of both the Federal statute at 2 U.S.C. § 439a 
and the provisions of House Rules, excess campaign funds may be 
placed in a depository, accruing interest, for use in a future political 
campaign. It should be noted that in addition to the general reporting 
requirements concerning the disposition of campaign funds and the 
present balance of bank or savings and loan accounts, 50 interest which 
has accrued on campaign funds placed in an interest bearing account 
will be subject to taxation as income of the candidate's political com- 
mittee. The Select Committee on Ethics stated in its final report that 
the House Rules would also not bar the use of excess campaign funds 
for making contributions to any charitable organization described 
in section 170(c) of the Internal Revenue Code, or to a political party 
or another candidate, as permitted by the regulations of the Federal 
Election Commission. 61 



*> Federal Election Commission Advisory Opinion 1978-94, December 15, 1978. 
60 See 2 U.S.C. § 434. PEC Regs section 104.2. 
« H. Rept 95-1837, supra at pp. 16-17. 



115 

Campaign Activities by House Employees; Use of Congressional 
Staff on Campaigns. As discussed in chapter 2 of this report, staff 
employees of a Member, officer, or of a committee of the House, are 
compensated from funds of the United States Treasury for the regular 
performance of official duties on behalf of the Member, officer, or a 
committee, and are not compensated from public funds for the per- 
formance of non-official political campaign activities on behalf of a 
Member. Members of Congress may therefore not compensate a staff 
employee from public funds merely for the performance of campaign 
duties. However, once an employee has completed the official duties 
assigned to him for which he is compensated from public funds, the 
employee is free to engage in campaign activities on his own free time. 
There appear to be no rulings in the House which would prohibit an 
employee from engaging in campaign activities while on annual leave 
or while on leave without pay status. 

As to the standards applicable to the duties of congressional staffers, 
although no precise job descriptions are in force for clerk-hire em- 
ployees or committee staffers, general ethical standards applicable to 
House employees require an employee to "give a full day's labor for a 
full day's pay", 52 and to "perform duties commensurate with the com- 
pensation he receives." 53 These ethical standards thus indicate that a 
congressional staff employee must fulfill his official duties for which 
public compensation is received and may therefore not engage in cam- 
paign activities on behalf of the Member to the neglect of those duties. 

In addition to these ethical standards, a general appropriations 
statute requires that appropriated funds be applied solely for their 
intended purposes. 54 Since congressional staff employees are paid funds 
appropriated from the United States Treasury, they are arguably 
compensated for services rendered for public purposes — that is, to 
assist Members of Congress in their official legislative and representa- 
tional duties, to work on committee business, or to perform other 
specified congressional duties. They are not, therefore, compensated 
to perform campaign activities, which are not part of a Member's 
official duties nor within a committee's official responsibilities. Again, 
however, once an employee fulfills his official duties for which he is 
compensated from public funds, he is generally free to engage in cam- 
paign activities. 

It is difficult to precisely define what is required of a Member's staff 
employee in order to be considered as having "fulfilled his official duties." 
His official duties are not defined by statute or by House Rule, but 
they are instead assigned to a staffer by the Member involved. A 
further complicating factor is that it is sometimes difficult to totally 
separate "campaign" activities from "official" legislative or repre- 
sentational duties. As noted by the Supreme Court of the United 
States, a Member's "legitimate" and "appropriate" representational 
duties might be characterized as "political in nature", and may in- 
clude "legitimate errands performed for constituents, the making of 
appointments with Government agencies, assistance in securing 
Government contracts, preparing so-called 'newsletters' to constitu- 
ents, news releases, and speeches delivered outside Congress." 55 Thus, 
a distinction needs to be made between a staffer's legitimate official 



K Code of Ethics for Government Service, 72 Stat, part II, B 12. 

"House Rule XLIII(8). 

M31U.S.C. §628. 

« United States v. Brewster, 408 U.S. 501, 512 (1972). 



116 

duties which might arguably be characterized as "political in nature", 
and those activities which are merely political "campaign" activities 
directed solely at the Member's reelection. 

Despite theoretical difficulties which may arise in distinguishing 
"official" from "campaign" activities of House staffers, it should be 
noted that under the theory of misuse of appropriated funds, false 
claims and fraud, various law suits have been filed against Members of 
Congress under the False Claims Act 56 provisions for claiming Federal 
salaries for staff employees who were allegedly not performing official 
congressional duties for the Member in return for their compensation 
from public funds. 57 In one of those cases, campaign activities of the 
staffer were involved. 58 Although citizens' suits concerning salaries 
of congressional employees under the False Claims Act generally 
have proved unsuccessful, the Department of Justice, it should be 
noted, has obtained a criminal indictment against a former Member of 
the House of Representatives charging that the Member defrauded 
the United States by placing 11 persons on his congressional payroll 
to pay them for operating and staffing various campaign headquarters- 
in the former Member's re-election campaign. 59 

The House Committee on Standards of Official Conduct has issued 
an advisory opinion on the subject of permissible campaign activities- 
of staff employees of House Members. That opinion indicates that 
campaign activity by staff employees of House Members is permitted* 
However, the opinion states that employees are expected to confine 
campaign activities to their own free off duty hours, albeit that these 
hours may occur during what is regarded as the "conventional" work 

da y : 

As to the allegation regarding campaign activity by an 
individual on the clerk hire rolls of the House it should be 
noted that due to the irregular time frame in which Congress 
operates, it is unrealistic to impose conventional work 
hours and rules on Congressional employees. At some times 
these employees may work more than double the usual work 
week — at others, some less. These employees are expected to 
fulfill the clerical work the Member requires during the 
hours he requires and generally are free at other periods. 
If during the periods he is free, he voluntarily engages in 
campaign activity, there is no bar to this. There will, of 
course, be differing views as to whether the spirit of this 
principle is violated but this Committee expects Members 
of the House to abide by the general proposition. 60 

Political Contributions by House Employees. Employees of the 
Federal Government are prohibited from making political contri- 
butions to a Member of Congress or another Federal employee under 

68 31 U.S.C. §231, 232; see requirement in House Administration Regulations for employing Member' 
officer or committee to certify the "regular performance of official duties" of staffer to receive salary, see 
discussion in Chapter 2 of this report. 

57 United States ex rel. Thompson v. Hays, Civil Action Nos. 76-1078. 1132 and 1140, dismissed by the 
court for lack of jurisdiction over subject matter because information on which suits were based was in t he 
possession of the United States prior to fili'i? of the suits: United States ex rel. Martin-Trigona v. Dosey 
Civil Action 76-1164 (D.D.C), dismissed for reasons noted above; United States ex rel. Joseph v. Cannon, 
Civil Action No. 77-0452, (D.D.C). 

68 See United States ex rel. Joseph v. Cannon, supra. 

*• United States v. Clark, Criminal No. 78-207 (D.C.W. Pa. 1978" 1 ; see report on indictment, Washington 
Post, September 6, 1978, p. A6. 

" House Committee on Standards of Official Conduct, Advisory Opinion No. 2, July 11, 1973. 



117 

the provisions of a Federal criminal statute. 61 The language of the 
statute at 18 U.S.C. § 607, clearly prohibits anyone who is an "officer, 
clerk, or other person in the service of the United States, or any 
department or agency thereof" from making a political contribution 
"directly or indirectly" to any other officer, clerk, person in the 
service of the United States or any Member of Congress. 

There has been some question surrounding this statutory provision 
concerning the propriety of making voluntary contributions by con- 
gressional employees to Members of Congress or to the personal 
campaign committee of a Member. The confusion surrounding this 
statute appears to derive in large part from the enforcement history, 
or more precisely the non-enforcement history of this provision. In 
the nearly 100 years of the existence of this law, there appear to be 
no indictments obtained by the Justice Department under its pro- 
visions. 

Although there are no reported cases under this statute, the De- 
partment of Justice, as well as other authorities on Federal criminal 
and campaign laws, have specifically noted in the past that even vol- 
untary contributions from congressional employees to Members of 
Congress are technical violations of the statute. 62 Additionally, the 
Department of Justice has testified in congressional hearings on crim- 
inal code reform that contributions by employees to a political com- 
mittee of a Member "would seem to be an 'indirect' giving, which is 
expressly prohibited by Section 607." 63 Questions have arisen, how- 
ever, concerning informal declarations of Justice Department en- 
forcement policy which have indicated that the Justice Department 
might not consider it a "prosecutable" violation (although apparently 
a technical violation) of the law where an employee makes a voluntary 
contribution, without coercion or corrupt intent, to a committee sup- 
porting a Member of Congress. 84 The statement in this 1974 letter 
written m response to a Senator's questions on contributions by Senate 
employees was, however, qualified concerning its non-enforcement 
position by noting that "the existence of certain kinds of relationships 
between a Senator and a Federal employee-contributor — such as an 
employer-employee relationship — may, in some circumstances, give 
rise to an inference of coercion." 65 Thus, a contribution from a con- 
gressional employee to one's employer/Member would be "suspect" 
even under this generous enforcement declaration bv the 1974 Justice 
Department. 

81 IS U.S.C. § 607. 
™ftt!i e ni! t?r from Attoniey General James P. McGranery, October 14, 1953, to House Judiciary Subcom- 
m i. e Chairman Prank L. Chelf concerning contributions made by staff of Representative Reva Beck 
£■««£„' i A - ^"'caHy. Mrs Bosone is guilty under one section, the contributors under another", Con- 
nfTK,i$ U arterl y T News Features, 1952, p. 1021; Working Papers of the National Commission on Reform 
rl^lf w 1 ™ 1 "? 1 La g s ' V oL A- PR- S1 8-819. see also Final Report, p. 165; Senate Report No. 95-500, 95th 
r™£ k '« ■ Session Report of the Committee on Rules and Administration, "Review of Laws Related to 
m?£ w , r«™J?*? e y ?J Sohclt e d f!0 "? Senate 0ffi cers and Employees", pp. 5-6: Federal Election Com- 
mission. Commissioner Memorandum No. 1434, from William Oldaker, General Counsel, p. 2, August 25, 
Government 6 below > concerning contributions by Senate employees as employees of the Federal 
■<mh r« S ni mony a by J° h T n C-. K eeney, Deputy Assistant Attorney General, Criminal Division, on S. 1400, 
mittPP on ?S & 6 Juo V T c,ar y,C on ] :nlt J ee - Se P l - V' mZ > Hearings p. 6787; see also Report of the Com- 
Conlr^ Kt I U in ia!y V Unlt ed States Senate to Accompany S. 1437, 95th Congress, S. Rpt. 95-605, 95th 
congress, 1st Session, Criminal Code Reform Act of 1977, pp. 484-485 

■Ti P r™n e r^ m ,^!; nr £ E - Peterson, Assistant Attorney General, Criminal Division, by Thomas J. Mc- 
liernan. Chief of the Fraud Section, Lnited States Department of Justice, August 12 1974. 



118 

As noted in an earlier section, the statement offered by the Depart- 
ment of Justice in 1974, discussed above, is an informal one, not bind- 
ing on the Department, which remains free to change its enforcement 
policy at any time in exercising its prosecutorial discretion. 66 Criminal 
code reforms passed by the Senate in the 95th Congress would amend 
this law to allow voluntary, unsolicited contributions to Members of 
Congress 67 which, as noted in the report on the measure, are now pro- 
hibited. 68 This legislation, however, has failed to pass the House and 
has not been enacted into law. 

As outlined earlier, in addition to possible technical violations of law 
by an employee when he makes a political contribution to a Member, 
the Member may be in violation of another Federal criminal law for 
receiving such a contribution from the employee, 69 and a Federal court 
has in fact sustained a conviction of a Member for receiving campaign 
contributions from his staff. 70 

Thus, considering the actual language of 18 U.S.C. § 607, the state- 
ments of intent by the legislature during the history of the legislation, 71 
and the possible political and publicity factors as well as the legal 
matters involved when a Member of Congress receives contributions 
from employees, a cautious and prudent course of conduct by an em- 
ployee would be to avoid making contributions to authorized political 
committees supporting a single, incumbent candidate for Congress, in 
addition to not handing over money directly to a Member of Congress. 

Although section 607 prohibits the making of political contributions 
to incumbent Senators or Representatives, the prohibition does not 
extend to state or local political candidates, or to non-incumbent 
Federal candidates who are not otherwise Federal Government em- 
ployees (although such congressional candidates would apparently 
be barred from receiving such contributions under 18 U.S.C. §602). 
Additionally, it appears that § 607 would be interpreted to allow an 
employee to make a contribution to a political party, or a multi- 
candidate political committee such as the Republican or Democratic 
Congressional Campaign Committee or the like, so long as contribu- 
tions are not "earmarked" to a specific incumbent candidate for Con- 
gress. Such "earmarking" of contributions might be considered an 
"indirect" contribution to the candidate. 

Campaign Activity in a Federal Building. In reelection campaigns 
of Members of Congress, a primary consideration is 18 U.S.C. § 603 
which prohibits the solicitation or receipt of political contributions 
"in any room or building occupied in the discharge of official duties" 
by officers or employees of the Government. 

As for the solicitation of contributions, although this statute has 
thus far not been specifically construed by the courts to prohibit the 
solicitation of campaign contributions from a congressional office 
directed to the public at large by letter or telephone, such activities 
would be barred by other provisions relating to appropriations and 

* As to enforcement of desuetndential criminal statutes, see: "Sutherland Statutory Construction," Fourth 
Edition by C. Dallas Sands, Volume 2, §§ 34.06, 34.08, 34.09. 

•» S. 1437, 95th Congress, section 1516. 

« S. Rpt. No. 95-605, part 1, supra at pp. 484-485. 

68 18 U.S.C. § 602; see letter from Attorney General James P. McGranery, October 14, 1953, cited at not* 
#02. 

'«' Brehm v. United States, 196 F.2d 769 (D.C. Cir. 1952), cert. den. 344 U.S. 838 (1952). 

" See: 14 Cong. Rec. 622 (1882), remarks by Senator Hoar. 



119 

official allowances. The criminal statute at § 603 has historically been 
construed to prohibit the solicitation of contributions from a Federal 
employee while such person is within a Federal building. The focus 
of the prohibition, then, has been directed to the location of the 
person solicited, rather than the location from which the solicitation 
originated. As noted by the Supreme Court in interpreting the fore- 
runner of § 603, "the solicitation was in the place where the letter was 
received." 72 Under this interpretation, section 603 would arguably 
not prohibit solicitations from a congressional office to the public at 
large so long as the persons solicited were not in a Federal building. 

However, other provisions of the United States Code, as well as 
regulations governing certain allowances in the House, specify that 
amounts provided from appropriated funds for telephone, mail, 
office space, stationery, etc., are to be used for "official" purposes. 73 
Thus, these provisions would apparently bar the use or conversion of 
such supplies or facilities for campaign purposes, rather than official 
congressional purposes. As noted in Chapter 3 of this Manual the use 
of official allowances, or supplies or goods secured by such allowances, 
for other than official purposes might possibly subject a Member to a 
number of legal liabilities concerning false claims, fraud, or conversion. 

As for receipt of campaign funds in a congressional office, as noted 
above, it appears that section 603 was initially enacted to prohibit 
the solicitation or receipt of political contributions from Federal em- 
ploj^ees while such employees were within a Federal building. The 
original basis of this interpretation is found in the legislative history 
and intent of the Pendleton Act, which was the forerunner of the pres- 
ent Federal statute. 74 The stated purpose of that Act was to "regulate 
and improve the Civil Service of the United States" and to protect 
Government employees from "political assessments" described as 
"one of the conspicuous evils of our corrupt civil service." 75 The intent 
of the specific provision in question was explained by Senator Logan 
as "preventing Senators and Representatives and other officers of the 
Government from going in [to a Federal building] for the purpose of 
annoying the clerks and other persons and asking for contributions." 76 

The present statute has undergone no substantive revision since its 
initial enactment as part of the Pendleton Act, and its original intent — 
that is to prohibit the solicitation or receipt of contributions from 
Government employees within a Federal building — has not specifi- 
cally been revised by Congress in the legislative history of section 603. 77 
However, although the original legislative intent of 18 U.S. C. §603 
indicates a narrow application of the prohibition, the language of the 
present statute does appear on its face to prohibit the receipt of any 
political contribution in a Federal building, regardless of who the 
contributor is. Therefore, discretion should be exercised concerning 
the acceptance of campaign contributions within a congressional office. 

7J United States v. Thayer, 209 U.S. 39, 44 (1908). 
78 See discussion of "Official Allowances", Chapter 3 of this report. 
» 22 Stat. 403, 407. 
75 14 Congressional Record 865. 
71 14 Congressional Record 640. 

77 See: 35 Stat. 1110, § 119; 62 Stat. 722; House Rept. No. 304 ,80th Congress, 1st Session, p, A51; see also 
revisor's note to 18 U.S.C. § 603, 1970 Ed.; 65 Stat. 718; House Rept. No. 462, S2d Congress, 1st Session. 



120 

Although no official, written opinion is available, authorities on con- 
gressional ethics in both the House and Senate have strongly advised 
against conducting campaign financing activities from a congressional 
office. 

It is not unusual, however, and is often unavoidable that unsolicited 
campaign contributions will be received through the mail, or a con- 
tribution by a supporter will be tendered in person, within a congres- 
sional office. When this situation occurs it has been advised that as a 
practical matter the person involved accept the contributions only as 
a transmittal for subsequent forwarding, as soon as possible, to ap- 
propriate campaign personnel outside of the congressional office for 
actual receipt and acknowledgment of the contribution. When con- 
tributions are offered in person within a congressional office, it has 
further been advised to suggest, when practical, that the contribution 
be tendered instead to the appropriate campaign committee outside 
of the Federal building. 78 

List of Prohibited Campaign Activities. Following is a brief listing 
of specific statutory prohibitions relating to campaign activities by 
an employee or Member of the House. This list may be used to provide 
a quick reference to activities which should raise so-called "red flags" 
as far as Federal statutory law is concerned. 

An employee or Member of the House may not: 

(1) Promise to use support or influence to obtain Federal employ- 
ment for anyone in return for a political contribution (18 U.S.C. § 211). 

(2) Deprive, attempt to deprive, or threaten to deprive anyone of 
employment or any other benefit, provided for or made possible by an 
Act of Congress appropriating relief funds, because of that person's 
political affiliation (18 U.S.C. § 246, as added by P.L. 94-453). 

(3) Make or offer to make an expenditure to any person either to 
vote or withhold one's vote or to vote for or against any candidate in 
a Federal election (18 U.S.C. § 597). 

(4) Solicit, accept, or receive an expenditure in consideration of his 
vote or the withholding of his vote m a Federal election (18 U.S.C. 

§ 597 )- 

(5) Use any appropriation by Congress for work relief, relief, or for 

increasing employment, or exercise any authority conferred by any 
appropriations act for the purpose of interfering with, restraining, or 
coercing any individual in the exercise of his right to vote (18 U.S.C. 

§ 598 >- 

(6) If a candidate, directly or indirectly, promise or pledge the 

appointment of any person to any public or private position or em- 
ployment, for the purpose of procuring support in one's candidacy 
(18 U.S.C. §599). 

(7) Promise employment or any other benefit provided for or made 
possible by any Act of Congress as reward for political activity or 
support (18 U.S.C. §600); 

n See S. 926, 95th Congress, as passed the Senate which would have amended § 603 to specifically provide 
that no violation occurs when contributions received in a congressional office are promptly transferred to 
a campaign account. 



121 

(8) Cause or attempt to cause anyone to make a political contri- 
bution by means of denying or threatening to deny any governmental 
employment or benefitprovided for or made possible, in whole or in 
part, by any act of Congress (18 U.S.C. § 601, as amended by 
P.L. 94-453). 

(9) Solicit or receive political contributions from any "person 
receiving any salary or compensation or services from money derived 
from the Treasury of the United States" (18 U.S.C. § 602). 

(10) Solicit or receive political contributions in a Federal building 
(18 U.S.C. §603). 

(11) Solicit or receive political contributions from persons known 
to be entitled to or to be receiving relief payments under any act of 
Congress (18 U.S.C. § 604). 

(12) Furnish, disclose, or receive for political purposes the names 
of persons receiving relief payments under any act of Congress (18 
U.S.C. § 605). 

(13) Intimidate any "officer or employee" mentioned in 18 U.S.C. 
602 to secure political contributions (18 U.S.C. § 606). 

(14) Make a political contribution to any Member of Congress, 
Federal officer or employee (18 U.S.C. § 607). 

(15) Knowingly accept a contribution in excess of limitations under 
Federal law of $1,000 to a candidate from any person, or $5,000 to a 
candidate from multicandidate committees (2 U.S.C. § 441a(a), added 
by P.L. 94-283). 

(16) Accept or receive any political contribution from the organi- 
zational or treasury funds of a national bank, corporation, or labor 
organization (2 U.S.C. §441b). 

(17) Knowingly solicit contributions from Government contractors 
(2 U.S.C. §441c). 

(18) Make an expenditure for any general public political adver- 
tising which anonymously advocates the election or defeat of a clearly 
identified candidate (2 U.S.C. §441d). 

(19) Solicit, accept, or receive a contribution from a foreign national 
(2 U.S.C. §441e). 

(20) Knowingly accept a contribution made by one person in the 
name of another person (2 U.S.C. § 44 If). 

(21) Fraudulently misrepresent oneself as speaking or acting on 
behalf of a candidate (2 U.S.C. § 44 lh). 

(22) Solicit funds by a mailing under the frank (2 U.S.C. § 439b). 

(23) To the extent that an individual may make political contri- 
butions or expenditures as discussed above, the individual may not: 

(a) Make a cash contribution in excess of $100 (2 U.S.C. 
§441g); 

(b) Make contributions in excess of $1,000 per election to any 
candidate, $5,000 per calendar year to political committees and 



45-937 O - 79 



122 

$20,000 to national party committees, or make contributions 
aggregating over $25,000 per calendar year (2 U.S.C. §441a(a)); 

(c) Make a contribution in the name of another (2 U.S.C. 
§441f); 

(d) Make contributions or expenditures in excess of $100 other 
than by contribution to a committee or candidate, without filing a 
report with the Federal Election Commission (2 U.S.C. § 434(e)). 



Appendix 

text of selected rules, regulations, opinions, and statutes 
relating to conduct standards 

1. Rules of the House of Representatives 

Rule XLIII 

CODE OF OFFICIAL CONDUCT 

There is hereby established by and for the House of Representatives 
the following code of conduct, to by known as, the "Code of Official 
Conduct": 

1. A Member, officer, or employee of the House of Representatives 
shall conduct himself at all times in a manner which shall reflect 
creditably on the House of Representatives. 

2. A Member, officer, or employee of the House of Representatives 
shall adhere to the spirit and the letter of the Rules of the House of 
Representatives and to the rules of duly constituted committees 
thereof. 

3. A Member, officer, or employee of the House of Representatives 
shall receive no compensation nor shall he permit any compensation 
to accrue to his beneficial interest from any source, the receipt of which 
would occur by virtue of influence improperly exerted from his position 
in the Congress. 

4. A Member, officer, or employee of the House of Representatives 
shall not accept gifts (other than personal hospitality of an individual 
or with a fair market value of $35 or less) in any calendar year ag- 
gregating $100 or more in value, directly or indirectly, from any person 
(other than from a relative of his) having a direct interest in legislation 
before the Congress or who is a foreign national (or agent of a foreign 
national). Any person registered under the Federal Regulation of 
Lobbying Act of 1946 (or any successor statute), any officer or director 
of such registered person, and any person retained by such registered 
person for the purpose of influencing legislation before the Congress 
shall be deemed to have a direct interest in legislation before the 
Congress. 

5. A Member, officer, or employee of the House of Representatives 
shall accept no honorarium for a speech, writing for publication, or 
other similar activity, from any person, organization, or corporation 
in excess of the usual and customary value for such services. 

6. A Member of the House of Representatives shall keep his cam- 
paign funds separate from his personal funds. He shall convert no 
campaign funds to personal use in excess of reimbursement for legiti- 
mate and verifiable prior campaign expenditures and he shall expend 
no funds from his campaign account not attributable to bona fide 
campaign purposes. 

7. A Member of the House of Representatives shall treat as cam- 
paign contributions all proceeds from testimonial dinners or other 
fund raising events. 

(123) 



124 

8. A Member of the House of Representatives shall retain no one 
from his clerk hire allowance who does not perform duties commensu- 
rate with the compensation he receives. 

9. A Member, officer, or employee of the House of Representatives 
shall not discharge or refuse to lure any individual, or otherwise dis- 
criminate against any individual with respect to compensation, terms, 
conditions, or privileges of employment, oecause of such individual's 
race, color, religion, sex, or national origin. 

10. A Member of the House of Representatives who has been con- 
victed by a court of record for the commission of a crime for which a 
sentence of two or more years' imprisonment may be imposed should 
refrain from participation in the business of each committee of which 
he is a member and should refrain from voting on any question at a 
meeting of the House, or of the Committee of the Whole House, 
unless or until judicial or executive proceedings result in reinstatement 
of the presumption of his innocence or until he is reelected to the 
House after the date of such conviction. 

11. A Member of the House of Representatives shall not authorize 
or otherwise allow a non-House individual, group, or organization to 
use the words "Congress of the United States", "House of Representa- 
tives", or "Official Business", or any combination of words thereof, 
on any letterhead or envelope. 

As used in this Code of Official Conduct of the House of Represent- 
atives — (a) the terms "Member" and "Member of the House of Rep- 
resentatives" include the Resident Commissioner from Puerto Rico 
and each Delegate to the House ; and (b) the term "officer or employee 
of the House of Representatives" means any individual whose com- 
pensation is disbursed by the Clerk of the House of Representatives. 

For the purposes of clause 4 of this Code of Official Conduct — 

(1) The term "relative" means, with respect to any Member, 
officer, or employee of the House of Representatives, an indi- 
vidual who is related as father, mother, son, daughter, brother, 
sister, uncle, aunt, first cousin, nephew, niece, husband, wife, 
grandfather, grandmother, grandson, granddaughter, father-in- 
law, mother-in-law, son-in-law, daughter-in-law, brother-in-law, 
sister-in-law, stepfather, stepmother, stepson, stepdaughter, step- 
brother, stepsister, half brother, half sister, or who is the grand- 
father or grandmother of the spouse of the person reporting. 

(2) The term "foreign national" means an individual who is not 
a citizen of the United States and who is not lawfully admitted 
for permanent residence. 

Rule XLV* 

PROHIBITION OF UNOFFICIAL OFFICE ACCOUNTS 

1. On or after January 3, 1978, no Member may maintain or have 
maintained for his use an unofficial office account. 

2. After the date of adoption of this rule, no funds may be paid into 
any unofficial office account. 

3. For purposes of this rule — 

(a) the term "unofficial office account" means an account or 
repository into which funds are received for the purpose of de- 

•Tbls rule was adopted by the House on March 2, 1977 (H. Eea> 287. 95th Cong.). 



125 

fraying otherwise unreimbursed expenses allowable under section 
162(a) of the Internal Revenue Code of 1954 as ordinary and 
necessary in the operation of a congressional office, and includes 
any newsletter fund referred to in section 527(g) of the Internal 
Revenue Code of 1954; and 

(b) the term "Member" means any Member of, Delegate to, or 
Resident Commissioner in, the House of Representatives. 

Rule XLVI* 

LIMITATIONS ON THE USE OF THE FRANK 

1. Any franked mail which is mailed by a Member under section 
3210(d) of title 39, United States Code, shall be mailed at the equiva- 
lent rate of postage which assures that such mail will be sent by the 
most economical means practicable. 

2. After December 31, 1977, the total number of pieces of mail which 
may be mailed as franked mail under section 3210(d) of title 39, 
United States Code, during any calendar year by a Member entitled to 
mail franked mail under this subsection may not exceed an amount 
equal to six multiplied by the number of addresses to which such mail 
may be delivered, in accordance with paragraph (4) of section 3210 
(d) of title 39, United States Code, in the area from which such Mem- 
ber was elected. Any mail matter which relates solely to a notice of 
appearance or a scheduled itinerary of a Member in the area from 
which such Member was elected shall not count against the limitation 
set forth in the preceding sentence. 

3. Any Member entitled to mail franked mail under section 3210(d) 
of title 39, United States Code, shall, before making any such mailing, 
submit a sample or description of the mail matter involved to the 
House Commission on Congressional Mailing Standards for an ad- 
visory opinion as to whether such proposed mailing is in compliance 
with the provisions of such section. 

4. Any mass mailing which otherwise is frankable by a Member 
under the provisions of section 3210(e) of title 39, United States Code, 
shall not be frankable unless the cost of preparing and printing such 
mass mailing is defrayed exclusively from funds made available in 
any appropriations Act. 

5. In the case of any Representative in the House of Representa- 
tives, other than a Representative at Large, who is a candidate for any 
statewide public office, any mass mailing shall not be frankable under 
section 3210 of title 39, United States Code, when the same is delivered 
to any address which is not located in the area constituting the 
congressional district from which any such individual was elected. 

6. In the case of any Member, any mass mailing shall not be frank- 
able under section 3210 of title 39, United States Code, when the same 
is mailed less than sixty days immediately before the date of any pri- 
mary or general election (whether regular, special, or runoff) in which 
such Member is a candidate for public office. 

7. For purposes of this rule, the term "Member" means any Member 
of the House of Representatives, a Delegate to the House of Repre- 
sentatives, or the Resident Commissioner in the House of Representa- 
tives. 



•This rule was adopted by the House on March 2, 1977 (H. Ken. 287. 98th Cong.). 



126 
Rule XLVII 

LIMITATIONS ON OUTSIDE EARNED INCOME 

1. (a) Except as provided by paragraph (b), no Member may, in 
any calendar year beginning after December 31, 1978, have outside 
earned income attributable to such calendar year which is in excess of 
15 per centum of the aggregate salary as a Member paid to the Member 
during such calendar year. 

(b) In the case of any individual who becomes a Member during any 
calendar year beginning after December 31, 1978, such Member 
may not have outside earned income attributable to the portion of 
that calendar year which occurs after such individual becomes a 
Member which is in excess of 15 per centum of the aggregate salary 
as a Member paid to the Member during such calendar year. 

2. No Member may, in any calendar year beginning after De- 
cember 31, 1978, accept any honorarium of more than $1,000 in value. 

3. For the purposes of this rule — 

(a) The term "Member" means any Member of the House of 
Representatives, a Delegate to the House of Representatives, 
or the Resident Commissioner in the House of Representatives. 

(b) The term "honorarium" means a payment of money or 
any thing of value to a Member for an appearance, speech, or 
article, by the Member; but there shall not be taken into account 
for purposes of this paragraph any actual and necessary travel 
expenses incurred by the Member to the extent that such ex- 
penses are paid or reimbursed by any other person, and the 
amount otherwise determined shall be reduced by the amount 
of any such expenses to the extent that they are not paid or 
reimbursed. 

(c) The term "travel expenses" means, with respect to a Mem- 
ber, the cost of transportation, and the cost of lodging and meals 
while away from his residence or the greater Washington, District 
of Columbia, metropolitan area. 

(d) The term "outside earned income" means, with respect to 
a Member, wages, salaries, professional fees, honorariums, and 
other amounts (other than copyright royalties) received or to be 
received as compensation for personal services actually rendered 
but does not include — 

(1) the salary of such Member as a Member; 

(2) any compensation derived by such Member for personal 
services actually rendered prior to the effective date of this rule 
or becoming such a Member, whichever occurs later; 

(3) any amount paid by, or on behalf of, a Member to a tax- 
qualified pension, profit-sharing, or stock bonus plan and received 
by such Member from such a plan; and 

(4) in the case of a Member engaged in a trade or business in 
which the Member or his family holds a controlling interest and 
in which both personal services and capital are income-producing 
factors, any amount received by such Member so long as the 
personal services actually rendered by the Member in the trade 
or business do not generate a significant amount of income. 

Outside earned income shall be determined without regard to any 
community property law. 



127 
Rule VIII 

DUTIES OP THE MEMBERS 

1. Every Member shall be present within the Hall of the House 
during its sittings, unless excused or necessarily prevented ; and shall 
vote on each question put, unless he has a direct personal or pecuniary 
interest in the event of such question. 

2. Regulations of the House Committee on Standards of Official 
Conduct: Regulations for the Acceptance of Decorations and 
Gifts, Including Travel or Expenses for Travel, by Members, 
Officers, or Employees of the House of Representatives From 
Foreign Governments 

1. AUTHORITY 

The Committee on Standards of Official Conduct is authorized to 
issue regulations on this subject by 5 U.S.C. §§ 7342(g), 7342(a)(6), 
as amended by P.L. 95-105, commonly known as the Foreign Gifts 
and Decorations Act. 

2. purpose 

The purpose of these regulations is to establish standards for the 
acceptance and disclosure of decorations, gifts or more than minimal 
value, and gifts of travel or expenses for travel taking place entirely 
outside the United States tendered by foreign governments to Mem- 
bers, officers, and employees of the House of Representatives. 

3. GENERAL STANDARDS 

(a) The United States Constitution (Article I, Section 9, clause 8) 
prohibits a Federal official from accepting gifts of any kind whatever 
from a foreign government without the consent of the Congress. 

(b) The Foreign Gifts and Decorations Act (5 U.S.C. 7342) prohibits 
an officer or employee of the Government from requesting or other- 
wise encouraging the tender of a gift or decoration from a foreign 
government, and prohibits the acceptance of such gifts other than in 
accordance with the provisions of that Act as implemented for Mem- 
bers, officers, and employees of the House by these regulations. 

(c) Rule XLIII, clause 4, of the Rules of the House of Representa- 
tives prohibits a Member, officer, or employee of the House from 
accepting gifts (other than personal hospitality of an individual or 
gifts with a fair market value of $35 or less) in any calendar year 
aggregating over $100 from a foreign national not acting as a repre- 
sentative of a foreign government. Food, lodging, transportation, and 
entertainment provided on an official basis by a foreign government 
to Members of the House of Representatives are not subject to the 
provisions of House Rule XLIII, clause 4, as such matters are deemed 
controlled by Constitutional and statutory prohibitions. 

4. DEFINITIONS 

As used in this section and sections 2, 3, 5 and 6 of these regulations: 

(a) "Member, officer, or employee of the House of Representatives" 

includes the spouse of such individual (unless such individual and 

spouse are separated) or a dependent of such individual (as denned 

injsection 152 of the Internal Revenue Code) ; 



128 

(b) "foreign government" means — 

(i) any unit of foreign, governmental authority, including any 
foreign municipal, local, State, and national government; 
.:' (ii) any international or multinational organization whose 
membership is composed of any unit of foreign government de- 
scribed in subparagraph (i) ; and 

(iii) any agent or representative of any such unit or such or- 
ganization, while acting as such; 
' (c) "decoration" means an order, device, medal, badge, insignia, 
emblem, or award tendered by, or received from, a foreign government; 
and 

r (d) "gift" means a tangible or intangible present (other than a 
decoration) tendered by, or received from, a foreign government. 

5. CONSENT OF CONGRESS FOR THE ACCEPTANCE OF DECORATIONS 

The Congress has consented (5 USC 7342(d)) to the accepting, 
retaining, and wearing by a Member, officer, or employee of the House 
of Representatives of a decoration tendered in recognition of active 
field service in time of combat operations or awarded for other out- 
standing or unusually meritorious performance, subject to the approval 
of the Committee on Standards of Official Conduct. 

(a) Decorations of minimal intrinsic value. — Decorations presented to 
Members, officers, or employees of the House tendered by or received 
from a foreign government may be accepted by such Member, officer, 
or employee where the intrinsic value of the decoration is of minimal 
value, without prior approval of the Committee on Standards of 
Official Conduct. Decorations of minimal intrinsic value are denned as 
those having a retail value in the United States of $100 or less. 
(■■ (b) Decorations of more than minimal intrinsic value. — Unless accept- 
ance is specifically approved by the Committee on Standards of 
Official Conduct, decorations of more than minimal value, if not 
promptly returned, are deemed to have been accepted on behalf of 
the United States and shall become the property of the United States. 
Within 60 days after acceptance of such a decoration, the decoration 
must be turned over to the Clerk of the House of Representatives for 
disposal; or, with the approval of the Committee on Standards of 
Official Conduct, deposited with the Committee for official use. At 
the time such decoration is turned over to the Clerk by a Member, 
officer, or employee, such individual must file a disclosure statement 
concerning such decoration with the Committee, detailing information 
as provided in section 7 of these regulations. 

6. CONSENT OF CONGRESS FOR THE ACCEPTANCE OF GIFTS 

Congress has consented to the acceptance of certain gifts, or gifts 
under particular circumstances, from foreign governments by officers 
or employees of the Government, including Members, officers, and 
employees of the House: 

(a) Gifts of minimal value. — Members, officers, and employees of 
the House may accept gifts of minimal value from foreign govern- 
ments tendered and received as a souvenir or mark of courtesy. 
Gifts of minimal value are defined as those having a retail value in the 
United States of $100 or less. 

(b) Gifts of more than minimal value where refusal may cause offense 
or embarrassment. — A Member, officer, or employee may accept tan- 



129 

foible gifts of more than minimal value when refusal would be deemed 
ikely to cause offense or embarrassment or otherwise adversely affect 
United States foreign relations. However, any such tangible gift 
received and not promptly returned is deemed to have been accepted 
on behalf of the United States, and upon acceptance becomes property 
of the United States. Within 60 days after accepting such a gift, the 
gift must be turned over to the Clerk of the House of Representatives 
for disposal, or, with the approval of the Committee on Standards of 
Official Conduct, deposited with the Committee for official use. At 
the time such gift is turned over to the Clerk by a Member, officer, 
or employee, such individual must file a disclosure statement concern- 
ing such gift with the Committee, detailing information as provided 
in section 7(a) of these regulations. Intangible gifts of more than 
minimal value may only be accepted in accordance with section. 6(c) 
and (e) of these regulations. 

(c) Education scholarship or medical treatment — Members, officers, 
or employees of the House may accept a gift of more than minimal 
value from a foreign government when the gift is in the nature 
of an educational scholarship or medical treatment. 

(d) Foreign educational or cultural exchange. — Acceptance of assist- 
ance from a foreign government for participation in foreign exchange 
or visitors programs by Federal officers or employees is consented to 
by Congress in certain instances outlined in 22 U.S.C. 2458a, the 
Mutual Educational and Cultural Exchange Act. Assistance or.grants 
received under that act are not considered "gifts" under these regula- 
tions. 

(e) Travel or expenses for travel outside of the United States. — A 
Member, officer, or employee of the House may accept gifts of travel 
or expenses for travel taking place entirely outside of the United States 
offered by a foreign government • when such travel or expenses for 
travel relate directly to the official duties of the Member, officer, or 
employee. Gifts of travel or expenses for travel include food, lodging, 
transportation and entertainment relating .to the official duties of 
the Member, officer, or employee. This provision allows a Member, 
officer, or employee to take advantage of opportunities such as certain 
onsite inspection or fact findings while in a foreign country. A spouse 
or dependent of a Member, officer, or employee of the House may 
accept such travel or expenses for travel when accompanying the 
Member, officer, or employee Of the House. Such travel or expenses 
for travel may not be accepted merely for the personal benefit, 
pleasure, enjoyment or financial enrichment of the individual or 
individuals involved. The acceptance of any suoh travel or expenses 
for travel shall be reported within 30 days after acceptance to the 
Committee on Standards of Official Conduct, providing information 
required in section 7(b) of these regulations. For the purposes of these 
regulations, travel or expenses for travel are deemed accepted upon 
departure from the donor country. 

7. REPORTS AND DISCLOSURE. 

Any gift provided to a .spouse or dependent should be considered 
to be a gift provided to the Member, officer, or employee and therefore 
must be disclosed by such Member, officer, or employee. 

For the purposes of these regulations, any decoration presented by 
a foreign government to the spouse or a dependent of a Member, 



130 

officer, or employee of the House is considered to be presented to the 
Member, officer, or employee when it is apparent the decoration would 
not have been offered but for the recipient's relation to the Member, 
officer, or employee, and therefore must be disclosed by such Member, 
officer, or employee. 

An appraisal of tangible gifts or decorations, if necessary, may be 
obtained through the Clerk of the House of Representatives. 

(a) Tangible gifts and decorations. — At the time of depositing a 
tangible gift or decoration of more than minimal value accepted by a 
Member, officer, or employee pursuant to section 5(b) or 6(b) of these 
regulations, the Member, officer, or employee shall report to the Com- 
mittee the following information : 

(i) the name and position of the reporting individual and the 
recipient; 

(ii) a brief description of the gift or decoration and the cir- 
cumstances justifying acceptance; 

(iii) the estimated value in the United States at the time of 
acceptance ; 

(iv) the date of acceptance of the gift or decoration ; 

(v) the identity, if known, of the foreign government and the 
name and position of the individual who presented the gift or 
decoration; 

(vi) disposition or current location of the gift or decoration. 

(b) Other gifts.- — Within 30 days after acceptance of gifts of travel 
pursuant to section 6(e) of these regulations, the Member, officer, or 
employee shall report to the Committee the following information: 

(i) the name and position of the reporting individual ; 

(ii) a brief description of the gift and the circumstances justi- 
fying acceptance ; and 

(iii) the identity, if known, of the foreign government and the 
name and position of the individual who presented the gift. 

8. PUBLIC INSPECTION 

Reports filed under these regulations as promulgated under 5 
U.S.C. 7342 shall be maintained by the Committee on Standards of 
Official Conduct and made available for public inspection at reasonable 
hours. Not later than January 31, 1979, and January 31 of each suc- 
ceeding year, the Committee on Standards of Official Conduct will 
compile a listing of all statements filed during the preceding year and 
will transmit such listing to the Secretaiy of State for publication in 
the Federal Register. 

Reports filed with the Committee under these regulations will be 
maintained for public inspection for a period of 7 years following 
transmittal to the Secretary of State. 

3. Advisory Opinions of the House Committee on Standards of 

Official Conduct 

A. Advisory Opinion No. 1, Issued January 26, 1970 

(On the Role of a Member of the House of Representatives in Com- 
municating With Executive and Independent Federal Agencies*)! i 

•Subsequent leirislatlon, reflations or rules may affect part or all of this advisory 
opinion (see 5 U.S.C. sec. 557(d) relating to prohibited ez parte communications to 

administrative agencies). 



131 



REASON FOR ISSUANCE 



A number of requests have come to the Committee for its advice 
in connection with actions a Member of Congress may properly take 
in discharging his representative function with respect to communica- 
tions on constituent matters. This advisory opinion is written to 
provide some guidelines in this area in the hope they will be of as- 
sistance to Members. 

BACKGROUND 

The first Article in our Bill of Rights provides that "Congress shall 
make no law . . . abridging the . . . right of the people ... to 
petition the Government for a redress of grievances." The exercise of 
this Right involves not only petition by groups of citizens with com- 
mon objectives, but increasingly by individuals with problems or 
complaints involving their personal relationships with the Federal 
Government. As the population has grown and as the Government has 
enlarged in scope and complexity, an increasing number of citizens 
find it more difficult to obtain redress by direct communication with 
administrative agencies. As a result, the individual turns increasingly 
to his most proximate connection with his Government, his represen- 
tative in the Congress, as evidenced by the fact that congressional 
offices devote more time to constituent requests than to any other 
single duty. 

The reasons individuals sometimes fail to find satisfaction from their 
petitions are varied. At the extremes, some grievances are simply 
imaginary rather than real, and some with merit are denied for lack 
of thorough administrative consideration. 

Sheer numbers impose requirements to standardize responses. Even 
if mechanical systems function properly and timely, the stereotyped 
responses they produce suggest indifference. At best, responses to 
grievances in form letters or by other automated means leave much to 
be desired. 

Another factor which may lead to petitioner dissatisfaction is the 
occasional failure of legislative language, or the administrative inter- 
pretation of it, to cover adequately all the merits the legislation in- 
tended. Specific cases arising under these conditions test the legislation 
and provide a valuable oversight disclosure to the Congress. 

Further, because of the complexity of our vast federal structure, 
often a citizen simply does not know the appropriate office to petition. 

For these, or similar reasons, it is logical and proper that the peti- 
tioner seek the assistance of his Congressman for an early and equitable 
resolution of his problem. 

REPRESENTATIONS 

This Committee is of the opinion that a Member of the House of 
Representatives, either on his own initiative or at the request of a 
petitioner, may properly communicate with an Executive or Inde- 
pendent Agency on any matter to: 

request information or a status report; 

urge prompt consideration; 



132 

arrange for interviews or appointments; 

express judgment; 

call for reconsideration of an administrative response which 
he believes is not supported by established law, Federal Regula- 
tion or legislative intent; 

perform any other service of a similar nature in this area com- 
patible with the criteria hereinafter expressed in this Advisory 
Opinion. 

PRINCIPLES TO BE OBSERVED 

The overall public interest, naturally, is primary to any individual 
matter and should be so considered. There are also other self-evident 
standards of official conduct which Members should uphold with 
regard to these communications. The Committee believes the follow- 
ing to be basic: 

1. A Member's responsibility in this area is to all his constituents 
equally and should be pursued with diligence irrespective of political 
or other considerations. 

2. Direct or implied suggestion of either favoritism or reprisal in 
advance of, or subsequent to, action taken by the agency contacted 
is unwarranted abuse of the representative role. 

3. A Member should make every effort to assure that representations 
made in his name by any staff employee conform to his instruction. 

CLEAR LIMITATIONS 

Attention is invited to United States Code, Title 18, Sec. 203(a) 
which states in part: "Whoever . . . directly or indirectly receives 
or agrees to receive, or asks, demands, solicits, or seeks, any com- 
pensation for any services rendered or to be rendered either by himself 
or another 

(1) at a time when he is a Member of Congress . . .; or 

(2) at a time when he is an officer or employee of the United 
States in the . . . legislative . . . branch of the government . . . 

in relation to any proceeding, application, request for a ruling or 
other determination, contract, claim, controversy, charge, accusation, 
arrest, or other particular matter in which the United States is a 
party or has a direct and substantial interest, before any department, 
agency, court-martial, officer, or any civil, military, or naval 
commission . . . 

Shall be fined not more than $10,000 or imprisoned for not more 
than two years or both; and shall be incapable of holding any office 
of honor, trust, or profit under the United States." 

The Committee emphasizes that it is not herein interpreting this 
statute but notes that the law does refer to any compensation, directly 
or indirectly, for services by himself or another. In this connection, 
the Committee suggests the need for caution to prevent the accrual 
to a Member of any compensation for any such services which may be 
performed by a law firm in which the Member retains a residual 
mterest. 

It should be noted that the above statute applies to officers and 
employees of the House of Representatives as well as to Members. 



133 

B. Advisory Opinion No. 2, Issued July 11, 1973 
(On the Subject of a Member's Clerk Hire) 

REASON FOR ISSUANCE 

A number of requests have come to the Committee for advice on 
specific situations which, to some degree, involve consideration of 
whether monies appropriated for Members' clerk hire are being 
properly utilized. 

A summary of the responses to these requests forms the basis for 
this Advisory Opinion which, it is hoped, will provide some guidelines 
and assistance to all Members. 

BACKGROUND 

The Committee requested the Congressional Research Servirp to 
examine in depth the full scope of the laws and the legislative iiibtory 
surrounding Members' clerk hire. The search produced little in the 
way of specific parameters in either case law or congressional intent, 
concluding that ". . . no definitive definition was found, . . .". It 
is out of this absence of other guidance the Committee feels constrained 
to express its views. 

Clerk-hire allowance for Representatives was initiated' in 1893 
(27 Stat. 757). The law providing it spoke of providing clerical assist- 
ance to a Representative "in the discharge of his official and repre- 
sentative duties . . .". The same phraseology is used today in each 
Legislative Appropriations bill and by the Clerk of the House in his 
testimony before the Subcommittee on Legislative Appropriations. 
An exact definition of "official and representative duties" was not 
foimd in the extensive materials researched. Remarks concerning 
various bills, however, usually refer to "clerical service" or terms of 
similar import, thus implying a consistent perception of the term as 
payment for personal services. 

SUMMARY OPINION 

This Committee is of the opinion that the funds appropriated for 
Members' clerk-hire should result only in payment for personal 
services of individuals, in accordance with the law relating to the 
employment of relatives, employed on a regular basis, in places as 
provided by law, for the purpose of performing the duties a Member 
requires in carrying out his representational functions. 

The Committee emphasizes that this opinion in no way seeks to 
encourage the establishment of uniform job descriptions or imposition 
of any rigid work standards on a Member's clerical staff. It does sug- 
gest, however, that it is improper to levy, as a condition of employ- 
ment, any responsibility on any clerk to incur personal expenditures 
for the primaiy benefit of the Member or of the Member's congres- 
sional office operations, such as subscriptions to publications, or pur- 
chase of services, goods or products intended for other than the clerk's 
own personal use. 

The opinion clearly would prohibit any Member from retaining 
any person from his clerk hire allowance under either an express or 



134 

tacit agreement that the salary to be paid him is in lieu of any present 
or future indebtedness of the Member, any portion of which may be 
allocable to goods, products, printing costs, campaign obligations, or 
any other non-representational service. 

In a related regard, the Committee feels a statement it made earlier, 
in responding to a complaint, may be of interest. It states: "As to the 
allegation regarding campaign activity by an individual on the clerk- 
hire rolls of the House, it should be noted that, due to the irregular 
time frames in which the Congress operates, it is unrealistic to impose 
conventional work hours and rules on congressional employees. At 
some times, these employees may work more than double the usual 
work week — at others, some less. Thus employees are expected to 
fulfill the clerical work the Member requires during the hours he 
requires and generally are free at other periods. If, during the periods 
he is free, he voluntarily engages in campaign activity, there is no 
bar to this. There will, of course, be differing views as to whether the 
spirit of this principle is violated, but this Committee expects Mem- 
bers of the House to abide by the general proposition." 

C. Advisory Opinion No. 3, Issued June 26, 1974 

(On the Subject of Foreign Travel by Members and Employees of the 
House of Representatives at the Expense of Foreign Governments*) 

REASON FOR ISSUANCE 

The Committee has received a number of requests from Members 
and employees of the House for guidance and advice regarding accept- 
ance of trips to foreign countries, the expenses of which are borne by 
the host country or some agent or instrumentality of it. 

The Committee is advised that similar inquiries recently have been 
put to the Department of State with respect to other Federal 
employees. 

In order to provide widest possible dissemination of views expressed 
in response to the requests, and to coordinate with statements likely 
to be forthcoming from other areas of the Federal government in this 
regard, this general advisory opinion is respectfully offered. 

BACKGROUND 

The United States Constitution, at Article I, Section 9, Clause 8, 
holds that: "No Title of Nobility shall be granted by the United 
States: And no Person holding any Office of Profit or Trust under 
them, shall without the Consent of the Congress, accept of any present, 
Emolument, Office, or Title, of any kind whatever, from any King, 
Prince, or foreign State." 

This provision, described as stemming from a "just jealousy of 
foreign influence of every sort," is extremely broad as to whom it 
covers, as well as to the "presents" or "emoluments" it prohibits — 
speaking of the latter as of any kind whatever. [Emphasis provided.] 

It is narrow only in the sense that the framers, aware that social or 
diplomatic protocols could compel some less than absolute observance 
of a prohibition on the receipt or exchange of gifts, provided for specific 
exceptions with "the consent of the Congress." 



♦Subsequent legislation, regulations or rules may affect part or all of this advisory 
opinion. (See 5 U.S.C. sec. 7342 as amended by P.L.. 95-105, and the regulations of the 
House Committee on Standards of Official Conduct on foreign gifts and travel, Issued 
January 19, 1978.) 



135 

Congress dealt from time "to time with these exceptions through 
public and private bills addressed to specific situations, and dealt 
generally, commencing in 1881, with the overall question of manage- 
ment of foreign gifts. 

In 1966 Congress passed the latest and the. existing Public Law 
89-673, "an Act to grant the consent of Congress to the acceptance of 
certain gifts and decorations from foreign governments." That law is 
presently codified at title 5, United States Code, section 7342, a copy 
of which is attached. 

The law is quite explicit in virtually all particulars, save whether 
the expense of a trip paid for by a foreign government is a ". . . pres- 
ent or thing, other than a decoration, tendered by or received from a 
foreign government; ..." 

It is on this point that this Opinion lies. 

BASIS OF AUTHORITY FOR OPINION 

Since this matter impinges equally on all Federal employees, the 
Committee sought advice from the Comptroller General as legal 
advisor to the Congress, and from the Secretary of State as the imple- 
menting authority over 5 U.S.C. 7342. 

Copies of their official responses are attached to this Opinion. 

SUMMARY OPINION 

It is the opinion of this Committee, on its own initiative and with 
the advice of the Comptroller General and the Assistant Secretary of 
State, that acceptance of travel or living expenses in specie or in kind 
by a Member or employee of the House of Representatives from any 
foreign government, official agent or representative thereof is not 
consented to in 5 U.S.C. 7342, and is, therefore, prohibited. This 
prohibition applies also to the family and household of Members and 
employees of the House of Representatives. 

D. Advisory Opinion No. 4, Issued May 14, 1975 

(On the Propriety of Accepting Certain Nonpaid Transportation*) 

reason for issuance 

The Committee has been requested in writing to express an opinion 
on the propriety of Members and staff of the U.S. House of Represen- 
tatives accepting nonpaid transportation provided under a number of 
circumstances. In order that all may be on notice, the response to that 
request is made in this Committee Advisory Opinion. 

BACKGROUND 

It is necessary and desirable that Members and employees of the 
U.S. House of Representatives, being public officials, maintain maxi- 
mum contact with the public at large to provide information on the 
work of the House and to gain citizen input into the legislative process. 

•Subsequent legislation, regulations or rules may affect part or all of this advisory 
opinion. (See House Rule XLIH(4) as amended by H. Res. 287. 95th Congress, and the 
advisory opinions of the Select Committee on Ethics, Advisory Opinions Nos. 2, 3, 6-10. ) 



136 

To accomplish this, considerable travel is required. Under some 
circumstances, such travel may be appropriately provided by other 
than commercial means. Conversely, in some circumstances nonpaid 
transportation offers should be declined. It is the intent of this Ad- 
visory Opinion to address both situations. 

The distinction turns on the purpose of the transportation. At 
times, it will be clear that there is a single identifiable purpose. At 
other times there may be more than one purpose involved. The Com- 
mittee stresses that the opinions hereafter stated deal with the prin- 
cipal purpose for taking the trip, such purpose to be fairly determined 
by the person involved, before acceptance of any non-paid 
transportation., »-.•* ■■>■. 

NONPAID TRANSPORTATION OFFERS TO BE DECLINED 

If the principal purpose of the trip is political campaign activity, 
and the host carrier is one who would be prohibited by law from making 
a campaign contribution, such nonpaid transportation would amount 
to a political contribution in kind, and should not be accepted. 

If the trip is principally for non-campaign purposes, and the person 
involved were to request the host carrier to schedule transportation 
expressly for the convenience of the congressional passenger, such 
request could be interpreted as abuse of one's public position and 
should be avoided. 

NONPAID TRANSPORTATION OFFERS WHICH MAT BE ACCEPTED 

If the purpose of the trip is principally representational or even 
personal, and if the host carrier's purpose in scheduling the transporta- 
tion is solely for the general benefit of the host, and the transportation 
is furnished on a space-available basis with no additional costs incurred 
in providing the accommodation, it would not be improper to accept 
such transportation. 

If the purpose of the transportation is to enable the congressional 
passenger, in his role as a public official, to be present at an event for 
the general benefit of an audience, the accommodation should be 
construed as accruing to the benefit of the audience — not the pas- 
senger — and it would not be improper to accept such transportation. 

The above principle can be similarly applied to situations in which 
a congressional passenger is transported in connection with the receipt 
of an honorarium. Under such circumstances, the transportation may 
be accepted in lieu of monetary reimbursement for travel to which 
the passenger would otherwise be entitled. 

Congressional officials, like other public officials and private per- 
sons, are on occasion invited as guests on scheduled airlines' inaugural 
flights. Specific authority to provide such non-paid transportation 
is contained in 14 CFR 223.8 and 399.34. Assuming that the condi- 
tions of these sections are strictly met, the Committee finds that there 
would be nothing improper in the acceptance of such inaugural flights. 
(Note: but see now Advisory Opinion No. 3, issued by the Select 
Committee on Ethics in the House after revision of the Code of 
Official Conduct in the House, which reached a different conclusion 
with respect to inaugural flights. The Select Committee opinion 
supersedes Advisory Opinion No. 4 of the Committee on Standards 
of Official Conduct). 



137 



4. Advisory Opinions of the Select Committee on Ethics 
95th Congress 

Advisory Opinion No. 1 

SUBJECT 

Effective date of House Rule XLVI, clause 4, prohibiting use of pri- 
vate funds to pay for the cost of preparing and printing mass mailings. 

BACKGROUND 

House Rule XLVI, clause 4, as adopted by the House on March 2, 
1977, provides as follows : 

Any mass mailing which otherwise is f rankable by a Member 
under the provisions of section 3210(e) of Title 39, -U.S. Code, 
shall not be frankable unless the cost of preparing and printing 
such mass mailing is defrayed exclusively from funds made avail- 
able in any appropriations Act. 
The Commission on Administrative Review, in its report on Finan- 
cial Ethics (H. Doc. 95-73, February 14, 1977, p. 19) recommended 
that this restriction on mass mailings take effect January 1, 1978. How- 
ever, the provision as contained in Title IV of H. Res. 287 inadver- 
tently omitted reference to an effective date. Consequently, during 
House consideration of H. Res. 287 on March 2, 1977, a colloquy be- 
tween Mr. Obey and Mr. Frenzel affirmed that the Commission on 
Administrative Review had intended that clause 4 of Rule XLVI take 
effect on January 1, 1978 (see Congressional Record, March 2, 1977, p. 
H1622) , and that this was the intent of H. Res. 287. 

REASON FOR ISSUANCE 

Clause 4 of House Rule XLVI is silent as to an effective date, and 
thus may be deemed to have taken effect upon adoption, notwithstand- 
ing legislative history to the contrary. In order to clarify the situation 
and to assure Members that they may continue to use private funds to 
prepare and print mass mailings sent under the frank until Janu- 
ary 1, 1978, the Select Committee issues this advisory opinion. 

OPINION 

Members may continue to use private funds to prepare and print 
mass mailings sent under the frank until January 1, 1978. 



Advisory Opinion No. 2 

SUBJECT 



Applicability of House Rule XLIII, clause 4, to reimbursement or 
payment of necessary expenses associated with a conference, meeting, 
or other similar event in which a Member, officer, or employee of the 
House participates. 



45-937 O - 79 - 10 



138 



REASON FOR ISSUANCE 

Members have raised a number of questions concerning the defini- 
tion and application of the gifts provisions as set forth in House Rule 
XLIII, clause 4. An advisory opinion has been requested as to whether 
the reimbursement or receipt of expenses connected with events in 
which a Member, officer, or employee participates constitutes a gift. 

BACKGROUND 

House Rule XLIII, clause 4, establishes, in effect, that Members, 
officers,, or employees of the House shall not accept gifts in any calen- 
dar year aggregating $100 or more in value, directly or indirectly, 
from any individual, organization, or corporation with a direct interest 
in legislation before the Congress, or from a foreign national. 

In most cases, an individual's expenses for a meeting or conference, 
including transportation, food, and lodging, would exceed the aggre- 
gate figure of $100. Additionally, many sponsoring organizations, 
domestic or foreign, would have an interest in legislation before the 
Congress. However, necessary expenses should not be considered to be 
a "gift" to a participating individual who renders personal services 
sufficient to constitute "equal consideration" for the expenses provided 
by the sponsoring organization. Conversely, it should be noted that 
the services rendered must be more than perfunctory in nature to con- 
stitute equal consideration for the expenses involved. For example, 
addressing an audience at an event or engaging in discussion seminars 
would be considered substantial participation sufficient to constitute 
"equal consideration," while simply visiting a specific site or location 
as part of a "fact-finding tour" would probably not be viewed as "equal 
consideration" for expenses paid by a sponsoring organization. 

A similar philosophy of exempting expenses for participation in an 
event is recognized in clause 3 of House Rule XLVII, which excludes 
travel, lodging, and meals from calculation of the honorarium paid 
for a speech or appearance. 

A separate question surrounds the reimbursement or payment of 
similar expenses for the spouse of a Member, officer, or employee. If 
a sponsoring organization pays the spouse's expenses to attend an event 
in which the Member participates, would those' expenses constitute a 
gift to the Member under clause 4 of Rule XLIII ? Rule XLIII does 
not specifically address this question. But as a matter of precedent, 
Federal Election Commission regulations exclude payment of expenses 
for a spouse as a portion of the honorarium received by a Member, 
officer, or employee. As a matter of policy, the ability of the spouse to 
accompany a Member to such events has many positive benefits. If 
House Rules are interpreted so as to prevent reimbursement of a 
spouse's travel, food, and lodging expenses, the incentive for Members 
to participate in meaningful programs will be diminished. 

SUMMARY OPINION 

A Member, officer, or employee of the House (and the individual's 
spouse or another family member) may be paid or reimbursed for 
transportation, food, ana lodging expenses when such expenses are 
directly associated with a conference, meeting, or similar event in 
which the Member, officer, or employee substantially participates. Such 



139 



reimbursements or payments aggregating $250 or more from one source 
would be disclosed in accordance with the provisions of section 102(2) 
(C) or the Ethics in Government Act (PL 95-521). 



Advisory Opinion No. 8 
subject 



Applicability of House Rule XLIII, clause 4, to acceptance of free 
transportation provided by air carriers on inaugural flights. 



REASON FOR ISSUANCE 

The Select Committee has been requested to issue an advisory 
opinion on the propriety of Members, officers, or employees of the 
House of Representatives accepting free transportation provided by 
air carriers on inaugural flights. 

BACKGROUND 

Commercial air carriers are authorized, under federal regulations 
(18 CFR 223.8 and 399.38) and with the approval of the Civil Aero- 
nautics Board, to provide free transportation on "inaugural flights" 
to invited guests when a new route or new equipment is introduced. 
Traditionally, the air carriers invite Members and employees of the 
House of Representatives, as well as officials of the Executive Branch, 
on such inugural flights. 

The applicable House Rule in this situation is Rule XLIII, clause 
4, which provides, in effect, that a Member, officer, or employee of 
the House of Representatives shall not accept gifts in any calendar 
year aggregating $100 or more in value, directly or indirectly, from 
any party with a direct interest in legislation before the Congress, or 
from a foreign national. 

The air carriers are subject to federal regulation, and thus are 
deemed to have a direct interest in legislation before the Congress. 
The question to be determined is whether an inaugural flight con- 
stitutes a gift. 

In the case of inaugural flights, the Member, officer, or employee of 
the House does not appear to render any services of equal considera- 
tion to the value of the flight, and therefore an inaugural flight would 
appear to constitute a gift to the Member, officer, or employee. If the 
value of the transportation provided on an inaugural flight exceeds 
$100, and the Committee assumes that such would be the case in every 
instance, acceptance of such a gift would be prohibited under Rule 
XLIII, clause 4. 

The Committee recognizes that the definition of the term "gift" 
for purposes of Rule XLIII, clause 4, might not include some situa- 
tion where a trip or event is primarily intended for educational pur- 
poses and is directly related to a Member's or officer's or employee's 
official duties. However, the Committee finds that inaugural flights, 



140 



as traditionally defined, do not have sufficient educational value to 
exclude them from the definition of a gift for purposes of the intent 
of Rule XLIII, clause 4. 

SUMMARY OPINION 

Acceptance of free transportation provided by air carriers on in- 
augural flights is prohibited under House Rule XLIII, clause 4. 



Advisory Opinion No. 4 



SUBJECT 



Under House Rules, may a Member of the House or the spouse of a 
Member solicit cash gifts of less than $100 for personal use through 
a direct mass mailing ? 

REASON FOR ISSUANCE 

A Member of the House has requested an advisory opinion as to 
whether his proposal to solicit gifts of less than $100 for personal use 
would be in violation of House Rule XLIII. 

BACKGROUND 

Rule XLIII, clause 4, prohibits acceptance of gifts aggregating 
over $100 from "persons" having a direct interest in legislation before 
the Congress. Since the proposal would solicit only gifts of less than 
$100, it would not be in violation of clause 4. 

However, Rule XLIII, clause 7, appears to have direct application 
to the proposed plan to solicit gifts. Before March 3, 1977, Rule 
XLIII, clause 7, read as follows : 

A Member of the House of Representatives shall treat as cam- 
paign contributions all proceeds from testimonial dinners or other 
fund-raising events if the sponsors of such affairs do not give clear 
notice in advance to the donors or participants that the proceeds 
are intended for other purposes. 
This provision was designed to deal with situations in which donations 
were given to Members under the mistaken notion that they were to 
be used for campaign purposes when, in fact, they were treated as per- 
sonal gifts. Hence, language was adopted which specified that unless 
advance notice was given, proceeds from fund-raising events could not 
be converted to personal use. 

The House Commission on Administrative Review recommended 
that proceeds from testimonial dinners and other fund-raising events 
should not be allowed to be converted to personal use under any cir- 
cumstances. Effective March 3, 1977, H. Res. 287 amended clause 7 to 
read simply : 

A Member of the House of Representatives shall treat as cam- 
paign contributions all proceeds from testimonial dinners or other 
fund-raising events. 



141 



In a technical sense, then, the propriety of the proposal turns on the 
interpretation of a "fund-raising event." There was no legislative his- 
tory defining the term fund-raising event when Rule XLIII was 
adopted in 1968. 

But in view of the widespread use of mass mailings to raise funds 
(direct mail solicitation has become a principal fund-raising tech- 
nique since 1968), it would appear that the proposal under considera- 
tion constitutes a fund-raising event. In the age of computerized mass 
mailings, it is unnecessary for people to gather together in a common 
place on a particular date to constitute a "fund-raising event." 

Additionally, Rule XLIII, clause 2, would appear to have appli- 
cability in this case. The provision states : 

A Member, officer, or employee of the House of Represent- 
atives shall adhere to the spirit and letter of the Rules of the 
House of Representatives and to the rules of duly constituted 
committees thereof. 

A major thrust of the provisions contained in the new House Rules 
adopted March 2, 1977, was to severely limit the potential for Members 
to "cash in" on their positions of influence for personal gain. There- 
fore, a limitation on outside earned income was proposed and adopted. 
A proposal to abolish unofficial office accounts was offered and adopted. 
A proposal to prohibit the conversion of political funds to personal use 
was adopted. And the proposal discussed above to treat all proceeds 
from fund-raising events as campaign contributions was also adopted. 
Therefore, it would appear that a proposal to solicit funds for per- 
sonal use would be contrary to the "spirit" of the House Rules adopted 
pursuant to H. Res. 287. 

The final question concerns the propriety of a spouse raising funds 
through mass mail solicitation for the benefit of the Member. While 
the Select Committee recognizes the basic independence of the spouse, 
the spouse under these circumstances would be acting essentially on 
behalf of the Member. Thus, the Member would be conducting indi- 
rectly the very activities he would be prohibited from engaging in 
directly. 

Consequently, the mass mail solicitation of funds by a spouse for a 
Member's use also appears to violate the "spirit" of House Rules. 

SUMMARY OPINION 

A direct mail solicitation by a Member of the House or the spouse of 
a Member constitutes a "fund-raising event" for purposes of House 
Rule XLIII, clause 7. Proceeds from a "fund-raising event" for a 
Member of the House must be treated as "campaign contributions" and 
cannot be converted to personal use by the Member. Therefore, any 
such attempt to raise funds for personal use through a mass mailing 
would be in violation of House Rule XLIII, clause 7. Additionally, 
any such activity would appear to be contrary to the spirit of House 
Rules and, therefore, in violation of House Rule XLIII, clause 2. 



142 
Advisory Opinion No. 5 

SUBJECT 

Use of campaign funds to pav for official expenses incurred prior to 
March 3, 1977. 

REASON FOR ISSUANCE 

The Select Committee has received several inquiries regarding the 
use of campaign funds to pay for official expenses incurred prior to 
the effective date of House Rule XLIII, clause 6, and Rule XLV. 

BACKGROUND AND DISCUSSION 

House Rule XLIII, clause 6, as amended on March 2, 1977, restricts 
the use of campaign funds to bona fide campaign purposes. House Rule 
XLV, also adopted on March 2, 1977, prohibits the acceptance of 
private contributions to defray ordinary and necessary expenses in- 
curred in the operation of a congressional office. Both Rules changes be- 
came effective upon adoption. 

Some Members committed excess campaign funds to pay for official 
expenses incurred on or before March 3, 1977, the effective date of the 
new Rules, but have not actually expended their campaign funds to 
pay those debts. In such cases, the campaign funds were contributed 
prior to the Rules changes and the expenses were incurred before the 
adoption of the new Rules. 

The amendment to Rule XLIII, clause 6, and new Rule XLV were 
not intended to have an ex post facto effect. Therefore, the Select Com- 
mittee finds that use of campaign funds contributed prior to the Rules 
changes to pay for official expenses incurred prior to March 3 is per- 
missible under the Rules. 

House Rule XLV clearly prohibits Members who have incurred of- 
ficial expenses either before or after March 3 from raising private 
funds subsequent to the effective date of the Rules course, to pay for 
campaign or political expenses incurred before or after March 3. 

SUMMARY OPINION 

Members who incurred official expenses prior to March 3, 1977, the 
effective date of new Rule XLIII, clause 6, and Rule XLV, may use 
campaign funds available on or before that date to pay those official 
expenses. The payment of obligations incurred prior to the effective 
date of the new Rules would be limited to the liability accrued up to 
March 3. Campaign funds raised after March 3, 1977 may not be used 
to pay for official expenses incurred before or after the effective date 
of the new Rules. 



143 



Advisory Opinion No. 6 

SUBJECT 

Acceptance of in-kind services for official purposes. 

REASON FOR ISSUANCE 

The Select Committee has been asked whether House Rule XLV, 
which prohibits unofficial office accounts, extends to private contribu- 
tions or in-kind services for official purposes. 

BACKGROUND AND DISCUSSION 

House Rule XLV provides that no funds may be paid into any un- 
official office account subsequent to March 2, 1977, and that such ac- 
counts must be abolished by January 3, 1978. The definition of an 
unofficial office account included in the new Rule focuses on the most 
common form, i.e., a privately subsidized account used to supplement 
official allowances. 

The legislative history of Rule XLV refers to an unofficial office 
account as a fund, repository, or process whereby funds are received 
or expended. The reasons for adopting new Rule XLV, as presented 
in the Financial Ethics report of the Commission on Administrative 
Review (H. Doc, 95-73, February 14, 1977), emphasize that eliminat- 
ing private support of the public's business should be the primary 
objective of a new Rule : 

The Commission strongly believes that private funds should 
be used only for politically-related purposes. Official allow- 
ances should reflect the necessary cost of official expenses. . . . 
To suggest otherwise would be to accept or condone the con- 
tinuation of the present system [of unofficial office accounts] 
which, at the very least, allows for the appearance of impro- 
priety, and, at worst, creates a climate for potential "influence 
peddling" through private financing of the official expenses 
of Members of Congress. 

Although it is clear that acceptance of monetary contributions to 
sustain such accounts was perceived as conduct to be prohibited by the 
new Rule, questions have been raised concerning the application of 
Rule XLV to acceptance of certain in-kind services (e.g., office sup- 
plies and equipment, district office space, etc.) and whether such items 
will be treated differently than monetary contributions for purposes 
of the Rule XLV prohibition. 

The Select Committee finds that no distinction can be made be- 
tween in-kind and monetary contributions. Whether the private sup- 
port alluded to in the Commission's report is in the form of a mone- 
tary contribution or in the form of an in-kind service is not relevant 
in view of the intended prohibition against the private financing of 
official business. Moreover, it can hardly be argued that donation of 
in-kind services is any less an iniusiqn <}| Juriygte support for official 
business than is the donation of money. 



144 



At least two precedents for treating in-kind services as monetary 
contributions are found in regulations promulgated by the Federal 
Election Commission (FEC) and the Internal Revenue Service 
(IRS). Those regulations require the inclusion of in-kind donations 
as contributions to unofficial office accounts, thus confirming the Se- 
lect Committee's understanding that money and in-kind contributions 
should be treated the same. 

The FEC defines an "office account" (unofficial office account) as 
"an account established for the purpose of supporting the activities of 
a Federal or State officeholder which contains excess campaign funds 
. . ." (11 CFR 113.1b). Such excess campaign funds include contribu- 
tions of "anything of value.'' Therefore, according to the FEC defi- 
nition, unofficial office accounts may encompass in-kind services or re- 
sources. 

Similarly, the IRS considers the donation of in-kind resources as a 
"contribution,'' applying the criterion of "anything of value.'' The 
IRS treats the contribution of in-kind services or resources used for 
official purposes as personal income to the Member, just as it treats 
contributions to unofficial office accounts. 

In sum, the Select Committee finds that for purposes of applying 
Rule XLV, no logical distinction can be drawn between the private 
contribution of in-kind services and the private contribution of money, 
and that both perpetuate the very kind of unofficial office accounts and 
practices that are prohibited by House Rule XLV. 

Equally clear, however, is that various in-kind services and func- 
tions provided by federal, state and local government agencies do not 
fall in the same category as private donations of money or in-kind 
services. Thus, the provision of office space or rooms for constituent 
meetings, etc., by a state or local government would not be prohibited 
by application of this Rule. Of course, the occasional use of privately 
owned meeting space where no other appropriate public accommoda- 
tions are reasonably available for meeting constituents does not fall 
within the proscriptions of the new Rule. 

Additionally, application of the Rule would not prohibit a Member 
from continued participation with various educational intern, fellow- 
ship or volunteer programs. Members have long recognized that there 
is an inherent educational and professional benefit in interns, fellows, 
and volunteers viewing first hand the Legislative Branch of govern- 
ment, and that there are compelling public policy considerations for 
encouraging such programs. There is nothing in the legislative history 
that suggests an intent to discontinue these programs, nor has there 
surfaced any evidence of abuses resulting from the infusion of private 
money into public business causing conflict of interest or other situa- 
tions intended by Congress to be prohibited by the new Rule. The 
Select Committee believes these programs are of primary benefit to 
the persons involved and notes that interns, fellows, and volunteers 
are not on the payroll of the House, nor are they considered to be 
employees of the House of Representatives. Therefore, this interpre- 
tation of Rule XLV does not apply to intern programs, provided the 
internships are primarily for educational purposes and do not give 
undue advantage to special interest groups or others with a direct in- 
terest in legislation. 



145 



However, it is clear that a Member would be violating the intent 
and the spirit of House Rule XLV if he attempted to supplement 
his official allowance by raising, receiving, or disbursing contributions 
to hire or support interns in his office. Therefore, it follows that a 
Member and his staff are prohibited from personally raising, receiv- 
ing, or disbursing contributions used to support an educational intern, 
fellowship, or volunteer program. This holding represents the only 
effective method for restricting the potential to collect and maintain, 
directly or indirectly, unofficial funds for supplementing staff assist- 
ance and the officially provided clerk-hire allowance. 

SUMMARY OPINION 

For purposes of House Rule XLV, the private contribution of 
in-kind services for official purposes is prohibited. However, Rule 
XLV does not apply to services provided by federal, state and local 
government agencies or to the occasional use of privately-owned meet- 
ing space where no public accommodations are reasonably available 
for meeting with constituents. Nor does Rule XLV apply to interns or 
volunteers in a Member's office, based on the understanding that such 
intern programs are primarily of educational benefit to the intern and 
do not give undue advantage to special interest groups. However, 
Members and their staffs may not personally raise, receive or disburse 
any private contributions for intern programs associated with their 
offices. 

, Advisory Opinion No. 7 

SUBJECT 

Definition of a gift for purposes of House Rule XLIII, clause 4. 
reason for issuance 

The Select Committee has received a number of inquiries concern- 
ing the definition of the word "gift" and application of the provisions 
of House Rule XLIII, clause 4 pertaining to acceptance of gifts. 

BACKGROUND AND DISCUSSION 

House Rule XLIII, clause 4 was amended in March 1977, to pro- 
vide that "a Member, officer, or employee of the House shall not accept 
gifts in any calendar year aggregating $100 or more in value, directly 
or indirectly, from any party with a direct interest in legislation be- 
fore the Congress, or from a foreign national." Specifically exempted 
from this provision are: (1) gifts from relatives; (2) gifts valued at 
$35 or less; and (3) gifts of personal hospitality of an individual. 

The Commission on Administrative Review, in its report on Finan- 
cial Ethics (H. Doc. 95-73, February 14, 1977) recommending the 
Rules changes that were enacted by the House, specified that bequests 



146 



and other forms of inheritance should not be considered gifts for 
purposes of the new Rule, and explained personal hospitality to mean 
"hospitality extended for a non-business purpose by an individual, 
not a corporation or organization, on property or facilities owned 
by that individual or his family." Additionally, it is understood that 
loans and campaign contributions are not considered to be gifts. 

Other than the exemptions specified in the Rule and the legislative 
history, there is no precise definition of what constitutes a gift for 
purposes of Rule XLIII, clause 4. The House recognized the likeli- 
hood that Members, officers and employees would need guidance on 
the definition of terms used in the new House Rules, and therefore 
passed H. Res. 383 which authorized the Select Committee to issue 
advisory opinions providing such guidance and interpretation re- 
specting the application of the Rules. 

The Select Committee begins with the proposition that the basic 
legal definition of a gift should be used in applying the provisions of 
Rule XLIII, clause 4, as follows : 

A payment, subscription, advance, forbearance, rendering, 
or deposit of money, services, or anything of value, including 
food, lodging, transportation, or entertainment, and reim- 
bursement for other than necessary expenses, unless consid- 
eration of equal or greater value is received by the donor. 

This definition is implicit, for example, in the Select Committee's Ad- 
visory Opinion #2, which states that necessary expenses provided 
a Member in connection with an event in which he "substantially par- 
ticipates," i.e., renders consideration of equal value, do not constitute 
a gift. 

The Select Committee finds that there are certain categories of gifts 
that were never intended to be covered under the Rule XLIII, clause 
4 limitations on acceptance of gifts. These are items that do not pre- 
sent potential conflicts of interest or are related to a Member's official 
duties. For these reasons, Rule XLIII, clause 4 is not applicable to 
the following categories of gifts : 

Food, lodging, transportation, and entertainment provided on 
an official basis by federal, state, and local governments and po- 
litical subdivisions thereof. Members, officers, and employees are 
frequently invited to various functions paid for or sponsored by 
such government agencies. It was not the intent of the gifts limi- 
tation to prohibit Members, officers and employees from partici- 
pating in such events. Even if the individual is not fully par- 
ticipating, but is simply present, for example, at a groundbreak- 
ing ceremony or a banquet honoring newly-elected officials, it 
would serve no purpose to preclude such activities. 

Food, lodging, transportation, and entertainment provided by 
a foreign government within a foreign country. The Foreign 
Gifts and Decorations Act was amended by PL 95-105 to give 
the consent of Congress to acceptance of gifts of travel or ex- 
penses for travel provided by a foreign government for travel 
taking place entirely outside the United States. Any such gifts 
of travel expenses must be disclosed to the Committee on Stand- 
ards of Official Conduct within thirty days after departure from 



147 



the donor country. Since such gifts from a foreign government 
are subject to these statutory requirements, they are exempted 
from the prohibitions of Rule XLIII. 

Communications to a Member's offices in Washington, D.C. and 
his district, including subscriptions to newspapers, magazines, 
and periodicals. Members are traditionally provided free sub- 
scriptions to weekly news magazines, newspapers, interest group 
journals, and other publications which are useful as information 
sources or reference tools in the conduct of the Member's official 
duties. In many cases, these publications are provided by organi- 
zations with a direct interest in legislation and could exceed $100 
in value in a calendar year, particularly if postage is added (e.g., 
local newspapers). It would be inappropriate and contrary to the 
public interest to prohibit Members from receiving these materials 
and might impinge on the rights of citizens to communicate with 
their Representative. The Select Committee emphasizes that this 
finding applies primarily to free subscriptions to publications, and 
not to individual items of considerable value, such as a set of en- 
cyclopedias or rare books. 

Bona fide awards presented in recognition of public service and 
available to the general public. A Alember, officer, or employee 
should be permitted to accept an award valued at more than $100 
from an organization so long as the award is not contrived for 
one special occasion and is available to the general public. 

A suitable memento of a function held in honor of the Member, 
officer, or employee. A Member, officer, or employee should be per- 
mitted to accept a suitable memento of reasonable value. How- 
ever, the Committee emphasizes that a "suitable memento" would 
not include items such as cash, a television set, or automobile. 

Consumable products provided by home-state businesses to a 
Member's office but which are primarily intended for consump- 
tion by persons other than the Member and his staff. Members 
have traditionally received gifts of consumable items (e.g.. cig- 
arettes, peanuts, etc.) from businesses in their home states. These 
consumable products are usually passed on to constituents and 
other visitors to the office and are therefore not considered by the 
Committee to be gifts to the Member or his staff. This applies only 
to gifts ,of consumable items, and only when such items are con- 
sumed primarily by persons other than the Member and his staff. 

Food and beverages consumed at banquets, receptions, or simi- 
lar events. This exemption does not apply to dinners for small 
groups at restaurants or other such private affairs. 

SUMMARY OPINION 

For purposes of Rule XLIII, clause 4, a gift is defined as follows : 

A payment, subscription, advance, forbearance, rendering, 
or deposit of money, services, or anything of value, including 
food, lodging, transportation, or entertainment, and reim- 
bursement for other than necessary expenses, unless consid- 
eration of equal or greater value is received by the donor. 

The Select Committee finds, based on the language of new Rule 
XLIII, clause 4, the Rule's legislative history, the absence of conflict 



148 



of interest issues, and/or public policy considerations, that the follow- 
ing items are not gifts for purposes of Rule XLIII, clause 4: 

(1) Bequests and other forms of inheritance; 

(2) Loans made in a commercially reasonable manner (includ- 
ing requirements that the loan be repaid and that a reasonable 
rate of interest be paid) ; 

(3) Political contributions as defined by the Federal Election 
Commission and otherwise reported as required by law; 

(4) Food, lodging, transportation, and entertainment provided 
on an official basis by federal, state, and local governments or po- 
litical subdivisions thereof; 

(5) Food, lodging, transportation, and entertainment provided 
by a foreign government within a foreign country. 

(6) Communications to a Member's offices in Washington and 
his district, including subscriptions to newspapers, magazines, 
and other periodicals. 

(7) Bona fide awards presented in recognition of public service 
and available to the general public ; 

(8) Suitable mementos of a function honoring the Member, 
officer, or employee. 

(9) Consumable products provided by home-state businesses to 
a Member's office that are primarily intended for consumption by 
persons other than the Member and his staff. 

(10) Food and beverages consumed at banquets, receptions, or 
similar events. 



Advisory Opinion No. 8 



SUBJECT 



Applicability of House Rule XLIII, clause 4 to acceptance of neces- 
sary expenses paid by an organization in connection with a fact-finding 
event which is directly related to the official duties of a Member, of- 
ficer, or employee. 

REASON FOR ISSUANCE 

The Select Committee has received numerous inquiries concerning 
whether a Member, officer, or employee may accept payment or re- 
imbursement for necessary expenses from an organization sponsoring 
a fact-finding event. 

BACKGROUND 

Members, officers, and employees of the House of Representatives 
are often invited by independent foundations, corporations, unions 
and other non-governmental organizations, both foreign and domes- 
tic, to attend a "fact-finding"' event which is intended for educational 
purposes directly related to their official duties. 

For example, an oil company may sponsor an inspection tour of its 
offshore oil drilling platform,' or a lumber company may arrange a 
demonstration of new logging methods in a remote area. Similarly, a 
foreign foundation may invite Members and employees to attend an 



149 



educational program designed to promote better understanding and 
improve U.S. relations with that country. 

The applicable House Rule regarding fact-finding events is Rule 
XLIII, clause 4, which provides that a Member, officer or employee 
shall not accept gifts 1 in any calendar year aggregating $100 or more 
in value, directly or indirectly, from any party with a direct interest 
in legislation before the Congress, or from a foreign national. In many 
instances, the sponsoring organization of a fact-finding tour or similar 
activity would be deemed to have a direct interest in legislation before 
the Congress, and the travel expenses provided by the organization 
would alone exceed $100. 

DISCUSSION 

Although there has been some criticism regarding abuses of "fact- 
finding tours"' in the past, the Select Committee finds that it would be 
contrary to the public interest and the intent of Rule XLIII to pro- 
hibit Members, officers, and employees from attending fact-finding 
events or activities which have a legitimate purpose directly related 
to the official duties of the Congress. The Committee also notes the 
precedent in current law (22 U.S.C. 2451-2) which allows federal em- 
ployees to accept travel expenses paid by foreign governments in con- 
nection with a trip which is for an educational or cultural purpose and 
is so certified by the State Department. 

Therefore, the Select Committee holds that necessar-y expenses paid 
by an organization sponsoring a fact-finding event are exempted from 
the limitations of Rule XLIII, clause 4, provided that the fact-finding 
event or activity is directly related to the official duties of the Member, 
officer, or employee. Any such reimbursement or payment of travel ex? 
penses aggregating over $250 in value from one source would be sub- 
ject to disclosure under the requirements of the Ethics in Government 
Act (PL 95-521). This public disclosure will guard against the poten- 
tial abuse of converting this kind of activity from an official business 
purpose to that of personal pleasure or entertainment. Gifts of that 
nature exceeding $100 in value were clearly intended to be prohibited 
by Rule XLIII, clause 4. 

This exemption also applies to necessary expenses for the spouse of 
a Member, officer, or employee in the case of foreign travel. The Com- 
mittee recognizes that the ability of a spouse to accompany a Member 
on a foreign trip is often a matter of protocol and therefore has diplo- 
matic value. However, the Committee does not believe that there would 
be many instances in which the presence of the spouse would be neces- 
sary or appropriate in the case of domestic fact-finding events. 

The Committee notes that the phrase "fact-finding event or activity" 
does not apply to situations where expenses are provided in considera- 
tion of personal services rendered. In those cases where the purpose of 
a Member's trip is to provide such services as delivering a major speech 
to a convention, necessary expenses are not considered to be a gift (see 
Advisory Opinion #2, issued April 6, 1977). In comparison, although 
a Member of Congress may render some personal services in the course 
of a fact-finding event, the primary purpose of the trip is for the Mem- 

1 In Advisory Opinion No. 7. the Committee held that Rule XLIII. clause 4 does not 
apply to travel expenses provided on an official basis by federal, state or local govern- 
ments, or provided by a foreign government within a foreign country. 



150 



bers, officers, or employees to become better informed regarding subject 
matters closely related to their official duties. 

Additionally, the Select Committee emphasizes that the definition 
of a '"fact-finding event" must be interpreted narrowly. House Rule 
XLIII, clause 2 puts Members on notice that not only the "letter' 
but also the "spirit" of Hou.se Rules must be adhered to. Therefore, 
since Members are already provided travel expenses to and from their 
own districts, a Member should not accept free transportation on a 
corporate jet or commercial flight from Washington to his district, on 
grounds that he would "tour" the corporate facilities there. Neither 
would the exemption apply, for example, to travel expenses provided 
by representatives of the maritime industry to attend a ship-launching. 

The intended definition of a fact-finding event would also not extend 
to expenses incurred during such an event which are unrelated to the 
specific fact-finding activity. For example, if a Member spends two 
days attending an educational event in a foreign country and then 
spends several more days touring that country at his ieisure, the 
expenses associated with the sight-seeing tour would not be exempted 
from the Rule. Similarly, this exemption for fact-finding activities 
applies only to necessary expenses (transportation, food', and lodging) 
and not to entertainment. Thus, a Member of Congress, whether travel- 
ing on a fact-finding tour or under any circumstances, may not accept 
gifts of entertainment from groups with a direct interest in legislation 
beyond the $100 limit imposed by Rule XLIII. 

The Committee also emphasizes that to qualify for the exemption, 
the fact-finding event or activity must bear a direct relationship to 
official duties. The responsibility will rest with the Member, officer, or 
employee to determine whether the particular event or activity is in- 
tended for fact-finding purposes directly related to his official duties. 

SUMMARY OPINION 

A Member, officer, or employee of the House (and the individual's 
spouse in the case of foreign travel) may be paid or reimbursed for 
transportation, food, and lodging expenses provided by the sponsor 
of a fact-finding event or activity which is directly related to official 
duties. Such reimbursements or payments aggregating $250 or more in 
value from one source would be disclosed in accordance with the pro- 
visions of section 102(2) (C) of the Ethics in Government Act (PL 
95-521). 

The Committee emphasizes that this holding has no bearing on any 
constitutional or statutory prohibition regarding acceptance of gifts 
from foreign governments or their representatives. 



Advisory Opinion No. 9 

SUBJECT 

Definition of an indirect gift for purposes of House Rule XLIII. 
clause 4. 



151 



REASON FOR ISSUANCE 

The Select Committee has received a number of requests for an ad- 
visory opinion interpreting what constitutes an "indirect gift" to a 
Member, officer, or employee for purposes of applying the new gifts 
provision in House Rules. 

BACKGROUND AND DISCUSSION 

House Ride XLIII, clause 4 provides that a Member, officer, or em- 
ployee shall not accept gifts in any calendar year aggregating $100 or 
more in value, directly or indirectly, from any party with a direct in- 
terest in legislation before the Congress. 

The word "indirectly" has principal reference to gifts to the spouse 
or dependent of a Member, officer, or employee of the House of Rep- 
resentatives. 1 For example, if a Member would be personally barred 
from receiving a color television set from a registered lobbyist, ob- 
viously it would not be appropriate for the Member's spouse or de- 
pendents to receive such a gift. Therefore, as a general rule, gifts re- 
ceived by the spouse or dependent of a Member, officer, or employee of 
the House from a party with a direct interest in legislation before the 
Congress would be considered to be indirect gifts to the Member, officer, 
or employee. Failure to so apply the gifts provision to spouses and 
dependents could cause the intent of the Rule to be easily defeated. 
The issue is not simply one of preventing circumvention of the gifts 
provision, but also a common sense recognition that assets and hold- 
ings of a spouse and dependents are generally considered to be shared 
by the partner, i.e., the Member, officer, or employee. However, in find- 
ing that the gifts to a spouse or dependent generally constitute an in- 
direct gift to a Member, officer, or employee because of the nature of 
the relationship involved, the Select Committee is well aware that 
where a truly independent status is identified, considerations of pri- 
vacy and equal rights should be controlling. 

Therefore, the following guidelines are set forth by the Select Com- 
mittee to clarify when gifts to spouses and dependents would not be 
considered as indirect gifts to the Member, officer, or employee of the 
House for purposes of Rule XLIII, clause 4. 

A spouse or dependent may frequently receive a gift from an em- 
ployer or another person which is prompted by recognition of their 
services, friendship, or some other consideration unrelated to the of- 
ficial responsibilities of the Member, officer, or employee. When it is 
clear that such gifts are truly independent of the Member, officer, or 
employee and would have been offered regardless of the donee's relation 
to that person, such gifts would not be considered as indirect gifts for 
purposes of Rule XLIII. However, when it is apparent that the gift 
may not have been offered hut for the donee's relation to a Member, 
officer or employee, such a gift would constitute an indirect gift to 
the Member, officer, or employee. 

An additional clarification that has been requested concerns the 
treatment of "simultaneous gifts" to a Member, officer, or employee 

1 The word "Indirectly" also refers to gifts received by a Member, officer, or employee 
through or from a third party. For example, a Member or employee could not accept a 
gift from an agent of a person with a direct interest in legislation before the Congress who 
had actually paid for the gift. 



152 



and his spouse or dependents. For example, an individual or organiza- 
tion with a direct interest in legislation before the Congress may well 
invite a Member's family to a dinner or reception. The question is 
whether such gifts should be aggregated or considered as separate 
gifts in relation to the provision of Kule XLIII, clause 4 which ex- 
empts all gifts valued at $35 or less. For example, the question has been 
raised : "Would a dinner costing $20 each for a Member and his spouse 
be considered as one $40 gift or as two $20 gifts (thus falling under 
the $35 exemption)?" 

The legislative history of the amendment to Rule XLIII, clause 4 
clearly indicates that the intent of the "de minimis" exemption for gifts 
of less than $35 in value was to avoid imposing excessively burdensome 
recordkeeping requirements and to ignore insubstantial gifts which do 
not present any potential conflict of interest. Furthermore, it would 
seem to serve no public policy consideration to prohibit a Member from 
attending a reception with his spouse and dependents, but to allow the 
Member to attend such a reception alone. Therefore, the Select Com- 
mittee finds that simultaneous gifts valued at $35 or less should not 
be aggregated, but rather should be considered as separate gifts. 

SUMMARY OPINION 

Gifts to a spouse or dependent are considered indirect gifts to the 
Member, officer, or employee for purposes of House Rule XLIII, clause 
4, unless such gifts are prompted by some consideration unrelated to 
the Member, officer, or employee. Simultaneous gifts such as dinner 
or reception invitations to a Member «nd his spouse and dependents 
should be treated as separate gifts and not be aggregated. Therefore, 
unless an individual gift is valued at more than $35, it would be ex- 
empted for purposes of Rule XLIII, clause 4. 



Advisory Opinion No. 10 

SUBJECT 

Who has a direct interest in legislation before the Congress? 
reason for issuance 

The Select Committee has been requested to issue interpretive 
guidelines concerning who has "a direct interest in legislation before 
the Congress" for purposes of applying, House Rule XLIII, clause 4. 

BACKGROUND AND DISCUSSION 

House Rule XLIII. clause 4 provides, in effect, that a Member, offi- 
cer, or employee shall not accept gifts aggregating over $100 in value 
in any calendar year from any party with a direct interest in legisla- 
tion before the Congress. This Rule has restricted gifts to Members 
since its adoption in 1968, when it prohibited Members, officers, and 



153 



employees from accepting gifts of "substantial value" from any party 
with a direct interest in legislation before the Congress. However, the 
term "direct interest in legislation " was neither defined nor discussed 
in the legislative history surrounding Kule XLIII, and clause 4, itself 
was essentially unenforceable because of the totally subjective nature 
of the term "substantial value/' 

On March 2, 1977, the House amended Rule XLIII, clause 4 by 
defining the term "substantial value'' to mean gifts aggregating over 
$100 in a calendar year. The Commission on Administrative Review, 
in its report recommending that the Rule be amended (H. Doc. 95-73, 
February 14, 1977) , noted that under the old Rule it was very diffi- 
cult to define precisely who has a direct interest in legislation before 
Congress, since almost every citizen has such an interest. The Com- 
mission recommended that : 

. . . the term "direct interest" should be defined so that it 
includes, but is not limited to, any person or organization who 
must file under the Federal Lobbying Act of 1946 or its suc- 
cessor statute. 

Therefore, H. Res. 287 amended House Rule XLIII, clause 4, to read, 
in part : 

Any person registered under the Federal Regulation of 
Lobbying Act of 194(5 (or any successor statute), any officer 
or director of such registered person, and any person re- 
tained by such registered person for the purpose of influenc- 
ing legislation before the Congress shall be deemed to have 
a direct interest in legislation before the Congress. 

The Select Committee also believes that any person, organization, 
or corporation which retains or employs a lobbyist should be deemed 
to have a direct interest in legislation. However, the Commission's 
report also noted that others, in addition to registered lobbyists, may 
well have a direct interest in legislation before the Congress, and that 
Rule XLIII, clause 4 should be interpreted in such a way that Mem- 
bers are "alerted to the need to exercise care in accepting gifts aggre- 
gating over $100 in any calendar year from all sources." 

The issue before the Select Committee is to clarify the term "direct 
interest in legislation before the Congress." The Congreess, by the 
very nature of the institution, represents individuals and groups with 
a direct interest in legislation. Taxpayers anticipating a rebate, par- 
ents petitioning for day care centers, etc., communicate with Members 
of Congress concerning legislation of interest to them. In one sense, 
therefore, most citizens have a "direct interest in legislation before the 
Congress." But it is not the intent of Rule XLIII, clause 4 to bar all 
gifts valued at more than $100 from concerned citizens interested in 
federal legislation. 

The problem for the Select Committee is to delineate to the extent 
possible the point at which individuals or organizations are trans- 
formed from being "concerned citizens" to those having a "direct 
interest" in legislation, placing them in a class of donors from whom 
Members may not accept certain gifts valued at more than $100. 

Beyond registered lobbyists and persons or organizations which 
employ lobbyists, there is another group of clearly identifiable indi- 



45-937 O - 79 - 11 



154 



viduals and organizations that have a direct interest in the legislative 
process, i.e., organizations which maintain a separate, segregated fund 
for political purposes (a Political Action Committee as defined in Sec. 
321 of the Federal Election Campaign Act of 1971) and the officers or 
directors of such organizations. Additionally, consistent with FEC 
regulations, any subordinate or affiliated organization of a "parent'' 
organization which maintains such a Political Action Committee 
should certainly also be deemed to have a direct interest in legislation 
before the Congress for purposes of Rule XLIII, clause 4. Of course, 
persons who simply contribute to such a political fund would not be 
included within this category. 

However, there are clearly a number of individuals and groups 
which neither retain paid lobbyists nor maintain a Political Action 
Committee, yet have a very direct and substantial interest in legisla- 
tion before the Congress. With this understanding, the Select Com- 
mittee believes that Members should not accept gifts aggregating over 
$100 in value from any individual or organization that the Member 
knows has a distinct or special interest in influencing or affecting the 
federal legislative process which sets such individual or organization 
apart from the general public. In this context, the Select Committee 
emphasizes the clear statement of intent issued by the Commission on 
Administrative Review that Members should be "alerted to the need 
to exercise care . . . in accepting gifts from, all sources' 1 ' 1 (emphasis 
added). Implicit in this admonition is the understanding that while 
individuals often receive gifts from non- relatives, and occasionally 
from organizations, it is rare that such gifts are valued at more than 
$100. Therefore, unless such a gift is from a close personal friend, it is 
most likely offered because of the Member's position as a United States 
Representative. 

The Select Committee also notes that appropriate exceptions have 
been made for purposes of Rule XLIII, clause 4 to allow acceptance 
of certain categories of gifts, as set forth in Advisory Opinion #7, 
even if such "gifts" are valued at more than $100. Thus, the Committee 
reiterates that a Member, officer, or employee should be most careful 
before accepting other forms of gifts from any source. 

However, if the Member does not believe that the donor of the gift 
has a distinct or special interest in the congressional legislative proc- 
ess which sets him clearly apart from the general public, then the 
Member should feel free to accept such gifts. Of course, gifts aggre- 
gating over $100 from one source must be disclosed in accordance with 
the new financial disclosure requirements of the Ethics in Government 
Act (PL 95-521). 

Finally, the question arises as to when legislation is considered to be 
"before the Congress." A narrow construction might be confined to an 
interest in a specific piece of legislation then pending before at least 
one subcommittee, or any other subdivision, of either House. If the 
Congress were not in session, for instance, no legislation would be be- 
fore it, and unlimited gifts (subject only to disclosure requirements) 
might then flow freely to favored legislators. Also, if the Congress 
were in session, but the "direct interest" was in having a particular 
piece of proposed legislation introduced, a narrow construction of the 
prohibition might lead to the conclusion that the legislation was not 
yet "before the Congress." 



155 



Clearly, in either of the two foregoing instances, a result incongru- 
ous with the entire purpose of the gift restriction would occur. When 
this purpose is the. red net ion of the tendency of certain types of gifts 
to affect legislative action, then a narrow reading would invite a sub- 
version of attempts at achieving that goal. 

Therefore, the phrase "legislation before the Congress" should be 
read broadly to include an ongoing special interest in affecting the 
legislative process. 

SUMMARY OPINION 

For purpose of House Rule XLIII, clause 4, the following indi- 
viduals and organizations are deemed to have a direct interest in legis- 
lation before the Congress: 

(l)(a) Any person, organization, or corporation registered 
under the Federal Regulation of Lobbying Act of 1946, or any 
successor statute ; and any person who is an officer or director of a 
registered lobbyist, or a person who has been employed or retained 
by a registered lobbyist for the purpose of influencing legislation 
before the Congress; 

(b) Any person, organization, or corporation which employs or 
retains a registered lobbyist ; 

(2) Any corporation, labor organization, or other organization 
which maintains a separate, segregated fund for political pur- 
poses (Political Action Committee as defined in the Federal Elec- 
tion Campaign Act of 1971 (2 U.S.C. 441b)) ; any subordinate 
or affiliated organization thereof; and the officers or directors of 
such organizations; and 

(3) Any other individual or organization which the Member, 
officer, or employee knows has a distinct or special interest in in- 
fluencing or affecting the federal legislative process which sets 
such individual or organization apart from the general public. 



Advisory Opinion No. 11 

SUBJECT 

The Select Committee has been asked whether a Member could accept 
proceeds from a fund-raising event for the Member's unrestricted per- 
sonal use, if the event were sponsored by a group independent of the 
Member. 

REASON FOR ISSUANCE 

The Select Committee has been asked whether a Member could 
accept proceeds from a fund-raising event for the Member's unre- 
stricted personal use, if the event were sponsored by a group inde- 
pendent of the Member. 

BACKGROUND AND DISCUSSION 

House Rule XLIII, clause 7. as amended on March 2, 1977, pro- 
hibits the conversion of proceeds from testimonial dinners or other 



156 



fund-raising events to a Member's personal use. The Select Commit- 
tee stated in Advisory Opinion Xo. 4 that a mass mailing constituted 
a fund-raising event for purposes of Rule XLIII, clause 7, and con- 
cluded that neither a Member nor his spouse could directly solicit 
funds for personal use by a fund-raising technique such as a mass 
mailing. 

An additional question has been asked which concerns the acceptance 
of funds for a Member's unrestricted personal use that are raised by 
a group independent of the Member, his spouse, staff, or campaign 
committee. 

As a general proposition, House Rules do not affect the actions of 
any individuals or organizations which are independent of a Member 
of Congress. The issue before the Select Committee, however, is not 
whether an independent group may conduct a fund-raising event, but 
whether a Member may accept the proceeds of such an event given in 
his behalf when such proceeds are for the Member's unrestricted per- 
sonal use. 

A major thrust of the provisions contained in the new House Rules 
was to severely limit the potential for Members of Congress to use 
their positions of influence for personal gain. In this context, there- 
fore, it is irrelevant whether the Member himself solicits these funds, 
or whether the Member accepts funds for personal use that are solicited 
on his behalf by an independent committee. 

Rule XLIII, clause 2 specifically states that a Member shall "ad- 
here to the spirit and letter of the Rules of the House of Representa- 
tives." The clear intent of clause 7 is to prevent the acceptance of pro- 
ceeds from fund-raising events for personal use. Thus, to allow a 
Member to accept such proceeds if raised by a paper "Dinner Commit- 
tee," "Fund-raising Committee," or similar subterfuge would render 
Rule XLIII, clause 7 meaningless. 

Finally, the Committee recognizes the distinction between the treat- 
ment of proceeds from a fund-raising event for purposes of Rule 
XLIII, clause 7, and acceptance of gifts for purposes of Rule XLIII, 
clause 4. Clause 4 does not prohibit the acceptance of gifts from any- 
one who is not a foreign national or does not have a direct interest in 
legislation before the Congress. Clause 7, however, addresses gifts from 
fund-raising events, specifying that proceeds from such events should 
not be treated as personal gifts, but as campaign contributions. 

SUMMARY OPIXION 

For purposes of House Rule XLIII, clause 7, a Member is prohib- 
ited from accepting the proceeds from a fund-raising event for his un- 
restricted personal use. 

Advisory Opiniox No. 12 

SUBJECT 

Application and interpretation of House rule XLIV, financial 
disclosure. 



157 



REASON FOR ISSUANCE 

The Select Committee has received a number of inquiries regarding 
the interpretation and application of the new financial disclosure re- 
quirements under House rule XL1Y, as amended on March 2. 1977. 

BACKGROUND AND DISCUSSION 

Rule XLIV requires Members, officers, their principal assistants, 
and professional committee staff to file an annual financial disclosure 
statement with the Clerk of the House. The first disclosure statement 
under the new Rule must be filed by April 30, 1978 and will cover only 
the period from October 1 through December JJ, 1977. Thereafter, 
each annual disclosure statement will relate to the preceding calendar 
year. 

In order to clarify the disclosure requirements, the Committee, pur- 
suant to its authority under H. Res. 383, issues this Advisory Opinion 
defining and interpreting the provisions of Rule XLIV, which re- 
quires the following information to be disclosed : 

(1) Income. — The source and amount of each item of income ag- 
gregating $100 or more from one source. (Capital gains are excluded 
from- the first filing . 

(2) Gifts. — (A) The source, a brief description, and value of gifts 
of transportation, lodging, food, or entertainment aggregating $250 
or more from one source; and (B) the source, a brief description, 
and value of all other gifts aggregating $100 or more from one source. 
Exempted are gifts from relatives, gifts valued at $35 or less, and gifts 
of personal hospitality of an individual in the personal residence of, 
or on property owned by that individual. 

The term "gift" means a payment, advance, forebearance, render- 
ing, or deposit of money, or any thing of value, unless consideration 
of equal or greater value is received, but does not include: (1) in- 
heritances; (2) political contributions; (3) transportation, lodging, 
food, and entertainment provided: (a) by federal, state, and local 
governments, or political subdivisions thereof; or (b) within a for- 
eign country by the government of that country ; (4) communications 
to the offices of a Member, including subscriptions to newspapers and 
periodicals; (5) suitable mementos of a function held in honor of the 
Member, officer, or employee; (6) consumable products provided by 
home-state businesses to a Member's office for distribution; and (7) 
food and beverages consumed at banquets, receptions or similar events. 
(N.B. This exemption does not include dinners for small groups at 
restaurants or other such "private" events. ) 

In disclosing gifts, it is not necessary that exact dollar figures be 
reported in every case. If the exact value of a gift is not reasonably 
ascertainable, a good-faith estimate is sufficient for disclosure pur- 
poses. In some cases involving "travel-related" expenses provided as a 
gift to a reporting individual, it might be difficult to provide even 
the approximate value of such expenses. Under these limited circum- 
stances, a brief description of the nature of the expenses provided 
would be sufficient for disclosure purposes. 

Travel-related expenses provided to a Member or employee for his 
personal benefit and which are unrelated to official duties are consid- 



158 



ered to be gifts. Travel-related expenses provided for speaking en- 
gagements, fact-finding tours, etc., are not considered to be gifts and 
should be disclosed as reimbursements (see below). 

(3) Reimbursements. — The source and value of reimbursements, di- 
rectly or indirectly, for expenditures aggregating $250 or more in 
value from any one source. Exempted are reimbursements for travel- 
related expenses provided by federal, state and local governments, or 
political subdivisions thereof. Reimbursements provided by foreign 
governments or by international governmental associations (e.g., 
NATO, Interparliamentary Union) are exempt. Such foreign travel- 
related expenses are required to be disclosed elsewhere under the terms 
of the Foreign Gifts and Decorations Act, as amended (Public Law 
95-105). 

Additionally, Members of Congress are often provided travel- 
related expenses from campaign funds to make political appearances 
on behalf of their colleagues or other candidates for federal office. Re- 
imbursements for these campaign-related activities are exempt from 
disclosure since such expenses are required to be disclosed elsewhere 
under the Federal Election Campaign Act. 

Disclosure of reimbursements is thus required for expenses provided 
by non-governmental sources such as trade associations, foundations, 
corporations, labor unions, educational institutions, and individuals. 
This category would generally include items such as travel expenses 
provided in connection with a speaking engagement or a fact-finding 
event related to official duties, whether those expenses were reim- 
bursed to the individual or paid directly by the sponsoring 
organization. 

Since reimbursements will often involve travel-related expenses 
which are not provided directly to a Member or employee on an indi- 
vidual basis, but rather involve an official group or delegation (as part 
of a fact-finding tour. etc.). actual or estimated costs may not be rea- 
sonably ascertainable. Therefore, whenever the exact or appropriate 
value of travel-related expenses is not reasonably ascertainable, a brief 
description of the itinerary or the nature of the expenses provided is 
sufficient for disclosure purposes. 

(4) Holdings. — The identity and category of value of any property 
held, directly or indirectly, in a trade or business or for investment or 
the production of income and which has a fair-market value of at least 
$1,000 as of the close of the year. Items such as household goods, auto- 
mobiles, and other personal property not principally held for invest- 
ment purposes or the production of income need not be disclosed. 

With respect to business interests, the reporting individual need 
only disclose the category of value of his interest in the business and 
not the assets and holdings of the business itself. Since the value of 
holdings needs to be disclosed only within certain categories, an ap- 
praised to determine the fair-market value should usually not be 
necessary. However, in those few instances where it is difficult to 
estimate even the category of value of an asset, the individual may 
use any generally recognized indication of value provided that the 
method of valuation is indicated on the disclosure form. 

(5) Liabilities. — The identity and category of value of each per- 
sonal liability owed, directly or indirectly, which exceeds $2,500 as 
of the close of the year. This category applies to all personal loans, 



159 



whether secured or unsecured, and regardless of the repayment terms 
or interest rates. Exempted, however, are mortgages secured by real 
property which is the personal residence of a Member or his spouse in 
the Washington, D.C. area or in the district ; or the principal residence 
of any other reporting individual or his spouse. Also exempted from 
disclosure are loans secured by automobiles and obligations to make 
alimony or child-support payments. A contingent liability (e.g., if the 
individual co-signs a note) need not be disclosed. Similarly, an indi- 
vidual with an interest in a business, corporation, partnership, etc., 
need not list a liability of that organization. 

(6) Security transactions. — The identity, date, and category of value 
of any transaction, directly or indirectly, in securities or commodity 
futures during the calendar year (beginning in 1978) which exceeds 
$1,000 in value. The first filing to be made in 1978 does not require the 
reporting of this information. Exempted are any transactions donat- 
ing such securities to any tax-exempt organization, as defined in section 
501(c)(3) of the IRS Code. 

(7) Real property transactions. — The identity, date, and category 
of value of any purchase or sale, directly or indirectly, of any interest 
in real property which exceeds $1,000 in value as of the date of such 
purchase or sale. This category requires the reporting of only real 
property transactions. Any real property held for investment purposes 
would be listed as a holding under item 4, as described above. As with 
liabilities owed, transactions involving personal residence property 
are exempted from disclosure. 

Categories of Value. — A detailed net-worth statement is not required 
under House Rule XLIV. Instead, financial interests and liabilities 
need be disclosed only by categories of value. The categories of value 
for items 4-7 are as follows: less than $5,000; between $5,000 and 
$15,000; between $15,000 and $50,000; between $50,000 and $100,000; 
and more than $100,000. 

Spouse disclosure 

Rule XLIV requires disclosure of spouse interests if they are under 
the "constructive control" of the reporting individual. This require- 
ment has existed under House Rule XLIV since its original adoption 
in 1968. As defined by the Committee on Standards of Official Conduct, 
the financial interests of a spouse are regarded as constructively con- 
trolled "if enhancement of those interests would substantially benefit 
the person reporting. Normally, in the absence of specific property 
division agreements, trusts, etc., the interests of spouses . . . would be 
constructively controlled." 

In view of the more detailed information now required to be dis- 
closed, the Select Committee believes that clarification of spouse dis- 
closure requirements is necessary. 

Accordingly, the financial interests of a spouse should be reported 
as follows: (1) source, but not amount, of spouse earned income ex- 
ceeding $1,000; (2) gifts or reimbursements to the spouse, unless re- 
ceived independent of the relationship to the reporting individual ; 
and (3) assets and liabilities of the spouse unless the reporting indi- 
vidual indicates that: (a) he or she neither derives, nor expects to 
derive, any economic benefit from such interests; and (b) such inter- 
ests were not obtained in any way from the assets or activities of the 
reporting individual. 



160 



The assets and liabilities of a spouse must be reported in the same 
manner as those of the reporting individual ; however, the person re- 
porting need not identify such items as those of the spouse. The finan- 
cial interests of a spouse living separate and apart from the reporting 
individual need not be disclosed. 



Advisory Opinion No. 13 

subject: general interpretation of house rule xlvii, dealing with 
limitations on members' outside earned income 

7. General 

(a) Purpose of rule. — House Rule XLVII, which was adopted on 
March 2, 1977 as part of the financial ethics code, limits both the 
amount of "outside earned income" a Member may have, and also the 
amount a Member may accept as an honorarium for any single speech, 
appearance, or article. Two major considerations prompted adoption 
of the Rule. First, substantial payments to a Member of Congress for 
rendering "personal services" to outside groups presents a significant 
and avoidable potential for conflict of interest. Second, it is consistent 
with the concept that being a Member of Congress is a full-time job to 
permit a Member to have substantial earnings from other employment. 

(b) Annual limitation generally. — Clause 1 of the Rule prohibits a 
Member from having outside earned income attributable to any calen- 
dar year beginning after December 31, 1978 in excess of 15% of the 
Member's salary as a U.S. Representative for that year. In order for an 
item to be counted against this limitation for a particular year: (i) 
it must be "outside earned income", within the meaning of Rule 
XLVII, and (ii) it must be attributable to that year. The Rule defines 
outside earned income to mean "wages, salaries, professional fees, hon- 
orariums, and other amounts (exclusive of copyright royalties) re- 
ceived or to be received as compensation for personal services actually 
rendered, not including the Member's salary as a U.S. Representative". 

Outside earned income is attributed to the year in which the Mem- 
ber's right to receive it becomes certain (i.e., under the accrual method) 
rather than to the year of receipt. Therefore, receipt of income earned 
during a particular year cannot be deferred to a future year in which 
the Member has less outside earned income, or until after the Member 
retires from Congress. The limitation is not applicable to compensation 
for personal services rendered prior to January 1, 1979, the effective 
date of Rule XLVII, or prior to the effective date of the Member's 
becoming a U.S. Representative, if later. Outside earned income is 
determined without regard to any community property law. That is, 
even though under applicable community property law, one-half of 
any personal service income earned by the Member is deemed to belong 
to the spouse, all of such income is considered earned income of the 
Member for purposes of the Rule. 

(c) Real facts controlling. — The limitations imposed by Rule 
XLVII may not be avoided by the characterization or disposition of 
any payment for services rendered. In all cases, the real facts will con- 



161 



(vol. Fov example, if a Member's spouse, child, other velative, ov tvust 
fov benefit of any of them, is paid an amount, however denominated, 
and the true considevation fov the payment is services rendered by the 
Member, the amount will be deemed outside earned income by the 
Member. Similarly, the label ov chavactevization placed on a transac- 
tion, arrangement or payment by the parties may be disregarded for 
purposes of the Rule. Thus, if amounts received or to be received by a 
Member are in fact attributable to any significant extent to services 
rendered by the Member, the characterization of such amounts as part- 
nership distributive shave, dividends, vent, intevest, payment fov a 
capital asset, ov the like, will not serve to prevent the application of 
Rule XLVII to such amounts. Moreover, the Rule applies to outside 
earned income realized in a medium other than money, for example, in 
property or services or through a bargain purchase or forbearance in 
consideration of personal services rendered. 

In short, income may not be recharacterized in order to circumvent 
the Rule. Indeed, characterization of income is essentially irrelevant. 
For purposes of this Opinion, there are two types of income — earned 
and unearned. If the compensation received is essentially a return on 
equity, then it would generally not be considered to be earned income. 
If the income is not a return on equity, then such income would gener- 
ally be considered to be earned income and subject to the limitation. 

When such amounts received or to be received by a Member are des- 
ignated as salary, fees, or commissions, the overriding presumption is 
that such amounts, almost by definition, constitute compensation for 
personal services rendered. An honorarium from a speaking engage- 
ment, for example, is obviously outside earned income. AVith respect 
to income from business ventures, the Committee is convinced that in 
the overwhelming majority of cases, there will be little or no difficulty 
in determining whether certain income is subject to the Rule. Again, 
the facts of each individual case will govern applicability of the Rule, 
but the principles set forth in this Opinion should be followed in mak- 
ing that determination. 

2. Outside earned income from business ventures 

This Advisory Opinion differentiates between businesses in which 
both capital and personal services are material income-producing fac- 
tors and those in which personal services is the only material income- 
producing factor. 

(a) Personal service businesses. — Where a Member owns or partici- 
pates in a personal service business, such as a professional practice, in 
which capital is not a material income-producing factor, his entire 
share of the profits is deemed to be outside earned income for purposes 
of the Rule, except to the extent he can demonstrate that his income in 
fact represents a return on investment. In general, capital is not a 
material income-producing factor where gross income of the business 
consists principally of fees, commissions ov other compensation for 
personal services performed by an individual. Thus, the practice of 
one's profession by a doctor, lawyer, insurance broker, or real estate 
agent will not, as such, be treated as a business in which capital is a 
material income-producing factor. Even where the practitioner may 
have a substantial investment in professional equipment or in the 
physical plant constituting the office from which he conducts his prac- 



162 



tice, the capital investment would be regarded as only incidental to the 
professional practice. 

Moreover, the fact that the Member may not personally participate 
to any substantial extent in the rendering of services to the customers 
or clients of the business, all such services being performed by assist- 
ants or associates, would not serve to justify classification of his share 
of the business income as other than earned income. If a Member shares 
in the profits of a personal service organization without being required 
to perform any significant productive services, absent a strong show- 
ing to the contrary, it will be presumed that the Member is being com- 
pensated for attracting or retaining customers or clients, and such 
income is considered outside earned income. 

Law practices. — Since there are a number of attorneys serving in the 
House of Representatives, for purposes of example, application of the 
Rule to practice of law is specifically addressed in this Opinion. Those 
Members who currently maintain an active affiliation with a law firm 
may now wish to enter into a buy-out agreement with their partners in 
order to liquidate their equity in the firm. This is perfectly appropri- 
ate. Amounts received or receivable by a Member in payment for his 
interest in a laAv firm or similar organization upon his retirement 
from it would not constitute outside earned income so long as the 
amounts payable do not, in effect, represent a continuing participa- 
tion in the law firm and the total amount payable is not in excess of 
the fair market value of the Member's interest. Normally such arrange- 
ments call for fixed payments at annual or more frequent intervals 
over a period of years. In some cases, however, the retiring partner 
and those continuing the business are unable to agree on a value for 
one or more assets of the business, such as contingent fee cases or 
accounts receivable of dubious value, and the buy-out agreement may 
accordingly provide that the retiring partner will be paid a share of 
such items, if, as and when they are collected. 

Payments to a Member under a buy-out agreement will not be 
deemed to be outside earned income where the arrangements are en- 
tered into in good faith and agreed to by all the partners, and reflect 
the usual and customary value of the equity generally accorded to 
partners in similar law practices in the same geographic area. A buy- 
out agreement should also be reasonably calculated to avoid the Mem- 
ber's participation in post-withdrawal profits. In general, the proceeds 
resulting from a buy-out agreement are taxed as capital gains. If such 
an agreement is not limited to liquidation of the Member's equity in 
the firm, and includes payments which might be taxable as earned in- 
come, any such payments under the agreement might be subject to the 
earned income limitation. 

The Committee notes that Rule XL VII does not prohibit continued 
affiliation with a law firm, as does the Senate Rule on outside earned 
income. However, those Members who wish to retain an interest in a 
law firm after the effective date of the Rule may be required to lessen 
their active involvement in the firm because of the earned income lim- 
itation. Accordingly, the Committee makes reference to the American 
Bar Association Code of Ethics, which states in part : "A lawyer who 
assumes ... a legislative post . . . shall not permit his name to remain 
in the name of a law firm or to be used in the professional notices of 



163 



the firm during any significant period in which he is not actively and 
regularly practicing law as a member of the firm." (ABA Disciplinary 
Rule 2-102B). Depending upon the particular circumstances involved 
in each case, this provision may have some bearing on a Member's con- 
tinued affiliation with 9, law firm. 

For those Members who will choose to remain formally affiliated 
with a law firm, some of their income from the law firm may be in the 
form of return on equity. In recognition of the principle that any 
capital investment in a business is entitled to a reasonable return, this 
Opinion provides that a Member may treat as unearned income a por- 
tion of his share of the profits from the law firm, as from any other per- 
sonal service business, equal to interest computed at 10 percent per an- 
num on his investment in the business assets (after adjustment to ex- 
clude investment income and expenses, if any). For purposes of this 
10 percent computation, the Member's investment in business assets 
will ordinarily be represented by the average balance of his capital ac- 
count during the year, where the business interest is a proprietorship 
or partnership, or by the average book value of his stock, where the in- 
vestment is in a subchapter S corporation. In general, a Member's 
equity in the firm would not exceed the amount he would receive pur- 
suant to a buy-out agreement, and should be calculated to avoid any 
benefit accruing to the Member from increased profits subsequent to the 
effective date of the Rule. 

(b) Businesses ichere capital is a material income- producing fac- 
tor. — Capital is a material income-producing factor if a substantial 
portion of the gross income of the business is attributable to the em- 
ployment of capital, as reflected, for example, by a substantial invest- 
ment in inventories, plant, machinery or other productive equipment. 
This Opinion discusses the application of the Rule in such cases to in- 
come frdm a fully taxable corporation and income from an unincor- 
porated business or subchapter S corporation. 

(1) Taxable corporations 

If a Member renders services to a fully taxable business corporation, 
he will not be deemed to realize outside earned income from such serv- 
ices beyond the amount of salary or other form of extra compensation 
designated as consideration for the personal services rendered. In those 
cases where the Member's sole finanical interest is stock in the corpora- 
tion, an increase in the net assets of the corporation would not be con- 
sidered to be subject to the limitation. An increase in the value of stock 
or other property is not ordinarily treated as earned income either 
for tax purposes or under generally accepted accounting principles; 
and any increase in the corporation's net profits would be subject first 
to corporate income tax and then to personal income tax before the 
Member receives any resulting increment to his wealth through a div- 
idend or sale of his stock. The foregoing has no application, of course, 
to income which a Member earns through his personal efforts in deal- 
ings with third parties but causes to be paid to a corporation and then 
distributed to him. For example, if a Member incorporates himself for 
the purpose of conducting a speaking business, and all fees for his 
speaking engagements are paid to the corporation from which he then 
draws "profits", all such amounts would be considered to be outside 
earned income. 



164 



In sum, if a Member renders services to a taxable corporation, only 
the salary or other compensation he receives for those services would be 
subject to the limitation, but not any increase in the corporation's 
assets or his share of the profits. This ruling is consistent with the 
intent of the Commission on Administrative Review which recom- 
mended the limitation on outside earned income. In its report (Docu- 
ment No. 95-73) , the Commission stated that ". . . Members should be 
able to render personal services to manage or protect their equity . . . 
without having to allocate these personal services toward the 15 per- 
cent limitation." 

(2) /Subchapter S corporation, partnership, unincorporated business 
In those cases where the Member has an ownership interest in a busi- 
ness for which he also performs services, as in a subchapter S corpora- 
tion or a partnership, some part of his share of the profits of that busi- 
ness may reflect the value of his services, and thus would be considered 
outside earned income. The determining factor is whether the Mem- 
ber's personal services generate significant income for the business. Of 
course, if the Member receives formal compensation from the business, 
for example, payments designated as salary or fees, such amounts 
would be considered earned income. Additionally, in those cases where 
other partners or associates are providing capital and managerial 
expertise, and the Member's principal role is to refer clients to the 
business or to help retain existing customers or clients, the Member 
would be deemed to be rendering income-producing services, even 
though the actual time involved might be minimal. However, if the 
Member is engaged primarily in the general oversight and manage- 
ment or protection of his investment, his services would not be deemed 
to generate significant income. Such non-income generating services 
would include consultation with other management officials, analysis 
of financial and other reports, participation in formal meetings, and 
making decisions concerning the general operations and investment 
strategy of the business. 

The application of the Rule to the various types of business orga- 
nizations as discussed in this Opinion applies equally to a business 
owned or controlled by the Member or his family. Again, the deter- 
mining factor is whether or not the personal services of the Member 
actually generate any significant income for the business. In those 
situations where the services rendered by the Member are incidental 
and do not generate significant income, no part of his share of the 
profits or any increase in the assets of the business would be deemed 
to be outside earned income. 

The Committee emphasizes that the definition of earned income in 
Rule XLVII, which excludes amounts received by a Member from a 
family controlled business "so long as the personal services actually 
rendered by the Member ... do not generate a significant amount of 
income," was simply intended to assure Members that they could con- 
tinue to make decisions and take actions necessary to manage or pro- 
tect their equity in a family trade or business, and would not be forced 
to divest themselves of their family business interests. As with any 
business, a Member would not be required to allocate his share of the 
profits of the business as outside earned income when the facts and 
circumstances show that the income is in reality a return on invest- 



165 



ment. For example, if the Member owns a hardware store and tho 
services he renders are incidental, such as occasionally serving cus- 
tomers, the income received from the business is basically a return on 
equity, (i.e., profits from the sale of hardware goods) and is not gen- 
erated by the Member's services. Similarly, if the Member's family 
owns a farm and the Member gives overall direction to the manage- 
ment of the business, the income received from the farming operations 
is not generated by the Member's personal services, but rather is 
basically a return on equity from the sale of crops or dairy products. 
These types of businesses are distinguishable from a personal service 
business where income is essentially produced by the services of the 
individual affiliated with the organization. 

3. When income is accountable 

(a) Income from pre -effective date services. — The Ride excludes 
from earned income any compensation derived by a Member for per- 
sonal services actually rendered prior to the effective date of the Rule 
(January 1, 1979) or prior to the effective date of the Member's be- 
coming a U.S. Representative, if later. This provision would serve to 
exclude from the limitation, for example, most renewal commissions 
paid to a Member with respect to life insurance policies sold by him 
prior to the effective date, or similar commissions received by a Mem- 
ber with respect to pre-effective date leases in which the Member was a 
leasing agent. In most such arrangements, payment of the commission 
is not contingent upon the performance of any future services by the 
recipient; the only contingency is that the insured or lessee continue 
to pay premiums or rent, as the case may be. The pre-effective date 
exclusion would also apply to a fee received by a lawyer-Member after 
the effective date where all the work had been done prior to the effec- 
tive date. However, this exclusion would not apply to income derived 
from the continuing or future business of clients brought into the firm 
prior to the effective date of the Rule. 

(b) Application of limitation to part years. — Where an individual 
becomes a Member during any calendar year beginning after Decem- 
ber 31, 1978, the Rule applies only to outside earned income of the new 
Member attributable to periods after the effective date of his becoming 
a Member. For the balance of the calendar year in which he becomes a 
Member, the applicable limitation will be 15% of the Members salary 
as a U.S. Representative for that part year, and only outside earned 
income attributable to that part year is counted against the limitation. 

4. Other provisions 

(a) Payments attributed to deferred compensation plans. — Amounts 
received by a Member from a tax-qualified pension, profit-sharing or 
stock bonus plan are not treated as outside earned income, as provided 
in the Rule, nor are contributions to such a plan counted as outside 
earned income. Amounts received by a Member from a non-qualified 
deferred compensation plan which were earned in a year prior to the 
effective date of the Rule are not outside earned income for the year 
received under the principle explained in Section 3(a), provided no 
part of the consideration for such payments is current services. 
Amounts set aside for a Member under a non-qualified deferred com- 
pensation plan for services rendered after the effective date of the 
Rule will generally constitute outside earned income of the Member 



166 



for that year, even though they will not be received until a later 
year, unless receipt is subject to a substantial risk of forfeiture. 

(b) Assignment of income to charities. — Notwithstanding the gen- 
eral holding of this Opinion that a Member cannot deflect the appli- 
cation of the Rule by assigning to another income which he in fact 
earned through rendering services, earned income assigned by a Mem- 
ber to a tax-exempt charity will not be counted as part of the Mem- 
ber's outside earned income, provided the Member is not a "disquali- 
fied person" with respect to the recipient organization within the 
meaning of section 4946(a) of the Internal Revenue Code. For pur- 
poses of the Rule, such income would not be deemed to have been "re- 
ceived" by the Member provided that he did not personally benefit in 
any way from such income. 

(c) Honoraria. — Clause 2 of Rule XLVII provides that no Mem- 
ber may, in any calendar year beginning after December 31, 1978, 
accept any honorarium of more than $750 in value for any single 
speech, appearance, or article by the Member. In computing the 
amount of any honorarium for purposes of the $750 limitation, there 
shall not be taken into account the reimbursement of any actual and 
necessary travel expenses incurred by the Member in earning the hon- 
orarium. To the extent any such travel expenses are not reimbursed, 
the amount of the honorarium shall be reduced accordingly. Payment 
of actual and necessary travel expenses of a spouse (or another family 
member) accompanying the Member is also excluded from the limita- 
tion, consistent with the Federal Election Commission regulations gov- 
erning receipt of honoraria. 

Under Section 1(b) of this Opinion, outside earned income is at- 
tributed to the year in which the Member's right to receive it becomes 
certain rather than to the year of receipt, (i.e., the accrual method). 
With respect to honoraria, however, the accrual method could cause 
some particular confusion in the case of a Member giving a speech in 
December but not receiving actual payment until January. Because of 
the potential problems that could arise, Members would have the lim- 
ited option of using a cash basis for receipt of honoraria for purposes 
of the Rule. 



167 

5. Code of Ethics for Government Service, 72 Stat. Part 2, B 12 

Code of Ethics for Government Service 

Resolved by the House of Representatives (the Senate concurring), 
That it is the sense of the Congress that the following Code of Ethics 
should be adhered to be all Government employees, including office- 
holders: 

CODE OF ETHICS FOR GOVERNMENT SERVICE 

Any person in Government service should : 

1 . Put loyalty to the highest moral principles and to country above 
loyalty to persons, party, or Government department. 

2. Uphold the Constitution, laws, and legal regulations of the 
United States and of all governments therein and never be a party 
to their evasion. 

3. Give a full day's labor for a full day's pay; giving to the per- 
formance of his duties his earnest effort and best thought. 

4. Seek to find and employ more efficient and economical ways of 
getting tasks accomplished. 

5. Never discriminate unfairly by the dispensing of special favors 
or privileges to anyone, whether for remuneration or not; and never 
accept, for himself or his family, favors or benefits under circum- 
stances which might be construed by reasonable persons as influencing 
the performance of his governmental duties. 

6. Make no private promises of any kind binding upon the duties 
of office, since a Government employee has no private word which can 
be binding on public duty. 

7. Engage in no business with the Government, either directly or 
indirectly, which is inconsistent with the conscientious performance 
of his gov ernmental duties. 

8. Never use any information coming to him confidentially in the 
performance of governmental duties as a means for making private 
profit. 

9. Expose corruption wherever discovered. 

10. Uphold these principles, ever conscious that public office is a 
public trust. 

(Passed July 11, 1958.)r : 

* U 6. 2 tJ.S.C. Sec. 86 

§86. Division of Salaries of Employees of House of Representatives 

It shall not be lawful to appoint or employ in any position under 
the House of Representatives more than one person at any one time, 
or to require or permit any such person to divide with another any 
portion of his salary or compensation while so employed. 

(Mar. 3, 1901, c. 830, § 1, 31 Stat. 968.) 

* " *7. 2 U.S.C. Sec. 87 

§ 87. Requiring or Permitting Employees of House of Representatives To Sublet 
Duties 

It shall not be lawful to require or permit any person in the employ 
of the House of Representatives to sublet to another the discharge of 
any portion of the duties of the position to which he is appointed. 

(Mar. 3, 1901, c. 830, § 1, 31 Stat. 968.) 



168 

Cross References: Subletting duties of an employee of Senate or House for- 
bidden, see section 101 of this title. 

8. 2 U.S.C. sec. 101 

§ 101. Subletting duties of employees of Senate or House of Representatives 

No employee of Congress, either in the Senate or House, shall sublet 
to, or hire, another to do or perform any part of the duties or work at- 
tached to the position to which he was appointed. 

(Mar. 2, 1895, c. 177, § 1, 28 Stat. 771.) 

9. 2 U.S.C. sec. 441i 

§441i. Acceptance of excessive honorariums — Prohibited practices 

(a) No person while an elected or appointed officer or employee of 
any branch of the Federal Government shall accept — 

(1) any honorarium of more than $2,000 (excluding amounts 
accepted for actual travel and subsistence expenses for such person 
and his spouse or an aide to such person, and excluding amounts 
paid or incurred for any agents' fees or commissions) for any ap- 
pearance, speech, or article; or 

(2) honorariums (not prohibited by paragraph (1) of this sec- 
tion) aggregating more than $25,000 in any calendar year. 

PAYMENT OF HONORARIUM TO CHARITABLE ORGANIZATION; DEFINITION 

(b) If an honorarium payable to a person is paid instead at his re- 
quest to a charitable organization selected by payor from a list of 5 or 
more charitable organizations provided by that person, that person 
shall not be treated, for purposes of subsection (a) of this section, as 
accepting that honorarium. For purposes of this subsection, the 
term "charitable organization" means an organization described in 
section 170(c) of Title 26. 

AGGREGATE AMOUNT RECEIVED DURING ANY CALENDAR YEAR 

(c) For purposes of determining the aggregate amount of honorar- 
iums received by a person during any calendar year, amounts returned 
to the person paying an honorarium before the close of the calendar 
year in which it was received shall be disregarded. 

TIME OF ACCEPTANCE OF HONORARIUM 

(d) For purposes of paragraph (2) of subsection (a) of this section, 
an honorarium shall be treated as accepted only in the year in which 
that honorarium is received. 

(As amended Pub.L. 95-216, Title V, § 502(a), Dec. 20, 1977, 91 
Stat. 1565.) 

1977 Amendment: Pub.L. 95-216 designated existing provisions as subsec. (a), 
and added subsecs. (b) to (d). 

Effective Date of 1977 Amendment: Section 502(b) of Pub.L. 95-216 provided 
that: "The amendments made by subsection (a) [to this section] shall apply with 
respect to any honorarium received after December 31, 1975." 

Legislative History: For legislative history and purpose of Pub.L. 95-216, see 
1977 U.S. Code Cong, and Adm.News, p. 4155. 



169 

10. 2 U.S.C. sec. 701 et seq. 

Public Law 95-521, 95th Congress 

AN ACT To establish certain Federal agencies, effect certain reorganizations of the 
Federal Government, to implement certain reforms in the operation of the 
Federal Government and to preserve and promote the integrity of public officials 
and institutions, and for other purposes 

Be it enacted by the Senate and House of Representatives oj the United 
States of America in Congress assembled, That this Act may be cited as 
the "Ethics in Government Act of 1978". 

TITLE I— LEGISLATIVE PERSONNEL FINANCIAL 
DISCLOSURE REQUIREMENTS 

COVERAGE 

Sec. 101. (a) Each Member in office on May 15 of a calendar year 
shall file on or before May 15 of that calendar year a report containing 
the information as described in section 102(a). 

(b) Any individual who is an officer or employee of the legislative 
branch designated in subsection (e) during any calendar year and per- 
forms the duties of his position or office for a period in excess of sixty 
days in that calendar year shall file on or before May 15 of the suc- 
ceeding year a report containing the information as described in section 
102(a)'. 

(c) Within thirty days of assuming the position of an officer or em- 
ployee designated in subsection (e), an individual other than an indi- 
. idual employed in the legislative branch upon assuming such position 
shall file a report containing the information as described in section 
102(b) unless the individual has left another position designated in 
subsection (e) within thirty days prior to assuming his new position. 
This subsection shall take effect on January 1, 1979. 

(d) Within thirty clays of becoming a candidat in a calendar year 
for any election for the office of Member, or on or before May 15 of 
that calendar year, which ever is later, but in no event later than 
seven days prior to the election, and on or before May 15 of each 
successive year the individual continues to be a candidate, an indi- 
vidual shall file a report containing the information as described in 
section 102(b). 

(e) The officers and employees referred to in subsections (b) and 
(c) are — 

(1) each officer or employee of the legislative branch who is 
compensated at a rate equal to or in excess of the annual rate of 
basic pay in effect for grade GS-16 of the General Schedule; and 

(2) at least one principal assistant designated for purposes of 
this section by each Member who does not have an employee com- 
pensated at a rate equal to or in excess of the annual rate of basic 
pay in effect for grade GS-16 of the General Schedule. 

For the purposes of this title, the legislative branch includes the 
Architect of the Capitol, the Botanic Gardens, the Congressional 
Budget Office, the Cost Accounting Standards Board, the General 
Accounting Office, the Government Printing Office, the Library of 
Congress, the Office of the Attending Physician, and the Office of 
Technology Assessment. 



170 

(f) Reasonable extensions of time for filing any report may be 
granted by the designated committee of the Senate with respect to 
those filing with the Secretary and by the designated committee of the 
House of Representatives with respect to those filing with the Clerk 
but in no event may the extension granted to a Member or candidate 
result in a required report being filed later than seven days prior to an 
election involving the Member or candidate. If the day on which a 
report is required to be filed falls on a weekend or holiday, the report 
may be filed on the next business day. 

(g) Notwithstanding the dates specified in subsection (d) of this 
section, an individual who is a candidate in calendar year 1978 shall 
file the report required by such subsection not later than November 1, 
1978, except that a candidate for the Senate who has filed a report as of 
such date pursuant to the Rules of the Senate need not file the report 
required by subsection (d) of this section. 

CONTENTS OF REPORTS 

Sec. 102. (a) Each report filed pursuant to subsections (a) and (b) 
of section 101 shall include a full and complete statement with respect 
to the following: 

(1)(A) The source, type, and amount or value of income 
(other than income referred to in subparagraph (B)) from any 
source (other than from current employment by the United States 
Government), and the source, date, and amount of honoraria 
from any source, received during the preceding calendar year, 
aggregating $100 or more in value. 

(B) The source and type of income which consists of divi- 
dends, interest, rent, and capital gains, received during the pre- 
ceding calendar year which exceeds $100 in amount or value, 
and an indication of which of the following categories the amount 
or value of such item of income is within: 
(i) not more than $1,000, 

(ii) greater than $1,000 but not more than $2,500, 
(iii) greater than $2,500 but not more than $5,000, 
(iv) greater than $5,000 but not more than $15,000, 
(v) greater than $15,000 but not more than $50,000, 
(vi) "greater than $50,000 but not more than $100,000, or 
(vii) greater than $100,000. 
(2) (A) The identity of the source and a brief description of 
an}^ crifts of transportation, lodging, food, or entertainment 
aggregating $250 or more in value received from any source other 
than a relative of the reporting individual during the preceding 
calendar year, except that any food, lodging, or entertainment 
received as personal hospitality of any individual need not be 
reported, and any gift with a fair market value of $35 or less 
need not be aggregated for purposes of this subparagraph. 

(B) The identity of the source, a brief description, and the 
value of all gifts other than transportation, lodging, food, or 
entertainment aggregating $100 or more in value received from 
any source other than a relative of the reporting individual during 
the preceding calendar year, except that any gift with a fair 
market value of $35 or less need not be aggregated for purposes 
of this subparagraph. A gift need not be so aggregated if in an 
unusual case, a publicly available request for a waiver is granted. 



171 

(C) The identity of the source and a brief description of reim- 
bursements received from any source aggregating $250 or more in 
value and received during the preceding calendar year. 

(3) The identity and category of value of any interest in prop- 
erty held during the preceding calendar year in a trade or busi- 
ness, or for investment or the production of income, which has a 
fair market value which exceeds $1,000 as of the close of the pre- 
ceding calendar year, excluding any personal liability owed to the 
reporting individual by a relative or any deposits aggregating 
$5,000 or less in a personal savings account. For purposes of this 
paragraph, a personal savings account shall include any certificate 
of deposit or any other form of deposit in a bank, savings and 
loan association, credit union, or similar financial institution. 

(4) The identity and category of value of the total liabilities 
owed to any creditor other than a relative which exceed $10,000 
at any time during the preceding calendar year, excluding — 

(A) any mortgage secured by real property which is a 
personal residence of the reporting individual or his spouse; 

(B) any loan secured by a personal motor vehicle, house- 
hold furniture, or appliances, which loan does not exceed the 
purchase price of the item which secures it. 

With respect to revolving charge accounts, only those with an 
outstanding liability which exceeds $10,000 as of the close of the 
preceding calendar year need be reported under this paragraph. 

(5) Except as provided in this paragraph, a brief description, 
the date, and category of value of any purchase, sale, or exchange 
during the preceding calendar year which exceeds $1,000 — 

(A) in real property, other than property used solely as a 
personal residence of the reporting individual or his spouse; 
or 

(B) in stocks, bonds, commodities futures, and other forms 
of securities. 

Reporting is not required under this paragraph of any transaction 
solely by and between the reporting individual, his spouse, or 
dependent children. 

(6) The identity of all positions on or before the date of filing 
during the current calendar year as an officer, director, trustee, 
partner, proprietor, representative, emplo}^ee, or consultant of 
any corporation, company, firm, partnership, or other business 
enterprise, any nonprofit organization, any labor organization, or 
any educational or other institution other than the United States. 
This paragraph shall not require the reporting of positions held 
in any religious, social, fraternal, or political entity and positions 
solely of an honorary nature. 

(7) A description of the date, parties to, and terms of any agree- 
ment or arrangement with respect to: (A) future employment; 
(B) a leave of absence during the period of the reporting indi- 
vidual's Government service ; (C) continuation of payments by a 
former employer other than the United States Government ; and 
(D) continuing participation in an employee welfare or benefit 
plan maintained by a former employer. 

(b) Each report filed pursuant to subsections (c) and (d) of sec- 
tion 101 shall include a full and complete statement with respect to 
the information required by paragraphs (3), (4\ (G), and (in the case 



172 

of reports filed pursuant to subsection (c) of section 101) (7) of sub- 
section (a), as of a date, specified in such report, which shall be not 
more than thirty-one days prior to the date of filing, and the informa- 
tion required by paragraph (1) of subsection (a) for the year of filing 
and the preceding calendar year. 

(c)(1) The categories for reporting the amount or value of the items 
covered in paragraphs (3), (4) and (5) of subsection (a) are as follows: 

(A) not more than $5,000; 

(B) greater than $5,000 but not more than $15,000; 

(C) greater than $15,000 but not more than $50,000; 

(D) greater than $50,000 but not more than $100,000; 

(E) greater than $100,000 but not more than $250,000; and 

(F) greater than $250,000. 

(2) For the purposes of paragraph (3) of subsection (a) if the current 
value of an interest in real property (or an interest in a real estate 
partnership) is not ascertainable without an appraisal, an individual 
may list (A) the date of purchase and the purchase price of the interest 
in the real property, or (B) the assessed value of the real property for 
tax purposes, adjusted to reflect the market value of the property 
used for the assessment if the assessed value is computed at less than 
100 percent of such market value, but such individual shall include in 
his report a full and complete description of the method used to deter- 
mine such assessed value, instead of specifying a category of value 
pursuant to paragraph (1) of this subsection. If the current value of 
any other item required to be reported under paragraph (3) of sub- 
section (a) is not ascertainable without an appraisal, such individual 
may list the book value of a corporation whose stock is not publicly 
traded, the net worth of a business partnership, the equity value of an 
individually owned business, or with respect to other holdings, any 
recognized indication of value, but such individual shall include in his 
report a full and complete description of the method used in deter- 
mining such value. In lieu of any value referred to in the preceding 
sentence, an individual may list the assessed value of the item for tax 
purposes, adjusted to reflect the market value of the item used for the 
assessment if the assessed value is computed at less than 100 percent 
of such market value, but a full and complete description of the 
method used in determining such assessed value shall be included in 
the report. 

(d)(1) Except as provided in the last sentence of this paragraph, 
each report shall also contain information listed in paragraphs (1) 
through (5) of subsection (a) respecting the spouse or dependent child 
of the reporting individual as follows: 

(A) The source of items of earned income earned by a spouse 
from any person which exceed $1,000 and, with respect to a 
spouse or dependent child, all information required to be reported 
in subsection (a)(1)(B) with respect to income derived from any 
asset held by the spouse or dependent child and reported pursuant 
to paragraph (3). With respect to earned income, if the spouse is 
self-employed in business or a profession, only the nature of such 
business or profession need be reported. 

(B) In the case of any gift which is not received totally inde- 
pendent of the spouse's relationship to the reporting individual, 
the identity of the source and a brief description of gifts of trans- 
portation, lodging, food, or entertainment or a brief description 
and the value of other gifts. 



173 

(C) In the case of any reimbursement which is not received 
totally independent of the spouse's relationship to the reporting 
individual, the identity of the source and a brief description of 
the reimbursement. 

(D) In the case of items described in paragraphs (3) through 
(5), all information required to be reported under these para- 
graphs other than items (i) which the reporting individual cer- 
tifies represent the spouse or dependent child's sole financial 
interest or responsibility and which the reporting individual has 
no knowledge of, (ii) which are not in any way, past or present, 
derived from the income, assets, or activities of the reporting 
individual, and (iii) from which the reporting individual neither 
derives, nor expects to derive, any financial or economic benefit. 

Each report referred to in subsection (b) of this section shall, with 
respect to the spouse and dependent child of the reporting individual, 
only contain information fisted in paragraphs (1), (3), and (4) of 
subsection (a) , as specified in this paragraph. 

(2) No report shall be required with respect to a spouse living sepa- 
rate and apart from the reporting individual with the intention of 
terminating the marriage or providing for permanent separation; or 
with respect to any income or obligations of an individual arising from 
the dissolution of his marriage or the permanent separation from his 
spouse. 

(e)(1) Except as provided in paragraph (2), each reporting indi- 
vidual shall report the information required to be reported pursuant to 
subsections (a) and (b) of this section with respect to the holdings of 
and the income from a trust or other financial arrangement from which 
income is received by, or with respect to which a beneficial interest in 
principal or income is held by, such individual, his spouse, or any 
dependent child. 

(2) A reporting individual need not report the holdings of or the 
source of income from any of the holdings of — 

(A) any qualified blind trust (as defined in paragraph (3)); or 

(B) a trust — 

(i) which was not created directly by such individual, his 
spouse, or any dependent child, and 

(ii) the holdings or sources of income of which such in- 
dividual, his spouse, and any dependent child have no knowl- 
edge of, 
but such individual shall report the category of the amount of in- 
come received by him, his spouse, or any dependent child from the 
trust under subsection (a)(1)(B) of this section. 

(3) For purposes of this subsection, the term "qualified blind trust" 
includes any trust in which a reporting individual, his spouse, or any 
dependent child has a beneficial interest in the principal or income, and 
which meets the following requirements : 

(A) The trustee of the trust is a financial institution, an 
attorney, a certified public accountant, or a broker, who (in the 
case of a financial institution or investment company, any officer 
or employee involved in the management or control of the trust 
who) — 

(i) is independent of and unassociated with any interested 

, r party so that the trustee cannot be controlled or influenced 

in the administration of the trust by any interested party, 



174 

(ii) is or has not been an employee of any interested party, 
or any organization affiliated with any interested party and 
is not a partner of, or involved in any joint venture or other 
investment with, any interested party, and 

(iii) is not a relative of any interested party. 

(B) Any asset transferred to the trust by an interested party is 
free of any restriction with respect to its transfer or sale unless 
such restriction is expressly approved by the supervising ethics 
office of the reporting individual. 

(C) The trust instrument which establishes the trust provides 
that — 

(i) except to the extent provided in subparagraph (B) of 
this paragraph, the trustee in the exercise of his authority 
and discretion to manage and control the assets of the trust 
shall not consult or notify any interested party; 

(ii) the trust shall not contain any asset the holding of 
which by an interested party is prohibited by any law or 
regulation ; 

(iii) the trustee shall promptly notify the reporting indi- 
vidual and his supervising ethics office when the holdings of 
any particular asset transferred to the trust by any interested 
party are disposed of or when the value of such holding is less 
than $1,000; 

(iv) the trust tax return shall be prepared by the trustee or 
his designee, and such return and any information relating 
thereto (other than the trust income summarized in appro- 
priate categories necessary to complete an interested party's 
tax return), shall not be disclosed to any interested partv; 

(v) an interested party shall not receive any report on the 
holdings and sources of income of the trust, except a report 
at the end of each calendar quarter with respect to the total 
cash value of the interest of the interested party in the trust 
or the net income or loss of the trust or any reports necessary 
to enable the interested party to complete an individual tax 
return required by law or to provide the information required 
by subsection (a)(1)(B) of this section but such report shall 
not identify anv asset or holding:; 

(vi) except for communications which solely consist of 
requests for distributions of cash or other unspecified assets 
of the trust, there shall be no direct or indirect communica- 
tion between the trustee and an interested party with respert 
to the trust unless such communication is in writing and 
unless it relates only (I) to the general financial interest and 
needs of the interested party (including, but not limited to, 
an interest in maximizing income or long-term capital gain) , 

(II) to the notification of the trustee of a law or regulation 
subsequently applicable to the reporting individual which 
prohibits the interested party from holding an asset, which 
notification directs that the asset not be held bv the trust, or 

(III) to directions to the trustee to sell all of an asset 
initially placed in the trust by an interested party which in 
the determination of the reporting individual creates a con- 
flict of interest or the appearance thereof due to the sub- 
sequent assumption of duties by the reporting individual 



175 

(but nothing herein shall require any such direction) ; and 
(vii) the interested parties shall make no effort to. obtain 
information with respect to the holdings of the trust, in- 
cluding obtaining a copy of any trust tax return filed or any 
information relating thereto except as otherwise provided 
in this subsection. 
(D) The proposed trust instrument and the proposed trustee 
is approved by the reporting individual's supervising ethics office. 
For purposes of this subsection "interested party" means a reporting 
individual, his spouse, and any dependent child if the reporting indi- 
vidual, his spouse, or dependent child has a beneficial interest in the 
principal or income of a qualified blind trust; "broker" has the mean- 
ing set forth in section 78 of title 15, United States Code; and "super- 
vising ethics office" means the designated committee of the House of 
Representatives for those who file their reports required b}^ this title 
with the Clerk and the designated committee of the Senate for those 
who file the reports required by this title with the Secretary. 

(4) An asset placed in a trust by an interested party shall be con- 
sidered a financial interest of the reporting individual, for the pur- 
poses of section 208 of title 18, United States Code, and any other 
conflict of interest statutes or regulations of the Federal Government, 
until such time as the reporting individual is notified by the trustee 
that such asset has been disposed of, or has a value of less than $1,000. 

(5) (A) The reporting individual shall, within thirty days after 
a qualified blind trust is approved by his supervising ethics office, file 
with such office a copy of — 

(i) the executed trust instrument of such trust (other than 
those provisions which relate to the testamentary disposition of 
the trust assets), and 

(ii) a list of the assets which were transferred to such trust, 
including the category of value of each asset as determined under 
subsection (c)(1) of this section. 

(B) The reporting individual shall, within thirty days of trans- 
ferring an asset (other than cash) to a previously established qualified 
blind trust, notify his supervising ethics office of the identity of each 
such asset and the category of value of each asset as determined under 
subsection (c)(1) of this section. 

(C) Within thirty days of the dissolution of a qualified blind trust, 
a reporting individual shall — 

(i) notify his supervising ethics office of such dissolution, and 
(ii) file with such office a copy of a list of the assets of the trust 
at the time of such dissolution and the category of value under 
subsection (c) of this subsection of each such asset. 

(D) Documents filed under subparagraphs (A), (B), and (C) of 
this paragraph and the lists provided by the trustee of assets placed in 
the trust by an interested party which have been sold shall be made 
available to the public in the same manner as a report is made available 
under section 104, and the provisions of that section shall apply. 

(E) A copy of each written communication with respect to the 
trust under paragraph (3)(C)(vi) shall be filed by the person initiat- 
ing the communication with the reporting individual's supervising 
ethics office within five days of the date of the communication. 



176 

(6) (A) A trustee of a qualified blind trust shall not knowingly 
or negligently (i) disclose any information to an interested party 
with respect to such trust that may not be disclosed under paragraph 
(3) of this subsection; (ii) acquire any holding the ownership of which 
is prohibited by the trust instrument ; (iii) solicit advice from any 
interested party with respect to such trust, which solicitation is pro- 
hibited by paragraph (3) of this subsection or the trust agreement; 
or (iv) fail to file any document required by this subsection. 

(B) A reporting individual shall not knowingly or negligently (i) 
solicit or receive any information with respect to a qualified blind trust 
of which he is an interested party that may not be disclosed under 
paragraph (3)(C) of this subsection, or (ii) fail to file any document 
required by this subsection. 

(C) (i) The Attorney General may bring a civil action in any appro- 
priate United States District Court against any individual who know- 
ingly and willfully violates the provisions of subparagraph (A) or 
(B) of this paragraph. The court in which such action is brought may 
assess against such individual a civil penalty in any amount not to 
exceed $5,000. 

(ii) The Attorney General may bring a civil action in any appro- 
priate United States District Court against any individual who negli- 
gently violates the provisions of subparagraph (A) or (B) of this 
paragraph. The court in which such action is brought may assess 
against such individual a civil penalty in any amount not to exceed 
$1,000. 

(7) Any trust which is in existence prior to the date of the enact- 
ment of this Act shall be considered a qualified blind trust if — 

(A) the supervising ethics office determines that the trust was 
a good faith effort to establish a blind trust; 

(B) the previous trust instrument is amended or, if such trust 
instrument does not by its terms permit amendment, all parties 
to the trust instrument, including the reporting individual and 
the trustee, agree in writing that the trust shall be administered 
in accordance with the requirements of paragraph (3)(C) and a 
trustee is (or has been) appointed who meets the requirements of 
paragraph (3) ; and 

(C) a copy of the trust instrument (except testamentary provi- 
sions), a list of the assets previously transferred to the trust by an 
interested party and the category of value of each such asset at 
the time it was placed in the trust, and a list of assets previously 
placed in the trust by an interested party which have been sold are 
filed and made available to the public as provided under para- 
graph (5) of this subsection. 

(f) Political campaign funds, including campaign receipts and 
expenditures, need not be included in any report filed pursuant to this 
title. 

FILING OF REPORTS; DUTIES OF CLERK AND SECRETARY 

Sec. 103. (a) The reports required by section 101 of Representa- 
tives, Delegates to Congress, the Resident Commissioner from 
Puerto Rico, officers and employees of the House, candidates seeking 
election to the House, and officers and employees of the Architect of 
the Capitol, the Botanic Gardens, the Congressional Budget Office, 
the Government Printing Office, and the Library of Congress shall 
be filed with the Clerk. 



177 

(b) The reports required by section 101 of Senators, officers and 
employees of the Senate, candidates seeking election to the Senate, 
and officers and employees of the General Accounting Office, the Cost 
Accounting Standards Board, the Office of Technology Assessment, 
and the Office of the Attending Physician shall be filed with the 
Secretary. 

(c) A copy of each report filed by a Member or an individual who 
is a candidate for the office of Member shall be sent by the Clerk or 
Secretary, as the case may be, to the appropriate State officer as desig- 
nated in accordance with section 316(a) of the Federal Election 
Campaign Act of 1971 (2 U.S.C. 439(a)) of the State represented by 
the Member or in which the individual is a candidate, as the case may 
be, within the seven-day period beginning the day that the report is 
filed with the Clerk or Secretary. 

(d)(1) A copy of each report filed under this title with the Clerk 
shall be sent by the Clerk to the designated committee of the House of 
Representatives within the seven-day period beginning the day that 
the report is filed. 

(2) A copy of each report filed with the Secretary shall be sent by 
the Secretary to the designated committee of the Senate. 

(e) In carrying out then responsibilities under this title, the Clerk 
and the Secretary shall avail themselves of the assistance of the Fed- 
eral Election Commission. The Commission shall make available to 
the Clerk and the Secretary on a regular basis a complete list of names 
and addresses of all candidates registered with the Commission, and 
shall cooperate and coordinate its candidate information and notifica- 
tion program with the Clerk and the Secretary to the greatest extent 
possible. 

(f) In order to carry out responsibilities under this title — 

(1) the Clerk shall, after consultation with the designated com- 
mittee of the House of Representatives, and 

(2) the designated committee of the Senate shall 

develop reporting forms and may promulgate rules and regulations. 

ACCESSIBILITY OF REPORTS 

Sec. 104. (a) Except as provided in the second sentence of this 
subsection, within fifteen calendar days after a report is filed with the 
Clerk under this title, the Clerk shall make such report available for 
public inspection at reasonable hours. With respect to reports required 
to be filed by May 15 of any year, such reports shall be made available 
for public inspection within fifteen calendar days after May 15 of such 
year. A copy of any such report shall be provided by the Clerk to any 
person upon request. 

(b) Except as provided in the second sentence of this subsection, 
within fifteen days after a report is filed with the Secretary under this 
title, the Secretary shall make such report available for public inspec- 
tion at reasonable hours. With respect to reports required to be filed 
by May 15 of any year, such reports shall be made available for public 
inspection within fifteen calendar days after May 15 of such year. A 
copy of any such report shall be provided by the Secretary to any 
person upon request. 



45-937 O - 79 - 12 



178 

(c) Any person requesting a copy of a report may be required to 
pay a reasonable fee to cover the cost of reproduction or mailing of 
such report, excluding any salary of any employee involved in such 
reproduction or mailing. A copy of such report may be furnished 
without charge or at a reduced charge if it is determined by the Clerk 
or Secretary that waiver or reduction of the fee is in the public inter- 
est because furnishing the information may be considered as primarily 
benefiting the public. 

(d) Any report filed under this title with the Clerk or Secretary 
shall be available to the public for a period of six years after receipt 
of the report. After such six-year period the report shall be destroyed 
unless needed in an ongoing investigation, except that in the case of 
an individual who filed the report pursuant to section 101(d) and was 
not subsequently elected; such reports shall be destroyed one year 
after the individual is no longer a candidate for election to the office 
of Member unless needed in an ongoing investigation. 

(e) (1) It shall be unlawful for any person to ootain or use a r:port — ■ 

(A) for any unlawful purpose; 

(B) for any commercial purpose other than by news and com- 
munications media for dissemination to the general public; 

(C) for determining or establishing the credit rating of any 
individual; or 

(D) for use, directly or indirectly, in the solicitation of money 
for any political, charitable, or other purpose. 

(2) The Attorney General may bring a civil action against any 
person who obtains or uses a report for any purpose prohibited in 
paragraph (1). The court in which such action is brought may assess 
against such person a penalty in any amount not to exceed $5,000. 
Such remedy shall be in addition to any other remedy available under 
statutory or common law. 

REVIEW AND COMPLIANCE PROCEDURES 

Sec. 105. (a) The designated committee of the House of Repre- 
sentatives and the designated committee of the Senate shall establish 
procedures for the review of reports sent to them under section 103 
(d)(1) and section 103(d)(2) to determine whether the reports are 
filed in a timely manner, are complete, and are in proper form. In the 
event a determination is made that a report is not so filed, the appro- 
priate committee shall so inform the reporting individual and direct 
him to take all necessary corrective action. 

(b) In order to carry out their responsibilities under this title the 
designated committee of the House of Representatives and the desig- 
nated committee of the Senate have power, within their respective 
jurisdictions, to render any advisory opinion interpreting this title, in 
writing, to persons covered by this title. Notwithstanding any other 
provisions of law, the individual to whom a public advisory opinion 
is rendered in accordance with this subsection, and any other indi- 
vidual covered by this title who is involved in a fact situation which 
is indistinguishable in all material aspects, and who, after the issuance 
of the advisory opinion, acts in good faith in accordance with the pro- 
visions and findings of such advisory opinion shall not, as a result of 
such act, be subject to any sanction provided in this title. 



179 

FAILURE TO FILE OR FALSIFYING REPORTS 

Sec. 106. The Attorney General may bring a civil action in any 
appropriate United States District Court against any individual who 
knowingly and willfully falsifies or who knowingly and willfully fails 
to file or report any information that such individual is required to 
report pursuant to section 102. The court in which such action is 
brought may assess against such individual a civil penalty in any 
amount not to exceed $5,000. No action may be brought under this 
section against any individual with respect to a report filed by such 
individual in calendar year 1978 pursuant to section 101(d). 

DEFINITIONS 

Sec. 107. For the purposes of this title, the term — 

(1) "income" means all income from whatever source derived, 
including but not limited to the following items: compensation 
for services, including fees, commissions, and similar items; net 
and gross income derived from business; gains derived from 
dealings in property; interest; rents; royalties; dividends; annu- 
ities; income from life insurance and endowment contracts; 
pensions; income from discharge of indebtedness; distributive 
share of partnership income; and income from an interest in an 
estate or trust; 

(2) "relative" means an individual who is related to the report- 
ing individual, as father, mother, son, daughter, brother, sister, 
uncle, aunt, great aunt, great uncle, first cousin, nephew, niece, 
husband, wife, grandfather, grandmother, grandson, grand- 
daughter, father-in-law, mother-in-law, son-in-law, daughter-in- 
law, brother-in-law, sister-in-law, stepfather, stepmother, 
stepson, stepdaughter, stepbrother, stepsister, half brother, half 
sister, or who is the grandfather or grandmother of the spouse of 
the reporting individual, and shall be deemed to include the 
fiance or fiancee of the reporting individual; 

(3) "gift" means a payment, advance, forbearance, rendering, 
or deposit of money, or any thing of value, unless consideration 
of equal or greater value is received by the donor, but does not 
include — 

(A) bequest and other forms of inheritance ; 

(B) suitable mementos of a function honoring the report- 
ing individual; 

(C) food, lodging, transportation, and entertainment 
provided by State and local governments, or political sub- 
divisions thereof, by a foreign government within a foreign 
country, or by the United States Government; 

(D) food and beverages consumed at banquets, receptions, 
or similar events; 

(E) consumable products provided by home-State busi- 
nesses to a Member's office for distribution; or 

(F) communications to the offices of a reporting individual 
including subscriptions to newspapers and periodicals; 

(4) "honoraria" has the meaning given such term in the Federal 
Election Campaign Act of 1971; 



180 

(5) "value" means a good faith estimate of the dollar value if 
the exact value is neither known nor easily obtainable by the 
reporting individual ; 

(6) "personal hospitality of any individual" means hospitality 
extended for a nonbusiness purpose by an individual, not a 
corporation or organisation, at the personal residence of that 
individual or his family or on property or facilities owned by 
that individual or his family; 

(7) "dependent child" means, when used with respect to any 
reporting individual, any individual who is a son, daughter, 
stepson, or stepdaughter and who — 

(A) is unmarried and under age 21 and is living in the 
household of such reporting individual ; or 

(B) is a dependent of such reporting individual within 
the meaning of section 152 of the Internal Revenue Code 
of 1954; 

(8) "reimbursement" means any payment or other thing of 
value received by the reporting individual, other than gifts, to 
cover travel-related expenses of such individual other than those 
which are — 

(A) provided by the United States Government, the Dis- 
trict of Columbia, or any State or political subdivision 
thereof; 

(B) required to be reported by the reporting individual 
under section 7342 of title 5, United States Code; or 

(C) required to be reported under section 304 of the Fed- 
eral Election Campaign Act of 1971 (2 U.S.C. 434); 

(9) "candidate" means an individual, other than a Member, 
who seeks nomination for election, or election, to the Congress 
whether or not such individual is elected, and for purposes of 
this paragraph, an individual shall be deemed to seek nomina- 
tion for election, or election, (A) if he has taken the action neces- 
sary under the law of a State to qualify himself for nomination 
for election, or election, or (B) if he or his principal campaign 
committee has taken action to register or file campaign reports 
required by section 304(a) of the Federal Election Campaign 
Act of 1971 (2 U.S.C. 434(a)); 

(10) "Clerk" means the Clerk of the House of Representatives; 

(11) "Secretary" means the Secretary of the Senate; 

(12) "Member" means a United States Senator, a Representa- 
tive in Congress, a Delegate to Congress, or the Resident Commis- 
sioner from Puerto Rico ; 

(13) "election" means (A) a general, special, primary, or run- 
off election, or (B) a convention or caucus of a political party 
which has authority to nominate a candidate; 

(14) "officer or employee of the House" means any individual, 
other than a Member, whose compensation is disbursed by the 
Clerk; 

(15) "officer or employee of the Senate" means an individual, 
other than a Senator or the Vice President, whose compensation 
is disbursed by the Secretary; and 

(16) "designated committee of the House of Representatives 
and designated committee of the Senate" means the committee of 
the House or Senate, as the case may be, assigned responsibility 
for administering the reporting requirements of this title. 



181 

OTHER LAWS 

Sec. 108. The provisions added by this title, and the regulations 
issued thereunder, shall supersede and preempt any State or local law 
with respect to financial disclosure by reason of candidacy for Federal 
office or employment by the United States Government. 

GENERAL ACCOUNTING OFFICE STUDY 

Sec. 109. (a) Before November 30, 1980, and regularly thereafter, 
the Comptroller General of the United States shall conduct a study 
to determine whether this title is being carried out effectively and 
whether timely and accurate reports are being filed by individuals 
subject to this title. 

(b) Within thirty days after completion of the study, the Comp- 
troller General shall transmit a report to each House of Congress 
containing a detailed statement of his findings and conclusions, to- 
gether with his recommendations for such legislative and adminis- 
trative actions as he deems appropriate. The first such study shall 
include the Comptroller General's findings and recommendations on 
the feasibility and potential need for a requirement that systematic 
random audits be conducted of financial disclosure reports filed under 
this title, including a thorough discussion of the type and nature of 
audits that might be conducted; the personnel and other costs of 
audits; the value of an audit to Members, the appropriate House and 
Senate committees, and the public; and, if conducted, whether a gov- 
ernmental or nongovernmental unit should perform^the audits, and 
under whose supervision. 

11. 5 U.S.C. sec. 557(d) 

§557. Initial decisions; conclusiveness; review by agency; submissions by 
parties; contents of decisions; record 

(a) This section applies, according to the provisions thereof, when 
a hearing is required to be conducted in accordance with section 556 
of this title. 

(d)(1) In any agency proceeding which is subject to subsection (a) 
of this section, except to the extent required for the disposition of ex 
parte matters as authorized by law — 

(A) no interested person outside the agency shall make or 
knowingly cause to be made to any member of the body compris- 
ing the agency, administrative law judge, or other employee who 
is or may reasonably be expected to be involved in the decisional 
process of the proceeding, an ex parte communication relevant 
to the merits of the proceeding; 

(B) no member oi the body comprising the agency, adminis- 
trative law judge, or other employee who is or may reasonably 
be expected to be involved in the decisional process of the pro- 
ceeding, shall make or knowingly cause to be made to any inter- 
ested person outside the agency an ex parte communication rel- 
evant to the merits of the proceeding; 

(C) a member of the body comprising the agency, administra- 
tive law judge, or other employee who is or may reasonably be 
expected to be involved in the decisional process of such pro- 
ceeding who receives, or who makes or knowingly causes to be 



182 

made, a communication prohibited by this subsection shall place 
on the public record of the proceeding: 

(i) all such written communications; 

(ii) memoranda stating the substance of all such oral 
communications; and 

(iii) all written responses, and memoranda stating the 
substance of all oral responses, to the materials described 
in clauses (i) and (ii) of this subparagraph ; 

(D) upon receipt of a communication knowingly made or 
knowingly caused to be made by a party in violation of this 
subsection, the agency, administrative law judge, or other em- 
ployee presiding at the hearing may, to the extent consistent 
with the interests of justice and the policy of the underlying 
statutes, require the party to show cause why his claim or in- 
terest in the proceeding should not be dismissed, denied, disre- 
garded, or otherwise adversely affected on account of such 
violation; and 

(E) the prohibitions of this subsection shall apply beginning 
at such time as the agency may designate, but in no case shall 
they begin to apply later than the time at which a proceeding is 
noticed for hearing unless the person responsible for the com- 
munication has knowledge that it will be noticed, in which case 
the prohibitions shall apply beginning at the time of his acqui- 
sition of such knowledge. 

(2) This subsection does not constitute authority to withhold in- 
formation from Congress. 

(Pub. L. 89-554, Sept. 6, 1966, 80 Stat. 387; Pub. L. 94-409, § 4(a), 
Sept. 13, 1976, 90 Stat. 1246.) 

12. 5 U.S.C. sec. 3110 

§3110. Employment of relatives; restrictions 

(a) For thejpurpose of this section — 

(1) "agency" means — 

(A) an Executive agency; 

(B) an office, agency, or other establishment in the leg- 
islative branch; 

(C) an office, agency, or other establishment in the judicial 
branch; and 

(D) the government of the District of Columbia; 

(2) "public official" means an officer (including the President 
and a Member of Congress), a member of the uniformed service, 
an employee and any other individual, in whom is vested the 
authority by law, rule, or regulation, or to whom the authority 
has been delegated, to appoint, employ, promote, or advance 
individuals, or to recommend individuals for appointment, em- 
ployment, promotion, or advancement, in connection with em- 
ployment in an agency; and 

(3) "relative" means, with respect to a public official, an 
individual who is related to the public official as father, mother, 
son, daughter, brother, sister, uncle, aunt, first cousin, nephew, 
niece, husband, wife, father-in-law, mother-in-law, son-in-law, 
daughter-in-law, brother-in-law, sister-in-law, stepfather, step- 
mother, stepson, stepdaughter, stepbrother, stepsister, half 
brother, or half sister. 



183 

(b) A public official may not appoint, employ, promote, advance, 
or advocate for appointment, employment, promotion, or advance- 
ment, in or to a civilian position in the agency in which he is serving 
•or over which he exercises jurisdiction or control any individual who 
is a relative of the public official. An individual may not be appointed, 
emplo}'ed, promoted, or advanced in or to a civilian position in an 
agency if such appointment, employment, promotion, or advancement 
has been advocated by a public official, serving in or exercising juris- 
diction or control over the agency, who is a relative of the individual. 

(c) An individual appointed, employed, promoted, or advanced in 
violation of this section is not entitled to pay, and money may not be 
paid from the Treasury as pay to an individual so appointed, employed, 
promoted, or advanced. 

(d) The Civil Service Commission may prescribe regulations author- 
izing the temporary employment, in the event of emergencies resulting 
from natural disasters or similar unforeseen events or circumstances, 
of individuals whose employment would otherwise be prohibited by 
this section. 

(e) This section shall not be construed to prohibit the appointment 
of an individual who is a preference eligible in any case in which the 
passing over of that individual on a certificate of eligibles furnished 
under section 3317(a) of this title will result in the selection for appoint- 
ment of an individual who is not a preference eligible. 

(Added Pub. L. 90-206, Title II, § 221(a), Dec. 16, 1967, 81 Stat. 
640.) 

13. 5 U.S.C. sec. 3303 

-§3303. Competitive service; recommendations of Senators or Representatives 

An individual concerned in examining an applicant for or appoint- 
ing him in the competitive service may not receive or consider a rec- 
ommendation of the applicant by a Senator or Representative, 
except as to the character or residence of the applicant. 
(Pub. L. 89-554, Sept. 6, 1966, 80 Stat. 418.) 

14. 5 U.S.C. sec. 5533 

■§5533. Dual pay from more than one position; limitations; exceptions 

(a) Except as provided by subsections (b), (c), and (d) of this sec- 
tion, an individual is not entitled to receive basic pay from more than 
one position for more than an aggregate of 40 hours of work in one 
calendar week (Sunday through Saturday). 

(b) Except as otherwise provided bj r subsection (c) of this section, 
the Civil Service Commission, subject to the supervision and control 
of the President, may prescribe regulations under which exceptions 
may be made to the restrictions in subsection (a) of this section when 
appropriate authority determines that the exceptions are warranted 
because personal services otherwise cannot be readily obtained. 

(c)(1) Except as provided by paragraph (2) of this subsection, 
unless otherwise authorized by law, appropriated funds are not avail- 
able for payment to an individual or pay from more than one position 
if the aggregate amount of the basic pay from the positions exceeds 
$2,000 a year, and if — 

(A) the pay of one of the positions is paid by the Clerk of 
the House of Representatives (in the case of employees receiving 
basic rates of compensation) ; or 



184 

(B) one of the positions is under the Office of the Architect 
of the Capitol. 
(2) Unless otherwise authorized by law, appropriated funds are 
not available for payment to an individual of pay from more than 
one position if the aggregate (gross) compensation from the positions 
exceeds $5,987 a year, and if the pay of one of the positions is paid 
by the Secretary of the Senate or the Clerk of the House of Repre- 
sentatives (in the case of employees receiving single per annum rates 
of compensation) . 

(d) Subsection (a) of this section does not apply to — 

(1) pay on a when-actually-employed basis received from more 
than one consultant or expert position if the pay is not received 
for the same hours of the same day; 

(2) pay consisting of fees paid on other than a time basis; 

(3) pay received by a teacher of the public schools of the Dis- 
trict of Columbia for employment in a position during the summer 
vacation period ; 

(4) pay paid by the Tennessee Valley Authority to an employee 
performing part-time or intermittent work in addition to his nor- 
mal duties when the Authority considers it to be in the interest 
of efficiency and economy; 

(5) pay received by an individual holding a position — 

(A) the pay of which is paid by the Secretary of the Senate 
or the Clerk of the House of Representatives; or 

(B) under the Architect of the Capitol ; 

(6) pay paid by the United States Coast Guard to an employee 
occupying a part-time position of lamplighter; and 

(7) pay within the purview of any of the following statutes: 

(A) section 162 of title 2; 

(B) section 23(b) of title 13; 

(C) section 327 of title 15; 

(D) section 907 of title 20 ; 

(E) section 873 of title 33 ; 

(F) section 3335 (a) or (c) of title 39; 

(G) section 631 or 631a of title 31, District of Columbia 
Code; or 

(H) section 102 of title 2, Canal Zone Code. 

(e) This section does not apply to an individual employed under 
sections 174J-1 to 174J-7 or 174k of title 40. 

(Pub. L. 89-554, Sept. 6, 1966, 80 Stat. 483; Pub. L. 90-57, § 105(h), 
July 28, 1967, 81 Stat. 143.) 

15. 5 U.S.C. sec. 7342 

"§7342. Receipt and disposition of foreign gifts and decorations 

<f (a) For the purpose of this section — 
"(1) 'employee' means — 

"(A) an employee as defined by section 2105 of this title 
and an officer or employee of the United States Postal Service 
or of the Postal Rate Commission ; 

"(B) an expert or consultant who is under contract under 
section 3109 of this title with the United States or any agency, 
department, or establishment thereof, including, in the case 
of an organization performing services under such section, 
any individual involved in the performance of such services; 



185 

"(C) an individual employed by, or occupying an office or 
position in, the government of a territory or possession of the 
United States or the government of the District of Columbia; 

"(D) a member of a uniformed service; 

"(E) the President and the Vice President; 

"(F) a Member of Congress as defined by section 2106 of 
this title (except the Vice President) and any Delegate to the 
Congress; and 

"(G) the spouse of an individual described in subpara- 
graphs (A) through (F) (unless such individual and his or 
her spouse are separated) or a dependent (within the mean- 
ing of section 152 of the Internal Revenue Code of 1954) 
of such an individual, other than a spouse or dependent who 
is an employee under subparagraphs (A) through (F) ; 
"(2) 'foreign government' means — 

"(A) any unit of foreign governmental authority, includ- 
ing any foreign national, State, local, and municipal govern- 
ment ; 

"(B) any international or multinational organization 
whose membership is composed of any unit of foreign govern- 
ment described in subparagraph (A) ; and 

"(C) any agent or representative of any such unit or 
such organization, while acting as such; 
"(3) 'gift' means a tangible or intangible present (other than 
a decoration) tendered by, or received from, a foreign govern- 
ment; 

"(4) 'decoration' means an order, device, medal, badge, insig- 
nia, emblem, or award tendered by, or received from, a foreign 
government ; 

"(5) 'minimal value' means a retail value in the United States 
at the time of acceptance of $100 or less, except that — 

"(A) on January 1, 1981, and at 3 year intervals there- 
after, 'minimal value' shall be redefined in regulations 
prescribed by the Administrator of General Services, in 
consultation with the Secretary of State, to reflect changes in 
the consumer price index for the immediately preceding 
8-year period ; and 

"(B) regulations of an employing agency may define 
'minimal value' for its employees to be less than the value 
established under this paragraph; and 
"(6) 'employing agency' means — 

"(A) the Committee on Standards of Official Conduct of 
the House of Representatives, for Members and employees 
of the House of Representatives, except that those respon- 
sibilities specified in subsections (c)(2)(A), e(l), and (g)(2) 
(B) shall be carried out by the Clerk of the House; 

"(B) the Select Committee on Ethics of the Senate, for 
Senators and employees of the Senate; except that those 
responsibilities (other than responsibilities involving approval 
of the employing agency) specified in subsections (c)(2), (d) 
and (g)(2)(B) shall be carried out by the Secretary of the 
Senate; 

"(C) the Administrative Office of the United States 
Courts, for judges and judicial branch employees; and 

"(D) the department, agency, office, or other entity in 
which an employee is employed, for other legislative branch 
employees and for all executive branch employees. 



186 

"(b) An employee may not — 

"(I) request or otherwise encourage the tender of a gift or 
decoration; or 

"(2) accept a gift or decoration, other than in accordance with 
the provisions of subsections (c) and (d). 
"(c) (1) The Congress consents to — 

"(A) the accepting and retaining by an employee of a gift of 
minimal value tendered and received as a souvenir or mark of 
courtesy; and 

"(B) the accepting by an employee of a gift of more than 
minimal value when such gift is in the nature of an educational 
scholarship or medical treatment or when it appears that to 
refuse the gift would likely cause offense or embarrrassment or 
otherwise adversely affect the foreign relations of the United 
States, except that — 

"(i) a tangible gift of more than minimal value is deemed 
to have been accepted on behalf of the United States and, 
upon acceptance, shall become the property of the United 
States; and 

"(ii) an employee may accept gifts of travel or expenses for 
travel taking place entirely outside the United States (such 
as transportation, food, and lodging) of more than minimal 
value if such acceptance is appropriate, consistent with the 
interests of the United States, and permitted by the employ- 
ing agency and any regulations which may be prescribed by 
the employing agency. 
"(2) Within 60 days after accepting a tangible gift of more than 
minimal value (other than a gift described in paragraph (l)(B)(ii)), 
an employee shall — 

"(A) deposit the gift for disposal with his or her employing 
agency; or 

"(B) subject to the approval of the employing agency deposit 
the gift with that agency for official use. 
Within 30 days after terminating the official use of a gift under sub- 
paragraph (B), the employing agency shall forward the gift to the 
Administrator of General Services in accordance with subsection (e) (1) 
or provide for its disposal in accordance with subsection (e)(2). 

(3) When an employee deposits a gift of more than minimal 
value for disposal or for official use pursuant to paragraph (2), or 
within 30 days after accepting travel or travel expenses as provided in 
paragraph (])(B)(ii) unless such travel or travel expenses are ac- 
cepted in accordance with specific instructions of his or her employing 
agency, the employee shall file a statement with his or her employing 
agency or its delegate containing the information prescribed in sub- 
section (f) for that gift. 

"(d) The Congress consents to the accepting, retaining, and wear- 
ing by an employee of a decoration tendered in recognition of active 
field service in time of combat operations or awarded for other out- 
standing or unusually meritorious performance, subject to the approval 
of the employing agency of such employee. Without this approval, the 
decoration is deemed to have been accepted on behalf of the United 
States, shall become the property of the United States, and shall be 
deposited by the employee, within sixty days of acceptance, with the 
employing agency for official use, for forwarding to the Administrator 
of General Services for disposal in accordance with subsection (e)(1), 
or for disposal in accordance with subsection (e)(2). . . 



187 

"(e)(1) Except as provided in paragraph (2), gifts and decorations 
that have been deposited with an employing agency for disposal shall 
be (A) returned to the donor, or (B) forwarded to the Administrator 
of General Services for transfer, donation, or other disposal in accord- 
ance with the provisions of the Federal Property and Administrative 
Services Act of 1949. However, no gift or decoration that has been 
deposited for disposal may be sold without the approval of the Secre- 
tary of State, upon a determination that the sale will not adversely 
affect the foreign relations of the United States. Gifts and decorations 
may be sold by negotiated sale. 

"(2) Gifts and decorations received by a Senator or an employee of 
the Senate that are deposited with the Secretary of the Senate for dis- 
posal, or are deposited for an official use which has terminated, shall be 
disposed of by the Commission on Arts and Antiquities of the United 
States Senate. Any such gift or decoration may be returned by the 
Commission to the donor or may be transferred or donated by the 
Commission, subject to such terms and conditions as it may prescribe, 
(A) to an agency or instrumentality of (i) the United States, (ii) a 
State, territory, or possession of the United States, or a political sub- 
division of the foregoing, or (iii) the District of Columbia, or (B) to 
an organization described in section 501(c)(3) of the Internal Reve- 
nue Code of 1954 which is exempt from taxation under section 501(a) 
of such Code. Any such gift or decoration not disposed of as provided 
in the preceding sentence shall be forwarded to the Administrator of 
General Services for disposal in accordance with paragraph (1). If the 
Administrator does not dispose of such gift or decoration within one 
year, he shall, at the request of the Commission, return it to the Com- 
mission and the Commission may dispose of such gift or decoration in 
such manner as it considers proper, except that such gift or decoration 
may be sold only with the approval of the Secretary of State upon a 
determination that the sale will not adversely affect the foreign rela- 
tions of the United States." 

"(f) (1) Not later than January 31 of each year, each employing 
agency or its delegate shall compile a listing of all statements filed 
during the preceding year by the employees of that agency pursuant 
to subsection (c) (3) and shall transmit such listing to the Secretary 
of State who shall publish a comprehensive listing of all such state- 
ments in the Federal Register. 

"(2) Such listings shall include for each tangible gift reported — ■ 

"(A) the name and position of the emploj^ee; 

"(B) a brief description of the gift and the circumstances 
justifying acceptance; 

"(C) the identity, if known, of the foreign government and the 
name and position of the individual who presented the gift; 

"(D) the date of acceptance of the gift; 

"(E) the estimated value in the United States of the gift at the 
time of acceptance; and 

"(F) disposition or current location of the gift. 
"(3) Such listing-s shall include for each gift of travel or travel 
expenses — 

"(A) the name and position of the employee; 

"(B) a brief description of the gift and the circumstances 
justifying acceptance; and 



188 

"(C) the identity, if known, of the foreign government and the 
I name and position of the individual who presented the gift. 

"(4) In transmitting such listings for the Central Intelligence 
Agency, the Director of Central Intelligence may delete the informa- 
tion described in subparagraphs (A) and (C) of paragraphs (2) and 
(3) if the Director certifies in writing to the Secretary of State that 
the publication of such information could adversely affect United 
States intelligence sources. 

"(g)(1) Each employing agency shall prescribe such regulations as 
may be necessary to carry out the purpose of this section. For all 
employing agencies in the executive branch, such regulations shall be 
prescribed pursuant to guidance provided by the Secretary of State. 
These regulations shall be implemented by each employing agency for 
its employees. 

"(2) Each employing agency shall — 

"(A) report to the Attorney General cases in which there is 
reason to believe that an employee has violated this section; 

"(B) establish a procedure for obtaining an appraisal, when 
necessary, of the value of gifts; and 

"(C) take any other actions necessary to carry out the purpose 
of this section. 

"(h) The Attorney General may bring a civil action in any district 
court of the United States against any employee who knowingly 
solicits or accepts a gift from a foreign government not consented to 
by this section or who fails to deposit or report such gift as required 
by this section. The court in which such action is brought may assess a 
penalty against such employee in any amount not to exceed the retail 
value of the gift improperly solicited or received plus $5,000. 

"(i) The President shall direct all Chiefs of a United States Diplo- 
matic Mission to inform their host governments that it is a general 
policy of the United States Government to prohibit United States 
Government employees from receiving gifts or decorations of more 
than minimal value. 

"(j) Nothing in this section shall be construed to derogate any regu- 
lation prescribed by any employing agency which provides for more 
stringent limitations on the receipt of gifts and decorations by its 
employees. 

"(k) The provisions of this section do not apply to grants and other 
forms of assistance to which section 108A of the Mutual Educational 
and Cultural Exchange Act of 1961 applies.". 

(2) The amendment made by paragraph (1) of this subsection 
shall take effect on January 1, 1978. 

(b)(1) After September 30, 1977, no appropriated funds, other than 
funds from the "Emergencies in the Diplomatic and Consular Service" 
account of the Department of State, may be used to purchase any 
tangible gift of more than minimal value (as defined in section 7342 (a) 
(5) of title 5, United States Code) for any foreign individual unless 
such gift has been approved by the Congress. 

(2) Beginning October 1, 1977, the Secretary of State shall annually 
transmit to the Speaker of the House of Representatives and the 
chairman of the Committee on Foreign Relations of the Senate a 
report containing details on (1) any gifts of more than minimal value 
purchased with appropriated funds which were given to a foreign 



189 

individual during the previous fiscal year, and (2) any other gifts 
of more than minimal value given by the United States Government 
to a foreign individual which were not obtained using appropriated 
funds. 

(Approved Aug. 17, 1977 amended Pub. L. 95-426, Oct. 7, 1978) 

16. 18 U.S.C. sec. 201 

§201. Bribery of public officials and witnesses 

(a) For the purpose of this section — 

"public official" means Member of Congress, or Resident 
Commissioner, either before or after he has qualified, or an of- 
• ficer or employee or person acting for or on behalf of the United 
States, or any department, agency or branch of Government 
thereof, including the District of Columbia, in any official func- 
tion, under or by authority of any such department, agency, or 
branch of Government, or a juror; and 

"person who has been selected to be a public official" means 
any person who has been nominated or appointed to be a public 
official, or has been officially informed that he will be so nomi- 
nated or appointed; and 

"official act" means any decision or action on any question, 
matter, cause, suit, proceeding or controversy, which may at 
any time be pending, or which may by law be brought before 
any public official, in his official capacity, or in his place of 
trust or profit. 

(b) Whoever, directly or indirectly, corruptly gives, offers or promises 
anything of value to any public official or person who has been 
selected to be a public official, or offers or promises any public official 
or any person who has been selected to be a public official to give 
anything of value to any other person or entity, with intent — 

(1) to influence any official act; or 

(2) to influence such public official or person who has been 
selected to be a public official to commit or aid in committing, 
or collude in, or allow, any fraud, or make opportunity for the 
commission of any fraud, on the United States; or 

(3) to induce such public official or such person who has 
been selected to be a public official to do or omit to do any act 
in violation of his lawful duty, or 

(c) Whoever, being a public official or person selected to be a public 
official, directly or indirectly, corruptly asks, demands, exacts, solicits, 
seeks, accepts, receives, or agrees to receive anything of value for 
himself or for any other person or entity, in return for: 

(1) being influenced in his performance of any official act; or 

(2) being, influenced to commit or aid in committing, or to 
collude in, or allow, any fraud, or make opportunity for the 
commission of any fraud, on the United States; or 

(3) being induced to do or omit to do any act in violation of 
his official duty; or 

(d) Whoever, directly or indirectly, corruptly gives, offers, or 
promises anything of value to any person, or offers or promises 
such person to give anything of value to any other person or entity, 
with intent to influence the testimony under oath or affirmation of 



45-937 O - 79 - 13 



190 

such first-mentioned person as a witness upon a trial, hearing, or 
other proceeding, before any court, any committee of either House 
or both Houses of Congress, or any agency, commission, or officer 
authorized by the laws of the United States to hear evidence or take 
testimony, or with intent to influence such person to absent himself 
therefrom; or 

(e) Whoever, directly or indirectly, corruptly asks, demands, ex- 
acts, solicits, seeks, accepts, receives, or agrees to receive anything of 
value for himself or for any other person or entity in return for being 
influenced in his testimony under oath or affirmation as a witness 
upon any such trial, hearing, or other proceeding, or in return for 
absenting himself therefrom — 

Shall be fined not more than $20,000 or three times the mone- 
tary equivalent of the thing of value, whichever is greater, or 
imprisoned for not more than fifteen years, or both, and may be 
disqualified from holding any office of honor, trust, or profit under 
the United States. 

(f) Whoever, otherwise than as provided by law for the proper 
discharge of official duty, directly or indirectly gives, offers, or prom- 
ises anything of value to any public official, former public official, or 
person selected to be a public official, for or because of any official act 
performed or to be performed by such public official, former public 
official, or person selected to be a public official; or 

(g) Whoever, being a public official, former public official, or person 
selected to be a public official, otherwise than as provided by law for 
the proper discharge of official duty, directly or indirectly asks, de- 
mands, exacts, solicits, seeks, accepts, receives, or agrees to receive 
anything of value for himself for or because of any official act per- 
formed or to be performed by him ; or 

(h) Whoever, directly or indirectly, gives, offers, or promises any- 
thing of value to any person, for or because of the testimony under 
oath or affirmation given or to be given by such person as a witness 
upon a trial, hearing, or other proceeding, before any court, any com- 
mittee of either House or both Houses of Congress, or any agency, 
commission, or officer authorized by the laws of the United States to 
hear evidence or take testimony, or for or because of his absence 
therefrom; or 

(i) Whoever, directly or indirectly, asks, demands, exacts, solicits, 
seeks, accepts, receives, or agrees to receive anything of value for 
himself for or because of the testimony under oath or affirmation 
given or to be given by him as a witness upon any such trial, hear- 
ing, or other proceeding, or for or because of his absence therefrom — 
Shall be fined not more than $10,000 or imprisoned for not more 
than two years, or both. 

(j) Subsections (d), (e), (h), and (i) shall not be construed to pro- 
hibit the payment or receipt of witness fees provided by law, or the 
payment, by the party upon whose behalf a witness is called and 
receipt by a witness, of the reasonable cost of travel and subsistence 
incurred and the reasonable value of time lost in attendance at any 
such trial, hearing, or proceeding, or in the case of expert witnesses, 
involving a technical or professional opinion, a reasonable fee for time 
spent in the preparation of such opinion, and in appearing and 
testifying. 



191 

(k) The offenses and penalties prescribed in this section are separate 
from and in addition to those prescribed in sections 1503, 1504, and 
1505 of this title. 

(Added Pub. L. 87-849, § 1(a), Oct. 23, 1962, 76 Stat. 1121, and 
amended Pub. L. 90-578, Title III, § 301(b), Oct. 17, 1968, 82 Stat. 
1115.) 

17. 18 U.S.C. sec. 203-204 

§203. Compensation to Members of Congress, officers, and others in matters 
affecting the Government 

(a) Whoever, otherwise than as provided by law for the proper 
discharge of official duties, directly or indirectly receives or agrees 
to receive, or asks, demands, solicits, or seeks, any compensation for 
any services rendered or to be rendered either by himself or an- 
other — 

(1) At a time when he is a Member of Congress, Member of 
Congress Elect, Resident Commissioner, or Resident Commis- 
sioner Elect; or 

(2) At a time when he is an officer or employee of the United 
States in the executive, legislative, or judicial branch of the 
Government, or in any agency of the United States, including 
the District of Columbia, 

in relation to any proceeding, application, request for a ruling or 
other determination, contract, claim, controversy, charge, accusation, 
arrest, or other particular matter in which the United States is a 
party or has a direct and substantial interest, before any depart- 
ment, agency, court-martial, officer, or any civil, military, or naval 
commission, or 

(b) Whoever, knowingly, otherwise than as provided by law for 
the proper discharge of official duties, directly or indirectly gives, 
promises or offers any compensation for any such services rendered 
or to be rendered at a time when the person to whom the compensa- 
tion is given, promised, or offered, is or was such a Member, Com- 
missioner, officer or employee — 

Shall be fined not more than $10,000 or imprisoned for not 
more than two years, or both; and shall be incapable of holding 
any office of honor, trust, or profit under the United States. 

(c) A special Government employee shall be subject to subsection 
(a) only in relation to a particular matter involving a specific party 
or parties (1) in which he has at any time participated personally 
and substantially as a Government employee or as a special Govern- 
ment employee through decision, approval, disapproval, recommen- 
dation, the rendering of advice, investigation or otherwise, or (2) 
which is pending in the department or agency of the Government in 
which he is serving: Provided, That clause (2) shall not apply in 
the case of a special Government employee who has served m such 
department or agency no more than sixty days during the immedi- 
ately preceding period of three hundred and sixty-five consecutive 
days. 

§204. Practice in Court of Claims by Members of Congress 

Whoever, being a Member of Congress, Member of Congress Elect, 
Resident Commissioner, or Resident Commissioner Elect, practices 



192 

in the Court of Claims, shall be fined not more than $10,000 or im- 
prisoned for not more than two years, or both and shall be incapable 
of holding any office of honor, trust, or profit under the United States* 

Added Pub. L. 87-849, § 1(a), Oct. 23, 1962, 76 Stat. 1122. 

18. 18 U.S.C. sec. 205 

§205. Activities of officers and employees in claims against and other matters 
affecting the Government 

Whoever, being an officer or employee of the United States in the 
executive, legislative, or judicial branch of the Government or in 
any agency of the United States, including the District of Columbia, 
otherwise than in the proper discharge of his official duties — 

(1) acts as agent or attorney lor prosecuting any claim against 
the United States, or receives any gratuity, or any share of or 
interest in any such claim in consideration of assistance in the 
prosecution of such claim, or 

(2) acts as agent or attorney for anyone before any depart- 
ment, agency, court, court-martial, officer, or any civil, military, 
or naval commission in connection with any proceeding, appli- 
•cation, request for a ruling or other determmation, contract, 
•claim, controversy, charge, accusation, arrest, or other particu- 
lar matter in which the United States is a party or has a direct 
and substantial interest — 

Shall be fined not more than $10,000 or imprisoned for not 
more than two years, or both. 

A special Government employee shall be subject to the preceding 
paragraphs only in relation to a particular matter involving a spe- 
cific party or parties (1) in which he has at any time participated 
personally and substantially as a Government employee or as a spe- 
cial Government employee through decision, approval, disapproval, 
recommendation, the rendering of advice, investigation or otherwise, 
or (2) which is pending in the department or agency of the Govern- 
ment in which he is serving: Provided, That clause (2) shall not 
apply in the case of a special Government employee who has served 
in such department or agency no more than sixty days during the 
immediately preceding period of three hundred and sixty-five con- 
secutive days. 

Nothing herein prevents an officer or employee, if not inconsist- 
ent with the faithful performance of his duties, from acting with- 
out compensation as agent or attorney for any person who is the 
subject of disciplinary, loyalty, or other personnel administration 
proceedings in connection with those proceedings. 

Nothing herein or in section 203 prevents an officer or employee, 
including a special Government employee, from acting, with or with- 
out compensation, as agent or attorney for his parents, spouse, 
child, or any person for whom, or for any estate for which, he is 
serving as guardian, executor, administrator, trustee, or other per- 
sonal fiduciary except in those matters in which he has participated 
personally and substantially as a Government employee, through de- 
cision, approval, disapproval, recommendation, the rendering of 
advice, investigation, or otherwise, or which are the subject of his 



193 

official responsibility, provided that the Government official re- 
sponsible for appointment to his position approves. 

Nothing herein or in section 203 prevents a special Government 
employee from acting as agent or attorney for another person in the 
performance of work under a grant by, or a contract with or for the 
benefit of, the United States provided that the head of the depart- 
ment or agency concerned with the grant or contract shall certify in 
writing that the national interest so requires. 

Such certification shall be published in the Federal Register. 

Nothing herein prevents an officer or employee from giving testi- 
mony under oath or from making statements required to be made 
under penalty for perjury or contempt. 

(Added Pub. L. 87-849, § 1(a), Oct. 23, 1962, 76 Stat. 1122.) 

19. 18 U.S.C. sec. 211 

§211. Acceptance or solicitation to obtain appointive public office 

Whoever solicits or receives, either as a political contribution, or 
for personal emolument, any money or thing of value, in considera- 
tion of the promise of support or use of influence in obtaining for i 
any person any appointive office or place under the United States, 
shall be fined not more than $1,000 or imprisoned not more than one 
year, or both. 

Whoever solicits or receives any thing of value in consideration of 
aiding a person to obtain employment under the United States either 
by referrmg his name to an executive department or agency of the 
United States or by requiring the payment of a fee because such 
person has secured such employment shall be fined not more than 
$1,000, or imprisoned not more than one year, or both. This section 
shall not apply to such services rendered by an employment agency 
pursuant to the written request of an executive department or agency 
of the United States. 

(June 25, 1948, c. 645, 62 Stat. 694, § 211, formerly § 215, amended 
Sept. 13, 1951, c. 380, 65 Stat. 320, and renumbered Oct. 23, 1962, 
Pub. L. 87-849, § 1(b), 76 Stat. 1125.) 

20. 18 U.S.C. sec. 286 

§286. Conspiracy to defraud the Government with respect to claims 

Whoever enters into any agreement, combination, or conspiracy to 
defraud the United States, or any department or agency thereof, by 
obtaining or aiding to obtain the payment or allowance of any false, 
fictitious or fraudulent claim, shall be fined not more than $10,000 
or imprisoned not more than ten years, or both. 
(June 25, 1948, c. 645, 62 Stat. 698.) 

21. 18 U.S.C. sec. 287 1 

§287. False, fictitious or fraudulent claims 

Whoever makes or presents to any person or officer in the civil; 
military, or naval service of the United States, or to any department 
or agency thereof, any claim upon or against the United States, or 
any department or agency thereof, knowing such claim to be false, 



194 

fictitious, or fraudulent, shall be fined not more than $10,000 or im- 
prisoned not more than five years, or both. 
(June 25, 1948, c. 645, 62 Stat. 698.) 

22. 18 U.S.C. sees. 431-433 

§431. Contracts by Member of Congress 

Whoever, being a Member of or Delegate to Congress, or a Resi- 
dent Commissioner, either before or after he has qualified, directly 
or indirectly, himself, or by any other person in trust for him, or 
for his use or benefit, or on his account, undertakes, executes, holds, 
or enjoys, in whole or in part, any contract or agreement, made or 
entered into in behalf of the United States or any agency thereof, 
by any officer or person authorized to make contracts on its behalf, 
shall be fined not more than $3,000. 

All contracts or agreements made in violation of this section shall 
be void; and whenever any sum of money is advanced by the United 
States or any agency thereof, in consideration of any such contract 
or agreement, it shall forthwith be repaid; and in case of failure 
or refusal to repay the same when remanded by the proper officer 
of the department or agency under whose authority such contract 
or agreement shall have been made or entered into, suit shall at once 
be brought against the person so failing or refusing and his sureties 
for the recovery of the money so advanced. June 25, 1948, c. 645, 
62 Stat. 702; Oct. 31, 1951, c. 655, § 19, 65 Stat. 717. 
§ 432. Officer or employee contracting with Member of Congress 

Whoever, being an officer or employee of the United States, on 
behalf of the United States or any agency thereof, directly or indi- 
rectly makes or enters into any contract, bargain, or agreement, with 
any Member of or Delegate to Congress, or any Resident Commis- 
sioner, either before or after he has qualified, shall be fined not more 
than $3,000. June 25, 1948, c. 645, 62 Stat. 702. 
§433. Exemptions with respect to certain contracts 

Sections 431 and 432 of this title shall not extend to any contract 
or agreement made or entered into, or accepted by any incorporated 
company for the general benefit of such corporation; nor to the pur- 
chase or sale of bills of exchange or other property where the same 
are ready for delivery and payment therefor is made at the time 
of making or entering into the contract or agreement. Nor shall 
the provisions of such sections apply to advances, loans, discounts, 
purchase or repurchase agreements, extensions, or renewals thereof, 
or acceptances, releases or substitutions of security thereof or other 
contracts or agreements made or entered into under the Reconstruc- 
tion Finance Corporation Act, the Agricultural Adjustment Act, the 
Federal Farm Loan Act, the Emergency Farm Mortgage Act of 1933j 
the Farm Credit Act of 1933, or the Home Owners Loan Act of 1933,- 
the Farmers' Home Administration Act of 1946, the Bankhead-Jones 
Farm Tenant Act, or to crop insurance agreements or contracts or 
agreements of a kind which the Secretary of Agriculture may enter 
into with farmers. 

Any exemption permitted by this section shall be made a matter of 
public record. June 25, 1948, c. 645, 62 Stat. 703; Oct. 4, 1961, Pub. L, 
87-353, §3(o),75Stat. 774. 



195 

23. 18 U.S.C. sec. 597 

§597. Expenditures to influence voting 

Whoever makes or offers to make an expenditure to any person, 
either to vote or withhold his vote, or to vote for or against any 
candidate; and 

Whoever solicits, accepts, or receives any such expenditure in 
consideration of his vote or the withholding of his vote — 

Shall be fined not more than $1,000 or imprisoned not more than 
one year, or both; and if the violation was willful, shall be fined not 
more than $10,000 or imprisoned not more than two years, or both. 

(June 25, 1948, c. 645, 62 Stat. 721.) 

24. 18 U.S.C. sec. 598 , 

§ 598. Coercion by means of relief appropriations 

Whoever uses any part of any appropriation made by Congress 
for work relief, relief, or for increasing employment by providing 
loans and grants for public-works projects, or exercises or administers 
any authority conferred by any Appropriation Act for the purpose of 
interfering with, restraining, or coercing any individual in the exercise 
of his right to vote at any election, shall be fined not more than $1,000 
or imprisoned not more than one year, or both. 

(June 25, 1948, c. 645, 62 Stat. 721.) 

25. 18 U.S.C. sec. 599 

§599. Promise of appointment by candidate 

Whoever, being a candidate, directly or indirectly promises or 
pledges the appointment, or the use of his influence or support for the 
appointment of any person to any public or private position or em- 
ployment, for the purpose of procuring support in his candidacy shall 
be fined not more than $1,000 or imprisoned not more than one year, 
or both; and if the violation was willful, shall be fined not more than 
$10,000 or imprisoned not more than two years, or both. 

(June 25, 1948, c. 645, 62 Stat. 721.) 

26. 18 U.S.C. sec. 600 

§600. Promise of employment or other benefit for political activity 

Whoever, directly or indirectly, promises any employment, position, 
compensation, contract, appointment, or other benefit, provided for or 
made possible in whole or in part by any Act of Congress, or any 
special consideration in obtaining any such benefit, to any person as 
consideration, favor, or reward for any political activity or for the 
support of or opposition to any candidate or any political party in 
connection with any general or special election to any political office, 
or in connection with any primary election or political convention or 
caucus held to select candidates for any political office, shall be fined 
not more than $10,000 or imprisoned not more than one year, or both. 

(As amended Oct. 2, 1976, Pub. L. 94-453, § 3, 90 Stat. 1517.) 

1976 Amendment: Pub. L. 94-453 substituted $10,000 for $1,000 maximum 
allowable fine. 

Legislative History: For legislative historv and purpose of Pub. L. 94-453, see 
1976 U.S. Code Cong, and Adm. News, p. 2883. 



196 

27. 18 U.S.C. sec. 601 

§601. Deprivation of employment or other benefit for political contribution 

(a) Whoever, directly or indirectly, knowingly causes or attempts to 
cause any person to make a contribution of a thing of value (including 
services) for the benefit of any candidate or any political party, by 
means of the denial or deprivation, or the threat of the denial or 
deprivation, of — 

(1) any employment, position, or work in or for any agency or 
other entity of the Government of the United States, a State, or a 
political subdivision of a State, or any compensation or benefit of 
such employment, position, or work; or 

(2) any payment or benefit of a program of the United States, a 
State, or a political subdivision of a State; 

if such employment, position, work, compensation, payment, or benefit 
is provided for or made possible in whole or in part by an Act of Con- 
gress, shall be fined not more than $10,000, or imprisoned not more 
than one year, or both. 

(b) As used in this section — 

(1) the term "candidate" means an individual who seeks 
nomination for election, or election, to Federal, State, or local 
office, whether or not such individual is elected, and, for purposes 
of this paragraph, an individual shall be deemed to seek nomina- 
tion for election, or election, to Federal, State, or local office, if 
he has (A) taken the action necessary under the law of a State to 
qualify himself for nomination for election, or election, or (B) 
received contributions or made expenditures, or has given his 
consent for any other person to receive contributions or make 
expenditures, with a view to bringing about his nomination for 
election, or election, to such office; 

(2) the term "election" means (A) a general, special primary, or 
runoff election, (B) a convention or caucus of a political party held 
to nominate a candidate, (C) a primary election held for the selec- 
tion of delegates to a nominating convention of a political party, 
(D) a primary election held for the expression of a preference for 
the nomination of persons for election to the office of President, 
and (E) the election of delegates to a constitutional convention 
for proposing amendments to the Constitution of the United 
States or of any State; and 

(3) the term "State" means a State of the United States, the 
District of Columbia, the Commonwealth of Puerto Rico, or any 
territory or possession of the United States. 

(As amended Oct. 2, 1976, Pub. L. 94-453, § 1, 90 Stat. 1516.) 

1976 Amendment: Pub. L. 94-453 eliminated provisions relating to deprivations 
based upon race, creed, and color which are now set out in section 246 of this title, 
replaced term political activity" with more precise terms and definitions, and 
raised the amount of maximum fine from $1,000 to $10,000. 

Legislative History: For legislative historv and purpose of Pub. L. 94-453, see 
1976 U.S. Code Cong, and Adm. News, p. 2883. 

28. 18 U.S.C. sec. 602 

§602. Solicitation of political contributions 

Whoever, being a Senator or Representative in, or Delegate or 
Resident Commissioner to, or a candidate for Congress, or individual 



197 

elected as, Senator, Representative, Delegate, or Resident Commis- 
sioner, or an officer or employee of the United States or any depart- 
ment or agency thereof, or a person receiving any salary or compensa- 
tion for services from money derived from the Treasury of the United 
States, directly or indirectly solicits, receives, or is in any manner 
concerned in soliciting or receiving, any assessment, subscription, or 
contribution for any political purpose whatever, from any other such 
officer, employee, or person, shall be fined not more than $5,000 or 
imprisoned not more than three years or both. 
(June 25, 1948, c. 645, 62 Stat. 722.) 

29. 18 U.S.C. sec. 603 

§603. Place of solicitation 

Whoever, in any room or building occupied in the discharge of 
official duties by any person mentioned in section 602 of this title, or 
in any navy yard, fort, or arsenal, solicits or receives any contribu- 
tion of money or other thing of value for any political purpose, shall 
be fined not more than $5,000 or imprisoned not more than three 
years, or both. 

(June 25, 1948, c. 645, 62 Stat. 722; Oct. 31, 1951, c.655, § 20(b), 
65 Stat. 718.) 

30. 18 U.S.C. sec. 604 

§ 604. Solicitation from persons on relief 

Whoever solicits or receives or is in any manner concerned in 
soliciting or receiving any assessment, subscription, or contribution 
for any political purpose from any person known by him to be entitled 
to, or receiving compensation, employment, or other benefit provided 
for or made possible by any Act of Congress appropriating funds for 
work relief or relief purposes, shall be fined not more than $1,000 or 
imprisoned not more than one year, or both. 

(June 25, 1948, c. 645, 62 Stat. 722.) 

31. 18 U.S.C. sec. 605 

§ 605. Disclosure of names of persons on relief 

Whoever, for political purposes, furnishes or discloses any list 
or names of persons receiving compensation, employment or bene- 
fits provided for or made possible by any Act of Congress appro- 
priating, or authorizing the appropriation of funds for work relief 
or relief purposes, to a political candidate, committee, campaign 
manager, or to any person for delivery to a political candidate, com- 
mittee, or campaign manager; and 

Whoever receives any such list or names for political purposes — 
Shall be fined not more than $1,000 or imprisoned not more 
than one year, or both. 

(June 25, 1948, c. 645, 62 Stat. 722.) 

32. 18 U.S.C. sec. 606 

§606. Intimidation to secure political contributions 

Whoever, being one of the officers or employees of the United 
States mentioned in section 602 of this title, discharges, or promotes, 



198 

or degrades, or in any manner changes the official rank or compensa- 
tion of any other officer or employee, or promises or threatens so to 
do, for giving or withholding or neglecting to make any contribution 
of money or other valuable thing for any polticial purpose, shall be 
fined not more than $5,000 or imprisoned not more than three years, 
or both. 

(June 25, 1948, c. 645, 62 Stat. 722.) 

33. 18 U.S.C. sec. 607 

§607. Making political contributions 

Whoever, being an officer, clerk, or other person in the service of 
the United States or any department or agency thereof, directly or 
indirectly gives or hands over to any other officer, clerk, or person 
in the service of the United States, or to any Senator or Member of or 
Delegate to Congress, or Resident Commissioner, any money or 
other valuable thing on account of or to be applied to the promotion 
of any political object, shall be fined not more than $5,000 or impris- 
oned not more than three years, or both. 

(June 25, 1948, c. 645, 62 Stat. 722.) 

34. 18 U.S.C. sec. 641 

§641. Public money, property or records 

Whoever embezzles, steals, purloins, or knowingly converts to hi- 
use or the use of another, or without authority, sells, conveys or dis 
poses of any record, voucher, money, or thing of value of the United 
States or of any department or agency thereof, or any property made 
or being made under contract for the United States or any department 
or agency thereof; or 

Whoever receives, conceals, or retains the same with intent to con- 
vert it to his use or gain, knowing it to have been embezzled, stolen, 
purloined or converted — 

Shall be fined not more than $10,000 or imprisoned not more 
than ten years, or both; but if the value of such property does not 
exceed the sum of $100, he shall be fined not more than $1,000 or 
imprisoned not more than one year, or both. 
The word "value" means face, par, or market value, or cost price, 
either wholesale or retail, whichever is greater. 
(June 25, 1948, c. 645, 62 Stat. 725.) 

35. 18 U.S.C. sec. 1001 

§1001. Statements or entries generally 

Whoever, in any matter within the jurisdiction of any department 
or agency of the United States knowingly and willfully falsifies, con- 
ceals or covers up by any trick, scheme, or device a material fact, 
or makes any false, fictitious or fraudulent statements or representa- 
tions, or makes or uses any false writing or document knowing the 
same to contain any false, fictitious or fraudulent statement or entry; 
shall be fined not more than $10,000 or imprisoned not more than 
five years, or both. 

(June 25, 1948, c. 645, 62 Stat, 749.) 



199 
36. 18 U.S.C. sec. 1719 

§1719. Franking pivilege 

Whoever makes use of any official envelope, label, or indorsement 
authorized by law, to avoid the payment of postage or registry fee on 
his private letter, packet, package, or other matter in the mail, shall 
be fined not more than $300. 

(June 25, 1948, c. 645, 62 Stat. 783.) 

37. 26 U.S.C. sections 4941 and 4946 

§4941. Taxes on self -dealing 

(a) Initial Taxes. — 

(1) On self-dealer. — There is hereby imposed a tax on each 
act of self-dealing between a disqualified person and a private 
foundation. The rate of tax shall be equal to 5 percent of the 
amount involved with respect to the act of self-dealing for each 
year (or part thereof) in the taxable period. The tax imposed by 
this paragraph shall be paid by any disqualified person (other than 
a foundation manager acting only as such) who participates in 
the act of self-dealing. In the case of a government official (as 
defined in section 4946(c)), a tax shall be imposed by this para- 
graph only if such disqualified person participates in the act of 
self-dealing knowing that it is such an act. 

(2) On foundation manager. — In any case in which a tax is 
imposed by paragraph (1), there is hereby imposed on the par- 
ticipation of any foundation manager in an act of self-dealing 
between a disqualified person and a private foundation, knowing 
that it is such an act, a tax equal to 2){ percent of the amount in- 
volved with respect to the act of self-dealing for each year (or 
part thereof) in the taxable period, unless such participation is 
not willful and is due to reasonable cause. The tax imposed by 
this paragraph shall be paid by any foundation manager who 
participated in the act of self-dealing. 

(b) Additional Taxes. — 

(1) On self-dealer. — In any case in which an initial tax is 
imposed by subsection (a) (1) on an act of self-dealing by a dis- 
qualified person with a private foundation and the act is not cor- 
rected within the correction period, there is hereby imposed a tax 
equal to 200 percent of the amount involved. The tax imposed by 
this paragraph shall be paid by any disqualified person (other 
than a foundation manager acting only as such) who participated 
in the act of self-dealing. 

(2) On foundation manager. — In any case in which an ad- 
tional tax is imposed by paragraph (1), if a foundation manager 
refused to agree to part or all of the correction, there is hereby 
imposed a tax equal to 50 percent of the amount involved. The 
tax imposed by this paragraph shall be paid by any foundation 
manager who refused to agree to part or all of the correction. 

(c) Special Rules. — For purposes of subsections (a) and (b) — 

(1) Joint and several liability. — If more than one person 
is liable under any paragraph of subsection (a) or (b) with respect 



200 

to any one act of self-dealing, all such persons shall be jointly and 
severally liable under such paragraph with respect to such act. 

(2) $10,000 limit for management. — With respect to any one 
act of self-dealing, the maximum amount of the tax imposed by 
subsection (a)(2) shall not exceed $10,000, and the maximum 
amount of the tax imposed by subsection (b) (2) shall not exceed 
$10,000. 
(d) Self-dealing. — 

(1) In general. — For purposes of this section, the term 
"self-dealing" means any direct or indirect — 

(A) sale or exchange, or leasing, of property between a 
private foundation and a disqualified person; 

(B) lending of money or other extension of credit between 
a private foundation and a disqualified person; 

(C) furnishing of goods, services, or facilities between a 
private foundation and a disqualified person; 

(D) payment of compensation (or payment or reimburse- 
ment of expenses) by a private foundation to a disqualified 
person; 

(E) transfer to, or use by or for the benefit of, a disquali- 
fied person of the income or assets of a private foundation; 
and 

(F) agreement Jby a private foundation to make any pay- 
ment of money of other property to a government official 
(as defined in section 4946(c)), other than an agreement to 
employ such individual for any period after the termination 
of h's government service if such individual is terminatmg 
his government service within a 90-day period. 

(2) Special rules. — For purposes of paragraph (1) — 

(A) the transfer of real or personal property by a dis- 
qualified person to a private foundation shall be treated as 
a sale or exchange if the property is subject to a mortage or 
similar lien which the foundation assumes or if it is subject to 
a mortgage or similar lien which a disqualified person placed 
on the property within the 10-year period ending on the date 
of the transfer; 

(B) the lending of money by a disqualified person to a 
private foundation shall not be an act of self-dealing if the 
loan is without interest or other charge and if the proceeds 
of the loan are used exclusively for purposes specified in sec- 
tion 501(c)(3); t 

(C) the furnishing of goods, services, or facilities by a 
disqualified person to a private foundation shall not be an act 
of self-dealing if the furnishing is without charge and if the 
goods, services, or faculties so furnished are used exclusively 
for purposes specified in section 501(c)(3); 

(D) the furnishing of goods, services, or facilities by a 
private foundation to a disqualified person shall not be an act 
of self-dealing if such furnishing is made on a basis no more 
favorable than that on which such goods, services, or facilities 
are made available to the general public; 



201 

(E) except in the case of a government official (as defined 
in section 4946(c)), the payment of compensation (and the 
payment or reimbursement of expenses) by a private founda- 
tion to a disqualified person for personal services which are 
reasonable and necessary to carrying out the exempt purpose 
of the private foundation shall not be an act of self-dealing 
if the compensation (or payment or reimbursement) is not 
excessive; 

(F) any transaction between a private foundation and a 
corporation which is a disqualified person (as defined in sect on 
4946(a)), pursuant to any liquidation, merger, redemption, 
recapitalization, or other corporate adjustment, organization, 
or reorganization, shall not be an act of self-dealing if all of the 
securities of the same class as that held by the foundation are 
subject to the same terms and such terms provide for receipt 
by the foundation of no less than fair market value ; and 

(G) in the case of a government official (as defined in sec- 
tion 4946(c)), paragraph (1) shall in addition not apply to — 

(i) prizes and awards which are subject to the provi- 
sions of section 74 (b) , if the recipients of such prizes and 
awards are selected from the general public, 

(ii) scholarships and fellowship grants which are sub- 
ject to the provisions of section 117(a) and are to be used 
for study at an educational organization described in sec- 
tion 170 (b)(1) (A) (ii), 

(iii) any annuity or other payment (forming part of 
a stock-bonus, pension, or profit-sharing plan) by a trust 
which is a qualified trust under section 401, 

(iv) any annuity or other payment under a plan which 
meets the requirements of section 404(a)(2), 

(v) any contribution or gift (other than a contribution 
or gift of money) to, or services or facilities made avail- 
able to, any such individual, if the aggregate value of 
such contributions, gifts, services, and facilities to, or 
made available to, such individual during any calendar 
year does not exceed $25, 

(vi) any payment made under chapter 41 of title 5, 
United States Code, or 

(vii) any payment or reimbursement of traveling ex- 
penses for travel solely from one point in the United 
States to another point in the United States, but only if 
such payment or reimbursement does not exceed the ac- 
tual cost of the transportation involved plus as amount 
for all other traveling expenses not in excess of 125 per- 
cent of the maximum amount payable under section 5702 
(a) of title 5, United States Code, for like travel by em- 
ployees of tho United States. 
(e) Other Definitions. — For purposes of this section — 

(1) Taxable period. — The term "taxable period" means, with 
respect to any act of self-dealing, the period beginning with the 
date on which the act of self-dealing occurs and ending on which- 
ever of the following is the earlier: (A) the date of mailing of a 
notice of deficiency with respect to the tax imposed by subsection 
(a)(1) under section 6212, or (B) the date on which correction 
of the act of self-dealing is completed. 



202 

(2) Amount involved. — The term "amount involved" means, 
with respect to any act of self-dealing, the greater of the amount 
of money and the fair market value of the other property given or 
the amount of money and the fair market value of the other prop- 
erty received ; except that, in the case of services described in sub- 
section (d) (2) (E) , the amount involved shall be only the excess 
compensation. For purposes of the preceding sentence, the fair 
market value — 

(A) in the case of the taxes imposed by subsection (a), 
shall be determined as of the date on which the act of self- 
dealing occurs; and 

(B) in the case of the taxes imposed by subsection (b), shall 
be the highest fair market value during the correction period. 

(3) Correction. — The terms "correction" and "correct" mean, 
with respect to any act of self-dealing, undoing the transaction to 
the extent possible, but in any case placing the private foundation 
in a financial position not worse than that in which it would be if 
the disqualified person were dealing under the highest fiduciary 
standards. 

(4) Correction period. — The term "correction period" means, 
with respect to any act of self-dealing, the period beginning with 
the date on which the act of self-dealing occurs and ending 90 
days after the date of mailing of a notice of deficiency with respect 
to the tax imposed by subsection (b)(1) under section 6212, ex- 
tended by — 

(A) any period in which a deficiency cannot be assessed 
under section 6213(a), and 

(B) any other period which the Secretary determines is rea- 
sonable and necessary to bring about correction of the act of 
self -dealing. 

(Added Pub. L. 91-172, Title I, § 101 (b) , Dec. 30, 1969, 83 Stat. 499, 
and amended Pub. L. 94-455, Title XIX, §§ 1901(b)(8)(H), 1906(b) 
(13) (A), Oct. 4, 1976, 90 Stat. 1795, 1834.) 
§4946. Definitions and special rules 
(a) Disqualified Person. — 

(1) In general. — For purposes of this chapter, the term "dis- 
qualified person" means, with respect to a private foundation, a 
person who is — . 

(A) a substantial contributor to the foundation, 

(B) a foundation manager (within the meaning of sub- 
section (b) (1)), 

(C) an owner of more than 20 percent of — 

(i) the total combined voting power of a corporation, 
(ii) the profits interest of a partnership, or 
(iii) the beneficial interest of a trust or unincorporated 
enterprise, 
which is a substantial contributor to the foundation, 

(D) a member of the family (as defined in subsection (d)) 
of any individual described in subparagraph (A), (B), or (C), 

(E) a corporation of which persons described in subpara- 
graph (A), (B), (C), or (D) own more than 35 percent of the 
total combined voting power, 



203 

(F) a partnership in which persons described in subpara- 
graph (A), (B), (C), or (D) own more than 35 percent of the 
profits interest, 

(G) a trust or estate in which persons described in sub- 
paragraph (A), (B), (C), or (D) hold more than 35 percent 
of the beneficial interest, 

(H) only for purposes of section 4943, a private founda- 
tion — 

(i) which is effectively controlled (directly or indi- 
rectly) by the same person or persons who control the 
private foundation in question, or 

(ii) substantially all of the contributions to which were 
made (directly or indirectly) by the same person or per- 
sons described in subparagraph (A) ,, (B) , or (C) , or mem- 
bers of their families (within the meaning of subsection 
(d)), who made (directly or indirectly) substantially all 
of the contributions to the private foundation in ques- 
tion, and 
(I) only for purposes of section 4941, a government official 
(as defined in subsection (c)). 

(2) Substantial contributors. — For purposes of paragraph 
(1), the term "substantial contributor" means a person who is 
described in section 507 (d) (2) . 

(3) Stockholdings. — For purposes of paragraphs (l)(C)(i) and 
(1)(E), there shall be taken into account indirect stockholdings 
which would be taken into account under section 267(c), except 
that, for purposes of this paragraph, section 287(c)(4) shall be 
treated as providing that the members of the family of an indi- 
vidual are the members within the meaning of subsection (d) . 

(4) Partnerships; trusts. — For purposes of paragraphs (1)(C) 
(ii) and (iii), (1)(F), and (1)(G), the ownership of profits or 
beneficial interests shall be determined in accordance with the 
rules for constructive ownership of stock provided in section 
267(c) (other than paragraph (3) thereof), except that section 
267(c)(4) shall be treated as providing that the members of the 
family of an individual are the members within the meaning of 
subsection (d). 

(b) Foundation Manager. — For purposes of this chapter, the term 
"foundation manager" means, with respect to any private founda- 
tion — 

(1) an officer, director, or trustee of a foundation (or an indi- 
vidual having powers or responsibilities similar to those of 
officers, directors, or trustees of the foundation), and 

(2) with respect to any act (or failure to act), the employees of 
the foundation having authority or responsibility with respect to 
such act (or failure to act) . 

(c) Government Official. — For purposes of subsection (a)(1) (I) 
and section 4941, the term "government official" means, with respect 
to an act of self -dealing described in section 4941, an individual who, 
at the time of such act, holds any of the following offices or positions 
(other than as a "special Government employee," as defined in section 
202(a) of title 18, United States Code): 

(1) an elective public office in the executive or legislative branch 
of the Government of the United States, 



204 

(2) an office in the executive or judicial branch of the Govern- 
ment of the United States, appointment to which was made by 
the President, 

(3) a position in the executive, legislative, or judicial branch of 
the Government of the United States — 

(A) which is listed in schedule C of rule VI of the Civil 
Service Rules, or 

(B) the compensation for which is equal to or greater than 
the lowest rate of compensation prescribed for GS-16 of the 
General Schedule under section 5332 of title 5, United States 
Code, 

(4) a position under the House of Representatives or the Senate 
of the United States held by an individual receiving gross com- 
pensation at an annual rate of $15,000 or more, 

(5) an elective or appointive public office in the executive, legis- 
lative, or judicial branch of the government of a State, possession 
of the United States, or political subdivision or other area of any 
of the foregoing, or of the District of Columbia, held by an indi- 
vidual receiving gross compensation at an annual rate of $15,000 
or more, or 

(6) a position as personal or executive assistant or secretary to 
any of the foregoing. 

(d) Members of Family. — For purposes of subsection (a)(1), the 
family of any individual shall include only his spouse, ancestors, lineal 
descendants, and spouses of lineal descendants. 

(Added Pub. L. 91-172, Title I, § 101(b), Dec. 30, 1969, 83 Stat. 
515.) 

38. 31 U.S.C. sections 231-233 

§231. Liability of persons making false claims 

Any person not in the military or naval forces of the United States, 
or in the militia called into or actually employed in the service of the 
United States, who shall make or cause to be made, or present or cause 
to be presented, for payment or approval, to or by any person or officer 
in the civil, military, or naval service of the United States, any 
claim upon or against the Government of the United States, or any 
department or officer thereof, knowing such claim to be false, fictitious, 
or fraudulent, or who, for the purpose of obtaining or aiding to obtain 
the payment or approval of such claim, makes, uses, or causes to be 
made or used, any false bill, receipt, voucher, roll, account, claim, 
certificate, affidavit, or deposition, knowing the same to contain any 
fraudulent or fictitious statement or entry, or who enters into any 
agreement, combination, or conspiracy to defraud the Government of 
the United States, or any department or officer thereof, by obtaining 
or aiding to obtain the payment or allowance of any false or fraudu- 
lent claim, or who, having charge, possession, custody, or control of 
any money or other public property used or to be used in the military 
or naval service, who, with intent to defraud the United States or will- 
fully to conceal such money or other property, delivers or causes to be 
delivered, to any other person having authority to receive the same, 
any amount of such money or other property less than that for which 
he received a certificate or took a receipt, and every person authorized 
to make or deliver any certificate, voucher, receipt, or other paper cer- 
tifying the receipt of arms, ammunition, provisions, clothing, or other 



205 

property so used or to be used, who makes or delivers the same to any 
other person without a full knowledge of the truth of the facts stated 
therein, and with intent to defraud the United States, and every per- 
son who knowingly purchases or receives in pledge for any obligation 
or indebtedness from any soldier, officer, sailor, or other person called 
into or employed in the military or naval service any arms, equip- 
ments, ammunition, clothes, military stores, or other public property, 
such soldier, sailor, officer, or other person not having the lawful 
right to pledge or sell the same, shall forfeit and pay to the United 
States the sum of $2,000, and, in addition, double the amount of 
damages which the United States may have sustained by reason of 
the doing or committing such act, together with the costs of suit; and 
such forfeiture and damages shall be sued for in the same suit. 
§232. Same; suits; procedure 

(A) The several district courts of the United States, the several dis- 
trict courts of the Territories of the United States, within whose juris- 
dictional limits the person doing or committing such act shall be found, 
shall wheresoever such act may have been done or committed, have 
full power and jurisdiction to hear, try, and determine such suit. 

(B) Except as hereinafter provided, such suit may be brought and 
carried on by any person, as well for himself as for the United States, 
the same shall be at the sole cost and charge of such person, and shall 
be in the name of the United States, but shall not be withdrawn or dis- 
continued without the consent, in writing, of the judge of the court 
and the United States attorney, first filed in the case, setting forth 
their reasons for such consent. 

(C) Whenever any such suit shall be brought by any person under 
clause (B) of this section notice of the pendency of such suit shall be 
given to the United States by serving upon the United States attorney 
for the district in which such suit shall have been brought a copy of 
the bill of complaint and by sending, by registered mail, or by certi- 
fied mail, to the Attorney General of the United States at Washington, 
District of Columbia, a copy of such bill together with a disclosure in 
writing of substantially all evidence and information in his possession 
material to the effective prosecution of such suit. The United States 
shall have sixty days, after service as above provided, within which to 
enter appearance in such suit. If the United States shall fail, or decline 
in writing to the court, during said period of sixty days to enter any 
such suit, such person may cany on such suit. If the United States 
within said period shall enter appearance in such suit the same shall be 
carried on solely by the United States. In carrying on such suit the 
United States shall not be bound by any action taken by the person 
who brought it, and may proceed in all respects as if it were instituting 
the suit: Provided, That if the United States shall fail to carry on such 
suit with due diligence within a period of six months from the date of 
its appearance therein, or within such additional time as the court 
after notice may allow, such suit may be carried on by the person 
bringing the same in accordance with clause (B) of this section. The 
court shall have no jurisdiction to proceed with any such suit brought 
under clause (B) of this section or pending suit brought under this 
section whenever it shall be made to appear that such suit was based 
upon evidence or information in the possession of the United States, 
or any agency, officer or employee thereof, at the time such suit was 



45-937 O - 79 - 14 



206 

brought: Provided, however, That no abatement shall be had as to a 
suit pending on December 23, 1943, if before such suit was filed such 
person had in his possession and voluntarily disclosed to the Attorney 
General substantial evidence and information which was not thereto- 
fore in the possession of the Department of Justice. 

(D) In any suit whether or not on appeal pending on December 23, 
1943, brought under this section, the court in which such suit is pend- 
ing shall stay all further proceedings, and shall forthwith cause written 
notice, by registered mail, or by certified mail, to be given the Attorney 
General that such suit is pending, and the Attorney General shall 
have sixty days from the date of such notice to appear and carry on 
such suit in accordance with clause (C) of this section. 

(E)(1) In any such suit, if carried on by the United States as 
herein provided, the court may award to the person who brought such 
suit, out of the proceeds of such suit or any settlement of any claim 
involved therein, which shall be collected, an amount which in the 
judgment of the court is fair and reasonable compensation to such 
person for disclosure of the information or evidence not in the posses- 
sion of the United States when such suit was brought. Any such 
award shall in no event exceed one-tenth of the proceeds of such suit 
or any settlement thereof. 

(2) In any such suit when not carried on by the United States as 
herein provided, whether heretofore or hereafter brought, the court 
may award to the person who brought such suit and prosecuted it to 
final judgment, or to settlement, as provided in clause (B) of this sec- 
tion, out of the proceeds of such suit or any settlement of any claim 
involved therein, which shall be collected, an amount, not in excess of 
one-fourth of the proceeds of such suit or any settlement thereof, 
which in the judgment of the court is fair and reasonable compensa- 
tion to such person for the collection of any forfeiture and damages; 
and such person shall be entitled to receive to his own use such rea- 
sonable expenses as the court shall find to have been necessarily in- 
curred and all costs the court may award against the defendant, to be 
allowed and taxed according to any provision of law or rule of court in 
force, or that shall be in force in suits between private parties in said 
«ourt: Provided, That such person shall be liable for all costs incurred 
by himself in such case and shall have no claim therefor on the United 
States. 

(R.S. § 3491; June 25, 1936, c. 804, 49 Stat. 1921; Dec. 23, 1943, c. 
377, § 1, 57 Stat. 608; June 25, 1948, c 646, §§ 1, 32(b), 62 Stat. 909, 
991; May 24, 1949, c. 139, § 127, 63 Stat. 107; June 11, 1960, Pub. L. 
86-507, § 1(28), (29), 74 Stat. 202.) 
§233. Duty of United States attorney as to such eases 

It shall be the duty of the several United States attorneys for the 
respective districts, for the District of Columbia, and for the several 
Territories, to be diligent in inquiring into any violation of the provi- 
sions of section 231 of this title by persons liable to such suit, and 
found within their respective districts or Territories, and to cause 
them to be proceeded against in due form of law for the recovery of 
such forfeiture and damages. And such person may be arrested and 
held to bail in such sum as the district judge may order, not exceeding 
the sum of $2,000, and twice the amount of the damages sworn to in 
tthe affidavit of the person bringing the suit. 

(R.S. § 3492; June 25, 1948, c. 646, § 1, 62 Stat. 909.) 



207 

39. 31 U.S.C. sec. 628 

§628. Application of moneys appropriated 

Except as otherwise provided by law, sums appropriated for the var- 
ious branches of expenditure in the public service shall be applied 
solely to the objects for which they are respectively made, and for no 
others. 

(R.S. § 3678). 

40. 39 U.S.C. sec. 1002 

§1002. Political recommendations 

(a) Except as provided in subsection (e) of this section, each ap- 
pointment, promotion, assignment, transfer, or designation, interim 
or otherwise, of an officer or employee in the Postal Service (except a 
Governor or member of the Postal Rate Commission) shall be made 
without regard to any recommendation or statement, oral or written, 
with respect to any person who requests or is under consideration for 
such appointment, promotion, assignment, transfer, or designation, 
made by — 

(1) any Member of the Senate or House of Representatives 
(including the Resident Commissioner from Puerto Kico) ; 

(2) any elected official of the government of any State (in- 
cluding the Commonwealth of Puerto Rico) or of any county, 
city, or other political subdivision of such State or Common- 
wealth ; 

(3) any official of a national political party or of a political 
party of any State (including the Commonwealth of Puerto 
Rico) , county, city, or other subdivision of such State or Common- 
wealth; or 

(4) any other individual or organization. 

(b) Except as provided in subsection (e) of this section, a person or 
organization referred to in clause (1), (2), (3), or (4) of subsection (a) 
of this section is prohibited from making or transmitting to the Postal 
Service, or to any other officer or employee of the Government of the 
United States, any recommendation or statement, oral or written, with 
respect to any person who requests or is under consideration for any 
such appointment, promotion, assignment, transfer, or designation. 
The Postal Service and any officer or employee of the Government of 
the United States, subject to subsection (e) of this section — 

(1) shall not solicit, request, consider, or accept any such 
recommendation or statement; and 

(2) shall return any such written recommendation or statement 
received by him, appropriately marked as in violation of this sec- 
tion, to the person or organization making or transmitting the 
same. 

(c) A person who requests or is under consideration for any such 
appointment, promotion, assignment, transfer, or designation is 
prohibited from requesting or soliciting any such recommendation or 
statement from any person or organization except a statement of the 
type referred to in subsection (e) (2) of this section. 

(d) Each employment form of the Postal Service used in connection 
with any such appointment, promotion, assignment, transfer, or 
designation shall contain appropriate language in boldface type 
informing all persons concerned of the provisions of this section. 



208 

During the time any such appointment, promotion, assignment,, 
transfer, or designation is under consideration, appropriate notice- 
of the provisions of this section printed in boldface type shall be posted 
in the post office concerned. 

(e) The Postal Service or any authorized officer or employee of the- 
Government of the United States may solicit, accept, and consider, 
and any other individual or organization may furnish or transmit to- 
the Postal Service or such authorized officer or employee, any state- 
ment with respect to a person who requests or is under consideration 
for such appointment, promotion, assignment, transfer, or designation, 
if— 

(1) the statement is furnished pursuant to a request or require- 
ment of the Postal Service and consists solely of an evaluation of 
the work performance, ability, aptitude, and general qualifications 
of such person ; 

(2) the statement relates solely to the character and residence- 
of such person ; 

(3) the statement is furnished pursuant to a request made by 
an authorized representative of the Government of the United' 
States solely in order to determine whether such person meets 
the loyalty, suitability, and character requirements for employ- 
ment with the Government of the United States; or 

(4) the statement is furnished by a former employer of such. 
person pursuant to a request of the Postal Service, and consists- 
solely of an evaluation of the work performance, ability, aptitude, 
and general qualifications of such person during his employment 
with such former employer. 

(f) The Postal Service shall take any action it determines necessary 
and proper, including but not limited to suspension, removal from 
office, or disqualification from the Postal Service, to enforce the pro- 
visions of this section. 

(g) The provisions of this section shall not affect the right of an 
officer or employee of the Postal Service to petition Congress as author- 
ized by section 7102 of title 5. 

(Pub. L. 91-375, Aug. 12, 1970, 84 Stat. 729.) 

Effective Date: Section effective March 1, 1971, pursuant to Resolution No. 
71-13 of the Board of Governors of the U.S. Postal Service. See section 15(c) of 
Pub. L. 91-375, set out as a note preceding section 101 of this title. 

Legislative History: For legislative history and purpose of Pub. L. 91-375, 
see 1970 U.S. Code Cong, and Adm. News, p. 3649. 

41. 39 U.S.C. sec. 3210 

§ 3210. Franked mail transmitted by the Vice President, Members of Congress,, 
and congressional officials 

(a)(1) It is the policy of the Congress that the privilege of sending 
mail as franked mail shall be established under this section in order 
to assist and expedite the conduct of the official business, activities, 
and duties of the Congress of the United States. 

(2) It is the intent of the Congress that such official business,, 
activities, and duties cover all matters which directly or indirectly 
pertain to the legislative process or to any congressional representative 
functions generally, or to the functioning, working, or operating of the 
Congress and the performance of official duties in connection there- 
with, and shall include, but not be limited to, the conveying of infor- 



209 

mation to the public, and the requesting of the views of the public, 
-or the views and information of other authority of government, as a 
guide or a means of assistance in the performance of those functions. 
(3) It is the intent of the Congress that mail matter which is frank- 
-able specifically includes, but is not limited to — 

(A) mail matter to any person and to all agencies and officials 
of Federal, State, and local governments regarding programs, 
decisions, and other related matters of public concern or public 
service, including any matter relating to actions of a past or 
current Congress; 

(B) the usual and customary congressional newsletter or press 
release which may deal with such matters as the impact of laws 
and decisions on State and local governments and individual citi- 
zens; reports on public and official actions taken by Members of 
Congress; and discussions of proposed or pending legislation or 
governmental actions and the positions of the Members of Con- 
gress on, and arguments for or against, such matters; 

(C) the usual and customary congressional questionnaire 
seeking public opinion on any law, pending or proposed legisla- 
tion, public issue, or subject; 

(D) mail matter dispatched by a Member of Congress between 
liis Washington office and any congressional district offices, or 
between his district offices; 

(E) mail matter directed by one Member of Congress to 
another Member of Congress or to representatives of the legisla- 
tive bodies of State and local governments; 

(F) mail matter expressing condolences to a person who has 
suffered a loss or congratulations to a person who has achieved 
some personal or public distinction; 

(G) mail matter, including general mass mailings, which 
consists of Federal laws, Federal regulations, other Federal pub- 
lications, publications purchased with Federal funds, or publica- 
tions containing items of general information ; 

(H) mail matter which consists of voter registration or election 
information or assistance prepared and mailed in a nonpartisan 
manner; 

(I) mail matter which constitutes or includes a biography or 
autobiography of any Member of, or Member-elect to, Congress or 
any biographical or autobiographical material concerning such 
Member or Member-elect or the spouse or other members of the 
family of such Member or Member-elect, and which is so mailed 
as a part of a Federal publication or in response to a specific 
xequest therefor and is not included for publicity purposes in a 
newsletter or other general mass mailing of the Member or 
Member-elect under the franking privilege ; or 

(J) mail matter which contains a picture, sketch, or other like- 
ness of any Member or Member-elect and which is so mailed as a 
part of a Federal publication or in response to a specific request 
therefor and, when contained in a newsletter or other general 
mass mailing of any Member or Member-elect, is not of such 
size, or does not occur with such frequency in the mail matter 
concerned, as to lead to the conclusion that the purpose of such 
picture, sketch, or likeness is to advertise the Member or Member- 
elect rather than to illustrate accompanying text. 



210 

(4) It is the intent of the Congress that the franking privilege under 
this section shall not permit, and may not be used for, the transmission 
through the mails as franked mail, of matter which in its nature is 
purely personal to the sender or to any other person and is unrelated 
to the official business, activities, and duties of the public officials- 
covered by subsection (b) (1) of this section. 

(5) It is the intent of the Congress that a Member of or Member- 
elect to Congress may not mail as franked mail — 

(A) mail matter which constitutes or includes any article, 
account, sketch, narration, or other text laudatory and compli- 
mentary of any Member of, or Member-elect to, Congress on a 
purely personal or political basis rather than on the basis of 
performance of official duties as a Member or on the basis of 
activities as a Member-elect; 

(B) mail matter which constitutes or includes — 

(i) greetings from the spouse or other members of the 
family of such Member or Member-elect; 

(ii) reports of how or when such Member or Member-elect, 
or the spouse of any other member of the family of such 
Member or Member-elect, spends time other than in the- 
performance of, or in connection with, the legislative, repre- 
sentative, and other official functions of such Member or the 
activities of such Member-elect as a Member-elect; or 

(iii) any card expressing holiday greetings from such 
Member or Member-elect ; 

(C) mail matter which specifically solicits political support for 
the sender or any other person or any political party, or a vote 
or financial assistance for any candidate for any public office; or 

(D) any mass mailing when the same is mailed at or delivered 
to any postal facility less than 28 days immediately before the- 
date of any primary or general election (whether regular, special, 
or runoff) in which such Member or Member-elect is a candidate- 
for public office. For the purpose of this clause (D), the term 
"mass mailing" shall mean newsletters and similar mailings of 
more than 500 pieces in which the content of the matter mailed 
m substantially identical but shall not apply to mailings — 

(i) which are in direct response to inquiries or requests 
from the persons to whom the matter is mailed ; 

(ii) to colleagues in Congress or to government officials- 
(whether Federal, State, or local) ; or 

(iii) of news releases to the communications media. 
The House Commission on Congressional Mailing Standards and the 
Select Committee on Standards and Conduct of the Senate shall 
prescribe for their respective Houses such rules and regulations and 
shall take such other action, as the Commission or Committee con- 
siders necessary and proper for the Members and Members-elect to 
conform to the provisions of this clause and applicable rules and regu- 
lations. Such rules and regulations shall include, but not be limited to, 
provisions prescribing the time within which such mailings shall be 
mailed at or delivered to any postal facility to attain compliance 
with this clause and the time when such mailings shall be deemed to- 
have been so mailed or delivered and such compliance attained; 



211 

(b)(1) The Vice President, each Member of or Member-elect to 
Congress, the Secretary of the Senate, the Sergeant at Arms of the 
Senate, each of the elected officers of the House of Representatives 
(other than a Member of the House), and the Legislative Counsels of 
the House of Representatives and the Senate, may send, as franked 
mail, matter relating to their official business, activities, and duties, 
as intended by Congress to be mailable as franked mail under sub- 
section (a)(2) and (3) of this section. 

(2) If a vacancy occurs in the Office of the Secretary of the Senate, 
the Sergeant at Arms of the Senate, an elected officer of the House of 
Representatives (other than a Member of the House) , or the Legisla- 
tive Counsel of the House of Representatives or the Senate, any 
authorized person may exercise the franking privilege in the officer's 
name during the period of the vacancy. 

(3) The Vice President, each Member of Congress, the Secretary of 
the Senate, the Sergeant at Arms of the Senate, and each of the elected 
officers of the House (other than a Member of the House), during the 
90-day period immediately following the date on which they leave 
office, may send, as franked mail, matter on official business relating 
to the closing of their respective offices. The House Commission on 
Congressional Mailing Standards and the Select Committee on Stand- 
ards and Conduct of the Senate shall prescribe for their respective 
Houses such rules and regulations, and shall take such other action 
as the Commission or Committee considers necessary and proper, to 
carry out the provisions of this paragraph. 

(c) Franked mail may be in any form appropriate for mail matter, 
including, but not limited to, correspondence, newsletters, question- 
naires, recordings, facsimiles, reprints, and reproductions. Franked 
mail shall not include matter which is intended by Congress to be 
nonmailable as franked mail under subsection (a) (4) and (5) of this 
section. 

(d) (1) A Member of the House may mail franked mail with a 
simplified form of address for delivery — 

(A) within that area constituting the congressional district from 
which he was elected; and 

(B) on and after the date on which the proposed redisricting 
of congressional districts in his State bjr legislative or judicial 
proceedings is initially completed (whether or not the redistrict- 
ing is actually in effect), within any additional area of each con- 
gressional district proposed or established in such redisricting 
and containing all or part of the area constituting the congressional 
district from which he was elected, unless and until the congres- 
sional district so proposed or established is changed by legislative 
or judicial proceedings. 

(2) A Member-elect to the House of Representatives may mail 
franked mail with a simplified form of address for delivery within 
that area constituting the congressional district from which he was 
elected. 

(3) A Delegate, Delegate-elect, Resident Commissioner, or Resident 
Commissioner-elect to the House of Representatives may mail franked 
mail with a simplified form of address for delivery within the area 
from which he was elected. 

(4) Franked mail mailed with a simplified form of address under 
this subsection — 



212 

(A) shall be prepared as directed by the Postal Service; and 

(B) may be delivered to — 

(i) each box holder or family on a rural or star route; 
(ii) each post office box holder; and 
(iii) each stop or box on a city carrier route. 
(5) For the purpose of this subsection, a congressional district in- 
cludes, in the case of a Representative at Large or Representative at 
Large-elect, the State from which he was elected. 

(e) The frankability of mail matter shall be determined under the 
provisions of this section by the type and content of the mail sent, or to 
be sent. Notwithstanding any other provision of law, the cost of pre- 
paring or printing mail matter which is frankable under this section 
may be paid from any funds, including, but not limited to, funds col- 
lected by a candidate or a political committee required to file reports of 
receipts and expenditures under the Federal Election Campaign Act 
of 1971 (Public Law 92-225), or from voluntary newsletter funds, or 
from similar funds administered and controlled by a Member or by a 
committee organized to administer such funds. 

(f) Notwithstanding any other provision of Federal, State, or local 
law, or any regulation thereunder, the equivalent amount of postage 
determined under section 3216 of this title on franked mail mailed 
under the frank of the Vice President or a Member of Congress, and the 
cost of preparing or printing such frankable matter for such mailing 
under the frank, shall not be considered as a contribution to, or an ex- 
penditure by, the Vice President or a Member of Congress for the 
purpose of determining any limitation on expenditures or contributions 
with respect to any such official, imposed by any Federal, State, or 
local law or regulation, in connection with any campaign of such 
official for election to any Federal office. 

(Pub. L. 91-375, Aug. 12, 1970, 84 Stat. 754, amended Pub. L. 92-51, 
§ 101, July 9, 1971, 85 Stat. 122; Pub. L. 93-191, § 1(a), Dec. 18, 1973, 
87 Stat. 737; Pub. L. 94-177, Dec. 23, 1975, 89 Stat. 1032.) 

42. 41 U.S.C. sec. 22 

§ 22. Interest of Member of Congress 

In every contract or agreement to be made or entered into, or 
accepted by or on behalf of the United States, there shall be inserted 
an express condition that no Member of Congress shall be admitted 
to any share or part of such contract or agreement, or to any benefit 
to arise thereupon. Nor shall the provisions of this section apply 
to any contracts or agreements heretofore or hereafter entered into 
under the Agricultual Adjustment Act, the Federal Farm Loan Act, 
the Emergency Farm Mortgage Act of 1933, the Federal Farm 
Mortgage Act, the Farm Credit Act of 1933, and the Home Owners' 
Loan Act of 1933, and shall not apply to contracts or agreements of 
a kind which the Secretary of Agriculture may enter into with farmers: 
Provided, That such exemption shall be made a matter of public 
record. R.S. § 3741; Feb. 27, 1877, c. 69, § 1, 19 Stat. 249; Jan. 25, 
1934, c. 5, 48 Stat. 337; June 27, 1934, c. 847, Title V, § 510, 48 Stat. 
1264; Aug. 26, 1937, c. 821, 50 Stat. 838. 



INDEX 

Abstention from voting: Pa & e 

Conviction of crime 6-7, 124 

Personal interest in matter 91, 94-97, 127 

Breweries and distilleries 95 

Central Pacific Railroad 96 

Defense contractor 96-97 

Import business 95 

Military pensions 1 95 

Municipal bonds 96 

National banks 95 

Accounting for official allowances : 

Certifications 24 

Recommended procedure 24 

Vouchers 24 

Adjudication by Federal agencies 32-33, 181-1S2 

Advertisements, personal: 

Official expenses 23 

Political expenses 112 

Airline carriers: 

Gifts from 52 

Inaugural flights 53, 136 

Representation of before Federal agencies 31 

Allowances (see "official allowances"). 

Allowance for official expenses 22-23 

American Bar Association Code of Professional Responsibility. 73, 75-76, 78, 79 
Amusement park, courtesy pass 54 

Bank stock 95 

Blind trusts; 

Assets 100, 101 

Conflicts of interest 100, 101 

Disclosure of trusts, generally 100 

Existing trusts 103 

Generally 100-103, 173-176 

Notifications and filings 102 

Prohibitions and enforcements 102-103 

Trust instrument requirements 101-102 

Trustee 101 

Bribery: 

For Federal jobs 15 

Generally 57, 58, 189-191 

Illegal gratuities 57-58 

British Broadcasting Corporation 70 

Buy-out arrangements 63 

Campaign activities: 

By House employees 105, 106, 115-116 

Finances (see "campaign funds and finances"). 

In a Federal building 118-120, 197 

Use of official facilities for 119 

Campaign contributions (see "campaign funds and finances" and "political 
contributions"). 

Campaign depositories 107 

Campaign finance reports 107 

(213) 



214 

Campaign funds and finances: **•»*• 

Campaign depositories 107 

Campaign finance reports 107 

Cash contributions 108 

Contribution limitations 107-108 

Corporate contributions 107 

Excess campaign funds 114 

Federal contractors 107 

Federal employees 108-109, 116-118, 196, 198 

Foreign nationals 108 

Generally 105-122 

Labor union contributions 107 

Political action committee, PACs 107-108 

Principal campaign committee 106-107 

Public utility holding company 108 

Registration 106-107 

Reporting 106-107 

Separate segregated funds 107-108 

Use of campaign funds 109-114 

Advertisements 112 

Dinner expenses 111-112 

Excess funds 114 

Holiday greetings 112 

Official expenses 111-113 

Personal expenses 110-111 

Travel to home district 110-111, 112 

Clerk hire allowance 12-13, 16, 18, 126 

Code of Ethics for Government Service 5, 

7-9, 61-62, 66-67, 82, 83, 85, 92-93, 94, 167 

Commercial land development 93-94 

Commission on Administrative Review.. 25, 26, 50-51, 56, 60, 64, 92, 97, 111, 113 

Commission on Congressional Mailing Standards 39, 40, 41-42, 44-45 

Committee on House Administration, Regulations and Accounting Pro- 
cedures for Allowances and Expenses 13-14, 16, 21, 22-23, 24 

Committee on Standards of Official Conduct: 

Generally - 3-10, 93-94, 96-97, 127-166 

Opinions: 

Campaigning by staff 116, 134 

Clerk hire 16, 18-19, 133-135 

Communicating to Federal agencies 29, 32, 35-36, 77 

Law practice 77, 132 

Regulations on gifts and decorations from foreign governments. 55, 127-130 

Commodities 94 

Communications to Federal agencies: 

Compensation for 30-31, 65-67, 74-75, 76-79, 84 

Ex parte communications 29, 32-33 

Generally . 28-38 

Private representations by staff 31-32, 84-85 

Recommendations for employment 36-37 

Standards of Official Conduct Committee opinion 35-36, 127-132 

Undue influence, fraud 33-35 

Compensation, for services before Federal agencies ' 30-31, 

65-67, 74-75, 76-79, 84 
Compensation, outside or additional (see "outside employment and 
compensation"). 

Computer services, expenses for , 22 

Condolences, as franked mail 42-43 

Conduct reflecting creditably on the House 3-5, 123 

Confidential information: 

Commodities 94 

Outside compensation 62, 83 

Outside investments 94 

Conflicts of interest: 

Abstentions from voting 91,94-97 

Disclosure 91-92, 97, 100-101 

Employee's outside employment or compensation 83 

Financial investments 90-92, 93, 97, 100-101 

Law practice 73-74, 76, 78-79 

Member's outside employment and compensation 60-61, 

61-62, 66, 67, 73-74, 76, 78-79 



215 

Page 
"Congratulations, as franked mail 42,43 

'Constituents: 

Constituency services 29 

Franked mail to (see "franking privilege") 39, 41-42 

Inquiries to Federal agencies on behalf of (see "communications to 
Federal agencies"). 

Recommendations to Federal employment 36-37 

Contracting with the Federal Government, by Members: 

Corporate exemption 67-68 

Employment with contractor 67 

Exemptions 69 

Generally 67-69,97,194 

Partnerships 67 

Shareholders in corporation 67-68, 97 

'Contracts with Federal Government, by employees.- 85-86 

'Contributions: 

Political (see "political contributions"). 

To office accounts (see "unofficial office accounts"). 

'Conversion , 24, 198 

Conviction of Member, legislative activity 6-7, 124 

Corporate political contributions 105, 107, 121 

'Country club, honorary membership in 54 

•Credit Mobilier Corporation 49 

Dinner expenses 25, 111-112 

Discrimination in employment 11, 12, 14-15, 124 

District office lease, expenses 22 

Donations by Member 23 

Double-billing 22,23-24 

Dual Government employment. 81,86, 183-184 

Dues or assessments paid by Member 23 

Duties of Member's staff 12, 13-14, 16-19, 40, 106, 107, 115-116 

Earned income 59, 60-61, 62-65, 90 

Earned income limitation: 

Accrual basis 65 

Business corporations 63 

Close corporations 64-65 

Family business or farm 64-65 

Generally 59, 60-61, 62-65, 71, 74, 79, 90, 126 

Partnerships 64 

Personal service businesses 63 

TJnicorporated businesses 64 

Educational expenses: 

From foreign governments 55, 129 

Official expenses, not as. 23 

Embezzlement. , 24, 198 

Entertainment, receipt of (see "gifts"). 

Excess campaign funds 114 

Death of Member 114 

Ex parte communications 28, 29, 32-33, 36, 181-182 

Fact-finding tours 52-53 

False claims 17-18,21,23-24, 116,204 

Talse Claims Act 23, 116,204-206 

False statements 15-16, 24, 198 

Favors (see "gifts"). 

Federal agencies: 

Communications to (see "communications to Federal agencies"). 

Compensation for services before 30-31, 65-67, 74-75, 76-79, 84, 191 

Representations before 31-32, 81, 84-86, 192 

Federal employees: 

Political contributions by 116-118 

Political contributions from 108-109 

'Federal employment: 

Bribery 15,38 

Political activities or contributions for 15,38 

Recommendations by Member for 27, 36-37 



216 

Financial disclosure: Pag» 

Agreements for future or continuing benefits 99~ 

Blind trusts 100-103 

Debts 99- 

Generally 58,79-80,88,89-92 97-103, 169-181 

Gifts .___ 58, 98, 99- 

Income 79-80, 88, 98, 99 

Financial holdings 91, 92, 98, 100-103 

Positions held . 1 99 

Spouse and dependents 99-100 1 

Transactions in property and securities ■ 99- 

Financial interests and investments: 

Abstentions from voting 91, 94-97 

Bank stock 95> 

Blind trusts 100-103 

Commercial land development ■. 93-94 

Commodities 94r 

Conflicts of interest 90-92, 93, 97, 100-101 

Corporations with Government contracts 67-69, 97, 194 

Disclosure 89-92,97-98, 100-101 

Disqualification . «. 91-92 

Divestiture 91 

Use of office for personal gain 92-94 

Foreign governments: 

Acting as agent of 81, 87" 

Compensation or "emoluments" from 69-70, 86-87 

Gifts from 54-55, 127-130* 

Foreign nationals: 

Campaign contributions 105, 107, 121 

Gifts from 50-54, 123- 

Former Members, franking privilege 41 

Foundations: 

Foreign 70> 

Private 69, 73, 88, 199-204 

Franking privilege: 

Authorization 40, 41 

Commission on Congressional Mailing Standards 39, 40, 41—42, 44-45 

Committees, use of 41 

Former Members 41 

Generally 26, 39-45, 112-113, 208-212" 

Guidelines for frankability, summary 42-43 

Loan of the frank 41 

Mass mailings 26, 44, 112-11 J 

Newsletters ^_ 39,41-43 

Postal patron mail 39, 44, 45 

Questionnaires 39, 41-42, 43 

Responsibility of Member's staff 40-41 

Return mail 41 

Standards of frankability, generally 41-43' 

Surviving spouse of Member 41 

Fraud - 15-16, 17-18, 23-24, 33-35, 116, 198, 204-206 

Fundraisers: 

As campaign contributions 47, 55-57, 113-114, 123"- 

Direct mail solicitations 56, 113 1 

Illness of family member 57, 113- 

Legal defense fund 57, 113-114- 

On Member's behalf 56-57, 113- 



217 

.Gifts: Page 

Airline carriers 52 

Bribery 57-58 

Courtesy pass 54 

Definition 53 

Fact-finding tours 52-53 

Financial disclosure 58, 98, 99 

Foreign governments 54-55, 127-130 

Foreign nationals . 50 

Fundraisers 55-57 

Honorary memberships 54 

Golf tournaments, celebrity, pro-am 52 

House receptions 51 

Illegal gratuities 57-58 

Lobbyists 50, 51-52 

One hundred dollar limit 50-54 

Personal hospitality . 50, 51 

Persons with direct interest in legislation , 51-52 

Political action committees 51-52 

Spouse of Member or employee 54 

Testimonials 55-57 

Tickets to political dinner «. 54 

Tickets to sports events 54 

Tickets to theatre 54 

Transportation or travel expenses: 

Conferences 52 

Fact-finding tours 52-53 

To home district 53 

Valuation of gifts. 54 

Government in the Sunshine Act 32-33, 181-182 

Golf tournaments, celebrity pro-am, expenses paid 52 

Holiday greetings: 

Expenses for, not official 23 

Nonfrankability of 39, 42, 43 

Political expense 112 

Honorarium: 

Award, not as honorarium 72, 87 

Campaign contribution, not as honorarium 72 

Defined 71, 72, 87-88 

Employees of the House, generally 87-88, 72-73 

Federal Election Commission Regulations 71-72,87-88 

Gift, not as honorarium 72, 88 

Limit, House rule 70-71, 72-73 

Limit, statute 71, 87-88, 168 

Members of the House, generally 70-73 

Statutory limit 71, 87-88, 168 

Stipend, not as honorarium 72, 88 

Usual and customary value 72-73 

Illness of family member, fundraiser 57, 113 

Impoundment 31-32 

Inaugural flights 53, 136 

Income limitation (see "earned income limitation"). 

Income, outside or additional (see "outside employment and compensation 

of Members" and "outside employment and compensation of employees"). 

In-kind contributions 24, 25, 26 

Inquiries to Federal agencies as to status of proceeding 31, 33, 35 

Inspection tours 52-53 

Intern programs 26 

Interventions in administrative proceedings (see "communications to 

Federal agencies"). 

Itinerary of Member, franking 42, 44 

Investments (see "financial interests and investments"). 



218 

Page- 

Kickbacks 11, 12, 15-16 

Korean influence investigation ; : 4 

Labor unions, campaign contributions 105, 107, 121 

Law practice: 

ABA Code of Professional Responsibility 73, 75-76, 78, 79 

Buy-out arrangements 63 

Conflicts of interest 73-74, 76, 78-79 

Court of Claims 74 

Dual partnerships 77-79 

Facade practice 75-76 

Federal practice 74-75, 76-79 

Federal practice by partner or firm 76-79 

Generally 73-79 

Income limitation 63, 64 

Indian Claims Commission 74 

Merchant Marine contractor 74 

Name in firm 75-76 

Senate rule 74 

Legal Defense fund 57, 113-114 

Legislative Counsel of House, franking privilege 41 

Lobbyists, gifts from 50-54 

Logging methods, inspection tour 53 

Mail fraud 16, 18 

Mass mailings : 

Expenses for 26, 112-113 

Franking 44 

Postal patron mail 44 

Meeting places, private 26 

Merit system 36-37 

Nepotism : 12, 14 

Newsletters 26, 39, 41-42, 43, 112 

Office accounts (see "unofficial office accounts"). 

Office equipment lease, expenses 22 

Officers of the House, franking privilege 40, 41 

Official allowances: 

Accounting procedure recommended 24 

Allowance for official expenses 22-23 

Committee on House Administration, regulations 13-14, 16, 21, 22-23, 24' 

False claims 17-18, 23-24 

Fraud 17-18,23-24 

Generally J 21-26 ; 

Regulations 21, 22-23, 24 

Travel expenses 22' 

Unofficial office accounts 24-26 

Official expenses 21, 22-23 

Oil drilling platform, inspection of 53 

Outside employment and compensation of House employees: 

Agent of foreign principal 81, 87 

Compensation for service before Federal agency 81, 84-85, 191 

Confidential information 83 

Conflicts of interest 81, 82-83 

Dual Government employment 81, 86, 183-184 

Financial disclosure 88, 98, 99' 

Foreign governments 86-87 

Generally 81-88 

Honorarium restrictions 87-88, 168 

Negotiations with Federal Government 85-86- 

Performance of official duties 82-84' 

Private foundations 88, 199, 204 

Professional staff of committees 83-84 

Representations before the Federal Government 84-86, 192? 

Use of position for private gain 85 



219 

Pnge 
Outside employment and compensation of Members: 

Earned income limit (see "earned income limitation"). 

Compensation for services before Federal agencies __ 59- 

65-67, 74-75, 76-79, 191 

Confidential information 62 

Conflicts of interest 59, 60-62, 66, 67, 73-79 

Contracting with the Federal Government 67-69, 194 

Federal agencies, compensation for services before _ 59 

65-67, 74-75, 76-79, 191 

Financial disclosure 79-80, 98, 99' 

Foreign governments 59 ; 69-70 

Generally. ____ 59-80 

Honorariums 70-73. 

Law practice (see "law practice"). 

Private foundations 69 

Use of position for personal gain 61 62 

Payroll padding 12, 17-18 

Personal advertisements (see "advertisements, personal"). ' 

Pictures of Member, franking 42 43. 

Political action committees, PACs: 

Contributions by 107-10& 

Corporate and labor union contributions 107-108 

Gifts from, and sponsoring organizations 51-52" 

Political activities by House employees (see "campaign activities"). 

Political contributions: 

Between Members of Congress __ 109- 

Cash 105, 108, 121 

Contractors 105, 107, 121 

Corporations 105, 107, 121 

Excess _____ 105, 107-108, 121 

Federal employees 105, 108-100; 116-118, 121 

Foreign nationals 105, 108, 121 

Labor unions 105, 107, 121 

Limitations 107-108, 121 

Political action committees 107-108- 

Public utility holding companies 107 

Reporting 106-107 

Use of _ 109-114 

Postage expenses 22* 

Postal patron mail 39 ; 44 ? 45 

Postal Service: 

Franked mail (see "franking privilege"). 

Recommendations for employment in 37 

Practice of law (see "law practice"). 

Principal campaign committee 106-107 

Private representations before the Government 3-1-32, 84-86, 192" 

Questionnaires, franking 41-42, 43 

Radio time, expenses 23 

Recommendations for employment: 

In competitive service 27, 36-37 

In Postal Service 27, 37 

Recruitment and employment expenses ' 22 

Relatives: 

Employment of 14 

Gifts from 47 > 59. 

Rulemaking by Federal agencies 32-33 

Select Committee on Ethics, 95th Congress __ _ 6 

25-26, 51-54, 56-57, 63-65, 11 2," 1 13-114 

Separate segregated funds 51-52, 107-108 

Services received from State, Federal, or local governments-: 

Gifts, not included as 53 

Unofficial office accounts, not considered as 26 

Services rendered before Federal agencies: 

Advertising 66-67, 76- 

Breach of fiduciary duty __ 66 

Compensation 30-31, 65^-67, 74?-75, 76-79, 84-85 

Law practice 74-75, 76-79- 

Partnership 66, 76-79, 84-85- 

Salary from firm 66-67, 76-77, 84-85- 



220 

Paarn 

Ship launchings i , . 53 

Slush funds (see "unofficial office accounts"). 

Spirit of House rules 5-6 

Spouse of Member or employee: 

Financial disclosure 99-100 

Franking privilege, surviving spouse of Member 41 

Gifts to i 54 

Greetings from and reports on, not frankable 42, 43 

Travel and transportation expenses 53, 55 

Staff of Member: 

Campaign activities 105, 106, 115-116 

Clerk hire allowance 12-13, 16, 18, 126 

Committee on House Administration, regulations on employment and 

compensation of staff 13-14, 16 

Committee on Standards of Official Conduct opinions 16, 

18-19, 116, 133-135 

Discrimination 14-15 

Employment and compensation of, generally 11-19 

Franked mail, responsibilities 40-41 

Nepotism 14 

Official duties 12-13, 16-19, 115-116 

Outside employment and compensation (see "outside employment and 
compensation of House employees"). 

Payroll padding 12, 17-18 

Representational activity before Federal agencies 31-32, 81, 84-86, 192 

Salary kickbacks 11, 12, 15-16 

Use of staff on campaigns _ — 115-116 

Stationery expenses 22 

Sunshine Act, Government in the 32-33, 181-182 

Telecommunications expenses ,*-*'- 22 

Television time, expenses for -___ 23 

Testimonials (see ^fundraisers"). 

Theft 24,198 

Tickets, as gifts: 

Political dinners. : 54 

Sporting events 54 

Theater 54 

Transportation expenses (see "travel and transportation expenses"). 

Travel and transportation expenses: 

Compensation 52, 70, 71, 87 

Conferences i , : 52 

Fact-finding tours 52-53 

Foreign governments 54-55, 70 

Gifts 52-53, 55, 70 

Home district 25, 53, 111-112 

Honorariums 71, 87 

Official expenses 22, 25 

Political expenses 25, 111-112 

Pteimbursements from official funds : 

Mode of travel 23 

Trips allegedly not taken 24 

Undue influence on administrative proceeding: 

Congressional hearings 33 

Fraud 33-35 

Threats or reprisals 35-36 

Standards of Official Conduct Committee opinion 35-36, 130-132 

Unjust enrichment 23 

Use of campaign funds 109-114 

Use of excess campaign funds 114' 

Volunteer programs 26 

Voting, abstention from : 

Conviction of a crime 6-7, 124 

Personal interest in a matter. , 91, 94-97, 127 

o 



96th Congress, 1st Session House Document No. 96-135 



RELEASE OF BUDGET AUTHORITY 
AND REVIEW OF DEFERRALS 



COMMUNICATION 

FROM 

THE COMPTROLLER GENERAL OF THE 
UNITED STATES 

TRANSMITTING 

A REPORT ON THE RELEASE OF CERTAIN BUDGET AUTHOR- 
ITY, THE RESCISSION OF WHICH WAS PROPOSED BY THE 
PRESIDENT AND NOT APPROVED BY THE CONGRESS, TO- 
GETHER WITH HIS REVIEW OF THE DEFERRALS AND RE- 
VISED DEFERRAL OF BUDGET AUTHORITY CONTAINED IN 
THE MESSAGE FROM THE PRESIDENT DATED APRIL 30, 1979 
(HOUSE DOCUMENT NO. 9C-10G), PURSUANT TO SECTION 1014 
(B) AND (C) OF PUBLIC LAW 93-344 




May 30, 1979. — Referred to the Committee on Appropriations 
and ordered to be printed 



U.S. GOVERNMENT PRINTING OFFICE 
39-012 WASHINGTON : 1979 



Comptroller General of the United States, 

Washington, B.C., May 30, 1970. 
B-115398. 
Hon. Thomas P. O'Neill, Jr., 

Speaker of the House of Representatives. 

Dear Mr. Speaker : This letter reports the release of budget author- 
ity required to be made available for obligation pursuant to section 
1012(b) of the Impoundment Control Act of 1974 and provides the 
Congress with our comments on the President's ninth special message 
that was sent to the Congress on April 26, 1 979. 

Release of funds 

The fifth special message for fiscal year 1979 submitted by the Presi- 
dent transmitted 10 rescission proposals (R79-2 through R79-11). Ex- 
cept as discussed below, we have confirmed that all of the funds 
involved in these 10 rescissions have either been rescinded (See Public 
Law 96-7, enacted Apr. 9, 1979) or made available for obligation as 
required by law (31 U.S.C. 1102 (b) ) . 

Rescission proposal R79-2, Department of Energy, Energy Pro- 
grams, Fossil Energy Construction, was not accepted by the Congress. 
The 45-day period of continuous session during which the funds may 
be withheld pending congressional consideration expired on March 27, 
1979. The $50 million in budget authority sought for rescission in 
R79-2 was, instead, made a proposed deferral (D79-55) and included 
in the President's ninth special message, April 26, 1979. Thus, these 
funds have not been made available for obligation. 

For rescission proposal R79-10, Foreign Claims Settlement Com- 
mission, payment of Vietnam prisoner of war claims, the Congress 
rescinded $8 million of the $9 million proposed. The remaining $1 
million has not been made available for obligation but, instead, was 
included in deferral D79-29A. another of the items transmitted in 
the ninth special message. 

Ninth special message 

On April 26, 1979, we received copies of the President's ninth special 
message for fiscal year 1979 that was transmitted to the Congress pur- 
suant to the Impoundment Control Act of 1974. Our comments on this 
message follow : 

Department of Energy 

D79-55 Energy Programs Fossil Energy Construction 80X021. / 

Foreign Claims Settlement Commission 

D79-29A Payment of Vietnam Prisoner of War Claims 79X0104 

As noted, deferrals D79-55 and D79-29A were the subject of pro- 
posed rescissions in the President's fifth special message (R79-2 and 
R79-10, respectively) . 

(1) 

H. Doc. 135 



In its consideration of R79-2, the House Committee on Appropria- 
tions stated- — 

* * * the committee recommends that the Executive sub- 
mit a deferral action on those funds not needed to complete 
design and marketing studies, until such time as more de- 
finitive information is available upon which to base a con- 
struction decision. 

House Report No. 96-25, 11 (1979) ; see also Senate Report No. 96-33, 
17 (1979) , to the same effect. 

Similarly, in connection with R79-10, the Senate Committee on Ap- 
propriations pointed out that $1 million of the Foreign Claims Settle- 
ment Commission's appropriation for Vietnam prisoner of war claims 
had been transferred to its salaries and expenses account during 1979, 
and the committee recommended — 

* * * the deletion of $1 million from the proposed rescis- 
sion in order to take similar action with respect to the Com- 
mission's 1980 budget. 

Senate Report No. 90-33. supra, at 12. 

The special message states that the deferral is being submitted pend- 
ing congressional action on the transfer recommended by the 
committee. 

In our opinion, submitting deferrals of budget authority in the 
cases of 1)79-55 and D79-29A after rescission requests have been re- 
jected for the same budget authority is technically inconsistent with 
section 1012(b) of the Impoundment Control Act, which provides: 

(b) Requirement To Make Available for Obligation. — 
Any amount of budget authority proposed to be rescinded or 
that is to be reserved as set forth in such special message 
shall be made available for obligation unless, within the 
prescribed 45-day period, the Congress has completed action 
on a rescission bill rescinding all or part of the amount pro- 
posed to be rescinded or that is to be reserved. 

However, since, these deferrals were ottered in response to the express 
wishes of the Senate and House Committees on Appropriations and 
apparently adopted by the Congress as a whole during its review of 
the bill that was enacted as Public Law 96-7, we plan no action pend- 
ing further congressional actions. 

With regard to the "other budgetary resources" noted in deferral 
message D79-55, we point out that on March 20, 1979, an $850,000 
accounting adjustment was made resulting in total other budgetary re- 
sources of $142,832,898. rather than $143,682,898, as stated in the mes- 
sage. This adjustment reflects an obligation incurred during the prior 
year which had not been charged to this balance because it had not 
been properly identified. 



H. Doc. 135 



Department of Energy 

D79-56 Energy Programs, Fossil Energy Construction 89X0214 
D79-57 Energy Programs, Strategic Petroleum Reserve 899/10218 
With the exceptions noted above, we conclude the information pro- 
vided m the ninth special message is correct and that the actions being 
proposed have been clearly and accurately stated. 
Sincerely yours, 

Elmer B. Staats, 
Comptroller General of the United States. 

O 



H. Doc. 135