Rep. Issa hit with ethics allegations

A liberal advocacy group is filing an ethics complaint against Rep. Darrell Issa, alleging that the California Republican has repeatedly used his public office for personal gain.

The group, American Family Voices, is planning to file the complaint with the House Office of Congressional Ethics (OCE) on Tuesday.

ADVERTISEMENT
The five-page complaint, which was obtained by The Hill, accuses Issa of using his position as chairman of the House Oversight and Government Reform Committee to add to his multimillion-dollar fortune.

An Issa spokesman on Monday said the allegations have absolutely no merit and are part of a smear campaign spearheaded by the White House.

The complaint alleges that Issa pressured the Securities and Exchange Commission (SEC) to halt an investigation of Goldman Sachs shortly after he bought a huge stake in one of Goldman’s high-yield mutual funds.

It also claims Issa used his authority to improperly defend Merrill Lynch, a firm with “which he has a significant financial interest,” the document states.

“In fact and in appearance, Rep. Issa has repeatedly — and impermissibly — used his public position to promote his private financial interests,” Mike Lux, president of American Family Voices, wrote in a letter to former Reps. Porter Goss (R-Fla.) and David Skaggs (D-Colo.), co-chairmen of the OCE.

A spokesman for Issa said the complaint is part of an effort orchestrated by the White House to discredit its critics.

“This complaint is entirely without merit. The White House has used an assortment of outside progressive groups in an effort to attack Oversight and Chairman Issa directly.  This is just their latest salvo in an ongoing effort to obstruct oversight,” said Frederick Hill, Issa’s spokesman.

Issa, one of the wealthiest members of Congress, is the GOP’s chief investigator of the Obama administration.

After a shaky start as chairman, Issa has recently uncovered information that has attracted major headlines, putting the White House in a defensive mode.

One of Issa’s reports released in June found that the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) used reckless tactics in the investigation of gun-running operations connected to Mexican drug cartels. The probe’s findings led to the resignation of Ken Melson, the acting head of the ATF.

On Monday, meanwhile, a group of House Democrats blasted Issa for not pursuing allegations that News Corp., the company owned by conservative media titan Rupert Murdoch, might have hacked phones belonging to the victims of the Sept. 11, 2001, terrorist attacks.

 Lux rejected Hill’s assertion that the complaint is politically motivated.  

“He’s basically saying that because we are progressives, the fact that Issa had interests in all these companies he was helping through his congressional office doesn’t matter,” Lux said. “The fact is that Issa has done things that are completely suspicious and there should be a thorough hearing of it.”

The complaint contends that in 2008 Issa improperly touted a merger between the Sirius and XM satellite radio companies while having a financial interest in Sirius though DEI Holdings, a company he founded and which bears his initials.

It further alleges that Issa secured millions of dollars in congressional earmarks to improve roads serving properties he owns, including a multimillion-dollar medical complex in Vista, Calif. 

“The symbiotic relationship he has established between his business interests and public responsibilities presents, on a continuing basis, the starkest example of conflict of interest,” Lux wrote.

“As disturbing as this would be in the case of any member of Congress, the conflict on display here is especially troubling because it involves the chair of the Committee on Oversight and Government Reform — a committee charged with ‘proactively investigating and exposing’ waste, fraud and abuse,” he added.

Lux cites a 3,080-word investigative report published in The New York Times on Aug. 15 and reporting by Thinkprogress.org, a liberal media outlet.

American Family Voices, a political advocacy group classified under section 501(c)4 of the tax code, describes itself as a “strong voice for middle- and low-income families on economic, healthcare and consumer issues.” It serves as an umbrella group that helps fund civil-rights, environmental, women’s-rights and consumer advocacy groups.

In defense of his boss, Hill pointed to a memo on Issa’s website disputing reporting in the Times’s investigation.

The memo, which dubbed the article a “hit piece,” said the Times undervalued the purchase price of the Vista, Calif., medical complex Issa bought in 2008.  Therefore, according to the memo, there’s no evidence the property appreciated significantly as a result of the earmarks Issa secured to improve the road serving it. The document notes that Issa did not own the property when he first sought the transportation funding for his district.

It also claims that Issa’s financial transactions through Merrill Lynch were properly disclosed in his annual ethics filing and disputed that Issa had a financial interest in Goldman Sachs’s performance.

Hill said Monday that Issa’s investment in the Goldman Sachs mutual fund does not depend on Goldman’s stock performance. He added that the returns are based on corporate debt payments. Hill said Issa did not try to stop the SEC investigation, but had concerns about its timing.

Members of the public cannot file complaints directly with the House Ethics Committee, but can file them with the OCE, which was established in 2008 by then-Speaker Nancy Pelosi (D-Calif.) and reauthorized earlier this year.

If the OCE finds reason to believe Issa committed a violation of House rules, it will forward the complaint to the Ethics Committee. 

Melanie Sloan, executive director of the Center for Responsibility and Ethics in Washington (CREW), a government watchdog group, said Issa’s intervention in the SEC's investigation of Goldman prompted concern. 

“Given his financial holdings, he probably went overboard with the stuff he said about Goldman,” said Sloan.

However, Sloan said it would be difficult to show Issa violated the rules by obtaining earmarks for roadways in his district, because he could argue they benefited constituents, and not just himself.  

Republicans have criticized CREW as a liberal-leaning group. CREW has pointed out it has pursued ethics investigations of Democrats and Republicans.


Jordy Yager contributed.