Waters accuses ethics panel of having weak case after calling off her trial

Rep. Maxine Waters (D-Calif.) accused the ethics committee of having a weak case that is unraveling after the panel abruptly cancelled her public trial.

“The committee’s decision to cancel the hearing and put it off indefinitely demonstrates that the committee does not have a strong case and would not be able to prove any violation has occurred,” she said in a lengthy statement Friday reacting to the announcement.


She also said she was disappointed the committee once again postponed the hearing and said it showed “a complete disregard for due process and fairness.”

“For over a year, I have cooperated with the investigation and I have consistently asked for a public hearing on this matter,” she said. “I remain eager to present my case and demonstrate to my constituents and all Americans that I have not violated any House rules.”

The House ethics committee announced Friday it has delayed indefinitely Waters trial because the panel had discovered new evidence in the case.

It is unclear from the committee's statement whether the trial will move forward and what evidence was discovered.

According to a joint statement from Rep. Zoe Lofgren (D-Calif.), who chairs the ethics committee, and ranking member Jo Bonner (R-Ala.), the case is being referred back to the subcommittee investigating the matter. Waters's trial was set to begin on Nov. 29.

"The committee voted to recommit the matter regarding Representative Maxine Waters to the investigative subcommittee due to materials discovered that may have had an effect on the investigative subcommittee's transmittal to the committee," they wrote. "As a result, the adjudicatory subcommittee no longer has jurisdiction over this matter and the adjudicatory hearing previously scheduled for November 29, 2010 will not be held."

Waters, a member of the Financial Services Committee, is accused of using her position to arrange a meeting between Treasury Department officials and the National Bankers Association regarding OneUnited Bank. At the time, Waters's husband was a significant shareholder in the bank and had formerly served on its board of directors.

The California congresswoman has strongly denied the ethics charges against her and has repeatedly argued that she was acting on behalf of all small and minority owned banks, not just OneUnited, as she has done for other minority-owned businesses throughout her career.

Waters’s preparations for the public trial stand in stark contrast to Rep. Charles Rangel’s (D-N.Y.) experience this week. Unlike Rangel, who faced a jury of his peers without legal representation, Waters planned to have an experienced legal team by her side and was prepared to mount a vigorous, detailed defense.

Her chief of staff, Mikael Moore, attended the Rangel trial and took voluminous notes during the proceedings. Moore figures prominently in the investigation; the ethics committee has scrutinized his e-mail contacts with the Federal Reserve, as well as One United executives. But Moore, Water’s grandson, also has spent months preparing a legal defense and assisting her attorneys, well-known ethics expert Stanley Brand and his associate Andrew Herman, in preparing the case.

Waters had planned to rely mainly on Brand and Herman to present her defense before the ethics adjudicatory committee, but she and Moore were also planning to serve as witnesses and make their case directly to the panel.

Rangel this week complained about not having a chance to set up a legal defense funds so he could afford to hire a new attorney when he and his legal team parted ways in October after he paid them more than $2 million over the course of two years. In contrast, Waters opened a legal defense fund in September and held a fundraiser in October that raised nearly $100,000, according to a knowledgeable source.

Waters had planned on the entire legal defense costing $300,000, a small fraction of Rangel’s legal bill. Rangel’s case was far longer, involving 13 counts of House ethics violations, compared to the three charges Waters faces. Yet, Waters also chose a more pared down legal team consisting of two attorneys who focus primarily on Congressional ethics, instead of a legal team from a pricey firm specializing in white-collar crime.

The decision is a setback for the ethics committee, which had hoped to conclude the Waters trial during the lame-duck session of Congress. The announcement comes one day after the committee recommended the House censure Rangel for committing 11 violations of House ethics rules.

In her statement Friday, Waters said the new material in question was a document the committee has had since Oct. 29, and argued that it didn’t provide any new “significant” information. Without spelling out exactly what the document is, Waters said it shows only that she was working to ensure that the bill that awarded the money to OneUnited was drafted to assist small and minority institutions generally.

“The document does not reflect any action on behalf of any specific company,” she said. “Although the Committee continues to insist that the ‘small bank language’ was drafted to benefit only one institution, the facts do not support that assertion; in fact, the documentary record directly contradicts it.”

Waters also said she is puzzled by the committee’s delay.

“If this evidence is so damning, the Committee should present its case before the public, as we asked them to do when I first learned of their desire to postpone the hearing,” she said. “Apparently the Committee now recognizes, as I have maintained, that there was no benefit, no improper action, no failure to disclose, no one influenced, and there is no case.”

Late in August, Waters demanded that the ethics committee stop gathering new evidence against her. The ethics committee's announcement Friday may have to do with additional evidence discovered during this process — either evidence that would have helped exonerate her or material that complicates the case because it was discovered after formal charges were made against her.

Waters's attorneys sent a letter to the ethics committee taking issue with the panel's ongoing investigative activities after the formal probe was over and Waters was charged with violating House rules.

“Such inquiry violates both the Committee’s rules and comparable federal criminal procedure and raises significant questions about the sufficiency of the evidence that the Investigative Subcommittee replied [sic] upon when it issued the charges contained in the SAV [statement of alleged violation],” wrote Brand and Herman. “Most alarmingly, it calls into question the impartiality and good faith of the Investigative Subcommittee.”

The lawyers cited an ethics committee document request to Waters’s office that aides received Aug. 17 and ongoing contacts and interviews with witnesses. The information requested, they argue, relates solely to matters addressed in the statement of alleged violation.

In addition, a top ethics committee aide threatened Waters with a subpoena if she did not voluntarily provide the documents in question, according to Brand and Herman.

In her statement Friday, Waters accused the committee of breaking its own rules that prohibit any amendments to the statement of alleged violation, a charging document akin to an indictment, after it is transmitted to the adjudicatory committee.

“There is no provision or authority for the committee to take this action, but the same body which is charged with interpreting the rules now seems to be guilty of making them up as it goes along,” she said. “Neither the letter sent to me nor the statement on the committee website cites any rule or clear rationale for this decision.”

—This story was updated at 5:40 p.m.

Jordan Fabian contributed to this report