Critics target GOP lawmaker for not disclosing oil royalties linked to bill

Rep. Mike Conaway (R-Texas) was the chief financial officer of an oil-and-gas exploration firm before his election to Congress in 2004 and still has an extensive portfolio of investments in the sector.

Though it is difficult to ascertain the exact wealth of members from the financial disclosure forms they must make public, Conaway’s filing in 2009 showed he had between $100,000 and $276,000 in oil-and-gas holdings.

Conaway sponsored legislation in 2009 to retroactively lift income limits for a tax break that would benefit some of the oil-and-gas companies that continue to give him royalties.

While the bill never gained traction in the Democratic-led Congress, watchdog groups say he should have asked the House ethics committee for permission to author the legislation, given his investments. Conaway, however, argues he did nothing improper.

“It was a very minor section of the [tax] code,” he said in an interview. “I simply introduced the bill, but it never went anywhere.”

Conaway’s actions point to the gray areas lawmakers face in deciding whether to contact the ethics committee over possible conflicts of interest.

It’s an issue that will be the focus of the forthcoming ethics trial of Rep. Maxine Waters (D-Calif.), who has been accused of breaking House rules by contacting Federal Reserve officials to help a minority-owned bank during the financial crisis.

Waters’s husband owned stock in the bank, and Conaway served on the investigative ethics subcommittee that charged her with a conflict of interest.

Possible conflicts of interest are common in Congress, but have received more scrutiny in the two years since the new Office of Congressional Ethics (OCE) began to shine a brighter light on members’ activities.

Lawmakers as well as watchdogs are questioning the definition of a conflict of interest, with some watchdogs arguing for a broader scope and some lawmakers criticizing the OCE for its wide-ranging probes.

“There’s a tension here,” said Meredith McGehee of the Campaign Legal Center. “It’s kind of the way the Founders made the House — the notion that you’re going to have farmers and townspeople, all walks of life — as members so they can speak to the impact of the legislation they are considering, as opposed to having a professional class or political class that would make those decisions.”

Conaway said he heard about the change to tax laws at an accounting conference in Midland, Texas, attended by oil-and-gas company executives.

If he had to contact the ethics committee about sponsoring the tax bill, so would any other member who pays taxes and would be affected by the legislation, he said.

“The premise of your questions would assume that anyone who introduced a bill that has to do with taxes would have to get ethics committee approval because we all have to pay taxes,” said Conaway, who added that it “never occurred to me that there was a conflict of interest.”

“My personal opinion is that I don’t have a conflict of interest,” he said. “If the rules are ambiguous, then [people] have to come clear it with the ethics committee.”

In 2009, Conaway received between $15,006 and $35,200 in royalty payments from oil-and-gas companies. He serves as vice president of the board of Kidwell Exploration and president of the board of Conabain Corp. House rules bar members from being paid to serve on boards, but those rules do not cover royalty payments from investments in those same companies.

“I wish I had more,” Conaway said in a phone interview with Hearst News Service earlier this year, referring to his oil-and-gas investments. “Many of my constituents feed their families with oil-and-gas interests.”

Conaway also emphasized the importance of the disclosure reports.

“I think it’s appropriate people understand my financial disclosure so when they look at how I vote, they see the influences I may or may not have.”

The House Ethics Manual distinguishes between voting and other more proactive official duties, such as “sponsoring legislation, advocating or participating in an action by a House committee, or contacting an executive branch agency.”

“Such actions entail a degree of advocacy above and beyond that involved in voting,” the manual states, “and thus a Member’s decision on whether to take any such action on a matter that may affect his or her personal financial interests requires added circumspection.”

It suggests that members contact the ethics committee for guidance in such situations.

Melanie Sloan, the executive director of Citizens for Responsibility and Ethics in Washington, said sponsoring a bill that could benefit the lawmaker-sponsor poses at least an appearance problem.

“When you’re going beyond voting, that can have implications that you are acting to further your own financial interests,” she said.

In addition to contacting the ethics committee before sponsoring legislation or taking other actions, McGehee said members could give a speech on the House floor disclosing any and all financial interests they have in a piece of legislation they’re sponsoring.