Loophole on event tickets splits panels

The Senate and House ethics committees have split over whether to allow lobbyists to take advantage of a longstanding loophole in the congressional gift ban in the wake of sweeping ethics reform passed last year.

Traditionally, lobbying organizations have been able to buy tickets for lavish charity events and request that the sponsors invite certain lawmakers and staff. The sponsors then seat those guests at the ticket-buyers’ table. House and Senate members have been allowed to accept tickets worth hundreds of dollars because they came directly from a charity, even though a lobbyist may have been the initial impetus for the invitation.

{mosads}But now the two chambers appear to be going in different directions on how to interpret a new gift ban included in the 2007 ethics law. House ethics officials have indicated that lobbyists may continue to direct free tickets to lawmakers. Senate ethics officials have withheld approval.

The Senate-House rift has caused uncertainty among lobbyists who provide major financial support to the charity galas that form the apex of Washington’s social scene and would like to see the House interpretation followed.

But watchdog groups say the Senate is correct.

“The Senate ethics committee is right on this,” said Craig Holman, an advocate for Public Citizen, a non-partisan watchdog group that helped push new ethics reforms through Congress. “The House ethics committee is notorious at trying to undermine the ethics rules.”

The ethics cloud may reduce the amount of money some charities are able to raise and could force members of the Senate, at least, to skip or pay out of their own pockets for big, glittering events such as the Leukemia Ball, scheduled for March 29 at the Washington Convention Center.

Lawmakers consider charity events a major perk because they provide an opportunity to rub elbows with Hollywood stars, business titans, sports figures and other noted celebrities. For example, Jay Leno, host of “The Tonight Show,” will headline this year’s Leukemia & Lymphoma Society’s “Roaring Twenties” ball.

“In a lot of cases a corporation takes possession of tickets and gives a few back to the charity,” said a registered lobbyist who declined to be identified. “The buyer will say, ‘Give me eight of the 10 tickets and you can have two tickets for staffer so-and-so.’”

“On the House side, the ethics committee has pretty well blessed that,” said Stefan Passantino, who heads the political law team at McKenna Long & Aldridge, in reference to the practice of corporations helping charities decide which lawmakers to invite to events. “But on the Senate side, they say, ‘We’re not going to be a part of a way of using a ticket broker to circumvent ethics rules.’”

Passantino said that some corporations are confused because they want to help arrange invitations for lawmakers to upcoming events and “the Senate ethics committee is not cooperating with that effort.”

“It is certainly an inconsistency in applying similar rules, which is the last thing the regulated community needs right now,” Passantino said, speaking of corporations and trade groups that hire lawyers to navigate Washington’s growing labyrinth of ethics rules.

Another lawyer who spoke on condition of anonymity said the House panel had approved a request to allow an interest group to make suggestions about invitations at an upcoming charity event. The Senate committee, however, refused and suggested that it would soon release new guidelines on the practice, said the source.

The confusion caused by the differing interpretation has caused angst among corporations. They want to avoid becoming ensnared in a high-profile Justice Department prosecution, such as those that resulted in jail sentences for former Reps. James Traficant (D-Ohio) and Bob Ney (R-Ohio).

Many K Street operatives and ethics advisers believe federal prosecutors have become more aggressive in pursuing political corruption investigations.

Government watchdog groups say that corporations employing lobbyists should not be allowed to have any influence over who is invited to charity balls and dinners.

“I would perceive any suggestion or indication that in any way provides some sort of obligation that a lawmaker be invited to an event as a gift from lobbying group to lawmaker,” said Holman of Public Citizen. “Certainly the ethics committee should define it that way as well.”

Holman said his group is hoping Speaker Nancy Pelosi (D-Calif.) will take a closer look.

“We’ve got to challenge the House ethics committee head on,” he added. “Hopefully we can get the help of the Speaker on this.”

Several prominent ethics lawyers said they were not yet aware that the Senate has taken a disapproving view of lobbyists directing invitations.

“If they’re changing that, they’re undoing a time-honored practice that existed before [the 2007 ethics laws],” said Kenneth Gross, an ethics expert at Skadden, Arps, Slate, Meagher & Flom. “It’s an accepted, ongoing practice. It’s been expressly authorized repeatedly by House ethics.”

Jan Baran, an expert at Wiley Rein LLP, said, “It’s certainly a procedure that has been acceptable for many years under the gift rules.”

But some lobbyists and lawyers say there is a new climate in town in the wake of major ethics scandals such as the one sparked by former lobbyists Jack Abramoff, whose dealings with lawmakers resulted in several convictions. Last year the House and Senate passed the new gift ban that prohibited lawmakers from accepting any gifts from lobbying organizations. Before then, members of Congress could accept gifts worth less than $50, an elastic exemption that lobbyists often stretched to give a wide range of goodies to lawmakers.

Stan Brand, who has defended members of Congress in corruption probes, urged lawmakers to avoid charity tickets that may have been directed by lobbyists.

“I don’t think that works under the rules,” he said. 

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