House Ethics Committee Clears 3 of Conflict of Interest

WASHINGTON — The House ethics committee, in one of its first official acts since the start of the new Congress, dismissed cases involving three members accused of creating an appearance of a conflict by holding fund-raising events with financial industry executives and lobbyists in the days before major votes on legislation revamping the nation’s financial regulations.

The decision came as a relief to lawmakers. If the ethics committee had found violations, ground rules for fund-raising would have radically changed in Washington, where popular restaurants and bars around Capitol Hill sometimes host two or three events each night.

The Office of Congressional Ethics, an independent investigative unit that serves as a prosecutor’s office, had assembled what it believed was compelling proof that the overlapping votes and financial industry fund-raising parties created the appearance of a conflict of interest, even if no deals were made to change votes as a result of the donations.

But the ethics committee, now led by Representative Jo Bonner, Republican of Alabama, endorsed a report by its own staff that concluded that these dinners and cocktail parties were just routine events, organized by professional fund-raising consultants who work independently from the lawmakers’ House policy staff. “The overall record demonstrated that there were no appearances of impropriety,” the report concluded.

The three members whose activities were looked at — Representatives Joseph Crowley, Democrat of New York; Tom Price, Republican of Georgia; and John Campbell, Republican of California — issued statements welcoming the dismissal. They said it confirmed their assertions that they did nothing improper.

“Congressman Price has always complied with both the letter and spirit of the law,” said Ryan Murphy, a spokesman for Mr. Price, who is chairman of the House Republican Policy Committee. “He is pleased that this matter has been completely resolved and is now closed.”

Several ethics watchdog groups say the decision represented a missed opportunity for the new ethics committee to send a message to lawmakers.

“You are raising money from the same parties who will be enormously affected by policy decision you are about to make,” said Norman J. Ornstein, a campaign finance expert at the American Enterprise Institute. “You don’t have to be a math genius to add 2 and 2. The message here is that anything goes as long as it is not a direct, specific violation of the rules.”

The Office of Congressional Ethics began the investigation after a December 2009 House vote on an early draft of the financial legislation that became law last year. Investigators collected hundreds of pages of e-mails and other documents offering a rare inside look at how fund-raising consultants solicit contributions from industry lobbyists, politely pressing them to write thousands of dollars in checks to support lawmakers’ re-election efforts.

Mr. Crowley’s fund-raising consultant, for example, invited executives or lobbyists from General Electric, UBS, Morgan Stanley, New York Life, American Express, Ernst & Young, Hartford Associates and Zurich — all companies registered to lobby on the financial regulation bill — for two fund-raising events that took place on the same night that the House would vote on key amendments to the bill. Representatives from several of these companies ended up attending.

The complaints against the three lawmakers repeatedly referred to a 2004 ruling by the ethics committee involving former Representative Tom DeLay, Republican of Texas, who was admonished after he attended a fund-raising event around the time of important House action on a related bill.

“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,” the 2004 ruling by the ethics committee said, as quoted in the cases filed against the three House members.

But lawyers for the House members argued that the Office of Congressional Ethics was overreaching, dismissing the idea of parallels between the 2004 case and the more recent fund-raising events. Consultants for the three House members, they argued, had scheduled their 2009 fund-raising events long before they knew when the vote would be taken on the financial legislation.

They also noted that fund-raising consultants had sent out the invitations to these events, not House staff members. And there is no evidence that the House members discussed the substance of the legislation at these fund-raising events.

“You had overlap, but you did not have crossing of the wires,” said Stanley Brand, a lawyer who represented Mr. Crowley. “And coincidence or temporal proximity is not enough to establish wrongdoing. There has to be a real connection.”

These were all arguments backed by the House ethics committee, whose staff noted in the report dismissing the cases that a “ ���reasonable, thoughtful’ person, who is well informed of all relevant facts and standards, would not conclude that there were any appearances of impropriety.”