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Minority Still Weighing Options on Oxley

House Democrats are searching for a back-door approach to get the ethics committee to begin a probe of Financial Services Chairman Mike Oxley (R-Ohio) while averting an all-out war with Republicans.

What appears to be the most likely option at this point is for rank-and-file Democrats to send a letter to Reps. Joel Hefley (R-Colo.) and Alan Mollohan (D-W.Va.), the chairman and ranking member of the ethics panel, respectively, asking that the committee look into the charges against the Ohio Republican, according to Democratic insiders.

A number of other moves are still under review, said the sources, including filing a formal ethics complaint alleging that Oxley and his aides tried to force the Investment Company Institute to replace its top lobbyist, a Democrat, with a Republican in order to forestall Financial Services Committee hearings into the mutual-fund industry. ICI is the mutual-fund industry’s top trade association.

Democrats are considering a referral to the Justice Department against Oxley as well, although such a move would be more a public relations stunt than a serious request for a corruption probe in the view of Republicans.

No final decisions have been made at this point on which direction Democrats will take, and senior Democratic staffers said reports to the contrary are inaccurate.

“We are still looking at this, and when we decide what to do, we’ll do it,” said a top Democratic aide.

GOP leaders, both publicly and privately, have repeatedly warned that they will counter any complaint against Oxley with ethics filings of their own against vulnerable Democrats such as Reps. Paul Kanjorski (Pa.) and Jim Moran (Va.), who have had questions raised about their own behavior, as well as Minority Leader Nancy Pelosi (D-Calif.).

An informal truce on ethics complaints has existed for years, and neither side wants to be seen as violating the cease-fire for political gain. Speaker Dennis Hastert (R-Ill.) said he told Pelosi exactly that before the Oxley story first appeared, and his top aides have repeated it in talks with Pelosi’s staff since then.

Oxley, who has dramatically lowered his profile in the past several weeks, won’t comment on the ICI incident or the charges swirling around him.

“I don’t respond to rumors or innuendo,” the former FBI agent said tersely. Oxley’s aides have steadfastly denied that their boss or anyone else at the committee has engaged in any unethical behavior, although they have quietly consulted ethics lawyers to find out what their own options are if a complaint is in fact filed against them.

ICI officials have also declined to comment on the matter.

Democratic leaders are trying hard to portray any action against Oxley as something beyond their control or having arisen spontaneously within the Democratic Caucus.

They say Democratic leaders were never going to personally file anything against Oxley.

“It is important to remember at all times that this is not a leadership-driven situation,” said a senior Democratic leadership aide. “Of course, Members talk to us. But I can tell you there is more than a handful — more than five Members — who want to do something and are ready to act.”

Figuring out the strategy around a Justice Department referral has slowed things down as well.

“I can tell you this: This is going to happen, this is moving forward. There will be action,” added the Democratic source.

At the heart of the case against Oxley are allegations that two of his staffers — Bob Foster, staff director for the Financial Services Committee, and Sam Geduldig, a former committee staffer who has since gone to work for Majority Whip Roy Blunt (R-Mo.) — openly suggested that ICI replace Julie Domenick, and if it did so there would be no committee hearings on the industry.

Democrats have struggled with the issue of what the staffers allegedly did because Oxley’s personal involvement in the purported effort to oust Domenick remains unclear.

“This is something that is still up in the air with a lot of Members,” said another top House Democratic staffer. “Do we go after Oxley, his people, or both?”

Pelosi has refused to be publicly drawn into the debate, saying she doesn’t know enough about the case to comment. Hefley, who has clashed with his own leadership in recent months, also has deflected questions on the issue.

The Congressional watchdog group Common Cause on Wednesday continued to press for an investigation of Oxley.

“For the good of the integrity of the House, the Ethics Committee should immediately begin an investigation,” said Don Simon, acting president of Common Cause. “The allegations are too serious to be ignored, even if Democrats are willing to do so.”

The Financial Services Committee has scheduled a March 12 hearing on the mutual-fund industry to be chaired by Rep. Richard Baker (R-La.), who oversees the subcommittee on capital markets, insurance and government-sponsored enterprises. Richard Haaga, ICI’s chairman, is scheduled to testify at the hearing.

Ethan Wallison contributed to this report.

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