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Invitation to Charity Events Is Not an Ethics Free Pass

I am the president of a charity based in Washington, D.C., that frequently hosts fundraising dinners. Recently, a corporation offered to donate to an upcoming dinner on the condition that we invite certain lawmakers and arrange for the lawmakers to sit at the corporation’s table. The corporation would pay the $10,000 fee for an invitation for a table of eight and then donate the invitation back to our charity if we use it to invite specific Members of the House. [IMGCAP(1)]

The CEO has assured me that there is a charity events exception to the ban on gifts to Members and that the proposal would comply with House ethics rules under that exception. I’m always in need of funds for these dinners but want to be sure the proposal complies with the ethics rules. Does it? If not, do I have any risk of personal liability?

A: The CEO is right that, while the House ethics rules generally prohibit Members from accepting gifts of any kind, an invitation to a charity event is an exception to the ban on gifts. The purpose of the exception is to enable Members and staff to lend their names to legitimate charitable enterprises. However, there are strings attached. To avoid trouble, before you issue any invitations, you and the CEO should carefully study the requirements of the exception.

The exception appears in Clause 5(a)(4)(C) of House Rule 25, which allows House Members and staffers to accept a sponsor’s unsolicited offer of free attendance at a charity event. For the exception to apply, the critical factor here is that the invitation must come from the sponsor of the event.

As you may know, for purposes of the exception, the term “sponsor” does not have the meaning one might normally assign to it, but rather refers to the event organizer — the entity or entities that are primarily responsible for organizing the event. The Ethics Manual states that a corporation that simply contributes money or buys tickets to an event is not considered a sponsor. Therefore, the manual states, House Members and staff may not accept an invitation from a corporation “that merely bought a block of tickets to or a table at the event.”

Given these rules, one could argue that the corporation’s proposed arrangement should not qualify for the charity events exception. According to the House Ethics Manual, a Member may not accept an invitation to a charity event from a corporate donor. If that’s the case, why should the Member be permitted to accept an invitation that a corporate donor has directed an event organizer to issue to the Member?

The answer may lie in the House Ethics Manual, which allows a corporate contributor to request that the organizer of a charity event invite particular Members or staff to sit with the contributor. However, there are restrictions on these requests, so both contributors and event organizers should tread carefully.

First, regardless of the contributor’s request, the invitation to the Member must neither reference a contributor nor be extended by anyone other than the organizer. Second, only the event organizer should communicate with the Member regarding the event. This is because a communication from the corporate contributor “may be deemed an impermissible invitation from the contributor.” In your case, while communications between the CEO and the Members are largely beyond your control, you might consider reminding the CEO not to communicate with the Members regarding the event.

Finally, while the contributor may request that the organizer invite particular Members or staff to sit with the contributor, the organizer must retain “ultimate control of the guest list and the seating arrangements.” You have been offered a contribution on the condition that you invite certain Members to sit with the potential contributor. The real crux of your question is whether it is possible for you to maintain ultimate control over the guest list and seating assignments while at the same time accepting a conditional offer like the CEO’s.

I would argue that it is possible to maintain ultimate control. After all, it is your choice whether to accept the CEO’s conditional offer. If you do not wish to invite the requested Members, or to seat the Members at the corporation’s table, you have the option to deny the corporation’s offer. On the other hand, someone also could argue that to accept the corporation’s offer is to relinquish ultimate control of the guest list and seating assignments. In the absence of any ethics rule language directly on point, there is a risk that the committee would accept this latter argument and conclude that the conditional offer violates the rules.

Given that risk, your next question is whether you have any risk of personal liability. The short answer is that you might. If the CEO who made the proposal to you is a lobbyist and his arrangement were to violate the House gift rules, the recently passed Honest Leadership and Open Government Act could certainly subject him to liability. Moreover, under the federal conspiracy statute, an aggressive prosecutor might argue that you too are liable. Generally, the conspiracy statute makes it a crime to agree to violate any other federal criminal statute. Here, if you were to participate willfully in a lobbyist’s scheme to violate the House gift rules, a prosecutor could argue that you have conspired with the lobbyist to violate the new statute requiring lobbyists to comply with those rules.

It is no secret that the ethics and lobbying reform exposes lobbyists to liability for violations of Congressional gift rules. As your question suggests, that reform also may provide aggressive prosecutors with a basis to argue that, in certain circumstances, such liability could extend to charity event organizers like you.

C. Simon Davidson is an attorney in the Washington, D.C., office of McGuireWoods LLP. Click here to submit questions. Readers should not treat his column as legal advice. Questions are not confidential and do not create any attorney-client relationship.