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Ethics Panel Eyes Sánchez Sisters

Clarification Appended

The House ethics committee is reviewing whether the chamber�s rules were broken when Rep. Linda Sánchez (D-Calif.) put three of Rep. Loretta Sanchez�s (D-Calif.) aides on her own payroll in late 2006 because of a budget shortfall in her sister�s office.

The shortfall occurred because a then-aide to Loretta Sanchez had been embezzling funds from the office for personal use.

Stan Brand, an attorney for Loretta Sanchez, confirmed Monday that the Committee on Standards of Official Conduct was looking into the arrangement to temporarily shift staff between the two Sánchez offices.

�We were the ones that brought all this to [the committee�s] attention,� said Brand, a former House Counsel who now heads the Brand Law Group. �When all this occurred, we self-reported to the committee.�

The review focuses in part on an agreement in which Linda Sánchez briefly put the three aides laid off from her sister�s office on her own payroll for a few weeks in late 2006 after discovering the embezzlement scandal had left Loretta Sanchez�s office short on funds.

On Monday, Caroline Valdez pleaded guilty in the U.S. District Court for the District of Columbia to charges that she stole between $5,000 and $10,000 in early 2006.

Between February and March, Valdez charged airline tickets and groceries to a House credit card, gave herself two $3,000 bonuses and submitted inflated reimbursement vouchers for taxicab rides, according to court documents. When one of her bonuses was delayed, she forged the Member�s signature on a letter requesting that the bonus �be processed as soon as possible.�

Under the plea agreement, the Justice Department agreed to ask for a prison sentence of no more than six months and a fine between $500 and $5,000. However, the felony charge of theft of government property holds a maximum jail sentence of 10 years.

In the agreement, Valdez also requests to not serve any time in jail. The Justice Department agreed to not object to that request.

Valdez, 27, will be sentenced Sept. 25.

Loretta Sanchez first learned of her office�s budget shortfall in fall 2006, after being alerted to the situation by the House Administration Committee, Brand said.

A routine audit of duplicate payments by the the House Inspector General subsequently revealed that Valdez was embezzling funds from the office. The matter was later referred to the Justice Department.

Brand said the California lawmakers sought the ethics committee review in late 2006 or early 2007.

�The Congresswoman wound up in a budget shortfall and had to terminate people,� Brand said. �This was not anything she or the staff did. In an effort to find work for them, a decision was made that would it be possible for them to work for another Member for that short period of time.�

�In an abundance of caution and wanting to make sure all the i�s were dotted and the t�s crossed, we brought that matter to the committee as well, without any prodding,� Brand added.

Under House rules, individual lawmakers are not allowed to use their Members� Representational Allowance � the annual budget that provides for staff salaries, travel and office supplies � to pay aides to work in a House office other than their own.

There is no indication that the committee has completed its work to date. The ethics panel does not disclose its work.

Both offices declined to comment, directing questions to their respective attorneys.

Linda Sánchez�s office referred inquires to Bob Bauer at the law firm Perkins Coie, who did not return a telephone call Monday.

Among the aides whom Linda Sánchez hired in late 2006 were her sister�s legislative director and legislative correspondent.

For a period of just a few weeks, Linda Sánchez paid those individuals about $17,000 as �part-time employees,� according to public House spending records.

She also paid an office manager $10,000 during December 2006, while Loretta Sanchez recorded a $1,000 payment to the same individual for a period from late October to late December.

Linda Sánchez employed her sister�s then-legislative director Edward Steiner as a part-time employee from Nov. 1 to Dec. 31 and paid him $14,700, according to quarterly House spending records for that period.

Similarly, she hired then-legislative correspondent Andrew Stephenson as a part-time employee Nov. 1-30 and paid him $2,500.

Neither individual received payment from Loretta Sanchez or any other lawmaker during that period.

Shane Skinner is more of an anomaly. He shows up on Loretta Sanchez�s payroll on Oct. 24, 2006, almost two years after he left her office as a scheduler.

Between Oct. 24 and Dec. 31, Loretta Sanchez paid Skinner a little more than $1,000 for work as an �office manager.�

Linda Sánchez paid him under the same title between Dec. 1 and Dec. 31, doling out $10,000, according to spending records.

Both Steiner and Stephenson reappear on Loretta Sanchez�s payroll in January 2007, as �scheduler/office manager� and �staff assistant/legislative correspondent,� respectively. Skinner disappears from both payrolls after Dec. 31.

House disbursement records list no payments to Steiner after August 2007 and none to Stephenson after July 2008.

Steiner, who is listed with the firm Sandler, Travis & Rosenberg as director of trade and legislative affairs, did not return a telephone call Monday. Neither Stephenson nor Skinner could be located.

According to Federal Election Commission records, Loretta Sanchez�s campaign paid Brand�s law firm $6,600 in late March.

Her campaign also posted a payment to Brand for nearly $3,000 in December 2007.

Clarification: May 19, 2009

Rep. Loretta Sanchez first learned about her office�s budget shortfall from the House Administration Committee, not the House Inspector General.

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