Deal Pushes Back Against Ethics Allegations
Ex-Rep. Nathan Deal (R-Ga.) denied charges that he abused his Congressional office for personal gain, according to a letter released Monday by the Office of Congressional Ethics as part of its investigation of the former lawmaker.
The OCE investigation focused on Deal’s efforts to persuade Georgia officials to preserve a state-funded auto salvage program that benefited his family’s business.
Deal, who resigned from the House on March 21 in favor of his gubernatorial campaign, denied any wrongdoing in a letter published with the report, and his attorney criticized the document as “inaccurate” in an interview Monday.
According to the 138-page OCE report, which recommended the House ethics committee conduct a further investigation, Deal sought to persuade Georgia officials to abandon a plan to expand the number of salvaged-vehicle inspection stations in the state and award contracts to those stations through a competitive bidding process.
Deal and his business partner, Ken Cronan, own and operate Recovery Services Inc., also known as Gainesville Salvage & Disposal, one of the eight existing inspection stations at the time of Deal’s alleged actions. The business no longer operates as an inspection site.
“The OCE does not take a position on Representative Deal’s motivations for inserting himself into discussion of potential modifications to a state vehicle inspection program,” the OCE report states.
“However, during operation of the previous vehicle inspection system, Representative Deal received a significant financial benefit as a GSD partner and corporate officer,” the report continues. “It is undisputed that as a public servant,’ Representative Deal took active steps to preserve a purely state program, one that had generated financial benefit for Representative Deal and his business partner. Further, while taking these steps, Representative Deal used resources of the House of Representatives.”
The Atlanta Journal-Constitution reported in early 2008 that Gainesville Salvage & Disposal earned $1.5 million from 2004 to 2008 from the salvage inspection program.
Deal defended his involvement, along with his chief of staff, in three meetings with Georgia state officials who proposed changes to the state inspection program, citing his “longstanding and routinely reported involvement in the salvage business.”
“Congressman Deal has become someone that Georgians, including elected and appointed government officials, would ask regarding salvage issues,” according to a “summary” that Deal submitted to the OCE.
In a letter from Deal, the Georgian also cited conflict of interest rules that allow Members to vote or contact federal agencies on issues that may affect them as “members of a class.”
“The suggestion appears to be that because I was involved in a family business in the area of salvage operations, I could not take any action in any matters involving salvage operations. This would be an overly broad and incorrect interpretation of House ethics rules,” Deal wrote.
He later cited the House ethics manual, which states: “A constituent need not be denied congressional intercession merely because a Member may stand to derive some incidental benefit along with others in the same class.”
The OCE also reported inconsistencies between Deal’s annual finance disclosure forms and his federal tax filings, and alleged that the Georgia lawmaker may have violated outside earned income limits.
On his House financial disclosures, Deal reported unearned “dividends” or “partnership income,” but he filed federal tax returns showing earned income in the same amounts.
Under House rules, Members were prohibited from earning more than $25,830 in calendar year 2008. Deal reported earning $75,000 from his salvage business.
An Oct. 26 letter from Deal’s personal accountant included in the report confirmed that Deal received “earned income,” including payroll taxes, and recommends that he refile his 2006 to 2008 federal income taxes with revised payroll forms. Those revisions will also earn Deal a rebate of about $16,000 in payroll taxes that he would not otherwise have owed.
“The only shred of truth in this political attack is that an innocent accounting error was made and subsequently corrected,” Deal’s gubernatorial campaign spokesman Harris Blackwood said in a statement released Monday.
The OCE’s decision to publish the report also marks an unprecedented move in the fragile relationship between the OCE and the Committee on Standards Official Conduct, also known as the ethics panel: The OCE said it published its findings in the Deal case because the House ethics committee missed a March 22 deadline to do so.
“Providing information to the public, improving transparency, is an essential element of the OCE’s mission,” OCE spokesman Jon Steinman said Monday. “The OCE board’s unanimous vote to release its report in this matter is, in letter and spirit, a fulfillment of that mission.”
Whenever the OCE issues a referral to the ethics committee, as it did in the Deal review, the ethics panel has up to 90 days to review the matter — an initial 45-day period and an optional 45-day extension — and determine its next step.
When the OCE recommends further investigation, the ethics committee must also issue a public statement on the referral at the end of the first 45-day period.
According to the OCE report issued Monday, that 45-day period expired March 22, but the ethics panel did not issue a statement at that time.
But it is not clear whether Deal was still under the House’s jurisdiction March 22. The Clerk of the House notes his resignation occurred March 21 — the Congressional Record shows Deal resigned at 11:45 p.m., minutes before the deadline — but was not effective until March 23.
Deal’s attorney, Randy Evans, defended Deal’s decision to resign Sunday, noting that he had previously said he would do so after the House vote on health care reform, which occurred earlier that day.
A telephone call to the House ethics committee’s office Monday was not immediately returned.
The ethics committee has never confirmed its own investigation into Deal — the Atlanta Journal-Constitution reported in December that documents obtained via the state’s sunshine laws showed ethics investigators had contacted state offices — and it is unclear whether the committee officially closed its probe of Deal when he resigned. The panel’s jurisdiction is limited to current Members, employees or officers of the House.
The OCE voted Friday to release its report on Deal. The OCE utilized a rule in the resolution that established the office — adopted into House rules at the start of the 111th Congress — that allows its eight-member board to vote to release “any communication to any person or entity … as necessary to conduct official business or pursuant to its rules.”