McCaul Amends Financial Reports

Posted September 21, 2010 at 6:57pm

Rep. Michael McCaul has filed amendments to his annual financial disclosure forms to correct several mistakes, including a printing error that omitted tens of millions of dollars in transactions, which he blamed on his accountant.

The Texas Republican filed amendments to both his calendar year 2008 and 2009 forms Thursday, following a Roll Call report on inconsistencies in his disclosure reports for those years.

In statements to Roll Call, McCaul and his staff have vigorously defended his financial disclosures, despite acknowledging the errors.

“My 2008 financial disclosure was 100 percent accurate and complete as to the detailed ownership of stock sold by my spouse and children, as well as the amount of income these transactions generated,” McCaul said in a statement provided to Roll Call last week. “In fact, I voluntarily over-disclose this detailed ownership information which is not required under the disclosure rules, but I provide it in order [to] go above and beyond the rules and be completely open.”

McCaul’s statement refers to his decision to label assets on his report as owned by his spouse, Linda McCaul, or his dependent children. Members are not statutorily required to supply such designations, although many lawmakers chose to do so.

[IMGCAP(1)]Members of Congress are required to disclose investment accounts, individual stocks and other assets, such as rental properties, on their annual forms.

Those annual reports require Members to detail each asset, including the account’s end-of-year value, as well as whether they earned any income, in Schedule III of the report. In Schedule IV of the reports, Members are required to detail any transactions, including a date of a purchase or sale, and the total value of the transaction, not merely the profit netted in the transaction.

On his 2008 report, McCaul stated that his spouse owned multiple stakes in Clear Channel Communications Inc., the media conglomerate founded by her father, Lowry Mays.

In an amendment to his 2008 report, McCaul acknowledged that his disclosure form undervalued his family’s sale of several portions of Clear Channel stock at $1 million to $5 million, stating it should have been listed at $5 million to $25 million.

“In disclosing the aggregated dollar amount of these transactions in the transaction section of my 2008 report, Millan & Company made a clerical error and placed one X in the wrong column, literally out of hundreds of columns in my report, assigning an incorrect aggregated value to the transactions,” McCaul said in his statement. “Significantly, the income from these transactions is 100 percent disclosed in the income section of this report.”

Roll Call’s analysis of McCaul’s annual reports earlier this month found two instances in which his wife’s 2008 sales of Clear Channel stock, which she owned as an individual and via a family partnership, did not appear in the transactions section of his report.

McCaul’s office stated that although income from the family’s investment in Clear Channel is listed as six separate assets in his report, the transaction details have been combined to just four assets — in one instance combining accounts with different names.

According to the instruction manual issued by the ethics committee along with financial disclosure forms, Members are encouraged to report their assets “in the same manner” throughout their reports. But it does not appear they are required to do so.

A revised version of the instruction manual posted on the ethics committee website earlier this year — an apparent draft, which was removed after Roll Call reported on the contents, including a provision addressing same-sex marriage — suggests the panel may be considering stronger language.

The new draft rules say, “Asset descriptions used on Schedule IV should be identical to those used to describe the same asset on Schedule III.” The word “identical” appears in italics.

McCaul also filed an amendment to his most recent financial disclosure form, which covers calendar year 2009, to detail transactions omitted by what McCaul’s accountant deemed a clerical error.

The original public version of McCaul’s 2009 disclosure report indicated his spouse purchased or sold dozens or stocks but failed to include the date of the transactions or the values of the dealings for more than 60 accounts, as well as investments in family partnerships.

The document, which is alphabetized, had included only stocks that began with the letters A to E.

In a statement to Roll Call last week, McCaul complained that he had filed a copy of his report with the Committee on Standards of Official Conduct for a “pre-filing screening” that included all the transaction data. Some of those transactions were then dropped when the final document was filed with the committee.

“For anyone to say there was under-disclosure to the Ethics Committee is simply false and misleading,” McCaul stated. “The Committee has the full and complete report in the electronically pre-filed version.”

The ethics committee does not comment on Members’ individual financial disclosure reports. The panel does review draft financial disclosures and recommend changes to Members before they file their reports for publication, but it does not make those recommendations or any draft documents publicly available.

McCaul is the ranking member of the panel conducting the ethics trial of Rep. Charlie Rangel on charges that, among other things, the New York Democrat failed to report or misreported numerous assets or income on his financial disclosure forms from 1998 to 2008.

The adjudicatory panel, led by McCaul and ethics Chairwoman Zoe Lofgren (D-Calif.), had not announced a start date for the proceedings at press time Tuesday.

McCaul is the fifth-richest Member of Congress, according to Roll Call’s annual survey of House and Senate wealth.