January 13, 1998
Honorable James V. Hansen, Chairman
Honorable Howard L. Berman, Ranking Minority Member
House Committee on Standards of Official Conduct
HT-2, The Capitol
U. S. House of Representatives
Washington, DC 20515
RE: The Robert Dole Line of Credit to House Speaker Newt Gingrich
Dear Representatives Hansen and Berman:
We are writing to urge that House Speaker Newt Gingrich be disallowed from accepting any loan from Robert Dole to pay a $300,000 penalty for violating the House Code of Official Conduct. On May 15, 1997, the House Committee on Standards of Official Conduct ("Ethics Committee") rejected an earlier loan agreement between Dole and Speaker Gingrich, and approved an up to $150,000 line of credit from Dole to Gingrich, which becomes available to Gingrich next January.
On January 6th, 1998, Dole registered as an agent of Taiwan, under the Foreign Agent Registration Act (FARA).(1) Dole is representing the Taipei Economic and Cultural Representative Office in the United States.(2) The Ethics Committee must not allow the Speaker of the House to accept such a large loan or favor from a person who has a fiduciary duty to advocate on behalf of the Taiwanese government.
The Dole-Gingrich line of credit, and its approval by the Ethics Committee, was contingent upon Dole not registering as a lobbyist. That loan agreement states that:
Furthermore, on May 15, 1997, Speaker Gingrich assured the Ethics Committee that:
Similarly, on May 12, 1997, Dole wrote to the Ethics Committee that he is
A: Dole's Foreign Agency Disqualifies Him as a Lender to Gingrich
Neither the Ethics Committee's letter to Gingrich nor any other supporting documents in the loan deal define the term "registered lobbyist." However, in common parlance, the term means either having registered as a foreign agent under the Foreign Agents Registration Act, or having registering as a lobbyist under the Lobbying Disclosure Act of 1995.(6)
Incredibly, the Ethics Committee apparently wishes to deny this plain fact. Yesterday, according to Associated Press, the Ethics Committee stated that "Registration under the Foreign Agents Registration Act, in and of itself, does not indicate whether lobbying of Congress will be undertaken. The Committee is in the process of ascertaining whether such activities are intended."
This line of argument is gravely flawed for two reasons.
First, the term "registered lobbyist" is plainly equivalent to foreign agent. For example, the Legal Times article quotes Ronald Shaiko, academic director of American University's Lobbying Institute: "My interpretation is that registering as a foreign agent is equated with registering as a lobbyist."
Along the same lines, The Washington Post quotes former Ethics Committee lawyer Ellen Weintraub: "a registered foreign agent is essentially a lobbyist for a foreign government....I don't know why it would make a difference to the ethics committee whether his [Dole's] clients are foreign or domestic."
In testimony before a Senate subcommittee, Mark Richard, then-Deputy Assistant Attorney General in charge of administering the Foreign Agents Registration Act, explained who must register under FARA:
First, there must be a showing of an agency relationship, that the individual: (1) is an agent, employee, representative or servant of the foreign principal; or (2), acts at the order or request of, or is under the direction or control of, a foreign principal. It must also be established that certain specified activities are being performed by the agent for foreign interests, which are either political in nature, or, which are carried on in sensitive areas in which the line between political and nonpolitical is difficult to define.(7)
In this case, according to Legal Times, the agreement between Verner, Liipfert partner Berl Bernhard and the Taipei Economic and Cultural Representative Office's representative Stephen Chen states that Verner, Liipfert's "primary task will be to establish and strengthen channels of communication with the leadership in the Clinton Administration and the Congress."
Surely, this task epitomizes the activities of a lobbyist. The Ethics Committee cannot possibly engage in obfuscatory wordplay sufficient to bury this plain fact; such rationalization insults the intelligence of the American people.
Second, irrespective of your unsupportable distinction between "registered lobbyist" and registered foreign agent, the Ethics Committee must not allow the Speaker of the House to receive an enormous, unseemly line of credit or loan from a registered agent of a foreign country.
We have previously argued that any loan from Dole to Gingrich should not be approved, because accepting the loan is, in our judgement, a violation of the House Gift Rule, and the House Code of Official Conduct. At the time, we noted that Verner, Liipfert had been retained by tobacco companies such as Phillip Morris, R. J. Reynolds, Brown & Williamson, Lorillard, and U.S. Tobacco to represent them on global tobacco settlement negotiations. We argued that:
That deplorable appearance is now worsened since Dole has registered as an agent of Taiwanese government.
Even if Dole does not lobby, Ellen Weintraub, the former Ethics Committee lawyer, said to The Washington Post that "there is an appearance issue when you have one very powerful man who is literally indebted to another man and he knows that man has a legislative ax to grind."
John A. Merrigan, a partner at Verner, Liipfert, means to reassure the
public by saying that Dole will merely provide "strategic advice and counseling"
to the Taiwanese.(9) But this is reassurance
that does not reassure. Whether Dole says he intends to lobby Congress
or merely provide "strategic advice and counseling" does not matter. The
deplorable taint remains, indelibly.
It is the job of the Ethics Committee to uphold the integrity of the House of Representatives. But this Ethics Committee, and its predecessor, seem set on a doctrine of liberal permissiveness towards House Members and their wrongdoing.(10) Such rule-bending generosity towards congressional wrongdoers is out of step with the views of the American people, who wish to have a Congress that they can trust, respect, and be proud of.
The Ethics Committee must endeavor to prevent foreign governments from
obtaining undue influence over any House Member. It should swiftly find
that Speaker Gingrich may only obtain a line of credit or loan from a commercial
bank, through an arm's-length transaction, at market rates. Just as the
Democratic Party should not have accepted campaign contributions from foreign
donors, Speaker Gingrich should not be allowed to receive large special
favors from any registered agent of the Taiwanese government, including
1. 22 U.S.C. § 611 et seq.
2. Timothy J. Burger, "Dole's New Gig: Agent for Taiwan." Legal Times, 12 January 1998. See also "Dole Registers as Taiwan Agent." Associated Press, 13 January 1998. Ruth Marcus, "Dole Registers as Taiwan Foreign Agent." The Washington Post, 13 January 1998.
3. Loan agreement between Newton Leroy Gingrich and Robert Dole, entered into as of 15 May 1997, at 3-4.
4. Correspondence from Speaker Newt Gingrich to Mr. James V. Hansen and Mr. Howard L. Berman, 15 May 1997, at 1.
5. Correspondence from Senator Bob Dole to Honorable James V. Hansen and Honorable Howard L. Berman, 12 May 1997.
6. 2 U.S.C. § 1601 et seq.
7. Statement of Mark M. Richard, Deputy Assistant Attorney General, Criminal Division, U.S. Department of Justice, before the Subcommittee on Oversight of Government Management, Senate Committee on Governmental Affairs, Concerning the Disclosure of Foreign Lobbying Under the Foreign Agents Registration Act of 1938, as Amended. S. Hrg. 102-377, June 20, 1991, at 198.
8. Correspondence from Gary Ruskin, Congressional Accountability Project to James Hansen and Howard Berman, 22 April 1997.
9. "Dole Registers as Taiwan Agent." Associated Press, 13 January 1998.
10. See testimony of Gary Ruskin, Director of the Congressional Accountability Project, before the House Ethics Reform Task Force, March 4, 1997.