Congressional Accountability Project
1611 Connecticut Ave. NW, Suite #3A
Washington, DC 20009
(202) 296-2787
fax (202) 833-2406

July 6, 1999

The Honorable Lamar Smith, Chairman
The Honorable Howard Berman, Ranking Member
House Committee on Standards of Official Conduct
HT-2, The Capitol
U. S. House of Representatives
Washington, DC 20515

RE: Request for Investigation of Representative Henry Hyde
Dear Representatives Smith and Berman:

This letter constitutes a second formal request for an inquiry into whether Representative Henry Hyde (R-IL), Chairman of the House Judiciary Committee, violated the House gift rule by receiving a gift of the services of Ernie Rizzo, a private investigator. The size and source of the gift are unknown.

According to news reports, Rizzo conducted an investigation of Tim Anderson, a critic of Chairman Hyde's role in the failure of Clyde Federal Savings and Loan ("Clyde"), and the unwillingness of the federal government to hold Chairman Hyde liable for part of the $67 million taxpayer bailout of Clyde. Chairman Hyde served on Clyde's board of directors between 1981 and 1984.

This request for inquiry is pursuant to House Rule 10, which authorizes the House Committee on Standards of Official Conduct ("Ethics Committee") to investigate "any alleged violation, by a Member...of the Code of Official Conduct or of any law, rule, regulation or standard of conduct applicable to the conduct of such Member...in the performance of his duties or the discharge of his responsibilities."(1) The Ethics Committee should appoint an investigative subcommittee and outside counsel to determine the size and the source of the gift to Chairman Hyde, and whether the gift violated the House gift rule or federal law.

On October 26, 1998, the Congressional Accountability Project sent a letter to the Ethics Committee requesting an investigation of Chairman Hyde. The Ethics Committee has yet to respond to that letter, nor has it announced the formation of an investigative subcommittee regarding Chairman Hyde. This letter renews our request, and includes additional information from today's New York Times, as well as other news articles.

We provide this information to the Ethics Committee for the purposes of establishing an investigative subcommittee in this matter. Ethics Committee Rule 19 states that "the Committee may consider any information in its possession indicating that a Member...may have committed a violation of the Code of Official Conduct or any law, rule, regulation, or other standard of conduct applicable to the conduct of such Member...in the performance of his or her duties or the discharge of his or her responsibilities."
 

A: Request for Ethics Committee Inquiry into Whether Chairman Hyde Violated the House Gift Rule by Receiving a Gift of the Services of a Private Investigator.
On October 18, 1998 the Chicago Tribune reported that Chairman Hyde had received the results of the investigation that private investigator Ernie Rizzo had conducted into the activities of Tim Anderson.
Republican Hyde denies he or anyone working under his direction hired the detective, but the House Judiciary Committee chairman acknowledges he was informed of the results of the investigation.
* * * * *
"I know he interviewed Anderson. I was apprised of the results of that interview," Hyde said. "I didn't hire him. I didn't pay him. I didn't direct him."(2)
Rizzo, however, told The New York Times that Hyde was more involved in Rizzo's activities. According to The Times, "Schirott, [Rizzo] said, told him the Congressman [Hyde] was concerned about a man turning up at hearings on the suit. Mr. Hyde wanted to know who the man was and what he knew." Rizzo says that he "told Hyde" that Anderson was making "30 or 40 calls a day to the media" about Hyde and the failure of Clyde Federal Savings and Loan. Rizzo obtained a file of materials about Clyde from Anderson. According to The Times, "Mr. Rizzo said he gave the file to Mr. Hyde."(3)

In an October 20 interview on KPFA's Flashpoints radio news magazine, Dennis Bernstein interviewed Ernie Rizzo:

DB: Can I ask you what you were asked to investigate?
ER: Mr. Anderson, who he was, what his position was. What kind of information... apparently he had been disseminating information and my client wanted to know exactly what his position was in this case.
* * * * *
DB: How much were you paid for this investigation?
ER: I don't have any comments on that. It was a two month investigation.
DB: Did you call other people besides Mr. Anderson to find out if he was credible and if he was who he said he was?
ER: We made a total and complete investigation of Mr. Anderson.
DB: Just to give us a sense of the breadth of that investigation did you call six other people, twenty other people, did you call his friends, his neighbors...
ER: Quite a few people.
DB: Did they include people within his realm of existence, people he worked with, people who were friends with him?
ER: The standard people you'd usually talk to when doing some background on an investigation. Working people, neighbors, business associates, things like that.(4)
The exact cost of Ernie Rizzo's investigative services is unknown. However, according to Roll Call, Rizzo said that he "would normally charge about $10,000 for a job similar to the one he did on Anderson."(5)

The donor of the gift to Chairman Hyde is unknown. On July 6, 1999, The New York Times reported that "Mr. Rizzo...was paid by a political ally of the congressman, not by his lawyer."(6) Who was that "political ally"? The Tribune reported that:

Hyde says Rizzo became involved without his prior knowledge through "a mutual friend" who "thought he was helping me." But Hyde says he now doesn't remember who that friend was.(7)

On October 26, Roll Call reported that:

Ernie Rizzo...said in an interview that he did the job for Hyde and his lawyer and was paid with a cashier's check in the mail.(8)
The New York Times reported that Rizzo did additional work for Hyde in December, 1998, as well.
In his interview with The Times, Mr. Rizzo revealed that...in December, he employed the technique [claiming to be a reporter, to trick Anderson] again because Mr. Hyde and his allies feared that Anderson might use the disclosure to disrupt the Clinton impeachment hearings.

"The day before the impeachment trial started in the House, I sent two guys back in," Mr. Rizzo said. "They posed as reporters. We wanted to know if Anderson was going to sue Hyde or make any other noise."(9)

Even if Rizzo was hired initially without Chairman Hyde's knowledge, if Chairman Hyde received the fruits of the gift of services, then he would have had the responsibility to report the gift to the Ethics Committee, and to dispose of the gift in an appropriate fashion.

Although it is commonplace for people to provide information to Members of Congress without that information constituting a gift, this case is different because the information was given to Henry Hyde pursuant to a lawsuit brought against him by the Resolution Trust Corporation in his capacity as a former director of a failed savings and loan, not in his official capacity as a Member of Congress.

In effect, this gift of private investigative services is no different from someone paying a portion of Chairman Hyde's legal fees. However, the allowable limit for contributions to legal defense funds was, and still is, $5,000 in a single year from any individual or organization.(10) Since this gift of services was probably worth more than $5,000, it would not likely have been permissible under the rules governing legal defense funds.

In 1995, the House gift rule,(11) prohibited the acceptance of gifts valued at more than $250, with certain exceptions or waivers granted by the Ethics Committee.

The gift of private investigative services meets the definition of a gift used in the House of Representatives at the time. The definition of a gift at the time was set forth by the House Select Committee on Ethics:

A payment, subscription, advance, forbearance, rendering, or deposit of money, services, or anything of value...unless consideration of equal or greater value is received by the donor.(12)
In an editorial last year, the Chicago Tribune wrote of "the need for Hyde to account fully for his Clyde Federal activities and his private eye" and that "the silence of the Ethics Committee in this matter is deafening."(13) We certainly agree. The Ethics Committee should, finally, appoint an investigative subcommittee and an outside counsel to determine the source of the gift of services to Chairman Hyde, the cost of the gift, and whether Chairman Hyde violated the House gift rule or federal law.

Sincerely,
 

Gary Ruskin
Director


ENDNOTES

1. House Rule 10, clause 4(e)(2).

2. Mike Dorning and Ray Gibson, "Hyde Denies Having Foe Investigated." Chicago Tribune, October 18, 1998. See Attachment #1.

3. Douglas Frantz, "Plenty of Dirty Jobs in Politics, and a New Breed of Diggers." The New York Times, July 6, 1999. See Attachment #2.

4. Transcript of Dennis Bernstein interview with Ernie Rizzo. KPFA Flashpoints radio news magazine, October 20, 1998. See Attachment #3.

5. Damon Chappie, "Private Eye's Work Linked to Hyde." Roll Call, October 26, 1998. Attachment #4 also includes Juliet Eilperin, "Watchdog Group Urges Probe of Hyde's Use of Detective," The Washington Post, October 27, 1998. Juliet Eilperin, "Lawyer for Hyde Hired Detective," The Washington Post, October 31, 1998. John McCarron, "Hypocrisy Watch: Here We Go Again." Chicago Tribune, March 1, 1999. Eric Zorn, "Vrdolyak Steps in, Private Eye Retreats in Radio Show Flap." Chicago Tribune, March 8, 1999. Eric Zorn, "Just the Fax, Please, Regarding Hyde and Private Eye." Chicago Tribune, March 11, 1999. Eric Zorn, "Maybe Hyde Will Heed a Letter from Another 3rd Grader." Chicago Tribune, March 29, 1999. Eric Zorn, "A Talk with a Sock Livens up Debate on 'Clydewater.'" Chicago Tribune, April 5, 1999. Eric Zorn, "Speaker of the Hose Wants Ethics Probe in 'Clydewater.'" Chicago Tribune, April 6, 1999. Eric Zorn, "Congressman, Aide Play a Vexing Game of Hyde-and-Seek." Chicago Tribune, June 22, 1999. Damon Chappie, "Hyde Blocks Appearance by Private Eye." Roll Call, February 15, 1999. Henry Hyde, "Hyde Sets the Record Straight." Chicago Tribune, March 10, 1999.

6. Douglas Frantz, "Plenty of Dirty Jobs in Politics, and a New Breed of Diggers." The New York Times, July 6, 1999.

7. Mike Dorning and Ray Gibson, "Hyde Denies Having Foe Investigated." Chicago Tribune, October 18, 1998.

8. Damon Chappie, "Private Eye's Work Linked to Hyde." Roll Call, October 26, 1998.

9. Douglas Frantz, "Plenty of Dirty Jobs in Politics, and a New Breed of Diggers." The New York Times, July 6, 1999.

10. House Ethics Manual at 49-50.

11. At the time, House Rule 43, clause 4.

12. House Ethics Manual, p. 28. Quoting House Select Commission on Ethics, Advisory Opinion No. 7 (May 9, 1977), reprinted in Final Report of the Select Committee on Ethics, H. Rep. No. 95-1837, 95th Cong., 2nd Sess.

13. "Henry Hyde's Private Eye." Chicago Tribune, November 19, 1998. See Attachment #5.