The party may be over, but the investigation is just beginning. The House Ethics Committee confirms that it is investigating lawmakers involved in the PMA Group contributions-cum-earmarks scandal embroiling the House Defense Appropriations Subcommittee.

Lawmakers just filed their personal financial disclosures and we're already seeing problems. Rep. Marion Berry under reported the value of property he owns in here in Washington. Sen. Chris Dodd, facing serious questions about his personal finances, asked for a 90-day extension to file his report. Nearly one-in-five senators were like Dodd and could not file their report on time. This included serial late-filer Sen. Bob Corker. Has this guy ever filed a report on time?

The Hill reports on one of those personal financial disclosures, those of Rep. Don Young. Apparently, Young has spent $1.3 million defending himself in an investigation into his relationship with the oil services company from Hades, VECO. Has there ever been one company that got so many politicians sent to jail or placed under investigation?

Budgeting political risk helped Fannie Mae, Freddie Mac, and financial services companies avoid the kind of scrutiny they needed from Congress for the past several years. Millions of dollars in private travel, campaign contributions, and lobbyists-galore created a border wall that no regulation or reform could climb over. Florida Rep. Tim Mahoney's hole gets deeper as a 2nd affair is revealed, the FBI opens and investigation, and the Democrats ditch him. There's more in this round-up of today's news:

Dave Jamieson at The New Republic looks into the lavish treatment members and staffers of the House Financial Services Committee received from Fannie Mae, Freddie Mac, and financial services companies in the years preceeding the collapse of the industry. Former chairman Mike Oxley, who now works for NASDAQ and as a lobbyist, approved a half-million dollars worth of privately paid travel, much of it offered by financial services companies. Fannie Mae and Freddie Mac had approximately one lobbyist for each member of the 70 person committee. Campaign contributions were spread around like butter on cornbread. Of course, all of this largesse eventually lured numerous staffers and committee members into the private sector and Jamieson names names:

Former Oxley adviser Carter McDowell moved on to the American Bankers Association; Karen Lynch Calton, one-time counsel to the committee, has lobbied for the Consumer Bankers Association; Greg Zerzan, an aide to Oxley, eventually went to the International Swaps and Derivatives Association; Linda Dallas Rich, a committee adviser, headed to the New York Stock Exchange; longtime Oxley aide Clinton Jones hopped to Fannie for a spell, before returning to Congress to serve Bachus on the finance committee; and even though Baker had been a perennial foe to the GSEs, the congressman's own former chief of staff, Duane Duncan, became a star on Fannie's lobbying team.

Rep. Tim Mahoney is in a load more trouble after the Associated Press revealed another affair and ABC News, the team that broke this story, reported that the FBI is investigating the allegations of hush money paid to the first reported mistress. It is alleged that Mahoney hired Patricia Allen, the first reported mistress, to both his campaign and congressional staffs. After things went sour (she discovered he was having another affair) Mahoney fired her and allegedly paid her $121,000 to keep her from filing a wrongful termination lawsuit. Speaker Nancy Pelosi called for an ethics committee investigation (although those haven't really led to anything since, I don't know, the 1990s) and House Democrats effectively abandoned the freshman Florida congressman to fend for himself in a difficult district.

The defense team in Sen. Ted Stevens' trial for filing false statements on his personal financial disclosure forms is attempting to show that the home renovations at the center of the charges were done for VECO's Bill Allen and not for Stevens. Stevens' daughter, Susan Stevens Covich, testified that when she appeared at her father's Girdwood, Alaska home to spend time while visiting Allen was present in numerous other people, often taking up all five available bedrooms leaving her to sleep on the couch. Covich said she stopped staying there after Allen's constant presence became "creepy". Previously, defense attorneys have shown that Stevens spends most of his time living in Washington, DC and not at the home in Girdwood. The judge presiding over the case stated that the case will likely be handed to the jury next week.

TPM Muckraker captured some great audio of Sen. Ted Stevens lashing out at constituents asking questions about his current legal predicament. To me, the last question was by far the most interesting. There's a transcript of the last Q&A after the video.

Q: I've been following the news lately and they were mentioning that you supported an ethics bill in 1989 that Congress had passed, it was an amended ethics and government bill that said that members of Congress needed to disclose their financial reports, anything exceeding $200, and now your defense team is saying that's unconstitutional, and I'm just wondering if you can talk to us Alaskans about how that's unconstitutional in 2008 but in 1989 that was satisfactory. A: As I've said before, I haven't seen that pleading, it was filed by my lawyers in Washington, they've been hired to do it- Q: OK well why don't you give us your opinion, aside from what your lawyers are saying- A: I'm sorry I'm not going to give my opinion about what my lawyers have done that I haven't read. So thank you very much, I don't know who gave you that amendment, that question, but whoever gave you that question ask them.

That's a pretty good question. From what I can tell, the Government Ethics Reform Act of 1989 passed the Senate by voice vote with an amendment attached. Also interesting, Sen. Stevens was an original cosponsor of the Ethics in Government Act of 1977, the law under which he is being prosecuted.

Sen. Ted Stevens has served as senator from Alaska for most of his life and nearly all of the state's existence. Stevens greatest accomplishments have been as a patronage chief; bringing home federal dollars for Alaska and protecting and expanding the extraction industries in the state, particularly the oil industry. In many ways, Stevens is Alaska. It comes as no surprise that Stevens would run his current reelection campaign on a message that says, "Without Ted, we're toast."

As some have noted already, Stevens - a "patronage-distributing warlord" - may be a dying breed of politician. There are others who still exclusively practice this kind of politics, most notably Alaska's lone representative Don Young, but few to the degree that Stevens has over the years. Stevens' undying support for earmarking and the oil industry may have brought on investigative scrutiny and, ultimately, an indictment. But they also appear to have muddled the water in the investigation, prompting prosecutors to charge Stevens with seemingly lesser felonies - for now.

From looking at the charges as filed and the evidence submitted by the prosecution it is evident that they have uncovered a scheme by which Sen. Stevens accepted gifts, including the extreme home makeover of his Bridgewood "chalet", in exchange for legislative help in Washington and Anchorage and help in dealing with executive branch agencies and international trade bodies. Despite what appears to be a mound of evidence, including taped phone calls and seized emails and phone messages, the government did not charge Stevens with accepting bribes or any other related charge instead relying on false statement charges. It might be difficult to prove that Sen. Stevens acted in support of a company in exchange for a bribe when his entire career has been based on his support for Alaskan oil interests. Of course, I'm not saying that Stevens is the right for his actions - a jury will have to decide that.

This is the "I've been doing it my whole career" defense. Which is kind of like the "criminalization of politics" defense. Or, the more effective "friend and compatriot" defense rolled out by both Jack Abramoff and Tom DeLay. DeLay and Abramoff were close friends who shared incredibly similar ideological beliefs. It's hard to pin someone down for doing something corrupt when it might overlap with something someone would do for a friend or for an ideological cause - or in Stevens' case, for a home state interest. So far, DeLay has escaped indictment for any role in Abramoff's crimes.

Sen. Stevens' legal defense team will certainly use this defense when the trial gets underway. Many congressmen, including John Murtha and Jerry Lewis, who appear to be running rackets in their districts in the name of winning money for local business and constituents already do so when confronted with negative stories. As Stevens could represent a dying breed of politician, this line of defense could crumble into dust during his trial.

Michael Stern at Point of Order, one of the better blogs for legal issues in Congress, covers the legal background of the charges brought against Sen. Ted Stevens. Stevens is facing seven felony charges for deliberately filing false financial disclosure forms to the Senate Ethics Committee. Give Stern's explanation a read; it'll be worth it when following the Stevens trial. Steven's trial starts on September 24.

Sen. Ted Stevens released a statement in which he declares his innocence and vows to fight the charges. He also stepped down his posts as ranking member of both the Commerce Committee and the Appropriations Committee.

For some background on Sen. Stevens, I wanted to point out the utility of Sunlight's Lawmaker Profile, which you can access through the front page of our web site. I was just toying around with Sen. Stevens' profile and got this telling image of a cloud of his top ten career contributors:

$88,000 from VECO, the company that he is alleged to have received gifts from, and which he is said to have done favors for.

You can also dig into his personal finances, earmarks, and contracts through this tool.

So, the indictment is in and the charges against Sen. Ted Stevens include seven counts of making false statements on his personal financial disclosure forms from 1999-2006. Many of these false statement counts revolve around work done on Stevens' Girdwood, AK home courtesy of the VECO oil company. Sunlight's Bill Allison makes the case at Real Time Investigations that if the money spent on equipment, parts, and labor did not constitute a gift, but rather a loan, then Stevens would be allowed to omit them from his disclosure forms, thereby acquitting him of several false statement charges:

[F]rom my quick read of the indictment, it appears that the government is suggesting that when Stevens says he has no liabilities of more than $10,000, that means the hundreds of thousands of dollars Stevens is alleged to have received as benefits from VECO couldn’t possibly have been loans. But if (and for the record, I doubt this is likely), if Stevens was borrowing money, labor and materials to renovate a residence from VECO rather than accepting it as a gift, I’m not sure Stevens would have to report it under current personal financial disclosure rules, which say,

property which is held or maintained solely for recreational or personal purposes does not have to be reported…. (p. 131)

and

Mortgages secured by a personal residence (including secondary residences) that are not used for rental purposes do not have to be disclosed. (p. 136)

Suppose there was some understanding Stevens would repay Veco or its CEO, Bill Allen, for the home repairs, the car swap, the furniture and so on — shouldn’t the public know of those potential conflicts of interest? The indictment reminds us,

The primary purpose of the yearly Financial Disclosure Forms is to disclose, monitor and deter conflicts of interest, thereby maintaining public confidence in the integrity of the United States Senate and its Members. Because the yearly Financial Disclosure Forms require public disclosure of financial information by each Member of the United States Senate, such as income, assets, gifts, financial interests, and liabilities, the Forms provide the public at large, including the voters of a particular state, with the information necessary to allow the public to evaluate and consider official conduct by a Member of the United States Senate in light of that Member’s private finances.

Do the current disclosure requirements adequately “deter conflicts of interest, thereby maintaining public confidence in the integrity of the United States Senate and its Members,” if they exempt personal residences, mortgages, car loans and so on from public view?

As Bill says, it is highly unlikely that these were loans and not gifts. One would have to assume that the cooperating witness identified in the indictment, VECO CEO Bill Allen, provided enough information to prove that there was no intention of repayment. Also, as I previously noted in the previous blog post, paragraph 17 of the indictment suggests (although the DOJ insistently declared that it does not allege) a possibility of quid pro quo:

17. It was a part of the scheme that STEVENS, while during that same time period that he was concealing his continuing receipt of things of value from ALLEN and VECO from 1999 to 2006, received and accepted solicitations for multiple official actions from ALLEN and other VECO employees, and knowing that STEVENS could and did use his official position and his office on behalf of VECO during that same time period. These solicitations for official action, some of which were made directly to STEVENS, included the following topics: (a) funding requests and other assistance with certain international VECO projects and partnerships, including those in Pakistan and Russia; (b) requests for multiple federal grants and contracts to benefit VECO, its subsidiaries, and its business partners, including grants from the National Science Foundation to a VECO subsidiary; and (c) assistance on both federal and state issues in connection with the effort to construct a natural gas pipeline from Alaska’s North Slope Region.

There is likely more information yet to be revealed, as the DOJ stated the investigation is ongoing, that would prove that these gifts and not loans.

Returning to Bill's chief point, there is a clear loop hole exposed in the system of conflict of interest disclosure. The personal financial disclosure documents are important in the revelation of conflicts of interest and ought to reveal all conflicts that lawmakers hold. In recent months and weeks, the number of stories highlighting conflicts that arise from the ownership of personal homes is putting a spotlight on the need for greater disclosure.

Sens. Chris Dodd and Kent Conrad received favorable mortgages on homes from Countrywide. Only Conrad disclosed his mortgage and home on his personal financial disclosure form. Rep. Laura Richardson defaulted on numerous mortgages which should have been disclosed but were not. And today it was reported that Rep. Joe Knollenberg undervalued his D.C. residence on more than one financial disclosure.

After considering these cases, most egregiously the case of Sen. Stevens, I'll let you comment on Bill's final question:

Do the current disclosure requirements adequately “deter conflicts of interest, thereby maintaining public confidence in the integrity of the United States Senate and its Members,” if they exempt personal residences, mortgages, car loans and so on from public view?