On March 1, 2010, Nathan Deal quit Congress. Asked at the time whether his resignation had anything to do with the pending House ethics investigation, Deal replied, "That's absolutely not true." Now, for the rest of the story.
On January 28, 2010, the bipartisan Board of the Office of Congressional Ethics "adopted the following report and findings and ordered them to be transmitted to the Committee on Standards of Official Conduct of the United States House of
Representatives." This report and findings in this matter were transmitted to the Committee on Standards of
Official Conduct on February 5, 2010. By resigning from Congress, Deal conveniently cut off further investigation, including recommended subpoenas, and sanctions.
THE ALLEGATIONS
- In 2008 and 2009, Representative Deal sought to preserve a state vehicle inspection program that had generated significant personal financial benefit for him and a business partner. Representative Deal attended meetings on the state inspection program with Georgia officials and told the OCE he attended the meetings, not as a private citizen, but rather as a "public servant" acting in some official capacity. Changes to the vehicle inspection program concerned a purely state issue and according to state officials, no other Member of Congress from Georgia involved themselves in it. Thus, the Board concludes that there is a substantial reason to believe that Representative Deal may have violated
House Rule 23, clause 3 and Rule 5 of the Code of Government Service.
- In addition, Representative Deal was accompanied by his Chief of Staff at meetings on the vehicle inspection program and directed the Chief of Staff to use a House email account to send emails related to the meetings. Thus, there is substantial reason to believe Representative Deal violated the House Ethics Manual’s prohibition on using
House equipment and resources for personal business purposes.
- Representative Deal disclosed $50,001 to $100,000 in unearned "Dividends" income (and unearned "Partnership Income" on an amended form) from GSD on his 2009 Financial Disclosure Statement (covering calendar year 2008). However, the same income was
described as earned wages on his 2008 personal income tax forms. Specifically, Representative Deal’s 2008 tax documents show $75,000 in GSD wages; in addition, Representative Deal received a W-2 from GSD in 2006, 2007, and 2008. Thus, there is a substantial reason to believe Representative Deal violated the House Ethics Manual’s
directive to disclose all earned income.
- Further, Representative Deal rendered some degree of service to GSD in 2008 and 2009 and his 2008 taxes show $75,000 in GSD wages. Thus, there is substantial reason to believe Representative Deal violated the earned income limitation, House Rule 25, Clause 1.
- Representative Deal is the GSD corporate secretary. His 2008 taxes show $75,000 in GSD wages. Thus, there is substantial reason to believe Representative Deal violated the prohibition on receiving compensation as a corporate officer, House Rule 25, Clause 2.
- Representative Deal also failed to disclose his status as the GSD corporate secretary on his financial disclosure forms. Thus, there is substantial reason to believe Representative Deal violated the House Ethics Manual’s directive to disclose all nongovernmental
positions held.
OFFICE OF CONGRESSIONAL ETHICS Review No. 09-1022
SOME OF THE FACTUAL FINDINGS
- The OCE requested and received documentary, and in some cases testimonial,
information from the following sources:
(1) Representative Deal;
(2) Representative Deal’s Chief of Staff;
(3) Representative Deal’s Business Partner;
(4) A Georgia State Legislator;
(5) The Georgia Revenue Commissioner;
(6) The Georgia Deputy Revenue Commissioner.
- The OCE requested, but was unable to conduct, interviews with the Georgia Lieutenant Governor, former members of his staff, and current members of his staff because the Lieutenant Governor refused to cooperate with the OCE investigation.
- The Revenue Commissioner’s 2008 plan would have eliminated state inspector positions and permitted qualified individuals to conduct private inspections. Private inspectors would become certified through a standardized program. The plan would also ask for
proposals from anyone in Georgia who wished to open an inspection station, regardless of proximity to an existing station. The changes would also place no limitation, per station, on the number of cars that could be inspected because each station would hire its own private inspectors, as opposed to waiting for rotating state inspectors. The
Revenue Commissioner believed that the private sector could best administer the inspection program for the state of Georgia and described his plan as effectively terminating what he described as "regional monopolies."
- The Revenue Commissioner stated that he met with Representative Deal and others on three occasions in 2008 and 2009 to discuss the Salvage Inspection Program. Representative Deal, his business partner, and his Chief of Staff confirmed this information.
- The Revenue Commissioner stated that the purpose of the second meeting on June 30, 2008, was to discuss a request by Representative Deal and his business partner to keep a permanent state inspector at GSD. The Lieutenant Governor also supported this request. The Revenue Commissioner explained to Representative Deal and his business partner that he felt the request was inappropriate and created a conflict because no other
station received such treatment.
- The third meeting was initiated by Representative Deal’s Chief of Staff who contacted the Lieutenant Governor’s office and also the Deputy Revenue Commissioner. When asked how he got the third meeting, Representative Deal stated that "probably the Lieutenant Governor" helped get the meeting.
- At the third meeting on March 27, 2009, the Revenue Commissioner stated that Representative Deal and Representative Deal’s business partner advocated against the changes in the Salvage Inspection Program that the Revenue Commissioner had proposed. The Revenue Commissioner also told the OCE that he would characterize interactions at the last meeting as contentious.50 Representative Deal’s Chief of Staff
characterized the meeting as "hostile."
- The Revenue Commissioner stated that at the third meeting, the Georgia State Legislator accompanying Representative Deal and his business partner "hotboxed" him and treated him as if he were a witness under cross-examination. When asked about why the State Legislator attended the meeting, Representative Deal stated that he did not know but
speculated that either the business partner or his Chief of Staff asked for his attendance. The Chief of Staff stated that the State Legislator attended because he is Representative Deal’s and the business partner’s representative in the state legislature. The State Legislator confirmed this assertion by the Chief of Staff. The State Legislator also
stated that no other constituents came to him with concerns over changes to the inspection program.
- When asked in what capacity he attended the meetings, Representative Deal stated that he attended them as someone with "personal knowledge" that was trying to "get information" from the Revenue Commissioner because nobody else could.
- The Board notes that the OCE specifically asked Representative Deal again whether he attended these meetings as a Member of Congress or as a salvage station owner and he responded that he attended as a "public servant."
- During his interview with the OCE, the Revenue Commissioner stated that he and Representative Deal had a private discussion at one of the meetings but that he could not disclose the nature of the conversation without being subpoenaed on the advice of the Georgia Attorney General. He stated that the information is a tax-related matter and for confidentiality reasons, he could not discuss the matter without being compelled to do so.
- Representative Deal’s Chief of Staff attended all three meetings with the Department of Revenue. When asked why he would attend the meetings, the Chief of Staff stated that he rarely allows Representative Deal to go anywhere without him, unless it is a family matter.
- Roughly twenty emails were sent from Representative Deal’s Chief of Staff to employees of the Georgia Department of Revenue and the Lieutenant Governor’s Office regarding meetings on vehicle inspection program. These emails were sent from the Chief of Staff’s U.S. House of Representatives email account.
- Representative Deal stated that he is the "Secretary/Treasurer" at GSD. Further, the Georgia Secretary of State lists Representative Deal as the GSD corporate secretary under the classification of "Officers."
- The Board notes that on his amended 2009 U.S. House of Representatives Financial Disclosure Statement, covering calendar year 2008, schedule VIII ("Positions") Representative Deal lists himself as a "member/partner/owner" of GSD but does not disclose that he is also the corporate secretary.
- On his 2009 U.S. House of Representatives Financial Disclosure Statement schedule III ("Assets and ‘Unearned’ Income"), reporting for calendar year 2008 and filed on May 13, 2009, Representative Deal listed GSD’s "Rent" income at $15,001 to $50,000 and "Dividends" income from $50,001 to $100,000.
- On his amended 2009 Financial Disclosure Statement (covering calendar year 2008), filed January 22, 2010, Representative Deal changed the GSD income from "Dividends" to "Partnership Income."
- Representative Deal stated that the reported "Dividend" income from $50,001 to $100,000 on the statement, reflected $75,000 received from GSD during 2008.
- However, on his 2008 tax return, Representative Deal disclosed wages of $75,000 from GSD. Further, a W-2 was issued to Representative Deal, from GSD, acknowledging $75,000 in wages and compensation. Representative Deal told the OCE that the $75,000 in wages listed on his tax return is the same income he described as "Dividends"
(and then subsequently "Partnership Income") on his 2009 Financial Disclosure Statement (covering 2008).
- When asked about the $75,000 amount reported as wages from GSD on his income taxes, Representative Deal stated that the amount actually reflected "equity" in the business and not earned income.95 The $75,000 amount is issued to Representative Deal each year, in monthly installments, and is based on an oral agreement with his business partner.
- The Board notes that Representative Deal’s accountant signed an October 26, 2009 letter stating that "due to an ethics investigation" and "based on various discussions," the $75,000 Representative Deal received from GSD was mistakenly reported as GSD income for the last three years.
- The Board also notes that as of December 16, 2009, the tax form in the OCE’s possession had not been amended or corrected, and when interviewed, Representative Deal did not tell the OCE that he had filed an amended form.
Geez. This report certainly gives some context for evaluating recent oversights and disclosure issues. Certainly worth a read or re-read. The facts speak volumes.