[House Prints, 111th Congress]
[From the U.S. Government Publishing Office]


                                 REPORT

                           Review No. 09-7000

    The Board of the Office of Congressional Ethics, by a vote 
of no less than four members, on July 24, 2009, adopted the 
following report and ordered it to be transmitted to the 
Committee on Standards of Official Conduct of the U.S. House of 
Representatives.
    SUBJECT: Representative Sam Graves
    NATURE OF THE ALLEGED VIOLATION: Representative Sam Graves, 
Ranking Member of the Committee on Small Business, invited 
Witness A to testify at a Committee hearing on ``The State of 
the Renewable Fuels Industry in the Current Economy.'' The 
hearing was held on March 4, 2009. Witness A and Representative 
Graves' wife, Lesley Graves, both hold financial interests in 
the same renewable fuels plants in Missouri. Representative 
Graves conduct may have violated House Rule 23 and House 
precedent regarding conflict of interest.
    RECOMMENDATION: The Board of the Office of Congressional 
Ethics recommends that the Committee on Standards of Official 
Conduct further review the above described allegations 
concerning Representative Graves.

    VOTES IN THE AFFIRMATIVE: 6

    VOTES IN THE NEGATIVE: 0

    MEMBER OF THE BOARD OR STAFF DESIGNATED TO PRESENT THIS 
REPORT TO THE STANDARDS COMMITTEE: Leo Wise, Staff Director & 
Chief Counsel.
                           TABLE OF CONTENTS

  I. INTRODUCTON......................................................5
          A. Summary of Allegations..............................     5
          B. Jurisdictional Statement............................     6
          C. Procedural History..................................     6
          D. Summary of Investigative Activity...................     7
 II. REPRESENTATIVE GRAVES' WITNESS SELECTION FOR COMMITTEE ON SMALL 
     BUSINESS HEARING.................................................7
          A. Applicable Laws, Rules and Standards of Conduct.....     7
          B. Representative Graves' Wife, Lesley Graves, and 
              Witness A Both Have Financial Interests in 
              Renewable Fuels Plants Located in Craig and Mexico, 
              Missouri...........................................     7
          C. Representative Graves Invited Witness A to Testify 
              Before the Committee on Small Business on the 
              Renewable Fuels Industry...........................     8
          D. Representative Graves Appeared to be Aware of 
              Potential Conflicts of Interest with Witness 
              Selection Prior to the March 4, 2009 Committee 
              Hearing............................................    15
          E. Representative Graves' Staff Appeared to be Aware of 
              Potential Conflicts of Interest with Witness 
              Selection Prior to the March 4, 2009 Committee 
              Hearing............................................    18
III. CONCLUSION......................................................21
                 FINDINGS OF FACT AND CITATIONS TO LAW

                           Review No. 09-7000

    On July 24, 2009, the Board adopted the following findings 
of fact and accompanying citations to law, regulations, rules 
and standards of conduct (in italics). The Board notes that 
these findings do not constitute a determination that a 
violation actually occurred.

                             I. INTRODUCTON

    1. The House Ethics Manual (``the Manual'') discusses the 
precedents guiding Members' actions on matters of personal 
financial interests. In voting matters, Members are required to 
abstain from voting on a matter in which they have a personal 
financial interest if the legislation affects the Member 
directly and not as one of a class. The Manual advises that 
other actions such as ``sponsoring legislation, advocating or 
participating in an action by a House committee, or contacting 
an executive branch agency entail ``a degree of advocacy above 
and beyond that involved in voting.'' \1\ As such, a ``Member's 
decision on whether to take any such action on a matter that 
may affect his or her personal financial interests requires 
added circumspection.'' A Member who considers advocating on a 
matter that may affect his personal financial interests is 
advised to first contact the Standards Committee for 
guidance.'' \2\ The Manual further advises that Members should 
guard against even the appearance of any impropriety or 
conflict of interest because such actions may adversely affect 
public perceptions and confidence.\3\
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    \1\ COMM. ON STANDARDS OF OFFICIAL CONDUCT, 110TH CONG., HOUSE 
ETHICS MANUAL 237 (2008).
    \2\ Id.
    \3\ See COMM. ON STANDARDS OF OFFICIAL CONDUCT, 110TH CONG., HOUSE 
ETHICS MANUAL 24, 71, 88, 188, 200, 209, 211, 213, 215, 238, 290, 309, 
321, 327, 352 (2008).
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                       A. SUMMARY OF ALLEGATIONS

    2. Based on the information before the OCE, there is 
substantial reason to believe that an appearance of a conflict 
of interest was created when Representative Graves invited 
Witness A, a friend of the Representative's who was invested in 
the same ethanol and biodiesel cooperatives as his wife, to 
testify before the Committee on Small Business.\4\
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    \4\ As per Rule 9 of the OFFICE OF CONGRESSIONAL ETHICS, RULES FOR 
THE CONDUCT OF INVESTIGATION 11 (2009), the Board shall refer a matter 
to the Standards Committee if it determines there is a substantial 
reason to believe the allegation.
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    3. It appears that Representative Graves had knowledge of 
Witness A's investment in Golden Triangle Energy Cooperative 
(``Golden Triangle'') and had reason to believe that Witness A 
was invested in Biofuels LLC (``Biofuels''), two companies in 
which Representative Graves' wife, Lesley Graves, was also 
invested. As such, it follows that Representative Graves could 
expect Witness A to testify at the hearing in a manner 
consistent with Witness A's and his own financial interest.
    4. Witness A informed OCE staff that while he was President 
of the Missouri Soybean Association he had approached 
Representative Graves about investing in Biofuels. In addition, 
Witness A's connection to Golden Triangle was previously 
acknowledged in the press, specifically in an article which 
included a quote from Representative Graves in which he stated 
that he ``probably should have'' disclosed his own interest in 
Golden Triangle during a previous hearing at which Witness A 
had testified.
    5. Witness A also acknowledged that he had discussed Golden 
Triangle Energy with Representative Graves and that he had 
discussed Biofuels with him.
    6. Based on emails and testimony, Representative Graves' 
wife's investments, as they related to witness selection, were 
raised as a potential conflicts issue when staff were 
considering witnesses for the March hearing.
    7. Representative Graves' Chief of Staff informed OCE staff 
that it was his practice to contact the Standards Committee 
when questions concerning conflicts of interest arose but that 
he did not review Representative Graves' financial disclosure 
statement.

                      B. JURISDICTIONAL STATEMENT

    8. The allegations that are the subject of this review 
concern Representative Sam Graves, a Member of the United 
States House of Representatives from the 6th District of 
Missouri. The Resolution the United States House of 
Representatives adopted creating the Office of Congressional 
Ethics directs that, ``[n]o review shall be undertaken'' . . . 
by the board of any alleged violation that occurred before the 
date of adoption of this resolution.'' \5\ The House adopted 
this Resolution on March 11, 2008. Because the conduct under 
review occurred or relates to actions taken after March 11, 
2008, review by the Office of Congressional Ethics is in 
accordance with the Resolution.
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    \5\ H. Res 895, 110th Cong. Sec. 1(e) (2008) (as amended).
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                         C. PROCEDURAL HISTORY

    9. A preliminary review in this matter commenced on April 
2, 2009, following a written request by at least two members of 
the OCE Board made on March 26, 2009.
    10. At least three members of the Board voted to initiate a 
second-phase review in this matter on April 24, 2009. The Board 
voted to extend the 45-day second-phase review by an additional 
14 days, as provided for under the Resolution, on June 12, 
2009.
    11. The second-phase review ended on June 30, 2009.
    12. The Board voted to refer the matter to the Committee on 
Standards of Official Conduct for further review and adopted 
these findings on July 24, 2009.
    13. This report and findings were transmitted to the 
Committee on Standards of Official Conduct on August 6, 2009.

                  D. SUMMARY OF INVESTIGATIVE ACTIVITY

    14. Over the course of its Review, the Office requested 
and/or gathered testimonial and documentary evidence from a 
number of sources.
    15. The Office interviewed:
    (1) Representative Sam Graves;
    (2) Representative Graves' then Deputy Chief of Staff;
    (3) Representative Graves' Chief of Staff;
    (4) Representative Graves' Communication Director; and
    (5) Witness A.
    16. In addition, the office requested and received 
documents from:
    (1) Representative Sam Graves and
    (2) Witness A

  II. REPRESENTATIVE GRAVES' WITNESS SELECTION FOR COMMITTEE ON SMALL 
                            BUSINESS HEARING

          A. APPLICABLE, LAWS, RULES AND STANDARDS OF CONDUCT

    17. Code of Official Conduct:
    Under House Rule 23 clause 2, Members ``shall adhere to the 
spirit and the letter of the Rules of the House . . .''
    Under House Rule 3 clause 1, ``Every Member . . . shall 
vote on each question put, unless he has a direct personal or 
pecuniary interest in the event of such question.''
    The House Ethics Manual advises ``sponsoring legislation, 
advocating or participating in an action by a House committee, 
or contacting an executive branch agency . . . entails a degree 
of advocacy above and beyond that involved in voting, and thus 
a Member's decision on whether to take any such action on a 
matter that may affect his or her personal financial interests 
requires added circumspection.''
    The House Ethics Manual further advises that Members should 
guard against even the appearance of any impropriety or 
conflict of interest because such actions may adversely affect 
public perceptions and confidence.\6\
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    \6\ COMM. ON STANDARDS OF OFFICIAL CONDUCT, 110TH CONG., HOUSE 
ETHICS MANUAL 24, 71, 88, 188, 200, 209, 211, 213, 215, 238, 290, 309, 
321, 327, 352 (2008).
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B. REPRESENTATIVE GRAVES' WIFE, LESLEY GRAVES, AND WITNESS A BOTH HAVE 
  FINANCIAL INTERESTS IN RENEWABLE FUELS PLANTS LOCATED IN CRAIG AND 
                           MEXICO, MISSOURI.

    18. Representative Graves' wife, Lesley Graves, is invested 
in two Missouri nonprofit cooperative marketing associations, 
Golden Triangle Energy Cooperative (``Golden Triangle'') 
located in Craig, Missouri and Biofuels LLC (``Biofuels'') 
located in Mexico, Missouri.\7\ Mrs. Graves' shares in Golden 
Triangle represent approximately a 0.18% interest in the 
cooperative which is valued between $1,000 and $15,000.\8\ Mrs. 
Graves owns 50 units in the Biofuels cooperative which are 
valued between $15,000 and $50,000.\9\
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    \7\ Statement for Golden Triangle, Biofuels LLC, and Show Me 
Ethanol (Exhibit 1 at 09-7000--000002-000004).
    \8\ Statement for Golden Triangle (Exhibit 1 at 09-7000--000002).
    \9\ Statement for Biofuels LLC (Exhibit 1 at 09-7000--000003).
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    19. Representative Graves disclosed both of Mrs. Graves' 
holdings on his 2008 financial disclosure report. A third 
company, Show Me Ethanol, is also disclosed on the 2008 
report.\10\ However, Mrs. Graves sold her interest in Show Me 
Ethanol on October 3, 2008.\11\
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    \10\ Representative Graves' 2008 Financial Disclosure Statement 
(Exhibit 2 at 09-7000--000009).
    \11\ Statement for Show Me Ethanol (Exhibit 1 at 09-7000--000004).
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    20. In a letter to the OCE staff, Witness A confirmed that 
he was invested in both Golden Triangle and Biofuels and stated 
that he was not invested in Show Me Ethanol.\12\ Witness A's 
shares in Golden Triangle represent approximately a 0.50% 
interest in the cooperative.\13\ Witness A owns three shares of 
stock (1/3 of 1 percent) in Biofuels, valued at $45,000.\14\
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    \12\ Letter to Leo Wise, Staff Director and Chief Counsel, Office 
of Congressional Ethics from Witness A, Apr. 29, 2009 (Exhibit 3 at 09-
7000--000015).
    \13\ Letter from Sheri Sharp, Controller, Golden Triangle Energy, 
LLC, to Witness A, Apr. 27, 2009 (Exhibit 3 at 09-7000--000017).
    \14\ Letter from JP Dunn, Director of Field Services, Biofuels, 
LLC, Apr. 24, 2009 (Exhibit 3 at 09-7000--000016).
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    21. When interviewed by OCE staff, Representative Graves 
stated that investments were not something he talks about with 
Witness A. He could not say what Witness A was invested in 
because Witness A ``goes in and out of investments.'' \15\
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    \15\ Memorandum of Interview of Representative Sam Graves, June 15, 
2009 (Exhibit 4 at 09-7000--000031).
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    22. The Board notes, however, that Witness A informed OCE 
staff that he may have spoken with Representative Graves about 
Golden Triangle at some point in time and that he would have 
talked with him about Biofuels.\16\
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    \16\ Memorandum of Interview of Witness A, July 13, 2009 (Exhibit 5 
at 09-7000--000042).
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    23. In addition, the Board notes that Witness A informed 
OCE staff that he approached Representative Graves about 
investing in Biofuels.\17\ Witness A stated that he was 
responsible for recruiting investors for Biofuels and Paseo 
Cargill. He further stated that he handed out numerous 
prospectuses to individuals for both entities and that he was 
responsible for marketing the businesses. He recalled that he 
gave Representative Graves a prospectus but he did not check 
with him to see if he had invested in the plant.\18\ As stated 
above, Representative Graves did, in fact, invest in Biofuels.
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    \17\ Memorandum of Interview of Witness A, July 13, 2009 (Exhibit 5 
at 09-7000--000041).
    \18\ Id.
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   C. REPRESENTATIVE GRAVES INVITED WITNESS A TO TESTIFY BEFORE THE 
      COMMITTEE ON SMALL BUSINESS ON THE RENEWABLE FUELS INDUSTRY.

    24. On February 24, 2009, the Chairwoman of the Committee 
on Small Business notified Committee staff that a full 
Committee Hearing entitled ``The State of the Renewable Fuels 
Industry in the Current Economy'' was to be held on March 4, 
2009.\19\
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    \19\ Memorandum to Members of the House Small Business Committee, 
Mar. 4, 2009 (Exhibit 6 at 09-7000--000045).
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    25. After receiving notice of the meeting, Joe Hartz (a 
member of the professional staff in the Republican Office of 
the Committee on Small Business) notified Representative 
Graves' then Deputy Chief of Staff of the hearing.\20\
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    \20\ Emails provided by Representative Sam Graves (Exhibit 7 at 09-
7000--000047).
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    26. Representative Graves' then Deputy Chief of Staff 
immediately forwarded Mr. Hartz's email to members of 
Representative Graves' staff asking for suggestions for a 
witness to testify at the hearing.\21\
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    \21\ Id. at 09-7000--000048. 

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    27. Several members of Representative Graves' staff 
responded the same day with numerous suggestions for witnesses:
    (a) ``Steve Flick or an investor at Golden Triangle . . .'' 
\22\
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    \22\ Id. 

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    (b) ``Dave Flicks brother'' (presumably another reference 
for Steve Flick):\23\
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    \23\ Id. at 09-7000--000050. 

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    (c) ``Dale Ludwig: \24\
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    \24\ Id. at 09-7000--000053. 

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    28. Representative Graves' Chief of Staff informed OCE 
staff that he had been impressed by the Flicks on another 
occasion.\25\
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    \25\ Memorandum of Interview of Representative Graves' Chief of 
Staff, June 16, 2009 (Exhibit 8 at 09-7000--000095).
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    29. According to Representative Graves' then Deputy Chief 
of Staff, Representative Graves dismissed the idea of inviting 
Mr. Flick to testify because Mr. Flick lived outside 
Representative Graves' district and Representative Graves 
wanted a witness from the 6th district to testify at the 
hearing.\26\
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    \26\ Memorandum of Interview of Representative Graves' then Deputy 
Chief of Staff, June 16, 2009 (Exhibit 9 at 09-7000--000107).
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    30. Representative Graves' then Deputy Chief of Staff 
emailed Representative Graves separately to notify him of the 
hearing and to ask who he would like to appear as a 
witness.\27\
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    \27\ Emails provided by Representative Sam Graves (Exhibit 7 at 09-
7000--000054). 

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    31. When interviewed by OCE staff, Representative Graves 
stated that he suggested Witness A's name for consideration but 
that it was not his decision to choose Witness A. He further 
stated that he does not choose witnesses for hearings and that 
he did not know who on his staff was responsible for making 
those decisions. He believed his then Deputy Chief of Staff or 
Karen Haas may have made the decision to invite Witness A.\28\
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    \28\ Memorandum of Interview of Representative Sam Graves, June 15, 
2009 (Exhibit 4 at 09-7000--000028-000029).
    32. In an email dated February 25, 2009, Representative 
Graves' then Deputy Chief of Staff notified Mr. Hartz and Karen 
Haas that Representative Graves wanted him to extend an 
invitation to Witness A.\29\ This email, specifically the 
statement ``he wants me to extend an invitation to him'' 
contradicts Representative Graves' statement that he did not 
choose the witness for the March hearing and that he did not 
know who had made the decision to invite Witness A.
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    \29\ Emails provided by Representative Sam Graves (Exhibit 7 at 09-
7000--000070).

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    33. In his interview with OCE staff, Witness A stated that 
it was Representative Graves that contacted him to ask if he 
was available to testify at the hearing.\30\ Representative 
Graves did not tell OCE that he had, in fact, contacted Witness 
A and asked him to testify.
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    \30\ Memorandum of Interview of Witness A, July 13, 2009 (Exhibit 5 
at 09-7000--000040).
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    34. Based on later email responses from other staff 
members, it appears that other individuals in addition to those 
initially suggested by staff were available to testify at the 
March 4 hearing. Chad Higdon suggested Bill Becker on February 
25, 2009: \31\
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    \31\ Emails provided by Representative Sam Graves (Exhibit 7 at 09-
7000--000065). 

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    35. On February 25, 2009, Brooke Shupe forwarded an email 
with additional names of individuals that were already 
scheduled to be in Washington on the day of the hearing.\32\
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    \32\ Id. at 09-7000--000069. 

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    36. Representative Graves' then Deputy Chief of Staff 
forwarded Ms. Shupe's email to staff asking for thoughts on Mr. 
Becker. He stated in the email that Representative Graves did 
not want Mr. Becker to testify but had agreed for him to do so 
if Witness A could not. Representative Graves' then Deputy 
Chief of Staff later followed up with an email to staff stating 
that Representative Graves had spoken with Witness A and that 
he was able to testify.\33\ The Board notes this email also 
contradicts Witness Representative Graves' statement that he 
did not know who had invited Witness A to testify.
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    \33\ Id. at 09-7000-000073. 

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
    37. When interviewed by OCE staff, Representative Graves 
stated that he did not recall why he did not want Mr. Becker to 
testify or why he was considered as an alternate; he stated 
that he thought that the office may have worked on a grant 
issue for Lifeline, the company at which Mr. Becker was CEO, 
and for that reason excluded him from consideration.\34\
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    \34\ Memorandum of Interview of Representative Sam Graves, June 15, 
2009 (Exhibit 4 at 09-7000--000030).
    38. Representative Graves' then Deputy Chief of Staff 
emailed staff on February 26, 2009, to confirm that Witness A 
was to testify and to notify staff that Witness A was one of 
Representative Graves' best friends.\35\
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    \35\ Emails provided by Representative Sam Graves (Exhibit 7 at 09-
7000--000079).

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    39. Witness A testified before the Committee on Small 
Business on March 4, 2009.\36\
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    \36\ Witness List for House Committee on Small Business, Mar. 4, 
2009 (Exhibit 11 at 09-7000--000119).
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    40. When asked why Witness A was chosen as a witness, 
Representative Graves stated that there was a ``time frame 
issue'' with finding a witness for the hearing and that they 
needed to find someone who knew renewable fuels. Representative 
Graves described Witness A as ``the foremost person'' with 
knowledge on renewable fuels.\37\
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    \37\ Memorandum of Interview of Representative Sam Graves, June 15, 
2009 (Exhibit 4 at 09-7000--000029).
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    41. When asked why Witness A was the ``foremost person'', 
Representative Graves stated that Witness A was the President 
of the Missouri Soybean Association, was involved with the corn 
growers, and that he testified throughout the country on 
renewable fuels.\38\
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    \38\ Id.
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    42. Witness A was introduced at the hearing by 
Representative Graves as a farmer from northwest Missouri whose 
family was very active in biodiesel and ethanol production. In 
his testimony, Witness A also described himself as being an 
investor in a small ethanol plant in the town of Craig, 
Missouri.\39\
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    \39\ Testimony of Witness A before the House of Representatives 
Small Business Committee, Mar. 4, 2009, available at, http://
www.youtube.com/view--play--list'p=A5AA7A25C5CF0401 (Renewable Fuels in 
the Current Economy--7).
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    43. Neither Representative Graves nor Witness A disclosed 
that Representative Graves' shared financial interests with 
Witness A during the Committee hearing.

D. REPRESENTATIVE GRAVES APPEARED TO BE AWARE OF POTENTIAL CONFLICTS OF 
 INTEREST WITH WITNESS SELECTION PRIOR TO THE MARCH 4, 2009 COMMITTEE 
                                HEARING.

    44. On November 7, 2007, Roll Call reported that 
Representative Graves joined several other Midwestern lawmakers 
in sponsoring legislation to create a national mandate for the 
use of increasing quantities of biodiesel as a replacement for 
regular diesel fuel.\40\ The article noted that the bill would 
potentially benefit Representative Graves wife, Lesley, who in 
2005 invested $15,000 in a new biodiesel plant (Biofuels) that 
had become the largest biodiesel facility in the state.\41\ The 
article also noted that in May of 2004, when Representative 
Graves was Chairman of the Subcommittee on Rural Enterprises, 
Agriculture and Technology, (a subcommittee of the full 
Committee on Small Business) the panel held a hearing on 
renewable fuels and tax incentives for ethanol and 
biodiesel.\42\ One of the witnesses for the hearing was the 
treasurer of Golden Triangle, a cooperative in which 
Representative Graves' wife was and continues to be 
invested.\43\ A second witness, Witness A in the current 
matter, spoke on behalf of the Missouri Soybean Association 
about the importance of a tax incentive for the use of 
biodiesel in blends with regular diesel fuel.\44\ The 2007 Roll 
Call article further noted that a year after the 2004 hearing, 
Witness A, along with other Missouri farmers, established a new 
company to build a biodiesel plant in Missouri.\45\ Witness A 
is quoted in the Roll Call article as stating that he recruited 
Representative Graves' family to invest in the new company. 
Mrs. Graves is reported as having invested $15,000 in the new 
venture.\46\
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    \40\ The legislation co-sponsored by Representative Graves' in 
October of 2007 was H. Con. Res. 25 (Exhibit 13 at 09-7000--000129).
    \41\ Paul Singer, Biofuels, Flights Benefit Graves, ROLL CALL, Nov. 
7, 2007 (Exhibit 14 at 09-7000--000131).
    \42\ Id.
    \43\ Id.
    \44\ Id.
    \45\ Id.
    \46\ Id.
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    45. Witness A informed OCE staff that he had recruited 
Representative Graves to invest in Biofules.\47\ Representative 
Graves' disclosed his wife's interest in Biofuels on his 2008 
Financial Disclosure Statement.\48\
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    \47\ Memorandum of Interview of Witness A, July 13, 2009 (Exhibit 5 
at 09-7000--000041).
    \48\ Representative Graves' 2008 Financial Disclosure Statement 
(Exhibit 2 at 09-7000--000009).
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    46. A second article was published on December 6, 2007, in 
the Kansas City Star. The article noted that Witness A and his 
father were invited to testify before the Small Business 
Subcommittee to promote federal subsidies for the renewable 
fuels industry in 2004.\49\ It further noted that Witness A and 
his father were identified at the hearing as members of Golden 
Triangle but that Representative Graves' financial connection 
to the cooperative was not disclosed at the hearing. 
Representative Graves is quoted in the article as saying that 
failing to disclose his connection to Golden Triangle at the 
hearing was a mistake and that ``[l]ooking back on it, I 
probably should have.'' \50\
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    \49\ Steve Kraske, Family ties to ethanol plant draw questions for 
Rep. Graves, KAN. CITY STAR, Dec. 6, 2007 at B1 (Exhibit 15 at 09-
7000--000135).
    \50\ Id.
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    47. As noted above, Witness A was invited again by 
Representative Graves to testify before the Committee on Small 
Business on March 4, 2009.\51\
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    \51\ Memorandum of Interview of Witness A, July 13, 2009 (Exhibit 5 
at 09-7000--000040).
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    48. Witness A informed the Committee that he volunteered 
with the Missouri Soybean Association and that he normally 
testified on behalf of the association. He also stated that the 
association prepared his testimony and prepped him for the 2009 
hearing.\52\
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    \52\ Id. at 09-7000--000041.
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    49. During his oral testimony and in his written testimony, 
Witness A recommended that Congress ``extend the federal 
Biodiesel Blender's Credit, include glycerin in the federal 
Bio-based Fuel Blender's Credit, and implement the Renewable 
Fuels Standard.'' \53\ Witness A is further quoted as saying 
that the blending credit would help one of the biodiesel plants 
he was involved in by minimizing the risk in ``booking business 
forward.'' \54\
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    \53\ Written Testimony of Witness A, Mar. 4, 2009 (Exhibit 12 at 
09-7000--000126).
    \54\ Id.
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    50. When asked by OCE staff if he was aware of Witness A's 
investments in 2004, Representative Graves stated that he was 
not aware of Witness A's investments.\55\
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    \55\ Memorandum of Interview of Representative Sam Graves, June 15, 
2009 (Exhibit 4 at 09-7000--000032).
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    51. Representative Graves further stated that Witness A was 
not testifying on behalf of Golden Triangle or ethanol at the 
2009 hearing, he was testifying on biodiesel issues.\56\ He 
further stated that he never really thought about the 2007 
articles before the 2009 hearing, he only thought about the 
fact that they had to find someone to testify at the hearing 
who knew what they were talking about and that Witness A knew 
the issue.\57\
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    \56\ Id. at 09-7000--000033.
    \57\ Id.
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    52. When asked by OCE staff about Witness A's 
recommendation to extend the Blender Fuel Credit (``BFC''), 
Representative Graves stated that the BFC was the ``big issue'' 
but that it was an agricultural issue, ``probably the hottest 
issue in the industry.'' \58\
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    \58\ Id.
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    53. Representative Graves stated that he did not remember 
Witness A's recommendation for the BFC but that he would not be 
surprised if he had made the recommendation.\59\ He further 
stated that it would also not surprise him if Witness A 
supported the Renewable Fuels Standard (``RFS'').\60\ He was 
sure the corn growers supported the RFS, as it was their 
biggest issue.\61\
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    \59\ Id. at 09-7000--000034.
    \60\ Id.
    \61\ Id.
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    54. With respect to Witness A's testimony regarding the 
plant that he was having difficulties ``booking business 
forward'', Representative Graves stated that he did not know 
which plant Witness A was referring to nor did he know how many 
businesses Witness A was invested in.\62\ He further stated 
that if it was a glycerin plant, then it would have been 
Biofuels but he was not sure (``he did not understand the 
glycerin deal.'') \63\
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    \62\ Id.
    \63\ Id.
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    55. When asked by OCE staff if he recalled the 2007 Roll 
Call and Kansas City Star articles, Representative Graves 
stated that he saw the articles after this issue came up with 
OCE but he felt that opponents ``bring this type of thing that 
feed these types of articles.'' \64\
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    \64\ Id. at 09-7000--000032
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    56. While Representative Graves stated that he did not 
recall the 2007 Kansas City Star article, when asked by OCE 
staff about a quote he made that appeared in the article, he 
stated that the quote was inaccurate.\65\ He informed OCE staff 
that he actually said that looking back he probably should have 
disclosed the investments he shared with Witness A ``if he had 
known what [Witness A] investments were.'' \66\ The Board notes 
that while Representative Graves stated that he did not recall 
the article, he claimed to remember the precise quote he had 
given to the reporter.
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    \65\ Id.
    \66\ Id.
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    57. In his interview with OCE, Witness A stated that he did 
not recall the 2007 Roll Call or Kansas City Star article but 
that he had seen articles about Representative Graves during 
campaign years and he did not pay attention to them because he 
felt they were a campaign tactic.\67\ He further stated that he 
was sure that he would have spoken to Representative Graves 
about the articles at the time they were published but that he 
did not think much of the issue because ``neither of us owned 
enough stock to make a difference.'' \68\
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    \67\ Memorandum of Interview of Witness A, July 13, 2009 (Exhibit 5 
at 09-7000--000041).
    \68\ Id.
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    58. Witness A stated that he did not recall the statement 
he made during the March hearing about the biodiesel plant that 
was having trouble booking future business but he was sure the 
plant he was referring to must have been Biofuels or Paseo 
Cargill.\69\ He further stated that he tries to use personal 
examples in prepared testimony to make a more personal 
connection to the subject matter.\70\
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    \69\ Id.
    \70\ Id.
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    59. Witness A stated that the articles on his prior 
testimony did not come up in conversations when he was asked to 
testify at the March 2009 hearing.\71\ He further stated that 
he had forgotten about the articles until now.\72\
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    \71\ Id. at 09-7000--000042.
    \72\ Id.
   E. REPRESENTATIVE GRAVES' STAFF APPEARED TO BE AWARE OF POTENTIAL 
CONFLICTS OF INTEREST WITH WITNESS SELECTION PRIOR TO THE MARCH 4, 2009 
                           COMMITTEE HEARING.

    60. On the afternoon of February 24, 2009, Representative 
Graves' Communications Director responded to Representative 
Graves' then Deputy Chief of Staff's email, which asked for 
suggestions for a witness for the hearing, stating, ``[l]ets 
make sure that we do not get a renewable company that SG or his 
wife is invested in.'' \73\
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    \73\ Emails provided by Representative Sam Graves (Exhibit 7 at 09-
7000--000051).

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    61. Representative Graves' then Deputy Chief of Staff 
replied to Mr. Hartz later that afternoon and asked which 
companies Representative Graves was invested in.\74\
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    \74\ Id.
    62. Mr. Hartz replied providing Representative Graves' then 
Deputy Chief of Staff with the names of three companies--Golden 
Triangle, Biofuels LLC, and Show Me Ethanol.\75\
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    \75\ Id. 

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
    63. When interviewed by OCE staff, Representative Graves' 
Communications Director stated that after he received the mass 
email about the hearing, articles in the press about Show Me 
Ethanol came to his mind.\76\ Several articles had been 
published about a funding issue related to Show Me Ethanol 
during the campaign in 2008.\77\ He stated that he emailed 
Representative Graves' then Deputy Chief of Staff about 
Representative Graves' holdings because he was trying to avoid 
bad press.\78\ According to Representative Graves' 
Communications Director, the articles were not about 
Representative Graves or his wife; instead they dealt with an 
issue between the state's Governor and the state's 
Treasurer.\79\ The state's Treasurer was denying funding for 
Show Me Ethanol because the Governor's brother and a state 
representative were invested in the company.\80\ Mrs. Graves 
was mentioned in the articles because she was also an 
investor.\81\ Representative Graves' Communications Director 
stated that Mrs. Graves sold her interest in Show Me Ethanol 
because she did not want to be an impediment for Show Me 
Ethanol to get state funding.\82\
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    \76\ Memorandum of Interview of Representative Graves' 
Communications Director, June 16, 2009 (Exhibit 16 at 09-7000--000140).
    \77\ Id.
    \78\ Id.
    \79\ Id.
    \80\ Id.
    \81\ Id.
    \82\ Id.
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    64. One of the articles mentioned by Representative Graves' 
Communications Director, ``Conflicts of interest stop ethanol 
plant from getting state aid'' was published on January 21, 
2008.\83\
---------------------------------------------------------------------------
    \83\ Steve Kraske, Conflicts of interest stop ethanol plant from 
getting state aid, KAN. CITY STAR, Jan. 21, 2008 (Exhibit 17 at 09-
7000--000144).
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    65. Representative Graves' Communications Director further 
stated that he called Representative Graves' then Deputy Chief 
of Staff the Friday before the hearing to see if the office had 
found a witness and he was told that Witness A was going to 
testify.\84\ He informed OCE staff that the only thing that 
came to his mind regarding Witness A was the Congressman's and 
Witness A's shared interest in aviation.\85\
---------------------------------------------------------------------------
    \84\ Memorandum of Interview of Representative Graves' 
Communications Director, June 16, 2009 (Exhibit 16 at 09-7000--000140).
    \85\ Id.
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    66. Representative Graves' Communications Director also 
stated that he did not know what Witness A did, if anything, on 
behalf of Golden Triangle. He thought that he was just an 
investor.\86\
---------------------------------------------------------------------------
    \86\ Id. at 09-7000--000141.
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    67. When asked by OCE staff whether Representative Graves' 
Communications Director's email raised any concerns with 
respect to Witness A, Representative Graves' then Deputy Chief 
of Staff stated that he did not want to use a witness from any 
of the three companies named in the email--``someone with their 
name on a business card.'' \87\ He stated that he did not have 
discussions of witnesses' personal financial records.\88\ He 
further stated that witnesses must disclose if they have 
contracts with the government but they are not obligated to 
provide personal financial information.\89\
---------------------------------------------------------------------------
    \87\ Memorandum of Interview of Representative Graves' then Deputy 
Chief of Staff, June 16, 2009 (Exhibit 9 at 09-7000--000106).
    \88\ Id.
    \89\ Id. at 09-7000--000108.
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    68. When asked if the Congressman's friendship with Witness 
A was an issue, Representative Graves' then Deputy Chief of 
Staff stated that it was not because Witness A was a credible 
witness and that he was involved with ``all the associations.'' 
\90\
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    \90\ Id. at 09-7000--000109.
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    69. When interviewed by OCE staff, Representative Graves' 
Chief of Staff stated that he did not recall the 2007 Roll Call 
article.\91\ He vaguely recalled the Kansas City Star article 
when it was shown to him by OCE staff. He further stated that 
something like the Roll Call article did not happen without 
comment (in other words he would have discussed it with 
Representative Graves), but he felt that the reporter was way 
off.\92\ He felt the article was for headlines for their 
opponent.\93\ He thought both articles were merely 
political.\94\
---------------------------------------------------------------------------
    \91\ Memorandum of Interview of Representative Graves' Chief of 
Staff, June 16, 2009 (Exhibit 8 at 09-7000--000096).
    \92\ Id. at 09-7000--000095.
    \93\ Id. at 09-7000--000096.
    \94\ Id.
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    70. Representative Graves' Chief of Staff informed OCE 
staff that he called the Standards Committee about conflict of 
interest issues and that there was also a lawyer in the office 
at that time that would consult Standards on issues that 
arose.\95\ He stated that if he thought there was any issue 
with the hearing, he would have contacted Standards.\96\ 
However, he further stated that he had never reviewed 
Representative Graves' financial disclosure statement.
---------------------------------------------------------------------------
    \95\ Id.
    \96\ Id.
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    71. When interviewed by OCE staff, Representative Graves 
stated that he did not know why the conflict of interest issue 
would come up.\97\ He further stated that neither his 
Communications Director nor his then Deputy Chief of Staff 
raised the issue with him.\98\
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    \97\ Memorandum of Interview of Representative Sam Graves, June 15, 
2009 (Exhibit 4 at 09-7000--000030).
    \98\ Id.
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                            III. CONCLUSION

    72. The House Ethics Manual states that ``advocating or 
participating in an action by a House committee . . . entails a 
degree of advocacy above and beyond that involved in voting and 
thus a Member's decision on whether to take any such action on 
a matter that may affect his or her own personal financial 
interests requires added circumspection.'' Further, such 
actions may implicate the standards of House Rule 3 Clause 
1.\99\
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    \99\ COMM. ON STANDARDS OF OFFICIAL CONDUCT, 110TH CONG., HOUSE 
ETHICS MANUAL 237 (2008).
---------------------------------------------------------------------------
    73. The Board notes that the House Ethics Manual does not 
provide precise guidance for conflicts of interest where a 
Member has a personal financial interest in Committee actions 
as Congressman Graves has in this matter. However, the House 
Ethics Manual advises in numerous instances that Members should 
guard against even the appearance of any impropriety or 
conflict of interest because such actions may adversely affect 
public perceptions and confidence.\100\
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    \100\ See COMM. ON STANDARDS OF OFFICIAL CONDUCT, 110TH CONG., 
HOUSE ETHICS MANUAL 24, 71, 88, 188, 200, 209, 211, 213, 215, 238, 290, 
309, 321, 327, 352 (2008).
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    74. To be clear, the Board is aware that the House Ethics 
Manual does not expressly prohibit a Member from participating 
in Committee actions, including selecting a witness for a 
hearing where the Member and witness share a financial interest 
that may be affected by the hearing. However, based on the 
information before the OCE, there is substantial reason to 
believe that Representative Graves' invitation to Witness A to 
testify before the Committee on Small Business on a matter that 
related to both Witness A's and his own financial interests 
created an appearance of a conflict of interest.
    75. It appears that Representative Graves had knowledge of 
Witness A's investment in Golden Triangle and had reason to 
believe that Witness A was also invested in Biofuels. As such, 
it follows that Representative Graves could expect Witness A to 
testify at the hearing in a manner beneficial to both Witness A 
and his own financial interests.
    76. The Board notes that Representative Graves' lack of 
candor in his responses to OCE staff denotes a level of 
knowledge that his invitation to Witness A to testify before 
the Committee on Small Business was problematic.
    77. Representative Graves informed OCE staff that he did 
not choose Witness A to testify before the Committee on Small 
Business nor did he know who did. However, statements made to 
OCE staff by Representative Graves' staff and emails submitted 
to the OCE by Representative Graves show otherwise.
    78. On the afternoon of February 24, 2009, Representative 
Graves' then Deputy Chief of Staff asked Representative Graves 
in an email who he wanted to invite to testify at the March 
hearing; the following morning Representative Graves' then 
Deputy Chief of Staff sent an email to Committee staff members 
Joe Hartz and Karen Haas that stated Representative Graves 
wanted him to extend an invitation to Witness A. Witness A also 
informed OCE staff that it was Representative Graves that 
called him to ask him to testify at the hearing.
    79. Representative Graves also told OCE staff that he was 
not aware of Witness A's investments. However, Witness A 
informed OCE staff that he had spoken with Representative 
Graves about Golden Triangle and that he had recruited the 
Congressman's family to invest in Biofuels. Witness A further 
stated that he had spoken with Representative Graves about 
Biofuels.
    80. It further appears that Representative Graves knew of 
and disregarded the probability that inviting Witness A to 
testify, without disclosing the financial interests he shared 
with Witness A, would create an appearance of a conflict of 
interest. In 2007, Representative Graves himself acknowledged 
in the Kansas City Star article that his failure to disclose 
his connection to Golden Triangle at a 2004 subcommittee 
hearing was a mistake and that he probably should have 
disclosed his interest in Golden Triangle at the hearing.
    81. For the reasons stated above, the Board finds there is 
substantial reason to believe that the guidance in the House 
Ethics Manual--advising Members to employ ``added 
circumspection'' when participating in actions that may affect 
their personal financial interest and to guard against taking 
any action that would give the appearance of any impropriety or 
conflict of interest--would compel Representative Graves to 
disclose the financial interests he shared with Witness A at 
the time of the Committee hearing or refrain from extending 
Witness A an invitation to appear.
    82. While the Board finds that there is substantial reason 
to believe that Representative Graves' invitation to Witness A 
created an appearance of a conflict of interest, the Board 
notes that any disqualifying interest that Representative 
Graves had in this matter would likely have affected 
Representative Graves only as a member of a class; therefore, 
there is not substantial reason to believe that Representative 
Graves' invitation to Witness A violated the spirit of House 
Rule 3.\101\
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    \101\ The House Ethics Manual, on page 234, advises Members that, 
in the context of voting, Members should ``withdraw when a question 
concerning himself arises; but . . . the disqualifying interest must be 
such as affects the Member directly, and not as one of a class.''
