[House Prints, 111th Congress]
[From the U.S. Government Publishing Office]
111th Congress Review No.
1st Session HOUSE OF REPRESENTATIVES 09-9030
_______________________________________________________________________
OFFICE OF CONGRESSIONAL ETHICS
UNITED STATES HOUSE OF
REPRESENTATIVES
----------
Report and Findings
Transmitted to the
Committee on Standards of Official Conduct
November 12, 2009
and released publicly pursuant to H. Res. 895 of the 110th Congress as
amended
[GRAPHIC] [TIFF OMITTED]CONGRESS.#13
November 2009
OFFICE OF
CONGRESSIONAL ETHICS
BOARD
United States House of Representatives
One Hundred Eleventh Congress
DAVID SKAGGS, Chair
PORTER GOSS, Co-Chair
YVONNE BURKE
KAREN ENGLISH
ALLISON HAYWARD
JAY EAGEN
WILLIAM FRENZEL
ABNER MIKVA
----------
Leo J. Wise, Chief Counsel & Staff
Director
Omar Ashmawy, Investigation Counsel
REPORT
Review No. 09-9030
The Board of the Office of Congressional Ethics (hereafter
``the Board''), by a vote of no less than four members, on
October 23, 2009, adopted the following report and ordered it
to be transmitted to the Committee on Standards of Official
Conduct of the United States House of Representatives.
SUBJECT: Representative Fortney Pete Stark
NATURE OF THE ALLEGED VIOLATION: Representative Fortney
Pete Stark has listed a house he owns in Harwood, Maryland as
his principal residence on Maryland tax forms. By doing so,
Representative Stark received state and county homestead tax
credits and any annual increases in his home assessments were
capped at no more than 10 percent. In order to qualify for the
Maryland Homestead Tax Credit, Maryland law requires the home
to be used as the owner's ``principal residence''--where the
homeowner regularly resides and is designated for voting,
obtaining a driver's license, and filing income tax returns.
Representative Stark pays California resident taxes, has a
California driver's license and is registered to vote in
California.
Representative Stark's conduct may have violated Maryland
law and the Code of Ethics for Government Service if he
misrepresented information on the Application for Homestead Tax
Credit Eligibility in order to prove eligibility.
RECOMMENDATION: The Board of the Office of Congressional
Ethics recommends that the Committee on Standards of Official
Conduct further review the above allegations.
VOTES IN THE AFFIRMATIVE: 6
VOTES IN THE NEGATIVE: 0
MEMBER OF THE BOARD OR STAFF DESIGNATED TO PRESENT THIS
REPORT TO THE COMMITTEE ON STANDARDS OF OFFICIAL CONDUCT: Leo
Wise, Staff Director & Chief Counsel.
TABLE OF CONTENTS
I. INTRODUCTION.....................................................3
A. Summary of Allegations.............................. 3
B. Jurisdictional Statement............................ 4
C. Procedural History.................................. 4
D. Summary of Investigative Activity................... 5
II. THE MARYLAND HOMESTEAD TAX CREDIT PROGRAM AND REPRESENTATIVE
STARK'S APPLICATION AND ELIGIBILITY..............................5
A. Applicable Law, Rules and Standards of Conduct...... 5
B. Maryland Homestead Tax Credit....................... 6
C. Representative Stark's Homestead Tax Credit
Application........................................ 8
D. Interview with Representative Stark................. 11
III. CONCLUSION......................................................12
IV. INFORMATION THE OCE WAS UNABLE TO OBTAIN AND RECOMMENDATIONS FOR
THE ISSUANCE OF SUBPOENAS.......................................12
FINDINGS OF FACT AND CITATIONS TO LAW
Review No. 09-9030
On October 23, 2009, the Board of the Office of
Congressional Ethics (hereafter the ``Board'' and the ``OCE'')
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. INTRODUCTION
A. SUMMARY OF ALLEGATIONS
1. There is substantial reason to believe that
Representative Fortney Pete Stark may have violated House rules
\1\ by misrepresenting information on the Maryland Application
for Homestead Tax Credit Eligibility. Specifically, sometime
between December 2008 and March 2009 Representative Stark
certified a house he owns in Harwood, Maryland, was his
``principle residence'' under Maryland law. By doing so, he
qualified for the Maryland Homestead Tax Credit. As a result,
Representative Stark received state and county homestead tax
credits and the increases in his home assessments were capped
at no more than 10 percent per year. In order to qualify for
the Maryland Homestead Tax Credit, Maryland law requires the
home to be used as the owner's ``principal residence.''
Maryland law defines ``principle residence'' as the one
dwelling where the homeowner regularly resides and is
designated for voting, obtaining a driver's license, and filing
income tax returns.
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\1\ As per Rule 9 of the OFFICE OF CONGRESSIONAL ETHICS, RULES FOR
THE CONDUCT OF INVESTIGATIONS 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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2. Sometime between December 2008 and March 2009,
Representative Stark certified to Maryland that he is
registered to vote in Maryland, while in fact he is registered
to vote in California. Representative Stark later changed his
certification.
3. Representative Stark told the OCE he did not certify
that he voted in Maryland nor did he later change his answer.
B. JURISDICTIONAL STATEMENT
4. The allegations that were the subject of this review
concern Representative Fortney Pete Stark, a Member of the
United States House of Representatives from the 13th District
of California. The Resolution the United States House of
Representatives adopted creating the Office of Congressional
Ethics (hereafter ``OCE'') 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.'' \2\
The House adopted this Resolution on March 11, 2008. Because
the conduct under review occurred after March 11, 2008, review
by the Board is in accordance with the Resolution.
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\2\ H. Res 895, 110th Cong. Sec. 1(e) (2008) (as amended)
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5. The Board notes that representations made by Members of
Congress regarding their state residency implicates their
official duties as a Member's state residency is a
qualification for the office they hold.
C. PROCEDURAL HISTORY
6. The OCE received a written request for a preliminary
review in this matter signed by at least two members of the
Board on June 5, 2009. The preliminary review commenced on that
date.\3\
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\3\ A preliminary review is ``requested'' in writing by members of
the Board of the OCE. The request for a preliminary review is
``received'' by the OCE on a date certain. According to H. Res. 895 of
the 110th Congress (hereafter ``the Resolution'), the timeframe for
conducting a preliminary review is 30 days from the date of receipt of
the Board's request.
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7. At least three members of the Board voted to initiate a
second-phase review in this matter on June 26, 2009. The second
phase review commenced on June 29, 2009.\4\ The second-phase
review was scheduled to end on August 13, 2009.
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\4\ According to the Resolution, the Board must vote (as opposed
to make a written authorization) on whether to conduct a second-phase
review in a matter before the expiration of the 30-day preliminary
review. If the Board votes for a second-phase, the second-phase
commences the day after the preliminary review ends.
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8. The Board voted to extend the 45-day second-phase review
by an additional 14 days on August 5, 2009, as provided for
under the Resolution. Following the extension, the second-phase
review was scheduled to end on August 28, 2009.\5\
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\5\ The 14-day extension expires after the 45-day second-phase
review ends. The 14-day extension does not begin on the date of the
Board vote.
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9. The second-phase review ended on August 28, 2009.
10. The Board voted to refer the matter to the Committee on
Standards of Official Conduct for further review and adopted
these findings on October 23, 2009.
11. The report and findings in this matter were transmitted
to the Committee on Standards of Official Conduct on November
12, 2009.
D. SUMMARY OF INVESTIGATIVE ACTIVITY
12. The OCE requested documentary and in some cases
testimonial information from the following sources:
(1) Maryland State Department of Assessments and
Taxation Taxpayer Services Division;
(2) Witness A, Associate Director of the Maryland
State Department of Assessments and Taxation Taxpayer
Services Division; \6\
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\6\ The Resolution provides that the names of cooperating
witnesses not be included in a referral to the Committee on Standards
of Official Conduct. H. Res 895, 110th Cong. Sec. 1(c) (2008) (as
amended). This provision applies to testimonial evidence and not to
documentary evidence.
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(3) Witness B, Supervisor of the Homestead Tax Credit
Application Program
(4) Anne Arundel County; and
(5) Representative Stark.
II. THE MARYLAND HOMESTEAD TAX CREDIT PROGRAM AND REPRESENTATIVE
STARK'S APPLICATION AND ELIGIBILITY
A. APPLICABLE LAW, RULES, AND STANDARDS OF CONDUCT
13. Maryland law:
Under the Maryland Code, Tax--Property Article Sec. 14-
1004, ``A person who willfully or with the intent to
evade payment of a tax under this article or to prevent
the collection of a tax under this article provides
false information or a false answer to a property tax
interrogatory under this article is guilty of a
misdemeanor and on conviction is subject to a fine not
exceeding $5,000 or imprisonment not exceeding 18
months or both.''
14. Code of Ethics for Government Service:
Under the Code of Ethics for Government Service \7\,
``all Government employees, including office holders .
. . should uphold the Constitution, laws, and legal
regulations of the United States and all governments
therein and never be a party to their evasion.''
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\7\ 72 Strat., Part 2, B12 (1958), H. Con. Res. 175, 85th Cong.
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15. If Representative Stark willfully misrepresented
information on Maryland's Application for Homestead Tax Credit
Eligibility in order to certify his Maryland house as his
principle residence under Maryland law and thereby qualify for
the corresponding tax credits, then he may have violated
Maryland law and paragraph 2 of the Code of Ethics for
Government Service.
16. For the purposes of the Board's deliberations, the
Board considered the Maryland tax code to be a ``legal
regulation,'' as described in paragraph 2 of the Code of Ethics
for Government Service, and the state of Maryland to be a
``government therein'' the United States.
17. Based on the facts collected by the OCE, the Board
concludes there is a substantial reason to believe the
allegation that is the subject of this review.\8\
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\8\ Rule 9 of the OFFICE OF CONGRESSIONAL ETHICS, RULES FOR THE
CONDUCT OF INVESTIGATIONS 11 (2009) provides that ``[t]he Board shall
refer a matter to the Standards Committee for further review if it
determines there is a substantial reason to believe the allegation
based on all the information then known to the Board.''
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B. MARYLAND HOMESTEAD TAX CREDIT
18. Representative Pete Stark represents the 13th
Congressional District of California.
19. Representative Stark and his wife have had an ownership
interest in a home in Harwood, Maryland, since at least 2000.
20. Based on information available on the Anne Arundel
County Maryland Real Estate Charges, Credits and Exemptions'
website, the Starks' Harwood home has been listed as their
principal residence since 2007 and Representative Stark has
been receiving the Homestead Tax Credit since at least 2007.\9\
From 2000 to 2007 Representative Stark received tax bills for
the Harwood residence that did not show the Homestead Tax
Credit.\10\ In calendar year 2009, the year directly affected
by his answers on the 2008 application, Representative Stark
received $3,769.79 in state and county tax credits.\11\
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\9\ Id.
\10\ Anne Arundel County Maryland Website, Real Estate Charges,
Credits and Exemptions tax records (Exhibit 1 at 09-9030--0002--09-
9030--0005).
\11\ Id.
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21. The Maryland Homestead Tax Credit limits the increase
in taxable assessments each year to 10 percent for the
homeowner's ``principal residence.'' Maryland state law defines
``principal residence'' as the one dwelling where the homeowner
regularly resides and is the location designated by the owner
for the legal purposes of voting, obtaining a driver's license,
and filing income tax returns.\12\ In an interview with Witness
A, Associate Director of the Maryland State Department of
Assessments and Taxation (SDAT), the witness indicated that an
individual must vote in Maryland, possess a Maryland driver's
license, and file a Maryland resident income tax return in
order to be eligible for the tax credit.\13\ For married
couples, at least one spouse must meet all residency
requirements.\14\ The applicant must also have a ``legal
interest'' in the property, which is defined as ``an interest
in a dwelling: as a sole owner; as a joint tenant; as a tenant
in common; as a tenant by the entireties; through membership in
a cooperative; under a land installment contract, or as a
holder of a life estate.\15\
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\12\ COMAR 18.07.03.01 (B)(3). See also Maryland Assessment
Procedures Manual (COMAR 18.07.03.01(B)(3)) at 1.
\13\ Memorandum of Interview of Witness A and Witness B (Exhibit 2
at 09-9030--0007).
\14\ Maryland Assessment Procedures Manual (COMAR
18.07.03.01(B)(3)) at 1.
\15\ COMAR Tax-Property, Title 9, Subtitle 1, Sec. 9-105 (a)(4).
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22. In October 2007, the Maryland General Assembly passed a
law that codified the requirement to receive the Homestead Tax
Credit and instructed SDAT to establish a procedure for
Maryland homeowners to certify their eligibility to receive the
Homestead Tax Credit.\16\
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\16\ COMAR 18.07.03.01(B)(3).
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23. Prior to October 2007, the requirements for eligibility
for the Homestead Tax Credit were the same.\17\
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\17\ Memorandum of Interview of Witness A and Witness B (Exhibit 2
at 09-9030--0007).
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24. In order to prevent the improper granting of the
Homestead Tax Credit to rented properties or multiple
properties of a single owner SDAT began mailing a one-time
application to homeowners to establish eligibility for the tax
credit.\18\ The application was included in the assessment
notice mailed to one-third of Maryland homeowners at the end of
each calendar year, for a period of three years beginning
December 2008.\19\
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\18\ Maryland Department of Assessments and Taxation Homestead Tax
Credit Application (Exhibit 3 at 09-9030--0011--09-9030--0012).
\19\ ``The Homestead Tax Credit,'' Maryland Department of
Assessments and Taxations, www.md.dat.md.us/sdatweb/homestead.html last
viewed by staff on May 26, 2009.
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C. REPRESENTATIVE STARK'S HOMESTEAD TAX CREDIT APPLICATION
25. The OCE requested a copy of the application
Representative Stark submitted to Maryland from the
Congressman. Representative Stark indicated that he did not
have a copy of the application because he submitted it online.
He then, without any prompting by the OCE, provided the OCE a
hand-done version of the application he submitted online.\20\
On that document he indicated:
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\20\ Recreated Maryland Homestead Tax Credit application (Exhibit
4 at 09-9030--0014--09-9030--0015).
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26. The OCE later obtained a copy of the application
Representative Stark submitted on line from SDAT.\21\ The
information Congressman Stark originally submitted on-line
(recorded by the State of Maryland) shows the following \22\ :
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\21\ The OCE sought and received Representative Stark's permission
to request a copy of his Homestead Tax Credit application from
Maryland.
\22\ Maryland Department of Assessments and Taxation Homestead Tax
Credit online application for Representative Stark (Exhibit 5 at 09-
9030--0017). The date displayed on the upper right corner of the
document represents the day the documented was printed in response to
an OCE Request for Information.
[GRAPHIC] [TIFF OMITTED] T4540.002
27. The Board takes note of question 4 where Congressman
Stark indicated that his home in Harwood, Maryland, was the
property from which he was registered to vote. When the OCE
inquired further, SDAT explained that when Congressman Stark
initially filed his application he did in fact answer question
4 in the affirmative.\23\
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\23\ Memorandum of Interview of Witness A and Witness B (Exhibit 2
at 09-9030--0009).
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28. However, on or about March 16, 2009, according to SDAT
records, Congressman Stark called the SDAT office and asked
that his answer to question 4 be changed from the affirmative
to the negative.\24\
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\24\ Maryland Department of Assessments and Taxation internal
electronic note attached to Representative Stark's Homestead Tax Credit
file (Exhibit 6 at 09-9030--0019).
[GRAPHIC] [TIFF OMITTED] T4540.003
29. The Board notes that the first press report on a Member
of Congress improperly receiving the Homestead Tax Credit
appeared on March 14, 2009, two days before Representative
Stark called to change his answer, in the New York Times and
concerned another Member of Congress.\25\
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\25\ Bronx Representative Loses a Tax Break'' The New York Times,
March 14, 2009 (Exhibit 7 at 09-9030--0021--09-9030--0022).
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30. Representative Stark told the OCE that both he and his
wife are registered to vote in Alameda County, California.\26\
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\26\ Memorandum of Interview Representative Stark (Exhibit 10 at
09-9030--0028)
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31. Congressman Stark and his wife maintain California
automobile licenses. Congressman Stark accurately answered this
question on the Maryland application, however, based on SDAT
procedures this did not disqualify him for the credit.\27\
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\27\ Memorandum of Interview of Witness A and Witness B (Exhibit 2
at 09-9030--0008).
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32. Representative Stark and his wife filed a 2008
California resident income tax return.\28\ Furthermore, it
appears Representative Stark and his wife also filed a Maryland
Non-Resident Income Tax Return for calendar year 2008.\29\ Both
returns were filed from the Harwood, Maryland, address.
According to Witness A, had SDAT been aware that Representative
Stark filed a Maryland Non-Resident return, that fact alone
would have been grounds to disallow the credit.\30\ However,
given the vagueness of question 2, the Board notes that,
despite SDAT's intentions, the question appears to allow an
applicant to answer the question in the affirmative if the
applicant files either a Maryland resident or non-resident
return from their Maryland address.
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\28\ California Form 540-ES for Representative Stark and Mrs.
Deborah Stark (Exhibit 8 at 09-9030--00024).
\29\ Letter from William G. Robinson to Representative and Mrs.
Stark regarding their 2008 Maryland Non-resident Income Tax Return
(Exhibit 9 at 09-9030--0026).
\30\ Memorandum of Interview of Witness A and Witness B (Exhibit 2
at 09-9030--0009).
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33. The Board notes that Representative Stark correctly
answered question 3 of the application, relating to his
driver's license. According to Maryland law the fact that
Representative Stark possessed a California driver's license
made him ineligible to receive the Homestead Tax Credit.\31\
However, SDAT's internal policy is to not reject an application
for the credit solely because the address is not the one from
which the property owner receives a driver's license.\32\
However, if this fact is brought to the attention of SDAT, then
the credit may be revoked.\33\
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\31\ COMAR 18.07.03.01 (B)(3). See also Maryland Assessment
Procedures Manual (COMAR 18.07.03.01(B)(3)) at 1.
\32\ Memorandum of Interview of Witness A and Witness B (Exhibit 2
at 09-9030--0008).
\33\ Id.
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D. INTERVIEW WITH REPRESENTATIVE STARK
34. The OCE interviewed Representative Stark on May 29,
2009. Representative Stark voluntarily agreed to an interview.
At the beginning of the interview Representative Stark refused
to discuss what he knew about the Maryland Homestead Tax Credit
program and his eligibility.\34\ Eventually, he spoke in some
detail about his application for the credit. Initially he
indicated that he did not recall completing the
application.\35\ However, later during the interview he stated
that he personally completed the application online.
Representative Stark also said that that he was aware that the
application for the tax credit had eligibility requirements.
Representative Stark specifically expressed his knowledge that
a person must be registered to vote in Maryland.\36\ After
completing the form, Representative Stark recalled that the
credit was denied.\37\
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\34\ Memorandum of Interview Rep. Stark (Exhibit 10 at 09-9030--
0028).
\35\ Id.
\36\ Id.
\37\ Id.
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35. When specifically asked, Representative Stark also
stated that he did not call the Maryland State Department of
Assessments and Taxation to change his answer to the tax credit
application.\38\ The Congressman also said he could not think
of anyone who would have called SDAT on his behalf.\39\ He
reviewed a copy of the online application he actually
submitted, shown above in paragraph 20, and admitted that his
answers to the voting question was incorrect. He could not
explain why the answers were incorrect.\40\
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\38\ Id. at 09-9030--0029.
\39\ Id.
\40\ Id.
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36. Approximately 15 minutes into the interview it became
apparent to the OCE staff that the Congressman was video
recording the interview.\41\ A Request for Information was
submitted to Representative Stark asking for a copy of the
recording on July 31, 2009.\42\ Congressman Stark denied the
request.\43\
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\41\ Id.
\42\ Request for Information to Representative Stark dated July
31, 2009 (Exhibit 11 at 09-9030--0031--09-9030--0033).
\43\ Email from Representative Stark's Chief of Staff dated
September 22, 2009 (Exhibit 12 at 09-9030--0035).
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III. CONCLUSION
37. For these reasons, the Board recommends that the
Standards Committee further review of the above described
allegations concerning Representative Stark.
IV. INFORMATION THE OCE WAS UNABLE TO OBTAIN AND RECOMMENDATIONS FOR
THE ISSUANCE OF SUBPOENAS
38. There was no information relevant to this review that
the Board was unable to obtain.
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