[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).
[GRAPHIC] [TIFF OMITTED] T4540.001

    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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