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


111th Congress                                                  Review No.
                        HOUSE OF REPRESENTATIVES
1st Session                                                     09-1022
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                     OFFICE OF CONGRESSIONAL ETHICS
                         UNITED STATES HOUSE OF
                             REPRESENTATIVES

                                 ------

                          Report and Findings

                          Transmitted to the
              Committee on Standards of Official Conduct
                            February 5, 2010
           and release publicly pursuant to H.Res. 895 of the
                       110th Congress as amended

                             February 2010


                  U.S. GOVERNMENT PRINTING OFFICE
55-496                    WASHINGTON : 2009
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                                 REPORT

                           Review No. 09-1022

    The Board of the Office of Congressional Ethics (the 
``Board''), by a vote of no less than four members, on January 
28, 2010, adopted the following report and findings and ordered 
them to be transmitted to the Committee on Standards of 
Official Conduct of the United States House of Representatives.
    SUBJECT: Representative Nathan Deal
    NATURE OF THE ALLEGED VIOLATION: Representative Nathan Deal 
and his business partner own Recovery Services, Inc. a/k/a 
Gainesville Salvage & Disposal (``GSD''), located in 
Gainesville, Georgia. GSD is a regional vehicle salvage station 
that was formerly authorized by the state of Georgia to 
facilitate inspections of damaged vehicles before they were 
sold or driven. In 2008 and 2009, Representative Deal and a 
member of his Congressional staff contacted and met with 
Georgia state officials related to contemplated state action on 
the vehicle inspection program.
    Further, on his 2009 Financial Disclosure Statement 
(covering calendar year 2008), Representative Deal listed 
unearned GSD ``Dividends'' income (unearned ``Partnership 
Income'' on an amended form) from $50,001 to $100,000. His 2008 
tax return disclosed $75,000 in earned wages from GSD.
    Representative Deal's conduct may have violated House Rules 
and House Standards of Conduct.
    RECOMMENDATION: The Board recommends that the Committee on 
Standards of Official Conduct further review the above 
allegations.
    VOTES IN THE AFFIRMATIVE: 6
    VOTES IN THE NEGATIVE: 0
    ABSTENTIONS: 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. INTRODUCTION.....................................................3
          A. Summary of Allegations..............................     3
          B. Jurisdictional Statement............................     4
          C. Procedural History..................................     4
          D. Summary of Investigative Activity...................     5
 II. REPRESENATIVE DEAL'S CONTACTS WITH GEORGIA STATE OFFICIALS 
     REGARDING THE STATE SALVAGE INSPECTION PROGRAM...................5
          A. Relevant Law, Regulations, Rules or Standards of 
              Conduct............................................     5
          B. Representative Deal Owns a Vehicle Salvage Business 
              that Facilitated Vehicle Inspections Until August 
              2009...............................................     6
          C. Representative Deal Met with Georgia State Officials 
              and Advocated for the Continuance of a State 
              Vehicle Inspection Program that the Department of 
              Revenue Sought to Modify...........................     6
          D. Representative Deal's Chief of Staff Contacted 
              Georgia State Officials About Meetings on the 
              Vehicle Inspection Program and Attended Three 
              Meetings on the Program with Representative Deal...    12
III. REPRESENTATIVE DEAL'S BUSINESS INTERESTS IN GAINESVILLE SALVAGE & 
     DISPOSAL, INC...................................................13
          A. Relevant Law, Regulations, Rules, or Standards of 
              Conduct............................................    13
          B. Representative Deal is a GSD Corporate Officer in 
              Addition to Being a ``Partner'' in the Company.....    14
          C. Representative Deal Discussed GSD with His Business 
              Partner on a Regular Basis and Participated in Some 
              GSD Business Actions...............................    16
          D. Representative Deal Disclosed ``Unearned'' Income 
              from GSD on His 2009 Financial Disclosure Statement 
              but Characterized the Same Amount as Wages on His 
              Federal Income Taxes...............................    17
 IV. CONCLUSION......................................................19
  V. INFORMATION THE OCE WAS UNABLE TO OBTAIN AND RECOMMNEDATIONS FOR 
     THE ISSUANCE OF SUBPOENAS.......................................19
                 FINDINGS OF FACT AND CITATIONS TO LAW

                           Review No. 09-1022

    On January 28, 2010, the Board of the Office of 
Congressional Ethics (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. In 2008 and 2009, Representative Deal sought to preserve 
a state vehicle inspection program that had generated 
significant personal financial benefit for him and a business 
partner. Representative Deal attended meetings on the state 
inspection program with Georgia officials and told the OCE he 
attended the meetings, not as a private citizen, but rather as 
a ``public servant'' acting in some official capacity. Changes 
to the vehicle inspection program concerned a purely state 
issue and according to state officials, no other Member of 
Congress from Georgia involved themselves in it. Thus, the 
Board concludes that there is a substantial reason to believe 
that Representative Deal may have violated House Rule 23, 
clause 3 and Rule 5 of the Code of Government Service.
    2. In addition, Representative Deal was accompanied by his 
Chief of Staff at meetings on the vehicle inspection program 
and directed the Chief of Staff to use a House email account to 
send emails related to the meetings. Thus, there is substantial 
reason to believe Representative Deal violated the House Ethics 
Manual's prohibition on using House equipment and resources for 
personal business purposes.
    3. Representative Deal disclosed $50,001 to $100,000 in 
unearned ``Dividends'' income (and unearned ``Partnership 
Income'' on an amended form) from GSD on his 2009 Financial 
Disclosure Statement (covering calendar year 2008). However, 
the same income was described as earned wages on his 2008 
personal income tax forms. Specifically, Representative Deal's 
2008 tax documents show $75,000 in GSD wages; in addition, 
Representative Deal received a W-2 from GSD in 2006, 2007, and 
2008. Thus, there is a substantial reason to believe 
Representative Deal violated the House Ethics Manual's 
directive to disclose all earned income.
    4. Further, Representative Deal rendered some degree of 
service to GSD in 2008 and 2009 and his 2008 taxes show $75,000 
in GSD wages. Thus, there is substantial reason to believe 
Representative Deal violated the earned income limitation, 
House Rule 25, Clause 1.
    5. Representative Deal is the GSD corporate secretary. His 
2008 taxes show $75,000 in GSD wages. Thus, there is 
substantial reason to believe Representative Deal violated the 
prohibition on receiving compensation as a corporate officer, 
House Rule 25, Clause 2.
    6. Representative Deal also failed to disclose his status 
as the GSD corporate secretary on his financial disclosure 
forms. Thus, there is substantial reason to believe 
Representative Deal violated the House Ethics Manual's 
directive to disclose all nongovernmental positions held.

                      B. JURISDICTIONAL STATEMENT

    7. The OCE has jurisdiction to review any alleged violation 
by a Member, officer, or employee of the House of any law, 
rule, regulation, or other standard of conduct applicable to 
the conduct of such Member, officer, or employee in the 
performance of his duties or the discharge of his 
responsibilities.\1\ The allegations that are the subject of 
this review concern Representative Deal, a Member of the United 
States House of Representatives from Georgia. The Resolution 
the United States House of Representatives adopted creating the 
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 or relates to actions taken after March 11, 
2008, review by the OCE is in accordance with the Resolution.
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    \1\  H. Res 895, 110th Cong. (2008) (``the Resolution'').
    \2\  Id. at Sec. 1(e) (2008).
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                         C. PROCEDURAL HISTORY

    8. The OCE received a written request for a preliminary 
review in this matter signed by at least two members of the 
Board on October 5, 2009. The preliminary review commenced on 
October 6, 2009.\3\ The preliminary review was scheduled to end 
on November 4, 2009.
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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 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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    9. At least three members of the Board voted to initiate a 
second-phase review in this matter on November 3, 2009. The 
second phase review commenced on November 5, 2009.\4\ The 
second-phase review was scheduled to end on December 19, 2009.
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    \4\  According to the Resolution, the Board must vote (as opposed 
to making 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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    10. The Board voted to extend the 45-day second-phase 
review by an additional 14 days on December 18, 2009, as 
provided for under the Resolution.\5\ Following the extension, 
the second-phase review was scheduled to end on January 2, 
2010.\6\
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    \5\  Id. at Sec. 1(c)(2)(A)(ii) (2008).
    \6\  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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    11. The Board voted to refer the matter to the Committee on 
Standards of Official Conduct for further review and adopted 
these findings on January 28, 2010. Representative Deal also 
submitted a statement to the Board.\7\
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    \7\  See Exhibit 14 at 09-1022--70.
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    12. This report and findings in this matter were 
transmitted to the Committee on Standards of Official Conduct 
on February 5, 2010.

                  D. SUMMARY OF INVESTIGATIVE ACTIVITY

    13. The OCE requested and received documentary, and in some 
cases testimonial, information from the following sources:
        (1) Representative Deal;
        (2) Representative Deal's Chief of Staff;
        (3) Representative Deal's Business Partner;
        (4) A Georgia State Legislator;
        (5) The Georgia Revenue Commissioner;
        (6) The Georgia Deputy Revenue Commissioner.
    14. The OCE requested, but was unable to conduct, 
interviews with the Georgia Lieutenant Governor, former members 
of his staff, and current members of his staff because the 
Lieutenant Governor refused to cooperate with the OCE 
investigation.\8\
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    \8\  See section V of the Findings of Fact and Citations to Law.
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    II. REPRESENATIVE DEAL'S CONTACTS WITH GEORGIA STATE OFFICIALS 
             REGARDING THE STATE SALVAGE INSPECTION PROGRAM

      A. RELEVANT LAW, REGULATIONS, RULES OR STANDARDS OF CONDUCT

    15. House Rule 23, Cl. 1 states that Members ``shall behave 
at all times in a manner that shall reflect creditably on the 
House.''
    16. House Rule 23, Cl. 3 states that ``[a] Member, 
Delegate, Resident Commissioner, officer, or employee of the 
House may not receive compensation and may not permit 
compensation to accrue to his beneficial interest from any 
source, the receipt of which would occur by virtue of influence 
improperly exerted from his position in Congress.''
    17. The Code of Government Service rule 5 states that a 
person in government should ``[n]ever discriminate unfairly by 
the dispensing of special favors or privileges to anyone, 
whether for remuneration or not; and never accept, for himself 
or his family, favors or benefits under circumstances which 
might be construed by reasonable persons as influencing the 
performance of his governmental duties.''
    18. The House Ethics Manual states that ``[a] provision of 
the rules issued by the House Administration Committee allows 
minor, incidental personal use of House equipment and supplies. 
However, the Standards Committee understands that this 
provision allows such use of those resources for personal 
purposes only, and does not allow their use for outside 
employment or business purposes.'' \9\
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    \9\  House Ethics Manual (2008) at 197.
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B. REPRESENTATIVE DEAL OWNS A VEHICLE SALVAGE BUSINESS THAT FACILITATED 
                 VEHICLE INSPECTIONS UNTIL AUGUST 2009

    19. In 1988, Representative Deal and his business partner 
opened a vehicle salvage company in Gainesville, Georgia.\10\ 
Currently, this company conducts business under the name 
``GSD,'' and is a ``C corporation.'' \11\ GSD has always been a 
C corporation \12\ and is owned, 50 percent each, by 
Representative Deal and his business partner.\13\
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    \10\  Memorandum of Interview of Representative Deal (December 16, 
2009) (Exhibit 1 at 09-1022--2 para. 2).
    \11\  A corporation taxed under 26 U.S.C. Sec. 11 and Subchapter C 
(26 U.S.C. Sec.  301 et seq.) of Chapter 1 of the Internal Revenue 
Code.
    \12\ Memorandum of Interview of Representative Deal (December 16, 
2009) (Exhibit 1 at 09-1022--2 para. 3).
    \13\  Memorandum of Interview of Representative Deal's business 
partner (October 30, 2009) (Exhibit 3 at 09-1022--12 para. 2).
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    20. GSD's salvage service assists automobile insurance 
companies in the disposal of damaged vehicles.\14\ GSD acts as 
a broker and facilitates the auction of salvaged cars; GSD then 
bills the insurance companies for conducting the auction.\15\ 
According to Representative Deal, this service generates most 
of GSD's revenue.\16\ GSD employs 10 clerical workers, 5 full-
time yard workers, 15 drivers, and Representative Dea's 
business partner.\17\ Representative Deal is the corporate 
secretary.\18\
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    \14\  Memorandum of Interview of Representative Deal (December 16, 
2009) (Exhibit 1 at 09-1022--2 para. 4).
    \15\  Id.
    \16\  Id.
    \17\  Memorandum of Interview of Representative Deal's business 
partner (October 30, 2009) (Exhibit 3 at 09-1022--12 para. 3).
    \18\  Memorandum of Interview of Representative Deal (December 16, 
2009) (Exhibit 1 at 09-1022--3 para. 10).
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    21. Beginning sometime in 1990, GSD began facilitating on-
site inspections of rebuilt, salvaged vehicles.\19\ This 
inspection service lasted for approximately 20 years; GSD 
stopped providing this service in August of 2009.\20\
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    \19\  Id. at para. 5.
    \20\  Memorandum of Interview of Representative Deal's business 
partner (October 30, 2009) (Exhibit 3 at 09-1022--12 para. 3).
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 C. REPRESENTATIVE DEAL MET WITH GEORGIA STATE OFFICIALS AND ADVOCATED 
  FOR THE CONTINUANCE OF A STATE VEHICLE INSPECTION PROGRAM THAT THE 
                 DEPARTMENT OF REVENUE SOUGHT TO MODIFY

    22. According to the Georgia Department of Revenue, the 
Georgia state Salvage Inspection Program, as it existed in 2008 
and part of 2009, authorized 5-6 \21\ privately owned stations 
throughout the state of Georgia to facilitate inspections of 
damaged vehicles before these vehicles could return to the 
road. These stations had exclusive jurisdiction within their 
designated region to facilitate inspections which were 
conducted by authorized state-employed inspectors. In exchange 
for this service, owners of salvaged cars paid a fee to both 
the state of Georgia and to the inspection station. State 
inspectors travelled between the regional stations, on a 
rotating basis (visiting each station twice per month) and 
granted titles to salvaged cars in addition to conducting some 
level of safety inspection.\22\ Under the program, if a 
proposed new inspection station applied for state 
authorization, its designated geographical region would not be 
placed anywhere within the regional jurisdiction of an already-
established station.\23\ GSD, the station owned in part by 
Representative Deal, participated in the Salvage Inspection 
Program from 1990 to August 2009.\24\
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    \21\ Initially, six stations were established until 2009, when 
inspections ceased at one of the stations. GSD was one of the five 
remaining stations.
    \22\  The level of safety inspection is a disputed fact between 
witnesses interviewed by the OCE. Representative Deal's business 
partner stated that the state inspectors are typically former body shop 
workers who have a working knowledge of vehicle safety specifications 
and thoroughly inspect the vehicles. See Memorandum of Interview of 
Representative Deal's business partner (October 30, 2009) (Exhibit 3 at 
09-1022--13 para.17). Representative Deal stated that state inspectors 
checked for safety of airbags and brakes among other items. Memorandum 
of Interview of Representative Deal (December 16, 2009) (Exhibit 1 at 
09-1022--4 para. 22). The Revenue Commissioner stated that the 
inspections have never included a safety check and focus almost 
exclusively on inspections of titles. Memorandum of Interview of the 
Georgia Revenue Commissioner (October 30, 2009) (Exhibit 4 at 09-1022--
17 para.15).
    \23\  Memorandum of Interview of Representative Deal (December 16, 
2009) (Exhibit 1 at 09-1022--2 para. 5); Memorandum of Interview of 
Representative Deal's business partner (October 30, 2009) (Exhibit 3 at 
09-1022--12 para. 3).
    \24\  The full chart is Exhibit 6 at 09-1022--23.
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    23. The Board notes that GSD, represented on the Department 
of Revenue chart \25\ below as ``Hall County,'' facilitated the 
most inspections, assessed the highest fee ($100), and 
generated the most revenue ($288,500) out of the six stations 
operating in Georgia in 2008.
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    \25\  Memorandum of Interview of the Georgia Revenue Commissioner 
(October 30, 2009) (Exhibit 4 at 09-1022--17 para. 9); see also 2005 
Department of Revenue Memorandum discussing the inspection program 
history in Georgia at Exhibit 5 09-1022--20.

[GRAPHIC] [TIFF OMITTED] T5496.001


    24. The Revenue Commissioner's 2008 plan would have 
eliminated state inspector positions and permitted qualified 
individuals to conduct private inspections.\26\ Private 
inspectors would become certified through a standardized 
program.\27\ The plan would also ask for proposals from anyone 
in Georgia who wished to open an inspection station, regardless 
of proximity to an existing station.\28\ The changes would also 
place no limitation, per station, on the number of cars that 
could be inspected because each station would hire its own 
private inspectors, as opposed to waiting for rotating state 
inspectors.\29\ The Revenue Commissioner believed that the 
private sector could best administer the inspection program for 
the state of Georgia and described his plan as effectively 
terminating what he described as ``regional monopolies.'' \30\
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    \26\  Id. at para. 11.
    \27\  Id. at para. 16.
    \28\  Id. at para. 11.
    \29\  Id. at para. 11.
    \30\  Memorandum of Interview of the Georgia Revenue Commissioner 
(October 30, 2009) (Exhibit 4 at 09-1022--17 para.s 8 & 11). In 2009, 
the Revenue Commissioner administratively implemented his changes. He 
also stated that as of the date of the interview, he believed the 
amount of inspection station applications had increased, especially 
within GSD's Atlanta-region. Id. at para. 10.
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    25. The Revenue Commissioner stated that he met with 
Representative Deal and others on three occasions in 2008 and 
2009 to discuss the Salvage Inspection Program.\31\ 
Representative Deal, his business partner, and his Chief of 
Staff confirmed this information.\32\
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    \31\  Id. at para. 12. The Revenue Commissioner also stated that no 
other Congressman or Senator from Georgia contacted him about the 
vehicle inspection program. Memorandum of Interview of the Georgia 
Revenue Commissioner (October 30, 2009) (Exhibit 4 at 09-1022--18 para. 
26).
    \32\  Memorandum of Interview of Representative Deal's business 
partner (October 30, 2009) (Exhibit 3 at 09-1022--12 para.s 7-13); 
Memorandum of Interview of Representative Deal's Chief of Staff 
(October 30, 2009) (Exhibit 7 at 09-1022--27 para. 10); Memorandum of 
Interview of Representative Deal (December 16, 2009) (Exhibit 1 at 09-
1022--3 para.s 12-25).
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    26. The Revenue Commissioner described the subject of the 
three meetings as follows.\33\
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    \33\  See Exhibit 8 at 09-1022--30.

    [GRAPHIC] [TIFF OMITTED] T5496.002
    

    [GRAPHIC] [TIFF OMITTED] T5496.003
    

    27. The Board notes that Representative Deal is listed as 
``U.S. Representative Nathan Deal'' in the ``attendees'' 
column.
    28. According to the Revenue Commissioner, the first 
meeting on January 28, 2008, concerned a proposed program named 
GRATIS (Georgia Registration and Title Information System).\34\ 
GRATIS sought to streamline the sharing of title information 
between insurance companies and the state.\35\
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    \34\  Memorandum of Interview of the Georgia Revenue Commissioner 
(October 30, 2009) (Exhibit 4 at 09-1022--17 para. 13).
    \35\  Id.; Memorandum of Interview of Representative Deal (December 
16, 2009) (Exhibit 1 at 09-1022--4 para. 15).
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    29. The Revenue Commissioner stated that the purpose of the 
second meeting on June 30, 2008, was to discuss a request by 
Representative Deal and his business partner to keep a 
permanent state inspector at GSD.\36\ The Lieutenant Governor 
also supported this request.\37\ The Revenue Commissioner 
explained to Representative Deal and his business partner that 
he felt the request was inappropriate and created a conflict 
because no other station received such treatment.\38\
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    \36\  Memorandum of Interview of the Georgia Revenue Commissioner 
(October 30, 2009) (Exhibit 4 at 09-1022--17 para. 17).
    \37\  Id. at para. 18.
    \38\  Id. at para. 19.
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    30. Representative Deal and his business partner told the 
OCE that the first meeting on January 28, 2008 was to discuss 
the GRATIS program and that the second meeting on June 30, 2008 
occurred as a ``follow-up'' to the first meeting.\39\ 
Representative Deal stated that he did not recall any other 
issues discussed at the second meeting besides a follow-up on 
the GRATIS issue.\40\
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    \39\  Memorandum of Interview of Representative Deal's business 
partner (October 30, 2009) (Exhibit 3 at 09-1022--12 para. 7); 
Memorandum of Interview of Representative Deal (December 16, 2009) 
(Exhibit 1 at 09-1022--2 para. 17).
    \40\  Memorandum of Interview of Representative Deal (December 16, 
2009) (Exhibit 1 at 09-1022--2 para. 17).
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    31. The January 28, 2008 and June 30, 2008 meetings were 
initiated by the Chief of Staff at Representative Deal's 
direction.\41\ Representative Deal stated that he asked for the 
meetings because auto insurance companies had contacted his 
business partner about the GRATIS issue and he felt that the 
GRATIS program would save the state money.\42\
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    \41\  Id. at para. 14.
    \42\  Id. at para. 16.
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    32. Both Representative Deal's business partner and his 
Chief of Staff stated that the Revenue Commissioner randomly 
and abruptly brought up the issue of privatization at the 
second meeting, which prompted the request for the third 
meeting.\43\ In addition, the Chief of Staff stated that 
Representative Deal had received constituent calls about the 
status of the inspection program.\44\ Representative Deal and 
his business partner stated that individuals involved with the 
inspection program (e.g., state employee inspectors and 
inspection station owners) could not obtain information on the 
status of the program, despite attempts to contact the 
Department of Revenue, which prompted the request for the third 
meeting.\45\ The Deputy Revenue Commissioner stated that his 
office attempts to provide information to anyone who requests 
it.\46\
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    \43\  Memorandum of Interview of Representative Deal's business 
partner (October 30, 2009) (Exhibit 3 at 09-1022--3 para. 9); 
Memorandum of Interview of Representative Deal's Chief of Staff 
(October 30, 2009) (Exhibit 7 at 09-1022--27 para. 13).
    \44\  Memorandum of Interview of Representative Deal's Chief of 
Staff (October 30, 2009) (Exhibit 7 at 09-1022--27 para. 7).
    \45\  Memorandum of Interview of Representative Deal's business 
partner (October 30, 2009) (Exhibit 3 at 09-1022--13 para. 11); 
Memorandum of Interview of Representative Deal (December 16, 2009) 
(Exhibit 1 at 09-1022--4 para. 18).
    \46\  Memorandum of Interview of the Georgia Deputy Revenue 
Commissioner (October 30, 2009) (Exhibit 9 at 09-1022--33 para. 6).
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    33. The third meeting was initiated by Representative 
Deal's Chief of Staff who contacted the Lieutenant Governor's 
office and also the Deputy Revenue Commissioner.\47\ When asked 
how he got the third meeting, Representative Deal stated that 
``probably the Lieutenant Governor'' helped get the 
meeting.\48\
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    \47\  Memorandum of Interview of Representative Deal (December 16, 
2009) (Exhibit 1 at 09-1022--3 para. 14); Memorandum of Interview of 
Representative Deal's Chief of Staff (October 30, 2009) (Exhibit 7 at 
09-1022--27 para. 14).
    \48\  Memorandum of Interview of Representative Deal (December 16, 
2009) (Exhibit 1 at 09-1022--4 para. 23).
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    34. At the third meeting on March 27, 2009, the Revenue 
Commissioner stated that Representative Deal and Representative 
Deal's business partner advocated against the changes in the 
Salvage Inspection Program that the Revenue Commissioner had 
proposed.\49\ The Revenue Commissioner also told the OCE that 
he would characterize interactions at the last meeting as 
contentious.\50\ Representative Deal's Chief of Staff 
characterized the meeting as ``hostile.'' \51\
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    \49\  Memorandum of Interview of the Georgia Revenue Commissioner 
(October 30, 2009) (Exhibit 4 at 09-1022--18 para. 23).
    \50\  Id. at para. 21.
    \51\  Memorandum of Interview of Representative Deal's Chief of 
Staff (October 30, 2009) (Exhibit 7 at 09-1022--27 para. 15).
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    35. The Revenue Commissioner stated that at the third 
meeting, the Georgia State Legislator accompanying 
Representative Deal and his business partner ``hotboxed'' him 
and treated him as if he were a witness under cross-
examination.\52\ When asked about why the State Legislator 
attended the meeting, Representative Deal stated that he did 
not know but speculated that either the business partner or his 
Chief of Staff asked for his attendance.\53\ The Chief of Staff 
stated that the State Legislator attended because he is 
Representative Deal's and the business partner's representative 
in the state legislature.\54\ The State Legislator confirmed 
this assertion by the Chief of Staff.\55\ The State Legislator 
also stated that no other constituents came to him with 
concerns over changes to the inspection program.\56\
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    \52\  Memorandum of Interview of the Georgia Revenue Commissioner 
(October 30, 2009) (Exhibit 4 at 09-1022--18 para. 22).
    \53\  Memorandum of Interview of Representative Deal (December 16, 
2009) (Exhibit 1 at 09-1022--4 para. 20).
    \54\  Memorandum of Interview of Representative Deal's Chief of 
Staff (October 30, 2009) (Exhibit 7 at 09-1022--28 para. 19).
    \55\  Memorandum of Interview of the Georgia State Legislator 
(October 30, 2009) (Exhibit 10 at 09-1022--37 para. 14).
    \56\  Id. at para. 18.
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    36. Representative Deal and his business partner maintain 
that although it was not in their financial interest to do so, 
at the third meeting they expressed to the Revenue Commissioner 
that the program should not be changed.\57\ They argued that 
any inspection should be conducted by state-employed and 
authorized inspectors to ensure the safety of drivers on 
Georgia roads.\58\ Representative Deal and his business partner 
stated that state inspectors are often former body shop workers 
or law enforcement personnel who have experience with vehicle 
safety specifications.\59\ They explained that they were 
concerned that inexperienced, private inspectors would 
jeopardize vehicle safety.\60\
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    \57\  Statement of Representative Deal (Exhibit 14 at 09-1022--70); 
Memorandum of Interview of Representative Deal (December 16, 2009) 
(Exhibit 1 at 09-1022--3 para.s 6 & 22); Memorandum of Interview of 
Representative Deal's business partner (December 16, 2009) (Exhibit 3 
at 09-1022--13 para.s 16 & 20).
    \58\  Id.
    \59\  Id.
    \60\  Id.
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    37. The Revenue Commissioner stated that the vehicle 
inspection program never covered the safety of vehicles.\61\ He 
stated that the state inspectors' only role was to grant title 
to salvaged cars; thus, their position was named ``Salvage 
Title Inspectors.'' \62\ These ``Salvage Title Inspectors'' 
examined the title of the vehicle, with a limited examination 
of the physical vehicle itself, to make proper title 
assessments.\63\ He further stated that his proposed 
elimination of state employed inspectors would not decrease 
vehicle safety because private inspectors would be required to 
receive accreditation from a ``worldwide collision repair 
training'' program and may, as a result, be even more qualified 
than previous inspectors.\64\
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    \61\  Memorandum of Interview of the Georgia Revenue Commissioner 
(October 30, 2009) (Exhibit 4 at 09-1022--17 para.s 15 & 23).
    \62\  Id. at para. 15.
    \63\  Id.
    \64\  Id. at para.16; http://www.i-car.com/index--us.shtml.
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    38. When asked in what capacity he attended the meetings, 
Representative Deal stated that he attended them as someone 
with ``personal knowledge'' that was trying to ``get 
information'' from the Revenue Commissioner because nobody else 
could.\65\
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    \65\  Memorandum of Interview of Representative Deal (December 16, 
2009) (Exhibit 1 at 09-1022--4 para. 25).
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    39. The Board notes that the OCE specifically asked 
Representative Deal again whether he attended these meetings as 
a Member of Congress or as a salvage station owner and he 
responded that he attended as a ``public servant.'' \66\
---------------------------------------------------------------------------
    \66\  Id.
---------------------------------------------------------------------------
    40. The Board also notes that Representative Deal submitted 
that others could not get meetings with the Department of 
Revenue and that his contact with the Lieutenant Governor aided 
him in getting the March 2009 meeting.
    41. During his interview with the OCE, the Revenue 
Commissioner stated that he and Representative Deal had a 
private discussion at one of the meetings but that he could not 
disclose the nature of the conversation without being 
subpoenaed on the advice of the Georgia Attorney General.\67\ 
He stated that the information is a tax-related matter and for 
confidentiality reasons, he could not discuss the matter 
without being compelled to do so.\68\
---------------------------------------------------------------------------
    \67\ Memorandum of Interview of the Georgia Revenue Commissioner 
(October 30, 2009) (Exhibit 4 at 09-1022--18 para. 25).
    \68\ Id.
---------------------------------------------------------------------------
    42. When asked about this private conversation, 
Representative Deal stated that he recalled talking to the 
Revenue Commissioner about the Commissioner's preference that 
Representative Deal's Chief of Staff refrain from contacting 
Department of Revenue staff.\69\
---------------------------------------------------------------------------
    \69\ Memorandum of Interview of Representative Deal (December 16, 
2009) (Exhibit 1 at 09-1022--4 para. 26).
---------------------------------------------------------------------------

    D. REPRESENTATIVE DEAL'S CHIEF OF STAFF CONTACTED GEORGIA STATE 
OFFICIALS ABOUT MEETINGS ON THE VEHICLE INSPECTION PROGRAM AND ATTENDED 
         THREE MEETINGS ON THE PROGRAM WITH REPRESENTATIVE DEAL

    43. Representative Deal's Chief of Staff attended all three 
meetings with the Department of Revenue.\70\ When asked why he 
would attend the meetings, the Chief of Staff stated that he 
rarely allows Representative Deal to go anywhere without him, 
unless it is a family matter.\71\
---------------------------------------------------------------------------
    \70\ Memorandum of Interview of Representative Deal's Chief of 
Staff (October 30, 2009) (Exhibit 7 at 09-1022--27 para. 16).
    \71\  Id. at para. 11.
---------------------------------------------------------------------------
    44. Roughly twenty emails were sent from Representative 
Deal's Chief of Staff to employees of the Georgia Department of 
Revenue and the Lieutenant Governor's Office regarding meetings 
on vehicle inspection program. These emails were sent from the 
Chief of Staff's U.S. House of Representatives email account.
    45. For example, a February 27, 2009 email from the 
Representative Deal's Chief of Staff requested a meeting with 
the Revenue Commissioner on the topic of vehicle 
inspections.\72\ The Board notes that ``Congressman Nathan 
Deal, GA-9'' appears at the bottom of the email.
---------------------------------------------------------------------------
    \72\ See Exhibit 11 at 09-1022--40 for additional emails.

    [GRAPHIC] [TIFF OMITTED] T5496.004
    

    46. As stated above, Representative Deal, his Chief of 
Staff, and his business partner maintain that any contact with 
Georgia state officials on the vehicle inspection program 
concerned the safety of Georgia citizens that, in their view, 
would be affected by a change in the state program.\73\ Thus, 
Representative Deal and his Chief of Staff assert that the use 
of house emails was a constituent-related issue.
---------------------------------------------------------------------------
    \73\  Memorandum of Interview of Representative Deal (December 16, 
2009) (Exhibit 1 at 09-1022--2 para.s 5-6); Memorandum of Interview of 
Representative Deal's business partner (October 30, 2009) (Exhibit 3 at 
09-1022--14 para. 20); Memorandum of Interview of Representative Deal's 
Chief of Staff (October 30, 2009) (Exhibit 7 at 09-1022--26 para. 17).
---------------------------------------------------------------------------
    47. However, the Board notes that the Ethics Manual's 
prohibition on the use of staff for personal business does not 
create an exception for matters affecting both personal 
financial interests and constituent interests.

III. REPRESENTATIVE DEAL'S BUSINESS INTERESTS IN GAINESVILLE SALVAGE & 
                             DISPOSAL, INC.

      A. RELEVANT LAW, REGULATIONS, RULES, OR STANDARDS OF CONDUCT

    48. House Rule 25, Cl. 1(a)(1) states that ``[e]xcept as 
provided by paragraph (b), a Member, Delegate, Resident 
Commissioner, officer, or employee of the House may not--(1) 
have outside earned income attributable to a calendar year that 
exceeds 15 percent of the annual rate of basic pay for level II 
of the Executive Schedule under section 5313 of title 5, United 
States Code, as of January 1 of that calendar year . . .''
    49. The House Ethics Manual states that the outside earned 
income limit for calendar year 2008 was $25,830.\74\
---------------------------------------------------------------------------
    \74\  House Ethics Manual (2008) at 214.
---------------------------------------------------------------------------
    50. The House Ethics Manual states that ``[t]he annual 
limitation applies to compensation for personal services 
(termed ``earned income''), but not to moneys received from 
ownership or other investments of equity (so-called ``unearned 
income''). In this regard, Advisory Opinion No. 13 emphasizes 
that the ``real facts'' of a particular case would control as 
to whether moneys received would be deemed earned income:
          [T]he label or characterization placed on a 
        transaction, arrangement or payment by the parties may 
        be disregarded for purposes of the Rule. Thus, if 
        amounts received or to be received by a Member, 
        officer, or employee are in fact attributable to any 
        significant extent to services rendered by the Member, 
        officer, or employee the characterization of such 
        amounts as partnership distributive share, dividends, 
        rent, interest, payment for a capital asset, or the 
        like, will not serve to prevent the application of Rule 
        25 to such amounts. . . .
          For purposes of this Opinion, there are two types of 
        income--earned and unearned. If the compensation 
        received is essentially a return on equity, then it 
        would generally not be considered to be earned income. 
        If the income is not a return on equity, then such 
        income would generally be considered to be earned 
        income and subject to the limitation.'' \75\
---------------------------------------------------------------------------
    \75\ Id. at 231.
---------------------------------------------------------------------------
    51. House Rule 25, Cl. 2(d) states that ``[a] Member, 
Delegate, Resident Commissioner, officer, or employee of the 
House may not--(d) serve for compensation as an officer or 
member of the board of an association, corporation, or other 
entity. . . .''
    52. The House Ethics Manual states that ``[a]ll Members of 
the House . . . must file a Financial Disclosure Statement by 
May 15 of each year.'' \76\ This Statement must disclose all 
income ``earned'' and ``unearned'' over $200.\77\ Further, the 
House Ethics Manual states that ``[i]ndividuals must disclose 
any nongovernmental positions, whether or not compensated, that 
they hold, unless the Statement is the first one filed with the 
House . . . Included are such positions as officer, director, 
trustee, partner, proprietor, representative, employee, or 
consultant of any corporation, company, firm, partnership, or 
other business enterprise, any nonprofit organization, any 
labor organization, or any educational or other institution.'' 
\78\
---------------------------------------------------------------------------
    \76\ Id. at 252.
    \77\ Id. at 254.
    \78\ Id. at 260.

B. REPRESENTATIVE DEAL IS A GSD CORPORATE OFFICER IN ADDITION TO BEING 
                      A ``PARTNER'' IN THE COMPANY

    53. Representative Deal stated that he is the ``Secretary/
Treasurer'' at GSD.\79\ Further, the Georgia Secretary of State 
lists Representative Deal as the GSD corporate secretary under 
the classification of ``Officers.'' \80\
---------------------------------------------------------------------------
    \79\ Memorandum of Interview of Representative Deal (December 16, 
2009) (Exhibit 1 at 09-1022--2 para. 10).
    \80\ ``Recovery Services, Inc.'' is the official corporate name; 
the company does business as ``Gainesville Salvage & Disposal.'' See 
Memorandum of Interview of Representative Deal (December 16, 2009) 
(Exhibit 1 at 09-1022--2 para. 3).

[GRAPHIC] [TIFF OMITTED] T5496.005


    54. The Board notes that on his amended 2009 U.S. House of 
Representatives Financial Disclosure Statement, covering 
calendar year 2008, schedule VIII (``Positions'') 
Representative Deal lists himself as a ``member/partner/owner'' 
of GSD but does not disclose that he is also the corporate 
secretary.\81\
---------------------------------------------------------------------------
    \81\  Represented Deal also filed an amended Financial Disclosure 
Statement on January 22, 2010, but did not list any additional 
positions held. See Exhibit 14 at 09-1022--81.

[GRAPHIC] [TIFF OMITTED] T5496.006


  C. REPRESENTATIVE DEAL DISCUSSED GSD WITH HIS BUSINESS PARTNER ON A 
      REGULAR BASIS AND PARTICIPATED IN SOME GSD BUSINESS ACTIONS

    55. Representative Deal stated that he talks with his 
business partner several times a week because they are close 
friends.\82\ Representative Deal estimated that GSD is 
discussed with his business partner once a week.\83\
---------------------------------------------------------------------------
    \82\ Memorandum of Interview of Representative Deal (December 16, 
2009) (Exhibit 1 at 09-1022--3 para. 9).
    \83\ Id.
---------------------------------------------------------------------------
    56. Representative Deal stated that his business partner 
hires and fires employees, sets schedules, and buys 
equipment.\84\ Representative Deal stated further that he has 
no day-to-day role in GSD operations and does not make business 
judgments; a statement corroborated by his business 
partner.\85\
---------------------------------------------------------------------------
    \84\ Id. at para. 10.
    \85\ Id.; Memorandum of Interview of Representative Deal's business 
partner (December 16, 2009) (Exhibit 3 at 09-1022--12 para. 2).
---------------------------------------------------------------------------
    57. Representative Deal does, however, sign bank notes for 
the purchase of new equipment.\86\
---------------------------------------------------------------------------
    \86\ Memorandum of Interview of Representative Deal (December 16, 
2009) (Exhibit 1 at 09-1022--3 para. 10).
---------------------------------------------------------------------------
    58. Representative Deal does not provide any legal advice 
to GSD; one of the partners at his former law firm provides 
this service to GSD.\87\
---------------------------------------------------------------------------
    \87\ Id.
---------------------------------------------------------------------------
    59. The Board notes that Representative Deal's Chief of 
Staff stated that because he is so close to Representative 
Deal, he is ``very familiar'' with GSD.\88\ The Chief of Staff 
stated that Representative Deal and his business partner speak 
daily but could not state with certainty whether these 
discussions involved GSD business matters.\89\ He further 
stated that Representative Deal is a ``good attorney'' and 
assists his business partner with business decisions.\90\
---------------------------------------------------------------------------
    \88\ Memorandum of Interview of Representative Deal's Chief of 
Staff (December 16, 2009) (Exhibit 7 at 09-1022--26 para. 6).
    \89\ Id.
    \90\ Id.
---------------------------------------------------------------------------
    60. Representative Deal stated that as a general rule, he 
does not visit the GSD facilities but may occasionally stop by 
on the way to the airport.\91\
---------------------------------------------------------------------------
    \91\ Memorandum of Interview of Representative Deal (December 16, 
2009) (Exhibit 1 at 09-1022--3 para. 11).
---------------------------------------------------------------------------

 D. REPRESENTATIVE DEAL DISCLOSED ``UNEARNED'' INCOME FROM GSD ON HIS 
 2009 FINANCIAL DISCLOSURE STATEMENT BUT CHARACTERIZED THE SAME AMOUNT 
                  AS WAGES ON HIS FEDERAL INCOME TAXES

    61. On his 2009 U.S. House of Representatives Financial 
Disclosure Statement schedule III (``Assets and 'Unearned' 
Income''), reporting for calendar year 2008 and filed on May 
13, 2009, Representative Deal listed GSD's ``Rent'' income at 
$15,001 to $50,000 and ``Dividends'' income from $50,001 to 
$100,000.

[GRAPHIC] [TIFF OMITTED] T5496.007

    62. On his amended 2009 Financial Disclosure Statement 
(covering calendar year 2008), filed January 22, 2010, 
Representative Deal changed the GSD income from ``Dividends'' 
to ``Partnership Income.''

[GRAPHIC] [TIFF OMITTED] T5496.008


    63. Representative Deal stated that the reported 
``Dividend'' income from $50,001 to $100,000 on the statement, 
reflected $75,000 received from GSD during 2008.\92\
---------------------------------------------------------------------------
    \92\ Memorandum of Interview of Representative Deal (December 16, 
2009) (Exhibit 1 at 09-1022--4 para. 27). Represented Deal also filed 
an amended 2009 Financial Disclosure Statement on January 22, 2010 
where he classifies GSD income as unearned ``Partnership Income.'' See 
Exhibit 14 at 09-1022--81.
---------------------------------------------------------------------------
    64. However, on his 2008 tax return, Representative Deal 
disclosed wages of $75,000 from GSD. Further, a W-2 was issued 
to Representative Deal, from GSD, acknowledging $75,000 in 
wages and compensation.\93\ Representative Deal told the OCE 
that the $75,000 in wages listed on his tax return is the same 
income he described as ``Dividends'' (and then subsequently 
``Partnership Income'') on his 2009 Financial Disclosure 
Statement (covering 2008).\94\
---------------------------------------------------------------------------
    \93\ Pursuant to an agreement between the OCE and Representative 
Deal, screenshots of tax returns are not displayed in these findings of 
fact.
    \94\ Memorandum of Interview of Representative Deal (December 16, 
2009) (Exhibit 1 at 09-1022--3 para. 27).
---------------------------------------------------------------------------
    65. When asked about the $75,000 amount reported as wages 
from GSD on his income taxes, Representative Deal stated that 
the amount actually reflected ``equity'' in the business and 
not earned income.\95\ The $75,000 amount is issued to 
Representative Deal each year, in monthly installments, and is 
based on an oral agreement with his business partner.\96\
---------------------------------------------------------------------------
    \95\ Id.
    \96\  Id. at para. 13.
---------------------------------------------------------------------------
    66. The Board notes that Representative Deal's accountant 
signed an October 26, 2009 letter stating that ``due to an 
ethics investigation'' and ``based on various discussions,'' 
the $75,000 Representative Deal received from GSD was 
mistakenly reported as GSD income for the last three years.
    67. The Board also notes that as of December 16, 2009, the 
tax form in the OCE's possession had not been amended or 
corrected, and when interviewed, Representative Deal did not 
tell the OCE that he had filed an amended form.

                             IV. CONCLUSION

    68. Representative Deal asserts that his interest in 
meeting with Georgia officials on the topic of vehicle salvage 
and inspections involved state safety and budget concerns. He 
argues that he took action as a public servant concerned with 
issues affecting the public. In contrast, the Georgia Revenue 
Commissioner asserts that he sought to open up state vehicle 
inspections to privatization and marketplace competition, 
thereby potentially decreasing the amount of vehicles inspected 
by existing stations.
    69. The OCE does not take a position on Representative 
Deal's motivations for inserting himself into discussions of 
potential modifications to a state vehicle inspection program. 
However, during operation of the previous vehicle inspection 
system, Representative Deal received a significant financial 
benefit as a GSD partner and corporate officer. It is 
undisputed that as a ``public servant,'' Representative Deal 
took active steps to preserve a purely state program, one that 
had generated financial benefit for Representative Deal and his 
business partner. Further, while taking these steps, 
Representative Deal used resources of the House of 
Representatives.
    70. The OCE reviews the facts as presented at the time of 
review and does not take a position on whether Representative 
Deal's income from GSD was mistakenly reported as earned income 
since 2006 on his federal income taxes. The evidence before the 
Board is that Representative Deal characterized his income from 
GSD as wages on his tax return and, by contrast, as unearned 
``Dividends'' or unearned ``Partnership Income'' on his 
Financial Disclosure Statements. This inconsistency, as of the 
end of the second-phase review and Board vote, has not been 
resolved.
    71. The $75,000 reported as earned income on the tax return 
exceeded the limit on outside earned income and prohibition on 
receiving any income while serving as a corporate officer. 
Further, Representative Deal did not disclose that he was the 
GSD corporate secretary on his 2009 Financial Disclosure 
Statement (covering calendar year 2008).
    72. For all the reasons stated above, the OCE Board 
recommends further review by the Committee on Standards of 
Official Conduct.

V. INFORMATION THE OCE WAS UNABLE TO OBTAIN AND RECOMMNEDATIONS FOR THE 
                         ISSUANCE OF SUBPOENAS

    73. The OCE requested an interview with the Georgia 
Lieutenant Governor and a former member of his staff. The 
Lieutenant Governor's Office would not cooperate with the OCE's 
requests for interviews \97\ but did produce some information 
concerning the Lieutenant Governor's presence at meetings 
discussed above concerning vehicle inspections. Thus, the OCE 
recommends that the Committee on Standards of Official subpoena 
the Georgia Lieutenant Governor.
---------------------------------------------------------------------------
    \97\ The Lieutenant Governor's Office responded to the OCE that 
because the Lieutenant Governor is a member of the Georgia State 
Legislature, any meeting relating to his legislative branch duties 
would not be discussed due to restrictions under the Georgia 
Constitution and Georgia state law. Citations by Legislative Counsel to 
the Lieutenant Governor: Georgia Constitution Art. 3 Section IV; OCGA 
50-14-1; OCGA 50-18-70.
---------------------------------------------------------------------------
    74. The OCE was unable to access any information, 
testimonial or otherwise, concerning the matter discussed by 
the Georgia Revenue Commissioner during his interview with the 
OCE. The Revenue Commissioner stated that he would release 
information if subpoenaed. Thus, the OCE recommends that the 
Committee on Standards of Official Conduct subpoena the Georgia 
Revenue Commissioner.



