[Congressional Record Volume 141, Number 207 (Friday, December 22, 1995)]
[House]
[Pages H15581-H15593]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  PROVIDING FOR CONSIDERATION OF HOUSE RESOLUTION 299, AMENDING HOUSE 
   RULES TO PLACE LIMITATIONS ON COPYRIGHT ROYALTY INCOME FOR HOUSE 
                    MEMBERS, OFFICERS AND EMPLOYEES

  Mr. SOLOMON. Mr. Speaker, by direction of the Committee on Rules, I 
call up House Resolution 322, and ask for its immediate consideration.
  The Clerk read the resolution, as follows:

                              H. Res. 322

       Resolved, That upon the adoption of this resolution it 
     shall be in order to consider in the House the resolution (H. 
     Res. 299) to amend the Rules of the House of Representatives 
     regarding outside earned income. It shall be in order without 
     intervention of any point of order to consider the motion to 
     amend printed in the report of the Committee on Rules 
     accompanying this resolution only if offered by the chairman 
     of the Committee on Rules. The resolution and the motion to 
     amend shall be debatable for thirty minutes equally divided 
     and controlled by the chairman and ranking minority member of 
     the Committee on Rules. The previous question shall be 
     considered as ordered on the motion to amend and on the 
     resolution to its adoption without further intervening 
     motion.

  The SPEAKER pro tempore (Mr. Bereuter). The gentleman from New York 
[Mr. Solomon] is recognized for 1 hour.
  Mr. SOLOMON. Mr. Speaker, for the purposes of debate only, I yield 30 
minutes to the gentleman from Massachusetts [Mr. Moakley], my very good 
friend, pending which I yield myself such time as I may consume. Mr. 
Speaker, during consideration of the resolution, all time yielded is 
for debate purposes only.
  (Mr. SOLOMON asked and was given permission to revise and extend his 
remarks, and include therein extraneous material.) 

[[Page H15582]]

  Mr. SOLOMON. Mr. Speaker, I would advise Members that they really 
ought to listen up. This is a question of whether Members are going to 
be treated as American citizens or as second-class citizens. This rule 
makes in order House Resolution 299, amending House rules to place 
limits on royalty income that House Members, officers, and high-level 
staff may receive in any given year.
  Mr. Speaker, the rule provides for consideration in the House, and 
makes in order without intervening points of order, a motion to amend 
printed in the report on this rule only if offered by myself. The 
resolution and substitute will be debated for 30 minutes, to be equally 
divided between the chairman and ranking minority member of the 
Committee on Rules.
  The previous question will be considered as ordered on the motion to 
amend and on the resolution to final adoption.
  Mr. Speaker, I do not want to take substantial time explaining the 
history of the resolution this rule makes in order, as brief as that 
history may be. The resolution was introduced on December 12 by the 
gentlwoman from Connecticut [Mrs. Johnson], chairwoman of the Committee 
on Standards of Official Conduct, by the direction of her committee as 
part of her report on the Speaker.
  In a letter to me on December 13, the gentlewoman from Connecticut 
required that the Committee on Rules consider House Resolution 299, her 
resolution, as soon as possible, and to report it to the floor quickly 
so that it may be approved by the House before the end of the year, the 
end of the year being about 1 week from now.
  Mr. Speaker, while the Committee on Rules did not have time to 
conduct proper hearings and proper deliberations on the resolution, and 
formerly report it as we normally would do with resolutions reported by 
committees of jurisdiction, it was decided by our committee, as a 
matter of courtesy to the gentlewoman from Connecticut and to the 
entire Committee on Standards of Official Conduct, to honor the 
commitment gentleman made to have a vote this year.
  Mr. Speaker, I have made clear my own opposition to this resolution's 
central thrust, which is to bring royalty income for the first time 
under the outside earned income cap, which is to bring royalty income 
for the first time under the outside earned income cap, which is now 
$20,040. In my opinion, a book is an author's intellectual property and 
any royalties are returned on that property. If Members think about 
that for a minute, that is now the Committee on Standards of Official 
Conduct has treated royalties up to this point.
  Mr. Speaker, let me just quote from page 94 of the most recent 
edition of the ``House Ethics Manual.''

                              {time}  1000

  This is our manual:

       House rule XLVII has long exempted book royalties from 
     outside earned income restrictions, royalties being deemed a 
     return on the author's intellectual property, akin to other 
     investment income.
       That is like your home, that is like your stocks and your 
     bonds, that is your personal property. Intellectual property 
     is no different.

  The Johnson resolution before us today would change that definition 
of royalties by calling them earned income rather than unearned income 
and thereby force Members to refuse any returns on their intellectual 
property investment that exceeds $20,000. In my opinion, that is 
absolutely wrong because royalty income does not present an ethical 
problem either in terms of posing a conflict of interest or of 
interfering with the time a Member devotes to his or her official 
office, and that is really what this is all about. Think about that.
  The House ethics manual favorably cites a Senate Ethics Committee 
report on this point as follows, and I quote, and again you ought to 
listen carefully to this: ``If an individual writes a book and it 
becomes a best seller, any royalties received are beyond his or her 
direct control. It is income which is, in effect, a return on a prior 
investment of time and energy.''

  Mr. Speaker and Members, the substitute that I intend to offer would 
retain the current exemptions of royalty income from outside earned 
income limitations. However, exactly like the Johnson resolution, my 
substitute would prohibit any advances on any royalty income for 
contracts entered into on or after January 1, 1996, and that is 1 week 
from now.
  Mr. Speaker and Members of this House, now a strong case can be made 
that advances on royalties might be perceived as inappropriate or as 
posing a potential conflict since there is no way to know how much 
royalty income might be generated by the sale of a book. If a Member, 
for instance, received a $100,000 advance and the book did not sell, 
that means the book, the intellectual property, really was not worth 
anything. So he or she would receive a windfall on something that was 
worthless, called worthless property. To prevent that from happening, 
the Solomon substitute bans all advances. I think that is fair because 
it gets rid of that possible perception.
  This is consistent with the rules that exist in the executive branch 
in all of the departments of Government. At present, the President of 
the United States, the Vice President, Cabinet members, and 
Presidential appointees may not receive any advances on royalty at the 
income, and that is exactly what we are doing. We are conforming to 
that regulation. Other noncareer executive branch employees may receive 
advances within the 15-percent cap unearned income.
  My substitute would put Members of this House under the identical 
rule that now applies to the President, the Vice President, the Cabinet 
members, to Presidential employees; that is, they may receive no 
advances but they may receive royalties based on the sale of a book at 
whatever that market price might be.
  Moreover, like the Johnson resolution, my substitute would require 
that any contracts entered into on or after January, 1996, 1 week from 
today, must receive the prior approval of the Ethics Committee as 
complying with the current House rule that the contracts be with 
established publishers; that is important, pursuant to usual and 
customary terms. That means that Members could not receive some kind of 
windfall because of the office they have or some kind of clout that 
they might have.
  So, in conclusion, Mr. Speaker, and I think you ought to listen 
carefully to this because these are your choices on this floor today: 
Members have these three choices:
  The Johnson resolution that restricts royalty income and bans 
advances. That is what her resolution does.
  The Solomon substitute that bans advances but permits royalty income. 
That is what my resolution does.
  Or, if both of these fail, if my substitute goes down and the Johnson 
resolution does not pass, we go back to the current House rule that 
permits advances and unlimited royalties.
  Those are the three choices of this body, Members.
  I am just going to tell you something. You know, we come under a 
great deal of criticism sometimes. People talk about the perks of this 
Congress and the large salaries that we have. But I am going to tell 
you something, you know, when I came to this Congress, I had a 
business, I had several businesses, and I had to sell them, and I had 
five teenage children I had to put through college at the time. Because 
of the situation where I was forced by the ethics rules at that time to 
sell my businesses, I had to sell them for about half of what they were 
worth. Today those businesses are worth several millions of dollars, 
and I received about $300,000, maybe a little less at that time.

  That money is all gone because I used it to educate all my five 
children. But, you know, when we retire, when I retire, you know, they 
say we have great pensions. I will take that pension and maybe my wife 
and I, if we live another 5 or 6 or 10 years after that, in other 
words, we will enjoy whatever those pension benefits were.
  But think about this, when I am gone and she is gone, where is the 
estate for your family? I have given up several million dollars by 
coming and serving in this body. You might say, ``Well, you asked for 
it, Mr. Solomon.'' That is true. But the truth is, when you talk about 
intellectual property and I look at the gentlewoman from Texas [Ms. 
Jackson-Lee] sitting there, I look at a lot of Members, you have a lot 
of wisdom, you have a lot of knowledge. That is yours. You have 
accumulated it over 

[[Page H15583]]
a lifetime. This is not something that we are taking advantage of or 
making exceptions to. These are reasonable intellectual properties that 
we have developed over time. It belongs to you, and you ought to be 
able to use that intellectual property as you see fit.
  Mr. CARDIN. Mr. Speaker, will the gentleman yield?
  Mr. SOLOMON. I yield to the gentleman from Maryland, a very respected 
member of the Committee on Standards of Official Conduct, an 
outstanding Member of this body.
  Mr. CARDIN. I appreciate how sincere the gentleman is on the points 
concerning intellectual property. Is the gentleman aware we are only 
dealing with book royalties? All other forms of intellectual property 
returns are currently subject to the outside earned income limits. The 
only exception today is dealing with book royalties, not with 
intellectual property generally.
  Mr. SOLOMON. That is exactly right. My good friend, when this debate 
continues, you are going to find concerns. We have a lot of concerns, 
and I will talk about them a little bit later on.
  But, you know, there are such thing as property, not intellectual 
property but property such as stocks and bonds, investment properties 
that bring in dividends to Members. You know, maybe if we are going to 
begin to go down this road, this brings up serious questions. You know, 
we vote on defense contracts around here, we vote on 
telecommunications; there are a lot of things that, if we are going 
down this road, you are going to be making this body second-class 
citizens. I would predict if this goes down this road today, that you 
are going to see nothing in this body 10 years from now but 
millionaires or political hacks, one or the other. And that is not what 
this country needs. You need all of the intellectual expertise from out 
of the private sector that you can get, whether it is lawyers or 
doctors, professors, businessmen. We need to let them know that we are 
not going to throw these stumbling blocks up to them. They are just 
like everybody in this body. I would say that 99 percent of every man 
and woman in this body have the greatest integrity. Sure, there is a 
bad apple. I come from apple growing areas. You will find one or two in 
a barrel. But let us not demean this body. Let us keep us as normal 
American citizens and treat us the same.

              Committee on Rules--Republican Bill Summary


               H. RES. 299--HOUSE COPYRIGHT ROYALTY RULE

       Purpose: The purpose of H. Res. 299 is to amend House rule 
     XLVII (``Limitations on Outside Employment and Earned 
     Income'') to place limits on book royalty income for Members, 
     officers and top-level employees of the House.
       Background and Legislative History: On December 12, 1995, 
     Representative Nancy Johnson of Connecticut, chairman of the 
     House Committee on Standards of Official Conduct, introduced 
     H. Res. 299, a resolution to amend House Rules regarding 
     outside earned income. The measure was cosponsored by eight 
     other members of the 10-member, bipartisan Standards 
     Committee. The resolution was referred exclusively to the 
     Rules Committee as a matter of original jurisdiction.
       The resolution was introduced pursuant to a vote of the 
     Committee in connection with the report it issued on December 
     12th on the ``Inquiry into Various Complaints Filed Against 
     Representative Newt Gingrich.'' In its report, the Committee 
     found that Representative Gingrich ``did not violate the 
     House Rule governing book contracts or royalty income'' and 
     that ``the book contract was in technical compliance with the 
     `usual and customary' standard of House rules regarding 
     royalty income.'' However, the Committee went on to indicate 
     that ``the original advance greatly exceeded the financial 
     bounds of any book contract contemplated at the time the 
     current rules were drafted,'' and that it ``strongly 
     questions the appropriateness of what some could describe as 
     an attempt by Representative Gingrich to capitalize on his 
     office.''
       Consequently, the Committee recommended in its report that 
     House Rule 47 (``Limitations on Outside Employment and Earned 
     Income'') be changed to subject royalty income derived from 
     books written while one is a Member to the same limits as 
     other sources of outside earned income. A copy of the 
     proposed rule was appended to the report.
       The current House Rule XLVII (``Limitations on Outside 
     Employment and Earned Income''), as revised as part of the 
     Ethics Reform Act of 1989 (Public Law 101-194) applies to all 
     Members as well as House officers and employees whose pay is 
     disbursed by the Clerk of the House and exceed the annual 
     rate of basic pay in effect for grade GS-16 of the General 
     Schedule under section 5332 of title 5 of the U.S. Code 
     (currently $81,529), and is employed for more than 90 days in 
     a calendar year. The exception to this definition is the 
     total ban on honoraria which applies to all Members, officers 
     and employees of the House.\1\
     \1\ The Committee on Standards of Official Conduct has 
     determined that certain matters are excluded from the 
     honorarium ban such as compensation for activities where 
     speaking, appearing or writing is only an incidental part of 
     the work for which payment is made: witness or juror fees; 
     fees to qualified individuals for conducting worship services 
     or religious ceremonies; payments for works of fiction, 
     poetry, lyrics, or script; or payments for performers who 
     appear on stage. House Ethics Manual, 102d Congress, 2d 
     Session, April 1992, pp. 93-94.
---------------------------------------------------------------------------
       Clause 1 of rule XLVII prohibits Members, and officers and 
     employees paid at least $81,529, from receiving outside 
     earned income in excess of 15% of the Executive Level II 
     salary (which is the same as a Member's base pay), or 
     $20,040. Clause 2 prohibits such individuals from receiving 
     any compensation: (1) from affiliation with or employment by 
     any firm, partnership, association, corporation or other 
     entity which provides professional services involving a 
     fiduciary relationship; (2) from practicing a profession that 
     involves a fiduciary relationship; (3) from serving an 
     officer or member of a board of any association, corporation 
     or other entity; or (4) from teaching except by the prior 
     notification and approval of the ethics committee.
       Clause 3(e) currently defines outside earned income as 
     ``wages, salaries, fees, and other amounts received or to be 
     received as compensation for personal services actually 
     rendered.'' The current definition goes on to specify certain 
     matters not considered as outside earned income, including: 
     (1) the salary of Members, officers or employees; (2) 
     compensation derived by such individuals for personal 
     services rendered prior to the effective date of the rule 
     (calendar year 1991), or prior to becoming Member, officer, 
     or employee, whichever comes later; (3) amounts paid to a 
     tax-qualified pension, profit-sharing, or stock bonus plan 
     received by such individuals; (4) amounts received by such 
     individuals from services rendered by them in a trade or 
     business in which they or their family holds a controlling 
     interest and in which both personal services and capital are 
     income-producing factors; and (5) ``copyright royalties 
     received from established publishers pursuant to usual and 
     customary contractual terms.''
       Thus, under current House Rules, copyright royalties are 
     considered to be unearned rather than earned income. As the 
     most recently published version of the House Ethics Manual 
     puts it:
       House Rule 47 has long exempted book royalties from outside 
     earned income restrictions, royalties being deemed a return 
     on the author's intellectual property, akin to other 
     unrestricted returns on property.\2\
     \2\ Id., p. 94.
---------------------------------------------------------------------------
       Provisions of H. Res. 299: H. Res. 299 would amend clause 3 
     of rule XLVII as follows:
       Copyright royalties earned while a Member, officer or 
     employee would be counted as earned income subject to the 
     outside earned income cap of 15% of a Member's salary.
       Copyright royalties for work published before becoming a 
     Member, officer or employee of the House would be exempt from 
     the cap.
       Copyright royalties could not be received unless from an 
     ``established publisher pursuant to usual and customary 
     contractual terms'' and unless the contract receives the 
     prior approval of the ethics committee.
       Advance payments on royalties would be prohibited to 
     Members, officers or employees but could be made to literary 
     agents, research staff, and other persons working on behalf 
     of the Member, officer or employee.
       Contracts providing for a deferral of royalties could not 
     be approved by the ethics committee, though exceptions could 
     be made as deemed appropriate.
       The provisions of the rule apply to royalties received 
     after December 31, 1995.
                                                                    ____


Summary of Solomon Substitute for H. Res. 299, Proposed House Royalties 
                           Rule (Rule XLVII)

       Section 1 of the substitute would amend House Rule XLVII 
     (``Limitations on Outside Employment and Earned Income'') by 
     inserting a new clause 3 (treatment of royalty income), and 
     by redesignating the existing clause 3 (definitions) as 
     clause 4. The new clause 3 would contain the following 
     provisions:
       Unlimited royalties could still be received by Members, 
     officers and employees under the existing ``usual and 
     customary contractual terms'' standard (by virtue of 
     retention of the existing clause 4(e) exemption of royalties 
     from definition of earned income).
       Advances on royalties would be prohibited except for 
     payments to literary agents, researchers, or other 
     individuals working on behalf of the Member, officer or 
     employee on the publication (other than to persons employed 
     by the House or relatives of the Member, officer or 
     employee), and solely for the benefit of the literary agent, 
     researcher or other individual. (underscored provisions are 
     not contained in H. Res. 299)
       Royalties from contracts entered into on or after Jan. 1, 
     1996, could not be received without the prior approval of the 
     contract by the ethics committee as being in compliance with 
     the requirement of clause 4(e)(5) that royalties are received 
     ``from and established publisher pursuant to usual and 
     customary contractual terms.''
       Provisions would be effective on January 1, 1996 (sec. 2 of 
     substitute).
     
[[Page H15584]]

  Mr. Speaker, I reserve the balance of my time.
  Mr. MOAKLEY. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I thank my colleague, the gentleman from New York, for 
yielding me the customary \1/2\ hour.
  Mr. Speaker, like a lot of other Members, I am very glad to see this 
rule come to the floor today. I will, however, seek to defeat the 
previous question in order to make sure this resolution stays as it is 
and is not turned into milque-toast mush by a substitute.
  On December 12, the Ethics Committee unanimously voted to issue a 
report saying, and I quote:

       Existing House rule must be changed to clearly restrict the 
     income a Member may derive from writing books.

  The Ethics Committee made a very strong statement in their report. I 
want to take this time to read a section of the ethics committee 
report, and I quote:

       Existing rules permit a member to reap significant and 
     immediate financial benefits appearing to be based primarily 
     on his or her position. At a minimum, this creates the 
     impression of exploiting one's office for personal gain. Such 
     a perception is especially troubling when it pertains to the 
     office of the Speaker of the House, a constitutional office 
     requiring the highest standards of ethical behavior.

  There you have it Mr. Speaker, the Speaker's book loophole creates 
the impression of exploiting one's office for personal gain. I say--the 
sooner we make this change, the better.
  Now I do not believe that serious damage hasn't already been done. 
According to the Washington Post, Speaker Gingrich has already made 10 
times his House salary on this book deal. I'm told that's a total of 
about $1.7 million. The Ethics Committee obviously thinks we should do 
something about that and I believe we should accept their 
recommendation.
  Passing this resolution, without weakening it, will change House 
Rules to include royalty income within the category of outside earned 
income which is limited to $20,040 a year.
  It's a good idea. It's way overdue. And it'll go a long way toward 
restoring the integrity of this House.
  I would remind my colleagues who have been working to put this 
decision off that the Ethcs Committee unanimously voted to have this 
begin January 1, every day we wait is another day a Member can earn 
money that they shouldn't be earning.
  I urge my colleagues to defeat the previous question. This House 
should vote on the Ethics Committee's resolution plain and simple. We 
shouldn't be making changes designed to enable Members to earn more 
money than they should be earning. It is wrong now. It was wrong when 
it started. And it will be wrong in March when the next check is due.
  Mr. Speaker, I yield 10 minutes to the gentlewoman from Connecticut 
[Mrs. Johnson], the chairperson of the Committee on Standards of 
Official Conduct, a Member who has been under a lot of pressure and 
managed to get all 10 Members of the Committee on Standards of Official 
Conduct together to agree to the legislation that we are now dealing 
with.
  (Mrs. JOHNSON of Connecticut asked and was given permission to revise 
and extend her remarks.)
  Mrs. JOHNSON of Connecticut. Mr. Speaker, I thank the gentleman for 
yielding me this time.
  Mr. Speaker, as Chair of the Committee on Standards of Official 
Conduct I rise in strong support of the committee's proposal to bring 
book royalties within the restrictions that now apply to outside earned 
income.
  Rule 47 of the Rules of the House of Representatives currently 
restricts the outside income of Members and senior staffers to $20,040 
per year. However, the rule's definition of ``outside earned income'' 
excludes ``copyright royalties received from established publishers 
pursuant to usual and customary contract terms.'' The Committee on 
Standards--as has the Senate Ethics Committee--interpreted this 
exclusion to also cover advances on royalties.
  Therefore, current rules permit a Member or senior staffer to earn an 
unlimited amount of money from book royalties and advances, while 
subjecting income earned from other outside work to a $20,040 cap. Nor 
is there any current requirement that book contracts be submitted to 
the Committee on Standards for approval.
  The proposal you will vote on today will end this anomaly. Advances 
on royalties would be prohibited; copyright royalties would be included 
in the definition of ``outside earned income,'' thus subjecting them to 
the $20,040 cap; the new cap would apply only to books sold after 
December 31, 1995, and then only if the book was published after the 
author began House service; all book contracts providing for payment to 
the author must be submitted to the Committee on Standards for approval 
before any payment may be accepted; and no contract will be approved 
which provides for deferral of royalty income beyond the year in which 
earned.
  Le me make clear that there will be no restriction on income from any 
book published before a Member entered the House; there will be no 
restriction on any advance paid or royalty earned prior to December 31; 
and any books sold in 1996 or thereafter cannot generate royalty 
payments to a Member or senior staffer that exceed $20,040, the outside 
earned income cap.
  As you all know, this proposal did not arise in a vacuum; nor is it 
directed at a particular book or at the finances of a particular 
Member. Rather, this proposal stems from our review of a number of 
contracts and is the result of many hours of hearings and 
deliberations.
  We heard from many major publishing houses and through the course of 
these discussions we became much more familiar with the industry, their 
practices, their usual royalties, and their negotiation process. Our 
proposal evolved as we received input from these experts and it is the 
Ethics Committee's considered judgment as to what is necessary and 
appropriate to ensure public confidence in our work.

                              {time}  1015

  This proposal to limit income royalty is not novel. Since the Ethics 
Reform Act of 1989, there has been a cap on all outside earned income 
except book royalties, and there has been a complete prohibition on 
receiving compensation for practicing law or other professions 
involving a fiduciary relationship, as well as on being paid for 
serving on a board or as an officer of any organization.
  Thus, our colleagues who, while Members, work as teachers, dentists, 
doctors, painters, pilots, taxidermists, clergy, actors, artists, 
salespersons, or morticians, are all now subject to the same earned 
income cap that we now propose to place on those of us who write books, 
while Members of Congress.
  What we propose today simply subjects writing for pay to the same 
restrictions that have governed other activities for years, 
restrictions that this body imposed in the past so that it would be 
clear that Members are receiving outside compensation not because of 
their position, but because of their talents.
  I know that some will argue, not unreasonably, that it is unfair to 
change the rules in mid-stream. In reply, I would note that the Ethics 
Committee debated this issue fully and concluded that the ethical 
interests of the House must prevail over the financial interests of a 
few Members.
  I would also point out that, however unfortunate, Members have always 
had to incur financial setbacks when rules were changed. When the 
current restrictions were imposed in 1989, the financial interests of 
many Members were directly affected. Many Members who were lawyers had 
to forfeit payments altogether; those who served on boards or were 
officers in organizations could no longer be compensated; and all 
income--except that of authors--became subject to the cap.
  It also will be argued--that the new book rule will unnecessarily 
restrict the free flow of ideas from Members that wish to contribute to 
the public debate. But for this very reason--to insure that useful 
books are still written and published by Members--the proposed rule 
expressly permits the publisher to compensate those to whom the 
proceeds of advances are usually directed: the lawyers, agents, fact-
checkers, and writers without whom a book could not be published.
  If a Member wants to communicate ideas through a book, and can 
convince a publisher that someone will buy the book, the publisher can 
pay those upfront expenses usually paid from the 

[[Page H15585]]
author's advance, the book will be published, and the Member/author can 
earn $20,040 per year in royalties. Thus, this new rule should not 
interfere with the free flow of ideas.
  Finally, I would like to state as clearly as I can why I have worked 
hard to bring this proposal directly to the floor of the House, 
although it is technically within the legislative jurisdiction of the 
Committee on Rules. I respect my good friend, the distinguished 
Chairman of the Committee on Rules, and his legitimate substantive and 
jurisdictional concerns. I also appreciate that the Ethics Committee 
recommendations usually go to the floor as privileged resolutions 
pertaining to specific matters of a Member's conduct.
  For the Ethics Committee to recommend a change that must go through 
another legislative committee is unusual; yet our right of direct 
access to the floor is no less important when we recommend a rule 
change than when we recommend an action with regard to a Member. We are 
a bipartisan committee composed of five Republicans and five Democrats. 
Thus it is fundamental to our independence and the integrity of our 
process that our recommendations come to the House floor as we write 
them.
  I urge the adoption of House Resolution 299.
  Mr. SOLOMON. Mr. Speaker, I yield 3 minutes to the gentleman from 
Hawaii [Mr. Abercrombie]. From time to time we have had differences of 
opinions on some issues, the gentleman is an outstanding Member of this 
body.
  Mr. ABERCROMBIE. Mr. Speaker, I thank the gentleman for yielding 
time.
  Mr. Speaker, friends, I am holding here the House rules and manual of 
the 104th Congress. Amendment No. 1 of the Constitution of the United 
States, which is incorporated into our rules, says,

       Congress shall make no law respecting an establishment of 
     religion, or prohibiting the free exercise thereof; or 
     abridging the freedom of speech, or of the press; or of the 
     right of the people peaceably to assemble, and to petition 
     the Government for a redress of grievances.

  You cannot come into the House of Representatives and decide you are 
bigger than the Constitution of the United States. Now, we all know the 
origin of this particular issue. I am not taking issue in turn with the 
motivations of the Committee on Standards of Official Conduct. As a 
matter of fact, we all know that serving on the Committee on Standards 
of Official Conduct is about as thankless a task as you can have in the 
House of Representatives.
  I think the Committee on Standards of Official Conduct has taken a 
pounding over the last several months and tried to come up with a good 
faith interpretation of what needs to be done, but that does not lessen 
our obligation to do the right thing by our own rulings and by the 
Constitution of the United States.
  Further, I will say that I think this is here today principally 
because of arguments that people have had with the Speaker of the House 
over the arrangements that were made with respect to a book contract 
that he signed or did not sign or wanted to sign, or whatever it was. 
That has been argued at length.
  I do not think you should make law or rules based on those instances 
which you think are egregious when it infringes and impedes those 
elements and principles that you know to be fundamentally right. Why 
should everybody else be judged by the standard of that person or that 
instance or that action which you think or you have decided or you have 
even decreed by virtue of law as being illegal or immoral, or whatever 
kind ever connotation you want to put on it?
  Mr. Speaker, I do not stand here tonight just speaking abstractly, as 
my good friend the ranking member on the Committee on Standards of 
Official Conduct knows. I do not want to stand here without saying I 
have discussed this with members of the Committee on Standards of 
Official Conduct, the ranking member, because I am the coauthor of a 
book. I put this book together with a coauthor who forswore his own 
advance because I did not want to do anything here that I had not 
already completed and then tried in the marketplace of ideas to see 
whether anybody wanted to pay any attention to it. So my coauthor went 
without. I was already making a living. I did not need it.
  That is why I think the Solomon amendment makes sense. If we are not 
willing to do this, I will tell you what I think is actually happening: 
Put all unearned income in. Why are you picking on the intellectual 
property or the ability to move an idea forward? Somebody who is a 
filmmaker, they could not come in here and be able to get the benefit 
of that. You put your stocks, your bonds, your investment property, 
everything else that is considered unearned income in here, then I will 
be willing to pay some attention, at least to the arguments being made.
  The bottom line is this, Mr. Speaker: You cannot go against the House 
rules and manual, which incorporate the Constitution of the United 
States which says you cannot abridge free speech.
  Mr. MOAKLEY. Mr. Speaker, I yield 6\1/2\ minutes to the gentleman 
from Washington [Mr. McDermott], the ranking minority member on the 
Committee on Standards of Official Conduct.
  Mr. McDERMOTT. Mr. Speaker, I rise today to support the distinguished 
chairwoman of the Committee on Standards of Official Conduct, the 
resolution she has introduced, and the committee which she has very 
ably led.
  That we are here today is a tribute to her leadership and to her 
steadfast commitment to the ethics process that this body has so 
carefully crafted to deal with the sensitive and troubling issues posed 
by allegations of Member conduct.
  We meet today, however, not as the last Speaker suggested to deal 
with one Member, but to consider a rule that if enacted will reflect 
well on the conduct of all Members. The proposed rule change, to 
eliminate the copyright royalty exception to the earned income cap, was 
in fact developed in the context of the Committee on Standards of 
Official Conduct's review of allegations against a Member, and bringing 
it to the floor today was a central element in the committee's 
unanimous vote of December 6.
  But, regardless of the outcome of the other matter, this is a good 
proposal. It should be considered on its own merits, free from partisan 
bickering.
  The resolution of the Committee on Standards of Official Conduct that 
we bring here today is a well thought out effort to bring some sense to 
the earned income restrictions by eliminating a major loophole. Its 
basic thrust is to ensure that those who offer money to a Member to 
write a book do so because of the content of the book, not the position 
of the Member.
  Similarly, in the past the House has placed restrictions on Members' 
professional activities so as to ensure that lawyers and teachers among 
us were not hired solely because they were Members. In the one case we 
eliminated altogether the possibility of income. That is lawyers. In 
the other, as we pose today, we placed a cap on it.
  We did this not because of polls that said it is what we should do; 
we did it because we think it is right. And if it was right to prohibit 
compensation to our colleagues who are lawyers and to restrict the 
outside earnings of all others, it is right to place a cap on royalty 
income.
  As the committee noted bluntly, but correctly, in its unanimous 
report of December 6, it is not appropriate to capitalize on one's 
office. This is not a body of 435 free enterprise zones. To prevent 
such conduct, the Committee on Standards of Official Conduct has 
produced a straightforward measure that prohibits advances to the 
author, requires all book contracts to be approved by the Committee on 
Standards of Official Conduct, and subjects royalty income to the same 
earned income cap that applies to all other activities.

  This new cap would apply to royalties pertaining to books sold after 
December 31, 1995, and then only if the book was published when the 
Member was in the Congress. No advances paid on royalties prior to 
December 31 would be affected. These provisions, in my opinion, reflect 
the realistic accommodation of several competing interests. Members are 
permitted to earn a not insubstantial amount of money, the temptation 
of multimillion-dollar advances is eliminated, and the public will 
continue to have the opportunity to read what Members want to write.
  Now, as to the process, traditionally recommendations of a 
nonpartisan 

[[Page H15586]]
Committee on Standards of Official Conduct are considered on the floor 
by way of a privileged resolution without going through the partisan 
Committee on Rules. Just as traditionally, the Committee on Standards 
of Official Conduct usually does not suggest substantive measures that 
are within the jurisdiction of other committees.
  But after careful deliberation and in compelling circumstances, we 
did so in this case. And to protect the interests of the committee and 
the nonpartisan processes, it is vitally important that we be permitted 
to present our measure to you today as it was written.
  This is not an attempt to usurp the powers of any other committee or 
to force the leadership to choose between chairmen. It is, and was, a 
sincere effort by the committee, made up of 10 Members, 5 Republicans 
and 5 Democrats, to bring to the floor a measure that we thought 
demanded immediate consideration.
  Some may say this rule change has had no public hearings. We spent 
countless hours talking to publishing industry executives, book agents, 
and others in the field, and then we drew the rule. We have done it by 
a trial of fire, and we settled on this as the best way to do it.
  In closing, I would like to commend the chairwoman for her 
leadership, and I commend my colleagues on the committee for their 
thoughtfulness and hard work, and particularly, the gentleman from Ohio 
[Mr. Sawyer] and the gentleman from Ohio [Mr. Hobson] deserve praise 
for the time they spent on crafting this resolution.
  You often hear in this House the lament that none of us asked to 
serve on this committee. It is true. While I do not suggest, however, 
that you support our recommendation because of the pain we have endured 
or will endure, I do believe it is relevant that those closest to the 
issue have produced a bipartisan solution to a problem of much 
importance to this House.
  This is a vote in support of a bipartisan decision on the Committee 
on Standards of Official Conduct. In the past the House has only 
strengthened what has come out of the committee. It has never weakened 
it. With all due respect to the gentleman from New York, his amendment 
weakens the proposal proposed by the Committee on Standards of Official 
Conduct. Therefore, I ask Members to support the proposal of the 
committee and reject the Solomon amendment.

                              {time}  1030

  Mr. SOLOMON. Mr. Speaker, I yield 4 minutes to the gentleman from 
Albuquerque, NM [Mr. Schiff], a very outstanding Member of this body 
and member of the Committee on Standards of Official Conduct.
  Mr. SCHIFF. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  I want to begin with a very serious and sincere expression of 
gratitude to the gentleman from New York, Chairman Solomon, and the 
Committee on Rules for bringing this matter to the House floor in such 
a short period of time. As he indicated, it was only a few days ago 
that the Committee on Standards of Official Conduct, which I am a 
member of, proposed this rule change, and asked to get it to the House 
floor by January 1, that is, before January 1, 1996.
  Chairman Solomon, although his plate was more than full with other 
legislative matters, although he had some specific individual concerns 
about the proposal, which he has certainly indicated, has such a high 
regard for the Committee on Standards of Official Conduct, and 
understands its importance to the House of Representatives, that he 
literally turned the Committee on Rules into a legislative pretzel to 
get us out here this morning and he has my deep appreciation.
  Second, I want to express my same appreciation to our chairwoman, the 
gentlewoman from Connecticut, Nancy Johnson. Even though Members agree 
and disagree individually, it is still not easy to get a majority vote 
on a situation where the committee is divided equally between 
Republican and Democratic Members. The Committee on Standards of 
Official Conduct is the only committee in the House of Representatives 
where we are equal as Republicans and Democrats.
  And Chairwoman Johnson has got a proposal, it is here on the floor, 
and it is here for Members to consider. And the gentlewoman from 
Connecticut [Mrs. Johnson] said that she guaranteed that she would get 
it to the House floor. Even though our chairwoman is not the chairman 
of the Committee on Rules, she guaranteed it would be on the House 
floor for Members to work their will on how to address this issue and 
that has been done. And I complement Chairwoman Johnson, too.
  That brings me to the rule itself. This proposed rule change was a 
result of a compromise, a lot of discussion and a lot of different 
views being rolled into one proposal. As a member of the Committee on 
Standards of Official Conduct who participated in putting together this 
proposed rule change, I intend to vote for it when we get to that vote. 
However, I want to acknowledge that in my judgment, speaking now 
individually, other members of the committee may have different views, 
but, in my judgment, the Solomon substitute, which we will have a 
chance to also vote on the House floor today, and it was always the 
understanding that amendments might be offered once we got to the House 
floor, I believe the Solomon substitute is another way that addresses 
the problem that originally brought this whole matter to the attention 
of the Committee on Standards of Official Conduct.
  I say that for this reason. The exception that we have allowed for 
book royalties allowed an exception for everything that was usual and 
customary in the publishing trade. And what we learned is that in the 
publishing trade prominent people are often offered large cash advances 
to write books. That has been true regardless of why the person is 
prominent. They could be a military veteran. They could be a former 
prosecutor in a well-known case in the State of California. It does not 
matter. The fact is that prominent people are offered by publishing 
houses large advances.
  Now, it was the Committee on Standards of Official Conduct's feeling 
that when someone is prominent as a Member of Congress in particular, a 
Member of the House of Representatives, one cannot help wondering that 
no matter how prominent the individual is, no matter how strong his 
intellectual credentials might be or her intellectual credentials might 
be, Republican or Democrat, it inherently raises a question when a 
large advance is offered. Did they really like this book or are they 
trying to get in close with somebody who votes on issues? That was the 
basis of the Committee on Standards of Official Conduct moving forward.

  Now, the Committee on Standards of Official Conduct offers a solution 
that I will vote for. It eliminates all advances and it subjects 
royalties. That is book-by-book sales to the $20,000 proximate limit on 
all earned income outside of the House of Representatives.
  The gentleman from New York, Chairman Solomon, proposes a substitute 
that eliminates the advances, eliminates the major issue that brought 
this issue up in the first place and allows the continuation of book-
by-book sales. I will support the Committee on Standards of Official 
Conduct, but I think both address the problem.
  Mr. MOAKLEY. Mr. Speaker, I yield 3\1/2\ minutes to the gentleman 
from Wisconsin [Mr. Obey], a person who has some legislative history on 
this entire matter.
  Mr. OBEY. Mr. Speaker, I support the committee resolution and oppose 
the Solomon resolution, and I want to tell Members why.
  The House has an exemption in the rules which limits outside income 
for Members. It has an exemption for book royalties, because I agreed 
to put it there back in 1977. At that time I chaired a commission that 
rewrote the House Code of Ethics under which 18 Members had been 
disciplined, a code which was upgraded 3 years ago.
  At that time, we voted to impose limits on outside income after a 
Presidential commission, chaired by Pete Peterson, who today heads the 
Concord Coalition, recommended a congressional pay raise, but they said 
it should go into effect only after Members had passed limitations on 
outside income to assure that Members could not trade on their 
positions for undue personal gain.
  I had one Member of the House come up to me and he said, ``Dave, I do 
not understand what you are doing with 

[[Page H15587]]
law practice.'' He said, ``I do not spend any time at my law practice. 
It is just that as I rise in seniority, the lobbies toss more business 
our way and I get a piece of the action.'' I said, ``I know. That is 
why we are doing what we are doing, because we do not think that is 
right.''

  I made an exception in the recommendation to the House on book 
royalties because at that time we had people like John Anderson, Mo 
Udall, Dick Bolling, who had written books. They were largely regarded 
as academic exercises. We never dreamed that any of them would be used 
to in any way significantly enrich a Member's lifestyle.
  Today, I think we have a different situation. To me, any individual 
Member can today exploit that loophole to unduly enrich himself because 
there is a conflict of interest. The amount of money that you make is 
going to be determined by the aggressiveness with which the publisher 
promotes the book. And if that publisher, his firm, has an interest 
before the Congress of the United States, that is a very troubling 
potentiality which I think events have shown we have to eliminate.
  I want to say one other thing. The gentleman from New York [Mr. 
Solomon] said that if we do not pass his amendment that Members of 
Congress will be ``second-class citizens.'' No person who has ever been 
elected by his fellow citizens to represent them in the halls of the 
Congress of the United States can ever be regarded in any way as a 
second-class citizen. The honor that is extended to us by that act far 
exceeds any monetary value that can accrue to anyone by virtue of any 
financial gain.
  Members of Congress ought to be willing to give up something for the 
greater good. In this instance, it is necessary for us, in my view, to 
stick with the committee. It is not a pleasant experience to serve on 
that Committee on Standards of Official Conduct. It is the toughest job 
in this House, whether you are a Republican or a Democrat you are asked 
to make excruciating judgments every day. That committee deserves to be 
backed up by the judgment of this House.
  Mr. SOLOMON. Mr. Speaker, I yield 3 minutes to the gentleman from 
Indiana [Mr. Burton], a very distinguished veteran Member of this body.
  Mr. BURTON of Indiana. Mr. Speaker, let me just say that I think we 
should give up something to serve in this House, and I think most 
people do give up something, but we should not give up everything. We 
should not give up everything.
  A lot of people have outside investments, and I guarantee my 
colleagues that this is going to lead to the point where if we have 
outside investments, property and so forth, and we sell it, we will not 
be able to get over $20,000 a year out of our investments. And a lot of 
people have made those investments counting on them for additional 
income because of the kids in college and other expenses they have to 
deal with. But we are going to lead to that. That is where we are 
going.
  In the past years, I have served with thousands and thousands of 
legislators in the State House and in the Federal Government, and very 
few were corrupt. I would say much less than one-half of 1 percent. And 
yet we engage in self-flagellation around here on a routine basis. We 
might as well have a cat-o'-nine-tails with little pieces of metal in 
it and just beat each other to death in front of the public. Maybe that 
will satisfy this insatiable desire for perfection. We are not going to 
be perfect. We are human beings. But we have a much lower rate of 
crookedness than the average population. and if Members do not believe 
it, just look at the statistics. Mr. Speaker, the thing that bothers me 
is we just continue down that road.
  My staff, who make very little salary, cannot even take an apple from 
somebody now. They cannot have a sandwich with somebody. They are 
making $20,000 a year, and they used to look forward to a lunch with 
somebody, and they cannot do it anymore because of the gift ban that we 
passed. We are just going way too far. Way too far.
  Mr. Speaker, I think that what we ought to be doing is we ought to be 
thinking about watching ourselves. If we do something corrupt, it is 
going to be brought out. I do not understand the mentality that says 
that we have to continue to limit ourselves, to squeeze ourselves time 
and again.
  And every single outside group, like Common Cause or Ralph Nader, 
they raise their eyebrows a little bit and we all start genuflecting. 
We all start getting more and more concerned. It makes no sense to me. 
Why are we doing this?
  If a person writes a book, I think the Solomon amendment addresses it 
very well. No big bonus at the front end, but if it is a royalty they 
get, they earn, they should be able to get that. What is corrupt about 
that? Intellectual property rights ought to be protected by this body. 
We should not be taking away first amendment rights. The gentleman from 
Hawaii is absolutely correct, that is what we are doing. I just simply 
do not understand it.
  If a person is going to be corrupt, they are going to be corrupt. 
They are going to take money like they did in ABSCAM. They will take it 
under the table, behind the back, over a transom, in a hotel room. So 
they are going to be corrupt, and they should be brought to justice. 
But we should not all be beating each other to death continually before 
the public like we do. It makes absolutely no sense.
  And let me just say this, Mr. Speaker. I really and truly believe we 
are going to drive people out of this chamber who have a lot to 
contribute because we are squeezing everybody so tightly.
  Mr. MOAKLEY. Mr. Speaker, would you kindly inform me how much time is 
left on each side.
  The SPEAKER pro tempore. The gentleman from Massachusetts [Mr. 
Moakley] has 10\1/2\ minutes, the gentleman from New York [Mr. Solomon] 
has 8\1/2\ minutes remaining.
  Mr. MOAKLEY. Mr. Speaker, I yield 2 minutes to the gentlewoman from 
California [Ms. Pelosi].
  Ms. PELOSI. Mr. Speaker, I, too, want to commend the gentleman from 
New York, Mr. Solomon, and the gentleman from Massachusetts, Mr. 
Moakley, for making this debate possible this morning; and add my voice 
to those commending our chairperson of the Committee on Standards of 
Official Conduct, the gentlewoman from Connecticut, Congresswoman Nancy 
Johnson, and our ranking member, the gentleman from Washington State, 
Mr. McDermott, for their leadership. And, as I say, especially our 
chairperson, for forging a consensus on this very difficult issue, and 
reminding Members of our evenly divided bipartisan committee.
  I want to remind my colleagues of a couple of things. Once again, the 
committee is bipartisan, evenly divided, five Democrats and five 
Republicans. And the report of which this rule was a part, the report 
and the better, came out of the committee unanimously, ten to nothing.
  I also want to remind my colleagues that should this body reject the 
recommendation of the Committee on Standards of Official Conduct, it 
would be the first time that the House of Representatives would have 
done that.
  Mr. Speaker, it seems ironic to me that we are gathered here this 
morning, while the Government is shut down, while we are having debates 
about how we are going to get checks out to poor people, that we are 
standing here talking about why Members of Congress should make more 
money on the outside, earned income, after they have been elected to 
come to Washington, DC, to do a job.
  I think that the particular rule we are addressing, frankly, does not 
speak necessarily to the integrity of any individual Member, but to the 
picture of what the American people expect of us; and, also, how the 
publishing industry works, which I think was enlightening to us, those 
of us on the Committee on Standards of Official Conduct.

                              {time}  1045

  So, I would say to our colleagues, I could be wrong. I could be 
wrong. But I think the American people, and I think the people involved 
in grassroots politics and issues who fight so passionately for their 
point of view, and those who elect us to this Congress, expect us to 
come here and not, as the gentleman from Washington [Mr. McDermott] 
said, be 435 free enterprise profit-making zones, but to do the work of 
the people.
  Mr. Speaker, I urge our colleagues to support the Committee on 
Standards of 

[[Page H15588]]
Official Conduct and reject the Solomon resolution.
  Mr. MOAKLEY. Mr. Speaker, I yield 2 minutes to the gentleman from 
California [Mr. Fazio].
  Mr. FAZIO of California. Mr. Speaker, I know we meant to spend a good 
deal of time on matters related to the integrity of this institution 
during this Congress. I simply want to say I think this vote today is 
as important as any we have cast on gift rules or on bringing this 
institution under laws that govern all Americans. This is a vote that I 
think goes to the question of the integrity of the process of enforcing 
the rules here in the House on our peers.
  Mr. Speaker, having served on the Committee on Standards of Official 
Conduct for 8 years during some very difficult times, I have nothing 
but the greatest admiration for those who serve during this very 
difficult time. I can tell my colleagues that it is important to the 
integrity of this institution that this committee be perpetuated in its 
unique bipartisan status and that its recommendations be upheld when 
they are brought to the floor in the manner in which they have come 
here.
  Mr. Speaker, we ought to pay all 12 of these individuals the respect 
that they are due and we ought to vote for their proposal today. No 
Member among us, unless they have served there, will ever understand 
what they do as a sacrifice for this institution. They are often said 
to be fools to take the job. I think they are among the most respected 
in the institution, because they get no credit at home, but they keep 
this body together when they do their job in a way that in the long run 
is what the American people most need.
  Mr. Speaker, I have hopes that we will vote not at all to reject the 
proposal they have made. I ask people not to support the Solomon 
substitute.
  Mr. Speaker, I also served with a number of my colleagues in 1989 on 
a committee that did a number of good things for this institution. We 
banned honoraria. We limited trips. We increased disclosure. We barred 
professional fees. We set gift limits that have been strengthened by 
earlier action this year. We ended the practice of taking campaign 
funds with us on retirement. We also limited outside earned income.
  Today we complete what I have to say was an imperfect job. We ought 
to pass this rule proposed by the committee to bring us into closer 
conformity with the executive branch, and do what must be done to 
concentrate our efforts on the job here in Washington.
  Mr. Speaker, I rise in support of the resolution brought forward by 
the chair and members of the Standards of Official Conduct Committee.
  As a past member of the Standards Committee during some of the most 
difficult deliberations undertaken by the committee, I can empathize 
with the dilemmas presented to the committee this year.
  They have done a good job under difficult circumstances, and the 
committee's resolution today reflects their hard work and courage in 
taking on many difficult questions.
  In addition to my service on the so-called Ethics Committee, I was 
privileged to be chairman of the 1989 bipartisan Commission on Ethics 
Reform that made significant changes to the rules we live under today.
  We banned honoraria.
  We capped earned income.
  We limited trips.
  We ended the practice of taking campaign funds on retirement.
  We increased disclosure.
  We barred professional fees.
  We banned revolving-door lobbying for the first time.
  We set gifts limits--which were further strengthened by our action 
this year.
  We did those things, and after hemming and hawing, the Senate came 
around later.
  I think the institution is much better for the changes we made.
  I think the American public is better served by ending some of those 
practices.
  In discussing changes, then and now, we need to keep our paramount 
goal in mind.
  It is the same goal we addressed in passing a gift ban this year.
  It is the same goal we addressed in passing lobby reform legislation.
  The goal: instilling confidence of Americans in their Government.
  Over the years, we have done that by making incremental changes in 
our rules which minimize the inherent conflicts of interest that will 
always be part of this job.
  But how many times during this debate and others will you hear our 
colleagues say--``we want to go further, we want to take the next 
step''--we want to eliminate even the appearance of conflict.
  It is a worthy goal and one we will always be challenged to respond 
to as times change.
  We talked about radio shows back in 1989.
  We came back in 1990 to prohibit Members and Senators from earning 
money for participation in radio shows. One Senator had made $37,750 
for participation in 1990 radio shows.
  Mind you, we didn't prohibit participation in regular radio shows.
  We merely said that our constituents might look at receiving large 
fees from radio shows as a method of avoiding the limitations on 
honoraria and earned income, and we need to do whatever is necessary to 
avoid that appearance.
  We also dealt with books back in 1989.
  Books were controversial then, as they are now.
  As we all know, former Speaker Jim Wright ran afoul of ethics 
provisions regarding books, and we clarified the ethics rules at the 
time to specify that royalties are exempt only if they come from 
established publishers, under ``usual and customary'' contract terms.
  But we were somewhat less concerned about a flurry of money-making 
tomes emanating from Members of Congress.
  In fact, I was quoted at the time saying, ``There aren't many members 
who write books.''
  Well, times have changed.
  The popularity of C-SPAN has increased.
  Talk shows and news programs have proliferated.
  The media's penchant for training their sights on controversial 
figures within our membership has intensified.
  The prospect of a Member benefiting personally from becoming a 
controversial leadership figure has opened new doors we could not fully 
have anticipated back in 1989.
  But the need to avoid the appearance of conflict of interest has 
remained the same--and that is what we are addressing with this 
resolution today.
  The grounding of this resolution is well known.
  Late last year, Speaker Gingrich made an agreement with a publishing 
company owned by media magnate Rupert Murdoch for a book advance of 
$4.5 million.
  The Speaker acknowledged the controversial nature of such an advance 
on December 30 when he renounced the advance and agreed to accept only 
royalties.
  On January 19, the Speaker spoke to several telecommunications 
company executives, including Murdoch, who were in Washington to lobby 
Republicans on the House Commerce Committee.
  The companies were Tele-Communications Inc. [TCI], the Nation's 
largest cable television firm, and Jones Intercable Inc., the 11th-
largest. At the time, TCI had announced plans to bring National 
Empowerment Television [NET], a conservative-oriented cable show that 
features a call-in program with Gingrich, to its 10.6 million 
customers. NET already carried Gingrich's college course, Renewing 
American Civilization. Jones Intercable had started carrying Gingrich's 
course on its Mind Extension University channel, which reaches 26 
million households.
  Both TCI and Jones Intercable spent hundreds of thousands of dollars 
last year lobbying Congress and contributing to congressional 
candidates, as did Murdoch's News Corporation, which owns Harper 
Collins, Gingrich's publishing house.
  With major telecommunications legislation pending before the House 
and the Commerce Committee, the appearance of conflict of interest was 
created by the Speaker's actions.
  In the past, we have treated royalties as exempt from outside 
earnings.
  We said royalties amounted to a return on the author's intellectual 
property, clearly beyond his or her direct control.
  But it is clear that advances on royalties pose a separate and more 
difficult question. It is clearly related to the opinion the committee 
has had for many years about written articles, where payment is 
negotiated in advance.
  The committee has always treated such advance payments as earned 
income subject to the earned income limitations.
  It is clear from this year's events that the committee has gone the 
extra step in believing book advances should now fall into this 
category as well, and that it is difficult if not impossible to 
separate the issue of advances from the issue of royalties.
  A unanimous Ethics Committee has been troubled sufficiently by these 
events that they are bringing this proposal today.
  The Speaker would be largely unaffected by this so it is inaccurate 
to say he is somehow a target.
  His book was published before the December 31 deadline, and 
presumably most of his royalties have already been obtained.
  But the circumstances surrounding the Speaker's book transaction show 
the difficulties involved with transactions of this kind, and the 
inherent conflicts of interest that may be 

[[Page H15589]]
created as Congress grapples from year to year with far-reaching 
legislation.
  I would remind my colleagues about the restrictions for those in the 
executive branch: Cabinet-level officials, and all other official 
appointed by the President to a full-time, non-career position, are 
barred completely from receiving any outside earned income; other high-
level officials in the executive branch in noncareer positions above a 
GS-15 level, are subject to the 15-percent limitation on outside earned 
income, but they may not receive compensation for speaking or writing 
if the subject matter deals primarily with programs and operations of 
his/her agency; advances on royalties are considered to be earned 
income subject to the earned income limitations.
  So the proposal today is in keeping with the executive branch 
although House Members, unlike Cabinet officials, will continue to be 
able to earn outside income.
  But perhaps the deeper question raised today is whether we are going 
to allow the Ethics Committee process to go forward.
  As a former member of that committee, I know how hard those judgments 
are to make, I know how hard it is to work for and gain unanimity in 
that room.
  This House has always respected that unanimity in the past.
  That process--that bipartisan process by the only committee in this 
House with equal numbers of Republicans and Democrats--should be above 
politics and above passions of the moment.
  That committee and that process is bigger than any one Member, and it 
is bigger than any clique, or any temporary coalition of Members with a 
different opinion.
  Ultimately, Members and cliques and coalitions are fleeting.
  But this process--this bipartisan process--must survive for the good 
of this institution.
  If we allow that process to fall to the politics of the moment, this 
House will be the loser. And all of us should be wary from that moment 
on--wary that a politicized Ethics Committee process will destroy the 
ability of this House to respond to the many difficult issues raised 
each year and give our constituents the confidence that those issues 
will be decided without interference, and without regard to personality 
or politics.
  That's why I support the action by the chairman today, and I urge all 
my colleagues to support this resolution without amendment so that the 
Ethics Committee process can flourish and go forward in this Congress 
and in Congresses to come.
  Mr. SOLOMON. Mr. Speaker, I yield 3 minutes to the gentleman from 
California [Mr. Rohrabacher] from the ever-expanding State of 
California; they keep bringing more and more Members here every year.
  Mr. ROHRABACHER. Mr. Speaker, the proposed change in intellectual 
property rights of our Members is bad policy and wrong-headed. If any 
Member writes a book after this change goes into effect, all it means 
is that the publisher will get the money that is due to the writer. 
That is all this means. We are doing nothing but giving the publisher 
money that deserves to go to a writer.
  Mr. Speaker, I know that. I am a writer by my profession, and I will 
say this. Those of my colleagues who claim that a book written by a 
Congressman is going to be a seller and we are just standing on our job 
as a Congressman to sell books, there are many books that have been 
written by Congressmen that have failed, utterly failed, and publishers 
know that. Some publishers are really hesitant to deal with Congressmen 
for that reason.
  Mr. Speaker, I say the decision should be made by the public as to 
who receives the money and who benefits from writing a book, whether it 
deals with a Member of Congress or not. That is what the Solomon 
amendment is all about.
  Mr. Speaker, it leaves it to the public, and it does not leave it to 
grandstanding politicians who now are trying to portray themselves to 
the public as reformers, when in reality all this is is an act of self-
flagellation for the sake of presenting a public image. It has nothing 
to do with the development of policy in this body. This will have no 
impact whatsoever on policy decisions.
  Those people who are pushing this reform, by the way, I would like to 
know the incomes of those people. I happen to be a very poor person. I 
have hardly any assets. I am a writer by profession. I spent several 
years in journalism while other people who are now in this body were 
out making money in real estate or making money in other investments or 
marrying into money.
  The fact is, what we are seeing now, those of us who are poor, rather 
than the millionaires in this body, are seeing their right to write a 
book and to have some income from our talent, which is our only asset, 
limited, while other people who are wealthy are not putting any 
restrictions on their ability to earn money while they are in this 
body.
  Mr. Speaker, I reject that totally, and if somebody comes up and says 
all unearned income will be restricted, I will support it. But it 
somebody comes up and says my right as a writer and a journalist and an 
average American is being restricted, I will not.

  The bottom line is let us leave this up to the American people. let 
us quit grandstanding. The American people will decide if a book is 
worth buying or not, and whether a politician's ideas are worth 
purchasing. Let us not make this a windfall for publishers.
  Mr. Speaker, all it will mean is that we will not have the incentive 
and we will not spend the time to write on the airplane, which I have 
done. I have spent my own private time on the airplane writing this 
book. And when I come in this door, I check my privacy when I come in 
this door, and now I cannot write a book about it to explain myself to 
the American people. It is an insult.
  Mr. MOAKLEY. Mr. Speaker, I yield myself such time as I may consume 
to say that I think the gentleman that left the microphone is in 
complete error if he calls the Committee on Standards of Official 
Conduct a grandstanding body of people. They are probably the hardest 
working and most abused people here in the Congress, and I want to 
disagree with the gentleman there.
  Mr. Speaker, I yield 4 minutes to the gentleman from Michigan [Mr. 
Bonior], our minority whip.
  Mr. BONIOR. Mr. Speaker, never before in the history of this House 
has a recommendation by the Committee on Standards of Official Conduct 
been weakened on the House Floor. Never before in the history of this 
House has a unanimous, bipartisan decision by the Committee on 
Standards of Official Conduct been denied a simple up-and-down vote on 
this floor.
  Mr. Speaker, I hope we do not see that dangerous precedent here 
today. Mr. Speaker, it was exactly one year ago this very day that we 
learned of the Speaker Newt Gingrich's $4.5 million book deal, and over 
the past 12 months the Speaker has made, as the gentleman from 
Massachusetts indicated, he has made approximately 10 times the amount 
of his congressional salary on his book deal.
  After a year-long investigation, the Committee on Standards of 
Official Conduct found that the Speaker used a loophole in the rules in 
an attempt to capitalize on his office. They found that the Speaker's 
book deal, and I quote, ``Created the appearance of exploiting one's 
office for personal gain.''
  In fact, members of the Committee on Standards of Official Conduct 
were so troubled by the Speaker's action that, in a unanimous 
bipartisan vote, five Republicans and five Democrats recommended 
changing the rules of this House so no Member would ever be able to 
cash in on his or her office to create a personal fortune.

  Under the recommendation of the Committee on Standards of Official 
Conduct, money from book royalties would be treated just like other 
outside income, subject to the annual cap of $20,040. The Committee on 
Standards of Official Conduct believes firmly that this is a fair way 
to deal with this problem and to close the loophole.
  But rather than allow a simple up-or-down vote on this 
recommendation, for the first time in the history of this House a 
recommendation from the Committee on Standards of Official Conduct is 
in danger of being weakened. The Solomon substitute before us today 
does not limit book royalties. It allows unlimited royalties, just like 
the current rule. It does not address the Speaker's book deal. It 
actually exempts it, because this substitute only applies to book 
contracts signed after January 1, 1996.
  Mr. Speaker, the Solomon substitute is actually weaker than the 
current standard for Federal employees, because if we were following 
Federal standards, no Member could make money off of a book that had 
anything to do with his or her office.
  The Committee on Standards of Official Conduct has recommended this 

[[Page H15590]]
  rule change because it was concerned about Members capitalizing on 
their office. It recommended closing this loophole so a Member never 
again would be able to exploit his or her office for personal gain.
  Mr. Speaker, I would suggest that we should follow the 
recommendations of the Committee on Standards of Official Conduct. It 
was 1 year ago today that we first learned about the Speaker's $4.5 
million book deal. Let us observe the 1-year anniversary by closing the 
loophole so nobody can get away with it again. I urge my colleagues to 
vote against the Solomon substitute and support the recommendation of 
the Committee on Standards of Official Conduct.
  Mr. SOLOMON. Mr. Speaker, I yield myself 30 seconds.
  Mr. Speaker, I am just surprised to hear the gentleman from Michigan 
[Mr. Bonior], the minority whip, come to the well and all of the sudden 
make this a personality issue. I am reading the last paragraph of the 
letter from the gentleman from Washington [Mr. McDermott] and the 
gentlewoman from Connecticut [Mrs. Johnson]. It says it is not directed 
at any Member or book. Rather, it is the result of full and careful 
consideration, and it goes on. It is a shame now this has dropped down 
like this.
  Mr. Speaker, I yield 2 minutes to the gentleman from Kentucky [Mr. 
Bunning], a member of the Committee on Standards of Official Conduct, 
to expand on that just for a moment.
  Mr. BUNNING of Kentucky. Mr. Speaker, obviously the gentleman from 
Michigan [Mr. Bonior], the minority whip, is incorrect. Recommendations 
of the Committee on Standards of Official Conduct have been changed on 
the floor of the House; in the recent past, in fact. Certain 
recommendations for censure were changed to a different level, to 
reprimand, and other things like that. So, in fact, they were changed 
on the floor of the House of Representatives.
  Mr. Speaker, let me say something. I have served on the Committee on 
Standards of Official Conduct for 5 years. First of all, the 
misstatements that have been made here that it was a unanimous vote on 
the rule was incorrect. I have tried to correct that publicly, but I 
have not been able to because nobody will bring it to the public's 
face.
  Mr. Speaker, I did not vote for the rule change and I am going to 
continue to tell my colleagues, I did vote for the resolution to bring 
the report to the floor. This started out as a rule change for all of 
Congress. It has turned into, by the office of the Democratic whip, a 
referendum on the Speaker of the House.
  Mr. Speaker, I think it is insane. I think it is wrong. I think it 
was not in the best interest of the Committee on Standards of Official 
Conduct, and if anybody has any doubt about supporting the Solomon 
amendment, read the recommendations of the office of the Democratic 
whip and they will vote for the Solomon amendment and against the 
recommendations of the Committee on Standards of Official Conduct.
  Mr. SOLOMON. Mr. Speaker, I yield 2 minutes to the gentleman from 
Palm Springs, CA [Mr. Bono]. Californians are all over the place. This 
gentleman is probably one of the most famous ever to come out of 
California.
  (Mr. BONO asked and was given permission to revise and extend his 
remarks.)
  Mr. BONO. Mr. Speaker, I am sorry I only have 2 minutes to speak. I 
am going to make a very broad statement. I know more about copyright 
than any Member, and I will be happy to debate any Member on all of 
these copyright axioms that I have heard while I was sitting here. They 
are not true.

                              {time}  1100

  Any time anybody wants to debate that, I will.
  Now, the notion that the industry is a corrupt industry is where you 
are going to have to begin with, because the process of copyright is 
one of advances. If you write a book, if you write a song, if you write 
a play, if you write a script, you are always advanced. Get that clear. 
You always get an advance, and it does not make any difference whether 
they guess wrong or whether they guess right. The industry decided to 
do it that way since the inception of the industry, and they usually 
guess right.
  So the notion that someone giving you an advance is dastardly is 
ridiculous because the industry has operated that way since it began.
  In my case, I can always, I have always, been able to take an advance 
from BMI or ASCAP whenever I wanted it. Well, you shut that down with 
the accusation that I am corrupt. Well, that is not true. I am not 
corrupt.
  My songs have a value, and because they have that value, I have the 
right to that advance and have exercised that right before.
  So we are here with the lesser of two evils. So you are knocking out 
an industry that you do not even know, and I will yield 15 seconds to 
any Member who can define ethics. Can some Member define ethics for me 
in 15 seconds? You cannot.
  I support the Solomon proposal. It is the best of the worst.
  Mr. MOAKLEY. Mr. Speaker, I yield the balance of my time to the 
gentleman from Maryland [Mr. Cardin], who is a member of the Committee 
on Standards of Official Conduct.
  Mr. CARDIN. Mr. Speaker, I thank the gentleman for yielding me this 
time and really thank our chairman, the gentlewoman from Connecticut 
[Mrs. Johnson] and the gentleman from Washington [Mr. McDermott] for 
what they have done to get a 10-to-0 vote in our committee on the 
recommendations and report.
  This is about supporting ethics. This is about supporting the 
bipartisan work of the Committee on Standards of Official Conduct. I 
hope each Member will take into consideration the fact that the vote 
coming before you is the unanimous work of our committee in dealing 
with some very difficult issues.
  I wish we could go into more detail, but the rules of our committee 
do not permit that. But this is a very important vote, and it reflects 
the confidence that you have in this bipartisan Committee on Standards 
of Official Conduct process.
  The substance of the rule that we bring before you completes the 
commitment we made to the American people under the Ethics Reform Act 
of 1989. That act increased Members' salaries by a significant amount, 
30 percent, in exchange for which we restricted our outside earned 
income, and eliminated honoraria. We did that, but we allowed one 
exception, and one exception only, and it dealt with book royalty 
contracts.
  We thought at that time that book royalty contracts would be a minor 
matter and it was not a major issue. We were wrong, as multimillion-
dollar contracts have become available.
  We said in 1989, and we repeat today in our ethics manual, that we 
need to restrict outside earned income because it conflicts with our 
responsibilities as Members of Congress, private commitments that may 
infringe upon public obligations. The pressures upon publishers for us 
to do tours or to promote our book conflicts with our responsibilities 
here. The appearance that an individual is profiting from a position in 
Congress, that is in our ethics manual. Outside earned income raises 
those concerns. Multimillion-dollar book contracts can raise those 
concerns.
  The Solomon substitute will allow Members still to earn multimillion 
dollars in book contracts. That is wrong, and that is what the 
Committee on Standards of Official Conduct is saying.
  The choice is clear. Please, support the work of our committee. It is 
also a matter of fairness. A farmer or a bricklayer or a doctor or a 
jewelrymaker, a performer or a football player who wants to have 
weekend youth camps, a person who records music or a person who 
develops software for computers are currently restricted to 15 percent, 
or $20,000. The only exception is book royalties. That is not right.
  We do not impede people from doing these activities. We say there is 
a limit as to how much they can earn.
  Originally, the Solomon substitute was promoted to make it similar to 
executive workers. Nothing could be further from accurate. High-level 
Federal officials cannot earn one dime from royalties that are in any 
way related to their official work.
  If we do not approve the Johnson resolution, we are allowing 
Congressmen to do much more than executive workers. The risk here is 
very real. We are telling you, in the Committee on Standards of 
Official Conduct, that we can not protect against abuses. Book 

[[Page H15591]]
contracts, book sales will take place. It will enrich Members.
  Support the work of the Committee on Standards of Official Conduct.
  Mr. SOLOMON. Mr. Speaker, I yield myself the balance of my time.
  Mr. HOBSON. Mr. Speaker, will the gentleman yield?
  Mr. SOLOMON. I yield to the gentleman from Ohio, a very valuable 
member of the Committee on Standards of Official Conduct.
  Mr. HOBSON. Mr. Speaker, the Committee on Standards of Official 
Conduct is not an easy place to serve, and I appreciate the bipartisan 
support that we have worked with within that committee.
  The rule that the Committee on Standards of Official Conduct 
presented to the House was arrived at after much spirited negotiations 
among its members but, I think, in good faith by all members of the 
committee.
  The goal of the rule is to solve various problems that we identified 
with the House's current policies relative to the publishing of books 
by Members. There were various views expressed by members of the 
committee, and this rule is a compromise. Not everybody agreed with 
every point in it, but it was a compromise.
  I support the committee's position and its rule.
  But, more importantly than that, I think it is important for the 
House to have this debate in a comity, for the most part which we have 
had, and whatever rule that comes out of this, it is important that we 
resolve this problem in a consensus manner without bitter debate 
because we have to judge ourselves and be judged by others and work 
together.
  So whatever rule comes out of this, it is important that we end it 
now and go back to our work together in the committee.
  Mr. SOLOMON. Mr. Speaker, reclaiming my time, let me just close by 
saying the Johnson resolution restricts royalty income and bans 
advances. The Solomon substitute prohibits advances but does permit 
royalty income, and those are the two choices, or you can reject them 
both and leave the rules the way they are.
  I hope that you will continue to treat us all the same and let us 
vote for the rule and then get on to the debate on the resolution 
itself.

 Summary, Background and Analysis of H. Res. 299, Proposed New Rule on 
 Book Royalties and Related Issues, Prepared by the Staff of the House 
                            Rules Committee

       Introduction: On December 12, 1995, Representative Nancy 
     Johnson of Connecticut, chairman of the House Committee on 
     Standards of Official Conduct, introduced H. Res. 299, a 
     resolution to amend House Rules regarding outside earned 
     income. The measure was cosponsored by eight other members of 
     the 10-member, bipartisan Standards Committee.
       The resolution was introduced pursuant to a vote of the 
     Committee in connection with the report it issued on December 
     12th on the ``Inquiry into Various Complaints Filed Against 
     Representative Newt Gingrich.'' In its report, the Committee 
     found that Representative Gingrich ``did not violate the 
     House Rule governing book contracts or royalty income'' and 
     that ``the book contract was in technical compliance with the 
     `usual and customary' standard of House rules regarding 
     royalty income.'' However, the Committee it went on to 
     indicate that ``the original advance greatly exceeded the 
     financial bounds of any book contract contemplated at the 
     time the current rules were drafted,'' and that it ``strongly 
     questions the appropriateness of what some could describe as 
     an attempt by Representative Gingrich to capitalize on his 
     office.''
       Consequently, the Committee recommended in its report that 
     House Rule 47 (``Limitations on Outside Employment and Earned 
     Income'') be changed to subject royalty income derived from 
     books written while one is a Member to the same limits as 
     other sources of outside earned income.'' A copy of the 
     proposed rule was appended to the report.


                  summary of provisions of rule change

       (1) Inclusion of Copyright Royalties as Earned Income: 
     House Rule XLVII (``Limitations on Outside Employment and 
     Earned Income''), would amend in the first paragraph of 
     clause 3(e), which defines ``outside earned income,'' by 
     adding the following new category: ``copyright royalties 
     earned while a Member, officer or employee of the House''; 
     and subparagraph (5) of clause 3(e), which now exempts 
     ``copyright royalties received from established publishers 
     pursuant to usual and customary contractual terms'' from the 
     definition of ``earned income,'' would be amended to only 
     exempt ``copyright royalties for works published before 
     becoming a Member, officer, or employee of the House.''
       (2) Limitations on Receipt of Copyright Royalties: Clause 3 
     of rule XLVII would be further amended by adding a new 
     paragraph (g) that would prohibit a covered Member, officer 
     or employee of the House from--
       (1) receiving any copyright royalties pursuant to a 
     contract entered into after becoming a Member, officer or 
     employee: (a) unless they are from an established publisher 
     pursuant to usual and customary contractual terms; and (b) 
     the contract has received prior approval of the Committee on 
     Standards of Official Conduct;
       (2) recieving any advance payment for any such work; but 
     this prohibition shall not apply to advance payments made 
     directly to literary agents, research staff, and other 
     persons working on behalf of the Member, officer or employee.
       Clause 3 of rule XLVII would be further amended by adding a 
     new paragraph (h) that would prohibit the Committee on 
     Standards of Official Conduct, subject to such exceptions as 
     it deems appropriate, from approving any contract that 
     permits deferral of royalty payments beyond the year in which 
     earned.
       (3) Effective Date: The amendments made by the resolution 
     ``shall apply to copyright royalties earned by a Member, 
     officer, or employee of the House of Representatives after 
     December 31, 1995.''
       Possible Problem: The resolution only applies to 
     ``copyright royalties earned'' after December 31, 1995 (p. 4, 
     lines 3-5), but prohibits the receipt of such royalties 
     unless the contract received prior approval by the Standards 
     Committee (p. 3, lines 11-13). This could presumably prohibit 
     individuals from receiving any royalties in 1996 from 
     contracts entered into prior to that year since they would 
     not have received prior approval by the ethics committee. Or 
     is it simply intended that existing, pre-1996 contracts be 
     approved prior to receiving any royalties in 1996?
       Background and Analysis: The current House Rule XLVII 
     (``Limitations on Outside Employment and Earned Income)'', 
     was revised as part of the Ethics Reform Act of 1989 (Public 
     Law 101-194) applies to all Members as well as House officers 
     and employees whose pay is disbursed by the Clerk of the 
     House and exceed the annual rate of basic pay in effect for 
     grade GS-16 of the General Schedule under section 5332 of 
     title 5 of the U.S. Code (currently $81,529), and is employed 
     for more than 90 days in a calendar year. The exception to 
     this definition is for the ban on total ban on honoraria 
     which applies to all Members, officers and employees of the 
     House.\1\
      Footnotes at end.
---------------------------------------------------------------------------
       Clause 1 of rule XLVII prohibits Members, and officers and 
     employees paid at least $81,529, from receiving outside 
     earned income in excess of 15% of the Executive Level II 
     salary (which is the same as a Member's base pay), or roughly 
     $20,000. Clause 2 prohibits such individuals from receiving 
     any compensation for: (1) affiliation with or employment by 
     any firm, partnership, association, corporation or other 
     entity which provides professional services involving a 
     fiduciary relationship; (2) for practicing a profession that 
     involves a fiduciary relationship; (3) from serving any 
     officer or member of a board of any association, corporation 
     or other entity; or (4) from teaching except by the prior 
     notification and approval of the ethics committee.
       Clause 3(e) currently defines outside earned income as 
     ``wages, salaries, fees, and other amounts received or to be 
     received as compensation for personal services actually 
     rendered.'' The current definition goes on to specify certain 
     matters not considered as outside earned income, including: 
     (1) the salary of Members, officers or employees; (2) 
     compensation derived by such individuals for personal 
     services rendered prior to the effective date of the rule 
     (calendar year 1991), or prior to becoming Member, officer, 
     or employee, whichever comes later; (3) amounts paid to a 
     tax-qualified pension, profit-sharing, or stock bonus plan 
     received by such individuals; (4) amounts received by such 
     individuals from services rendered by them in a trade or 
     business in which they or their family holds a controlling 
     interest and in which both personal services and capital 
     are income-producing factors; and (5) ``copyright 
     royalties received from established publishers pursuant to 
     usual and customary contractual terms.''
       Thus, under current House Rules, copyright royalties are 
     considered to be unearned rather than earned income. As the 
     most recently published version of the House Ethics Manual 
     puts it:
       House Rule 47 has long exempted book royalties for outside 
     earned income restrictions, royalties being deemed a return 
     on the authors's intellectual property, akin to other 
     unrestricted returns on property.\2\
       The Manual goes on to cite the Senate Special Committee on 
     Official Conduct's 1977 report on its Code of Official 
     Conduct as follows--
       If an individual writes a book, and it becomes a best-
     seller, any royalties received are beyond his direct control. 
     It is income which is, in effect, a return on a prior 
     investment of time and energy.\3\
       And the Manual concludes on this point by distinguishing 
     book royalties from articles:
       A book author's royalties generally reflect the book's 
     sales, that is, the public's assessment of the book's worth. 
     An article, on the 

[[Page H15592]]
     other hand, typically garners a one-time fee, based only on what the 
     publisher is willing to pay the particular author (and not 
     necessarily limited by the marketability of the piece).\4\
       Finally, the Manual offers the following Example to 
     illustrate its point:
       Member A writes a book of memoirs about his years in public 
     service. An established publisher offers the Members its 
     usual and customary royalty terms for the right to publish 
     the book. Member A may have the book published and collect 
     royalties. The royalties will be deemed ``unearned income'' 
     and will not count against A's outside earned income cap.\5\
       Restrictions on Executive Branch Officials: The Ethics 
     Reform Act placed the same restrictions on top level 
     officials and employees of all three branches of government 
     paid at a salary above the GS-15 level. However, several 
     things should be noted in this regard. First, Executive Order 
     No. 12674, section 102 (April 12, 1989), bars all cabinet 
     level officials and all other officials appointed by the 
     President to a full time, noncareer position from receiving 
     any outside earned income. Other high level executive branch 
     officials who are in noncareer positions and compensated 
     above the GS-15 level are subject to the law's 15% outside 
     earned income cap as well as the prohibitions on the outside 
     practice of professions involving a fiduciary relationship, 
     and compensation for service on boards of 
     organizations.\6\
       Second, to the extent that non-career employees of the 
     Executive Branch (paid in excess of the GS-15 level salary) 
     are permitted to accept compensation for writing or speaking 
     on the outside, they are proscribed by regulations of the 
     Office of Government Ethics from being compensated for 
     speaking, lecturing or writing activity if the subject matter 
     ``deals in significant part with the general subject matter 
     area, industry of economic sector primarily affected by the 
     programs and operations of his agency.'' \7\
       Third, the honoraria ban on all officials and employees was 
     held unconstitutional by the Supreme Court with respect to 
     career employees at the GS-15 level and below (United States 
     v. National Treasury Employees Union, Feb. 22, 1995), 
     affirming lower court decisions overturning the ban. The 
     Supreme Court held that the broad ban imposed prior 
     limitations and restrictions on nearly 1.7 million citizens 
     for their ``expressive activities in their capacity as 
     citizens, not as Government employees.'' However, the 
     application of the immediate ruling is to rank-and-file 
     government employees in the executive branch who were 
     represented by the plaintiffs.\8\
       Fourth, royalties from the publication of a book are 
     considered by the Executive Branch for its employees, as a 
     return on one's intellectual property (copyright), that is, 
     unearned income such as investment income, and are not 
     considered outside earned income. However, advances on 
     royalties and some other pre-publication payments and 
     contracts have been held by the Office of Government Ethics, 
     in advisory letters, to be earned income subject to the 
     earned income limitations.\9\
       Summary: It is clear from the foregoing that the proposed 
     new House rule on royalties would constitute a major shift in 
     the definitions of earned and unearned income regarding 
     copyright royalties and advances on published works. It would 
     also create a double standard for Executive and Legislative 
     Branch officials and employees. The proposed limits may also 
     raise First Amendment questions under the Constitution given 
     the Supreme Court's decision in U.S. v. NTEU. All of these 
     issues deserve thorough study before any action is taken.


                               Footnotes

     \1\ The Committee on Standards of Official Conduct has 
     determined that certain matters are excluded from the 
     honorarium ban such as compensation for activities where 
     speaking, appearing or writing is only an incidental part of 
     the work for which payment is made; witness or juror fees; 
     fees to qualified individuals for conducting worship services 
     or religious ceremonies; payments for works of fiction, 
     poetry, lyrics, or script; or payments for performers who 
     appear on stage. House Ethics Manual, 102nd Congress, 2d 
     Session, April 1992, pp. 93-94.
     \2\ Id., p. 94.
     \3\ Id., p. 95.
     \4\ Id.
     \5\ Id., pp. 94-95.
     \6\ ``Summary Outline of Restrictions on Outside Earned 
     Income for Executive Branch and Members of the House, 
     Including Payments for Writing a Book,'' by Jack Maskell, 
     Legislative Attorney, American Law Division, Congressional 
     Research Service, January 19, 1995, p. 1.
     \7\ Id., pages 1-2.
     \8\ ``Receipt off Honoraria or Other Outside Income by 
     Officers and Employees of the Federal Government After the 
     Supreme Court Decision in United States v. NTEU,'' by Jack 
     Maskell, Legislative Attorney, American Law Division, 
     Congressional Research Service, Library of Congress, p. 1.
     \9\ Maskell, ``Summary Outline of Restrictions . . . .,'' op. 
     cit., pp. 2-3, citing Office of Government Ethics Advisory 
     Letters 86 X 4, April 10, 1986; 82 X 18, December 3, 1982; 89 
     X 17, September 26, 1989: ``Income attributable to the 
     former, such as an advance on royalties, is `earned income' 
     while retention of a royalty interest following publication 
     is a mere property right in the residual income stream.''

                  executive branch rules on royalties

  Mr. SOLOMON. Mr. Speaker, there has been some confusion sown about 
what rules currently apply to top level executive branch officials. As 
I have indicated, the President, Vice President, Cabinet officers, and 
Presidential appointees are barred from receiving any advances on book 
royalties, but may receive unlimited royalties.
  I cite as my authority a report of the American Law Division of the 
Congressional Research Service dated January 19, 1995, by Legislative 
Attorney Jack Maskell, and I quote:

       Cabinet level officials--and all other officials appointed 
     by the President to a full time, noncareer position--are 
     barred completely from receiving any outside earned income 
     [by] Executive Order No. 12674, section 102, April 12, 1989.

  And, according to the American Law Division memorandum, citing 
several Office of Government Ethics Advisory letters, and I quote:

       Advances on royalties and some other publication payments 
     and contracts have been . . . considered to be earned income 
     subject to the earned income limitations.

  Since top level executive officials can receive no earned income, 
they are barred from receiving any advances.
  Other senior, noncareer executive branch employees earning over 
$81,000 are subject to the 15-percent cap when it comes to advances.
  With respect to book royalties for executive branch officials, the 
American Law Division memorandum says the following, and I quote:

       Royalties after the publication of a book are considered as 
     a return on one's intellectual property (copyright)--that is, 
     unearned income such as investment income, and are not 
     considered outside earned income.

  The memo cites the regulation from volume 5 the Code of Federal 
Regulations at section 2636.303(b)(5).
  In summary, Mr. Speaker, the President, Vice President, Cabinet 
members, and other Presidential appointees are barred from receiving 
book advances but are not limited with respect to book royalty income.


         response to argument of different administration rules

  Mr. Speaker, the argument has been made that my substitute does not 
put us on the same plane as our executive branch counterparts because 
they would still have different rules and regulations on other forms of 
earned or unearned income.
  That may well be, but it is irrelevant to this debate. I am simply 
arguing today that, when it comes to book royalties and advances, we 
should adopt the same rules that both President Bush and President 
Clinton and their Office of Government Ethics thought were advisable.
  So to drag in extraneous arguments and rules relating to other 
differences between the House and the executive branch is a 
smokescreen, plain and simple.
  All I am asking is that, when it comes to book royalties and 
advances, the Vice President and the Speaker be treated the same. To 
imply that it is OK for one to receive unlimited royalties, but not OK 
for the other to do so, flies in the face of common sense and logic.
  Either royalties are bad and unethical once they reach a certain 
amount, or they are not. The Office of Government Ethics has found 
under Democratic and Republican administrations alike that they do not 
pose an ethical problem. To now say that unlimited royalties are 
ethical for a Democratic Vice President but not for Jerry Solomon is an 
insult to the integrity of this House and to the intelligence of the 
American people. Let's not obscure the central issues and facts of this 
debate with smoke.


  response to argument that substitute permits unlimited royalties on 
                        matters other than books

  Mr. Speaker, I am astounded at the new smokescreen being thrown up 
here that my substitute somehow creates a new loophole for copyright 
royalties from matters other than books.
  The Ethics Committee argues that it currently permits unlimited 
royalties only from books, and that other copyright royalties on things 
like records or songs are subject to the 15-percent outside earned 
income cap.
  The fact is that I have used the same terminology as the Ethics 
Committee's resolution, and therefore it should be subject to the same 
interpretations that now apply to different categories of copyright 
royalties.
  Just as the Ethics Committee's resolution talks about publications, 
publishers, and literary agents, so too does my substitute. Nowhere in 
either the resolution or my substitute is the word ``book'' used--
anymore than it is used in the current House rule regarding copyright 
royalties.
  Therefore, if the current exemption for copyright royalties is 
interpreted by the Ethics Committee to mean that it only applies to 
book royalties, then the same interpretation would continue to apply if 
my substitute is adopted.
  The ethics committee could have taken a broader interpretation of the 
term ``publication'' since, under the copyright law, found in title 17 
of the United States Code, at section 101, the term is defined as, and 
I quote: ``the distribution of copies or phonorecords of a work to the 
public by sale or other transfer of ownership, or by rental, lease or 
lending.'' End quote. Moreover, the term ``literary works'' are defined 
by section 101 of title 17 to include, and I quote, ``books, 
periodicals, manuscripts, phonorecords, film, tapes,'' et cetera. 

[[Page H15593]]

  But, if the Ethics Committee currently interprets the term 
``publication'' to mean the publication of a book, and the term 
``literary work'' to mean only a book, then that will continue to be 
the case if my substitute is adopted since I have not, by the language 
of my substitute or by this legislative history, said anything to 
broaden that definition or interpretation.


response to argument that royalties may be perceived as capitalizing on 
                                 office

  The central argument used by the Ethics Committee in recommending not 
only a ban on advances but a limit on royalties is that such income 
``creates the impression of exploiting one's office for personal 
gain.''
  This argument conveniently blurs the distinction between advances, 
which are payments made up front before knowing how well a book will 
sell, and royalties which are based solely on the popularity of a book 
with the buying public.
  My substitute recognizes that there is an appearance problem with 
advances given to a government official.
  That is currently banned in the executive branch for top officials 
and would be banned by my substitute. But, to go on to argue that 
receiving royalty income based on sales is somehow unethical because 
someone is a government office holder or appointee is a bogus argument.
  A book does not become a best-seller just because the author is well-
known. There are plenty of books that have not made substantial profits 
that have been written by authors who have had previous best-sellers, 
regardless of their names, positions, or previous works.
  I do not recall any great public uproar over the fact that Vice 
President Gore's book on the environment, ``Earth in the Balance,'' 
became a best-seller. People did not charge that he was taking undue 
advantage of his position in government. It was widely accepted that 
the book sold well because he had something to say, and said it well, 
and that many people were therefore willing to spend money to buy the 
book.
  Let's not set a double standard for books by liberal authors and 
books by conservative authors. It shouldn't make a difference what the 
ideological stripe of the author is except with those who think it is 
sinful for conservatives to make money but somehow simply fortunate 
that liberals can reap profits occasionally from peddling their ideas.
  Mr. Speaker, I move the previous question on the resolution.
  The previous question was ordered.
  The SPEAKER pro tempore (Mr. Bereuter). The question is on the 
resolution.
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.
  Mr. SOLOMON. Mr. Speaker, I object to the vote on the ground a quorum 
is not present and make the point of order that a quorum is not 
present.
  The SPEAKER pro tempore. Evidently a quorum is not present.
  The Sergeant at Arms will notify absent Members.
  The vote was taken by electronic device, and there were--yeas 380, 
nays 11, answered ``present'' 1, not voting 41, as follows:

                             [Roll No. 881]

                               YEAS--380

     Abercrombie
     Allard
     Andrews
     Archer
     Armey
     Bachus
     Baker (CA)
     Baldacci
     Ballenger
     Barcia
     Barr
     Barrett (NE)
     Barrett (WI)
     Bartlett
     Barton
     Bass
     Bateman
     Beilenson
     Bentsen
     Bereuter
     Bilbray
     Bilirakis
     Bishop
     Bliley
     Blute
     Boehlert
     Boehner
     Bonilla
     Bonior
     Bono
     Borski
     Boucher
     Brewster
     Browder
     Brown (FL)
     Brown (OH)
     Brownback
     Bryant (TN)
     Bryant (TX)
     Bunn
     Bunning
     Burr
     Burton
     Buyer
     Camp
     Campbell
     Canady
     Cardin
     Castle
     Chabot
     Chambliss
     Chapman
     Chenoweth
     Christensen
     Chrysler
     Clayton
     Clement
     Clinger
     Clyburn
     Coble
     Coburn
     Coleman
     Collins (GA)
     Collins (IL)
     Combest
     Condit
     Cooley
     Cox
     Coyne
     Crane
     Crapo
     Cremeans
     Cubin
     Cunningham
     Danner
     Davis
     de la Garza
     Deal
     DeFazio
     DeLauro
     DeLay
     Dellums
     Deutsch
     Diaz-Balart
     Dickey
     Dicks
     Dingell
     Dixon
     Doggett
     Dooley
     Doolittle
     Dornan
     Doyle
     Dreier
     Duncan
     Dunn
     Durbin
     Ehlers
     Ehrlich
     Emerson
     Engel
     English
     Ensign
     Eshoo
     Evans
     Everett
     Ewing
     Farr
     Fawell
     Fazio
     Fields (LA)
     Flake
     Flanagan
     Foglietta
     Foley
     Forbes
     Fowler
     Fox
     Frank (MA)
     Franks (CT)
     Franks (NJ)
     Frelinghuysen
     Frisa
     Frost
     Funderburk
     Furse
     Ganske
     Gejdenson
     Gekas
     Gephardt
     Geren
     Gilchrest
     Gillmor
     Gonzalez
     Goodlatte
     Goodling
     Gordon
     Goss
     Graham
     Greenwood
     Gutknecht
     Hall (OH)
     Hall (TX)
     Hamilton
     Hancock
     Hansen
     Hastert
     Hastings (WA)
     Hayworth
     Hefley
     Hefner
     Heineman
     Herger
     Hilleary
     Hilliard
     Hobson
     Hoekstra
     Hoke
     Holden
     Horn
     Hostettler
     Houghton
     Hoyer
     Hunter
     Hutchinson
     Hyde
     Inglis
     Istook
     Jackson (IL)
     Jackson-Lee (TX)
     Johnson (CT)
     Johnson (SD)
     Johnson, E.B.
     Johnson, Sam
     Johnston
     Jones
     Kaptur
     Kasich
     Kelly
     Kennedy (MA)
     Kennedy (RI)
     Kennelly
     Kildee
     Kim
     King
     Kingston
     Kleczka
     Klug
     Knollenberg
     Kolbe
     LaHood
     Largent
     Latham
     LaTourette
     Laughlin
     Lazio
     Leach
     Levin
     Lewis (CA)
     Lewis (GA)
     Lewis (KY)
     Lightfoot
     Linder
     Livingston
     LoBiondo
     Longley
     Lowey
     Lucas
     Luther
     Maloney
     Manton
     Markey
     Martinez
     Martini
     Mascara
     Matsui
     McCarthy
     McCollum
     McCrery
     McDade
     McDermott
     McHale
     McHugh
     McInnis
     McIntosh
     McKeon
     McKinney
     McNulty
     Meehan
     Menendez
     Metcalf
     Meyers
     Mfume
     Mica
     Miller (FL)
     Minge
     Mink
     Moakley
     Molinari
     Mollohan
     Montgomery
     Moorhead
     Moran
     Morella
     Murtha
     Myrick
     Nadler
     Nethercutt
     Neumann
     Ney
     Norwood
     Nussle
     Oberstar
     Obey
     Olver
     Ortiz
     Orton
     Oxley
     Packard
     Pallone
     Parker
     Pastor
     Paxon
     Payne (NJ)
     Payne (VA)
     Pelosi
     Peterson (FL)
     Peterson (MN)
     Petri
     Pickett
     Pombo
     Pomeroy
     Porter
     Portman
     Poshard
     Pryce
     Radanovich
     Rahall
     Ramstad
     Rangel
     Reed
     Regula
     Richardson
     Riggs
     Rivers
     Roberts
     Roemer
     Rogers
     Rohrabacher
     Rose
     Roth
     Roukema
     Roybal-Allard
     Royce
     Rush
     Sabo
     Salmon
     Sanders
     Sanford
     Sawyer
     Saxton
     Scarborough
     Schaefer
     Schiff
     Schroeder
     Schumer
     Scott
     Seastrand
     Sensenbrenner
     Serrano
     Shadegg
     Shaw
     Shays
     Shuster
     Sisisky
     Skaggs
     Skeen
     Skelton
     Slaughter
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Solomon
     Souder
     Spence
     Spratt
     Stark
     Stearns
     Stenholm
     Stockman
     Stokes
     Studds
     Stump
     Stupak
     Talent
     Tanner
     Tate
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Tejeda
     Thomas
     Thompson
     Thornberry
     Thornton
     Thurman
     Tiahrt
     Torkildsen
     Torres
     Torricelli
     Traficant
     Upton
     Velazquez
     Vento
     Visclosky
     Volkmer
     Vucanovich
     Waldholtz
     Walker
     Walsh
     Wamp
     Ward
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Weller
     White
     Whitfield
     Wicker
     Williams
     Wilson
     Wise
     Wolf
     Woolsey
     Wynn
     Yates
     Young (FL)
     Zeliff
     Zimmer

                                NAYS--11

     Baesler
     Brown (CA)
     Clay
     Costello
     Hastings (FL)
     Hinchey
     Kanjorski
     Klink
     Miller (CA)
     Waters
     Watt (NC)

                        ANSWERED ``PRESENT''--1

       
     Gunderson
       

                             NOT VOTING--41

     Ackerman
     Baker (LA)
     Becerra
     Berman
     Bevill
     Callahan
     Calvert
     Collins (MI)
     Conyers
     Cramer
     Edwards
     Fattah
     Fields (TX)
     Filner
     Ford
     Gallegly
     Gibbons
     Gilman
     Green
     Gutierrez
     Harman
     Hayes
     Jacobs
     Jefferson
     LaFalce
     Lantos
     Lincoln
     Lipinski
     Lofgren
     Manzullo
     Meek
     Myers
     Neal
     Owens
     Quillen
     Quinn
     Ros-Lehtinen
     Towns
     Waxman
     Wyden
     Young (AK)

                              {time}  1127

  Mr. MILLER of California changed his vote from ``yea'' to ``nay.''
  So the resolution was agreed to.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.

                          ____________________