[House Report 108-722]
[From the U.S. Government Publishing Office]



108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES                 
 2d Session                                                     108-722
_______________________________________________________________________

                                     

                                                       Calendar No. 235


INVESTIGATION OF CERTAIN ALLEGATIONS RELATED TO VOTING ON THE MEDICARE 
     PRESCRIPTION DRUG, IMPROVEMENT, AND MODERNIZATION ACT OF 2003

                               ----------                              

                              R E P O R T

                                 of the

                       COMMITTEE ON STANDARDS OF
                            OFFICIAL CONDUCT

MR. HULSHOF FROM THE INVESTIGATIVE SUBCOMMITTEE SUBMITTED THE FOLLOWING 
        REPORT TO THE COMMITTEE ON STANDARDS OF OFFICIAL CONDUCT




   October 4, 2004.--Refered to the House Calendar and ordered to be 
                                printed
INVESTIGATION OF CERTAIN ALLEGATIONS RELATED TO VOTING ON THE MEDICARE 
     PRESCRIPTION DRUG, IMPROVEMENT, AND MODERNIZATION ACT OF 2003


108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES                 
 2d Session                                                     108-722
_______________________________________________________________________

                                     

                                                       Calendar No. 235


INVESTIGATION OF CERTAIN ALLEGATIONS RELATED TO VOTING ON THE MEDICARE 
     PRESCRIPTION DRUG, IMPROVEMENT, AND MODERNIZATION ACT OF 2003

                               __________

                              R E P O R T

                                 of the

                       COMMITTEE ON STANDARDS OF

                            OFFICIAL CONDUCT

MR. HULSHOF FROM THE INVESTIGATIVE SUBCOMMITTEE SUBMITTED THE FOLLOWING 
        REPORT TO THE COMMITTEE ON STANDARDS OF OFFICIAL CONDUCT




   October 4, 2004.--Refered to the House Calendar and ordered to be 
                                printed
               COMMITTEE ON STANDARDS OF OFFICIAL CONDUCT

JOEL HEFLEY, Colorado                ALAN B. MOLLOHAN, West Virginia
  Chairman                             Ranking Minority Member
DOC HASTINGS, Washington             STEPHANIE TUBBS JONES, Ohio
JUDY BIGGERT, Illinois               GENE GREEN, Texas
KENNY C. HULSHOF, Missouri           LUCILLE ROYBAL-ALLARD, California
STEVEN C. LaTOURETTE, Ohio           MICHAEL F. DOYLE, Pennsylvania
              John E. Vargo, Chief Counsel/Staff Director
                 Paul M. Lewis, Counsel to the Chairman
     Mary Colleen McCarty, Assistant to the Ranking Minority Member
                        Carol E. Dixon, Counsel
                      Kenneth E. Kellner, Counsel
                    Bernadette C. Sargeant, Counsel
                      John Sassaman, Jr., Counsel
                     Peter Van Hartesveldt, Counsel
                Peter L. Johnson, Systems Administrator
                     Amelia Snider, Staff Assistant
                 Joanne White, Administrative Assistant
                                 ------                                

                       Investigative Subcommittee

KENNY C. HULSHOF, Missouri           MICHAEL F. DOYLE, Pennsylvania
JOHN B. SHADEGG, Arizona             WILLIAM D. DELAHUNT, Massachusetts
     Kenneth E. Kellner, Counsel to the Investigative Subcommittee
   Bernadette C. Sargeant, Counsel to the Investigative Subcommittee


                         LETTER OF TRANSMITTAL

                              ----------                              

                          House of Representatives,
                Committee on Standards of Official Conduct,
                                   Washington, DC, October 4, 2004.
Hon. Jeff Trandahl,
Clerk, House of Representatives,
Washington, DC.
    Dear Mr. Trandahl: Pursuant to Rule 21(a) of the Committee 
on Standards of Official Conduct, and Clauses 3(a)(2) and (b) 
of Rule 11 of the House of Representatives, and by direction of 
the Committee on Standards of Official Conduct, we herewith 
transmit the attached Report, ``Investigation of Certain 
Allegations Related to Voting on the Medicare Prescription 
Drug, Improvement, and Modernization Act of 2003''
            Sincerely,
                                   Joel Hefley,
                                           Chairman.
                                   Alan B. Mollohan,
                                           Ranking Minority Member.


                            C O N T E N T S

                              ----------                              
                                                                   Page
 I. Executive Summary.................................................3
II. Conduct of the Inquiry............................................4
        A. Establishment of Investigative Subcommittee...........     4
        B. Investigative Process.................................    12
III.Narrative Summary of Evidence....................................14

        A. Events Preceding the Vote on the Medicare Prescription 
            Drug Act.............................................    14
            1. Telephone Conversations Between Representative 
                Nick Smith and a Former Member of his 
                Congressional Staff..............................    14
            2. Conversation with Majority Leader Tom DeLay.......    18
            3. Representative Smith's Telephone Conversation with 
                Brad Smith.......................................    21
            4. Remarks Made by Representative Smith to Fellow 
                Members at the Hunan Dynasty Restaurant..........    22
        B. Events on the House Floor During and Immediately 
            Following the Vote...................................    26
            1. Representative Smith's Interaction with Speaker 
                Hastert and Secretary Tommy Thompson.............    26
            2. Representative Smith's Interaction with 
                Representative William Thomas and Representative 
                Nancy Johnson....................................    28
            3. Representative Smith's Interaction with 
                Representative Candice Miller....................    28
            4. Representative Smith's Interaction with 
                Representative James T. Walsh....................    30
            5. Representative Smith's Interaction with 
                Representative Randy ``Duke'' Cunningham.........    32
            6. Representative Smith's Contacts with Unidentified 
                Members..........................................    33
        C. Representative Smith's Actions After the Vote and His 
            Allegations of Wrongdoing............................    34
IV. Findings and Recommendations.....................................36
        A. Summary of Findings...................................    36
        B. Review of Relevant Standards of Conduct...............    38
        C. Conclusions Regarding the Conduct of Certain Members..    39
            1. Representative Nick Smith.........................    39
            2. Representative James T. Walsh and Representative 
                Randall ``Duke'' Cunningham......................    41
            3. Representative Candice Miller.....................    41
            4. Majority Leader Tom DeLay.........................    42
        D. Additional Recommendations............................    43
Exhibit List.....................................................    44
Exhibits.........................................................    45
                                                       Calendar No. 235
108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     108-722

======================================================================



 
INVESTIGATION OF CERTAIN ALLEGATIONS RELATED TO VOTING ON THE MEDICARE 
     PRESCRIPTION DRUG, IMPROVEMENT, AND MODERNIZATION ACT OF 2003

                                _______
                                

  October 4, 2004.--Referred to the House Calendar and ordered to be 
                                printed

                                _______
                                

   Mr. Hefley, from the Committee on Standards of Official Conduct, 
                        submitted the following

                              R E P O R T

    The Committee on Standards of Official Conduct 
(``Committee'') submits this Report pursuant to House Rule XI, 
Clause 3(a)(2), which authorizes the Committee to investigate 
any alleged violation by a Member, officer, or employee of the 
House of Representatives, of the Code of Official Conduct or of 
any law, rule, regulation, or other standard of conduct 
applicable to the conduct of such Member, officer, or employee.
    On March 17, 2004, the Committee adopted a resolution which 
established an Investigative Subcommittee to investigate 
alleged communications received by Representative Nick Smith 
linking support for the congressional candidacy of his son with 
Representative Smith's vote on the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003 (``Medicare 
Prescription Drug Act'' or ``Medicare legislation''). This 
action was undertaken following certain public statements made 
by Representative Smith relating to the vote on the Medicare 
legislation.
    The Investigative Subcommittee completed its investigation 
in September of this year. Pursuant to its charge, at the 
conclusion of its inquiry, the Investigative Subcommittee 
prepared a Report to the full Committee with the Investigative 
Subcommittee's findings, conclusions, and recommendations.
    The Report of the Investigative Subcommittee in this matter 
was unanimously adopted by that body on September 29, 2004. On 
that same date, the Investigative Subcommittee transmitted its 
Report to the Committee.
    By unanimous vote on September 30, 2004, the Committee 
adopted the Report of the Investigative Subcommittee and 
includes that Report herewith as part of the Committee's Report 
to the House of Representatives in this matter. By this act, 
the Committee approves and adopts the findings, conclusions, 
and recommendations of the Investigative Subcommittee, 
including the recommendation in the Investigative 
Subcommittee's Report that the publication of its Report will 
serve as a public admonishment by the Committee to 
Representative Smith, Representative Miller, and Majority 
Leader DeLay regarding their conduct in this matter.
    For the reasons discussed herein and in the Investigative 
Subcommittee's Report, the Investigative Subcommittee 
ultimately concluded that Representative Smith, Representative 
Miller, and Majority Leader DeLay should be publicly admonished 
for their conduct as described in the Investigative 
Subcommittee's Report. The Investigative Subcommittee, however, 
for the reasons explained in its Report, does not recommend 
that further proceedings be initiated regarding the conduct of 
any of these Members pursuant to House and Committee rules.
    As explained in detail in the Investigative Subcommittee's 
Report, the conduct of Representative Smith in this matter 
could support a finding that he violated the House Code of 
Official Conduct. Among other findings reached by the 
Investigative Subcommittee regarding Representative Smith's 
conduct in this matter, the Investigative Subcommittee found 
that contrary to public statements made by Representative 
Smith, no group, organization, business interest, or 
corporation of any kind, or any individual affiliated with any 
such entities, offered $100,000 or any other specific sum of 
money to support the congressional candidacy of Brad Smith in 
order to induce Representative Nick Smith to vote in favor of 
the Medicare Prescription Drug Act. Similarly, the 
Investigative Subcommittee found that Representative Nick Smith 
was not offered an endorsement or financial support for his 
son's candidacy from the National Republican Congressional 
Committee in exchange for voting in favor of the Medicare 
Prescription Drug Act. Statements made to that effect by 
Representative Smith appear to have been the result of 
speculation or exaggeration on the part of Representative Nick 
Smith. In addition, Representative Smith failed to cooperate 
fully with the Chairman and Ranking Minority Member of the 
Committee on Standards of Official Conduct in their efforts to 
develop information informally about his allegations. As 
explained in the Report, Representative Smith failed to 
exercise reasonable judgment and restraint, and is accountable 
for making public statements that risked impugning the 
reputation of the House.
    The Investigative Subcommittee also found that Majority 
Leader Tom DeLay offered to endorse Representative Smith's son 
in exchange for Representative Smith's vote in favor of the 
Medicare bill. In the view of the Investigative Subcommittee, 
this conduct could support a finding that Majority Leader DeLay 
violated House rules. The Investigative Subcommittee concluded 
that it is improper for a Member to offer or link support for 
the personal interests of another Member as part of a quid pro 
quo to achieve a legislative goal.
    The Investigative Subcommittee reached a similar conclusion 
regarding the conduct of Representative Candice Miller, who 
made a statement to Representative Smith on the House floor 
during the vote on the Medicare legislation that referenced the 
congressional candidacy of Representative Smith's son. 
Representative Smith fairly interpreted Representative Miller's 
statements to him during the vote as a threat of retaliation 
against him for voting in opposition to the bill.
    Although the Investigative Subcommittee learned that two 
other Members--Representative Randall ``Duke'' Cunningham and 
Representative James T. Walsh--also made statements to 
Representative Smith referencing that congressional candidacy 
ofRepresentative Smith's son, the Committee emphasizes that it 
was the Investigative Subcommittee's conclusion that neither of those 
Members violated House rules.
    The Report of the Investigative Subcommittee clarifies the 
standards of conduct applicable to Members and others within 
the jurisdiction of the Committee. Specifically, Members, 
employees, and officials of the House are advised that the 
linking of official actions with personal considerations in the 
manner described in the Investigative Subcommittee's Report is 
impermissible and violates House rules.
    The Report also contains procedural recommendations for 
future investigations undertaken by the Committee and for the 
conducting of House business. The procedural recommendations 
include a recommendation that House rules be amended so as to 
limit access to the House floor during House debate by Cabinet-
level officials, except for such officials that are former 
Members. See House Rule IV, Clause 2(a)(12) (permitting ``Heads 
of departments'' to ``the Hall of the House'').

                          I. Executive Summary

    On March 17, 2004, the Committee on Standards of Official 
Conduct established an Investigative Subcommittee to 
investigate alleged communications received by Representative 
Smith linking support for the congressional candidacy of his 
son with Representative Smith's vote on the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003 
(hereafter the ``Medicare Prescription Drug Act'' or ``Medicare 
legislation''). The investigation encompassed certain public 
statements made by Representative Smith, including statements 
in which Representative Smith alleged that ``bribes'' and other 
improper offers were made to persuade Members of the House to 
vote in favor of the Medicare Prescription Drug Act. The 
Investigative Subcommittee was authorized to conduct a full and 
complete investigation into the alleged communications received 
by Representative Smith, and was directed to report to the full 
Committee at the conclusion of its inquiry with the 
Investigative Subcommittee's findings, conclusions, and 
recommendations.
    The Investigative Subcommittee concluded that the public 
allegations made by Representative Smith stemmed from his 
reaction to a conversation he had with a friend and former 
staff member, as well as from interactions Representative Smith 
had with several Members of the House during or near the time 
of the vote on the Medicare Prescription Drug Act. Regarding 
the conversation Representative Smith had with the former staff 
member, the record indicates that the staff member was not 
attempting to influence Representative Smith's vote, but was 
merely discussing possible consequences of Representative 
Smith's vote in favor of or in opposition to the Medicare 
legislation. Similarly, the information learned by the 
Investigative Subcommittee about Representative Smith's 
encounters with different Members of the House (as described in 
this Report) did not support many of the allegations made by 
Representative Smith.
    The evidence obtained by the Investigative Subcommittee in 
this matter included, but was not limited to, the sworn 
testimony of 17 Members of the House (including Representative 
Nick Smith), and interviews and sworn testimony obtained from 
12 other witnesses. During the inquiry, approximately 1400 
pages of transcribed sworn testimony and witness statements 
resulted from proceedings before the Investigative Subcommittee 
or interviews with Investigative Subcommittee counsel. In 
addition, approximately two thousand pages of documents were 
supplied to the Investigative Subcommittee in response to 
subpoenas for documents and records.
    As explained in this Report, the conduct of Representative 
Smith in this matter raises concerns that he himself violated a 
provision of the House Code of Official Conduct. The 
Investigative Subcommittee reached a similar conclusion 
regarding the conduct of two other Members of the House in this 
matter. The Investigative Subcommittee could pursue these 
matters only if its jurisdiction were expanded pursuant to 
Committee rules and the resolution adopted by the full 
Committee on March 17, 2004. For the reasons discussed herein, 
however, even though the Investigative Subcommittee concluded 
that there is substantial reason to believe that violations of 
the Code of Official Conduct occurred, the Investigative 
Subcommittee does not recommend in this Report that its 
jurisdiction be expanded so as to seek formal disciplinary 
action against any Member regarding any matter discussed in 
this Report.
    In addition to the foregoing, a description of the 
Investigative Subcommittee's investigative efforts, and an 
explanation of all the Investigative Subcommittee's findings 
are also delineated in this Report. The Report also contains 
procedural recommendations for future investigations undertaken 
by the Committee,\1\ as well as proposals for clarification of 
certain standards of conduct applicable to the conduct of 
Members, officers, and employees of the House in the 
performance of their duties or the discharge of their 
responsibilities.
---------------------------------------------------------------------------
    \1\ Such recommendations relate to the sequestration and 
representation of witnesses, and to the current House Rule admitting 
members of the President's cabinet to the House floor during House 
proceedings.
---------------------------------------------------------------------------

                       II. Conduct of the Inquiry


             A. ESTABLISHMENT OF INVESTIGATIVE SUBCOMMITTEE

    On November 22, 2003, the House approved the Conference 
Report on the bill H.R. 1, the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003, by a vote of 220-
215.\2\ The vote was called at approximately 3:00 a.m., and 
concluded at approximately 5:51 a.m.
---------------------------------------------------------------------------
    \2\ See 149 Cong. Rec. H12295-96 (daily ed. Nov. 21, 2003).
---------------------------------------------------------------------------
    The following day, Representative Nick Smith \3\ posted a 
column on his official congressional Web site regarding the 
November 22 vote on the Medicare legislation.\4\
---------------------------------------------------------------------------
    \3\ Representative Nick Smith has served as a Member of Congress 
from the Seventh District of Michigan since January 1993.
    \4\ The address of Representative Nick Smith's congressional Web 
site is http://www.house.gov/nicksmith/.
---------------------------------------------------------------------------
    Exhibit 1. Representative Smith's column included the 
following statements:

          Votes in the House usually last 15 minutes plus a 
        traditional two minute cushion. But because the 
        leadership did not have the votes to prevail, this vote 
        was held open for a record two-hours-and-51 minutes as 
        bribes and special deals were offered to convince 
        members to vote yes. [Emphasis added.]
          I was targeted by lobbyists and the congressional 
        leadership to change my vote, being a fiscal 
        conservative and being on the record as a no vote. 
        Secretary of Health and Human Services Tommy Thompson 
        and Speaker of the House Dennis Hastert talked to me 
        for a long time about the bill and why I should vote 
        yes. Other members and groups made offers of extensive 
        financial campaign support and endorsements for my son 
        Brad who is running for my seat. They also made threats 
        of voting against Brad if I voted no. Brad heard about 
        what was going on and called me to say he didn't want 
        to get to Congress that way and that I should do the 
        right thing. That added to my resolve.

    On November 24, 2003, Representative Nick Smith issued a 
press statement
    (Exhibit 2), also posted on his Web site, in which he 
stated

          Washington was abuzz Monday over the resolve of 
        Congressman Nick Smith (R-Michigan) who resisted 
        intense pressure to vote for the Medicare bill. 
        Following a story that appeared on Sunday in the 
        Washington Post, Congressman Nick Smith responded with 
        this statement:
          ``I thought I knew `arm-twisting' serving 16 years in 
        the Michigan legislature and 11 years in the United 
        States Congress. However, this was the most intense and 
        strongest pressure to change my vote that I've ever 
        experienced.''
          ``Being a strong fiscal conservative and having voted 
        no on the two prescription drug bills I was a target 
        for early pressure to vote yes on this third go-
        round.''
          ``My only regret is that it might have hurt my son. 
        Advocates of the Medicare prescription drug bill had 
        figured out that my vulnerability might lie in my 
        strong support for my family. Since I'm retiring and my 
        son Brad is running for my seat. I got significant 
        promises for help for his campaign and threats they'd 
        work against him if I voted no.''
          ``Brad got word of the situation and called me and 
        told me that he didn't want to go to Congress this way. 
        He told me to do the right thing. That helped my 
        resolve.'' \5\
---------------------------------------------------------------------------
    \5\ The Washington Post article dated November 23, 2003 that is 
cited in Representative Nick Smith's press statement of November 24, 
2003 purported to describe certain activities on the House floor that 
occurred during the vote on the Medicare Prescription Drug Act, 
including reported efforts by Speaker J. Dennis Hastert and Health and 
Human Services Secretary Tommy G. Thompson to persuade Representative 
Nick Smith to vote in favor of the Medicare Prescription Drug Act. 
Exhibit 3.

    The statements by Representative Nick Smith were followed 
by a series of news reports referencing Representative Smith's 
vote on the Medicare Prescription Drug Act. For example, an 
article published by Human Events Online on November 26, 2004, 
quotes Representative Smith as saying Brad Smith would receive 
``almost unlimited financial support, plus some nationally 
recognized names to endorse him'' if Representative Smith voted 
in favor of the Medicare Prescription Drug Act. Exhibit 4.
    In addition, the following description of alleged events 
during the vote on the Medicare Prescription Drug Act was 
contained in a column published in the Chicago Sun-Times on 
November 27, 2004 (Exhibit 5):

          [Nick] Smith, self term-limited, is leaving Congress. 
        His lawyer son Brad is one of five Republicans seeking 
        to replace him from a GOP district in Michigan's 
        southern tier. On the House floor, Nick Smith was told 
        business interests would give his son $100,000 in 
        return for his father's vote. When he still declined, 
        fellow Republican House members told him that they 
        would make sure Brad Smith never came to Congress. 
        After Nick Smith voted no and the bill passed, Duke 
        Cunningham of California and other Republicans taunted 
        him that his son was dead meat.\6\
---------------------------------------------------------------------------
    \6\ In an article that was published on line in Slate.com on 
December 1, 2003, Representative Smith's chief of staff Kurt Schmautz 
is quoted as saying that the allegations in the article published in 
the Chicago Sun-Times are ``basically accurate.'' Exhibit 6.

    On December 1, 2003, during a radio interview with WKZO-
Kalamazoo, Representative Nick Smith made the following 
additional statements with respect to the passage of the 
Medicare Prescription Drug Act: \7\
---------------------------------------------------------------------------
    \7\ See Exhibit 7. Exhibit 7 is a transcript prepared from a 
digital audio copy of the radio interview.

          They threatened--here's what they did. They--they--
        they started out by offering the carrot. They know 
        what's important to every Member and what's important 
        to me is my family and my kids. And I term-limited 
        myself, and so Bradley, my son, is running for 
        Congress. And so the first offer was to give him 
        $100,000-plus for his campaign and endorsements by 
        national leadership. And--and I said, no, I'm going to 
        stick to my guns on what I think is right for the 
        constituents in my district.
          And so what they did then is come--come forth with 
        sort of the stick. And they said, well, if you don't 
        change your vote--this is about 4 a.m., Saturday 
        morning--then some of us are going to work to make sure 
        your son doesn't get to Congress. And that kind of 
        personal attack is just sort of beyond what anybody 
        should do. So I told them to get the heck out of there. 
        And I might have used a different word besides 
        ``heck,'' I don't know. But it's--it's a tough 
        situation when civility breaks down.

    On December 4, 2003, Representative Nick Smith issued 
another press release (Exhibit 8), this time stating that:

          I have received many inquiries about lobbying 
        pressure on the Medicare vote that took place on 
        November 21 and the morning of November 22. I talked to 
        a lot of members and organizations about the bill 
        before and during the vote. I think I made it clear 
        that I opposed the legislation because it was not good 
        fiscal policy.
          I want to make clear that no member of Congress made 
        an offer of financial assistance for my son's campaign 
        in exchange for my vote on the Medicare bill. I was 
        told that my vote could result in interested groups 
        giving substantial and aggressive ``support'' and 
        ``endorsements.'' No specific reference was made to 
        money.
          Some members said they would work against Brad if I 
        voted no. My son called and said, ``I don't want to go 
        to Congress that way'' and ``Do the right thing.''
          The vote was taken in the middle of the night. People 
        were frustrated and nerves were frayed on all sides. 
        The lobbying effort on behalf of the legislation was 
        intense. Anyone with information can bend my ear, but 
        they can't twist my arm.
          The lobbying from members was intense, but I want to 
        be absolutely clear that I believe that no member 
        violated any ethical rule in this episode. I see no 
        need for an ethics investigation, let alone a criminal 
        investigation.

    An article published by the Lansing State Journal on 
December 5, 2003, reports on Representative Nick Smith's press 
statement of December 4, 2003, and states that Representative 
Smith ``appeared to backpedal [  ] on his allegation that he 
was offered a bribe in exchange for voting for major Medicare 
legislation.'' Exhibit 9. However, the same article quotes Brad 
Smith, Representative Smith's son and candidate to replace his 
father in Congress, as saying that on the evening before the 
vote on the legislation, he was told by his father that 
``interest groups and key Republicans'' had offered ``financial 
contributions and endorsements'' for Brad Smith's congressional 
campaign.
    On December 8, 2003, pursuant to Committee Rule 18(a), the 
Chairman and Ranking Minority Member of the Committee initiated 
informal fact-finding concerning the statements made by 
Representative Nick Smith as to communications he may have 
received linking his support for the Medicare Prescription Drug 
Act with support for the congressional candidacy of his son.\8\ 
In a letter to Representative Smith, he was asked to comment 
upon news accounts of communications to him regarding his vote 
on the Medicare Prescription Drug Act, as well as to respond to 
specific questions on this matter. Exhibit 10.
---------------------------------------------------------------------------
    \8\ A press statement was issued by the Chairman and Ranking 
Minority Member on February 4, 2004 announcing that informal fact-
finding was initiated on December 8, 2003.
---------------------------------------------------------------------------
    By letter to the Committee December 17, 2003, 
Representative Smith responded to the Committee's letter to him 
(Exhibit 11), stating that:

          [T]he news report was incorrect. No House member made 
        an offer of financial assistance to me for my son's 
        campaign in exchange for my vote.

           *         *         *         *         *

          Let me be very clear that the Robert Novak media 
        report that a member told me that business interests 
        would give $100,000 to my son's congressional campaign 
        in exchange for my vote on the Medicare bill is untrue. 
        On the Friday evening before the vote on the bill 
        started, a friend called and told me that if I voted 
        for the bill my son's congressional campaign would 
        receive ``substantial and aggressive support'' or words 
        very close to that. This person was neither a member of 
        Congress nor a lobbyist. However, combined with 
        members' comments that there could be endorsements, 
        business support and members coming to Michigan to 
        campaign for my son, I deemed the statement credible. 
        In my mind, I believed that this would mean tens of 
        thousands, if not hundreds of thousands of dollars for 
        my son's campaign if I voted for the bill.

    Representative Smith also stated in his letter to the 
Committee that he did not provide the $100,000 figure to Robert 
Novak,\9\ but that ``[u]nfortunately, a few days after reading 
his column, I repeated the same figure in a live radio 
interview on WKZO, from a cell phone while driving my car. 
Although I continue to believe Mr. Novak's figure is in the 
ballpark of what my son's campaign could have received, it was 
a mistake for me to repeat the $100,000 figure.'' He also 
stated that he ``regard[ed] as credible the statements that my 
son's campaign could receive substantial and aggressive 
support, including support from third parties. But I repeat, no 
member offered me, or my son, campaign money for my vote.'' In 
apparent response to the Committee's request for details about 
communications made to him regarding his vote on the Medicare 
Prescription Drug Act, he stated that ``[e]ven though I do 
recall an overarching message that my son's campaign could be 
affected by my vote, it would be unfair for me to try to 
reconstruct exactly the words that were said and who said them. 
I simply cannot do that with precision.'' Exhibit 11.
---------------------------------------------------------------------------
    \9\ See Exhibit 5.
---------------------------------------------------------------------------
    On December 23, 2003, the Washington Post published an 
article that described a gathering at the Hunan Dynasty 
restaurant that was held on November 21, 2003, theevening 
before the vote on the Medicare legislation. Exhibit 12. According to 
the article, Representative Smith reportedly spoke to several 
Republican Members regarding pressure on him to change his vote. The 
article reported that at least three other Members of Congress recall 
Representative Smith telling them of an offer of financial benefits for 
his son's campaign if he voted in favor of the Medicare Prescription 
Drug Act. One of the Members mentioned in the Washington Post article 
is quoted as saying that Representative Smith told attendees at the 
gathering that ``someone had said his son .  .  . would be the 
beneficiary if he would vote for the bill, up to the tune of about 
$100,000 .  .  .  .'' Exhibit 12 (Ellipses original).
    A Detroit News article published on February 12, 2004 
references additional public comments by Representative Smith 
on this matter. According to the article, on February 11, 2004, 
Representative Smith stated that he was offered ``aggressive 
and substantial'' support for his son's congressional campaign 
in connection with his vote on the Medicare Prescription Drug 
Act. Exhibit 13.
    By letter dated February 13, 2004, the Chairman and Ranking 
Minority Member of the Committee again contacted Representative 
Smith. Exhibit 14. The purpose of this letter was to obtain 
additional information from Representative Smith regarding the 
public allegations he had made. The letter referenced 
Representative Smith's letter of December 17, 2003 to the 
Committee, and asked Representative Smith to identify the 
``friend'' referred to in his letter to the Committee, which 
friend allegedly called Representative Smith and told him that 
his son's campaign would receive ``substantial and aggressive 
support'' or words to that effect if Representative Smith voted 
for the Medicare Prescription Drug Act.\10\ Exhibits 14 and 11. 
In the letter to Representative Smith, the Chairman and Ranking 
Minority Member of the Committee communicated to Representative 
Smith that it considered the call to Representative Smith (as 
described in Representative Smith's letter of December 17) ``to 
be an extremely serious matter'' and further advised 
Representative Smith that the events as described by 
Representative Smith ``may implicate the Committee's 
jurisdiction.'' Exhibit 14.
---------------------------------------------------------------------------
    \10\ The letter from the Chairman and Ranking Minority Member of 
the Committee to Representative Smith further asked for specific 
details about Representative Smith's communication with his ``friend,'' 
and also requested the identity of certain other individuals and other 
information about events reported in the Washington Post article dated 
December 23, 2003. Exhibit 14; see also Exhibit 12. As noted later in 
this Report, from testimony received during its inquiry from 
Representative Nick Smith and another source, the Investigative 
Subcommittee learned that the unnamed ``friend'' referenced in 
Representative Smith's letter to the Committee dated December 17, 2003 
was Jason Roe. Mr. Roe is presently chief of staff to Representative 
Tom Feeney.
---------------------------------------------------------------------------
    By letter from his counsel dated March 5, 2004, 
Representative Smith declined to provide the additional 
information requested by the Chairman and Ranking Minority 
Member of the Committee. In the letter, Representative Smith's 
counsel stated that ``[i]n his letter of December 17, 
Representative Smith confirmed to your Committee that, 
notwithstanding press reports characterizing some of the speech 
and debate as implying that financial support for his son's 
Michigan congressional campaign could be affected by his vote, 
`no House member made an offer of financial assistance . . . 
for my son's campaign in exchange for my vote.' By this reply, 
Representative Smith reaffirms that recollection.'' Exhibit 15 
(Ellipses original).
    After having been unable to obtain full cooperation from 
Representative Nick Smith in obtaining facts and evidence 
related to the public allegations made by Representative Smith, 
and because the allegations--made in several different forums--
called into question the integrity of the House and its 
legislative process, the Committee determined to establish an 
Investigative Subcommittee to inquire into this matter. The 
Investigative Subcommittee was established pursuant to a 
resolution adopted by the Committee on March 17, 2004 and in 
accordance with the House and Committee rules referenced in the 
resolution. In subsequent Investigative Subcommittee and 
Committee proceedings, the Investigative Subcommittee's inquiry 
was referred to as the ``Investigation of Certain Allegations 
Related to Voting on the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003.''\11\
---------------------------------------------------------------------------
    \11\ The establishment of the Investigative Subcommittee was 
publicly announced by the Committee on March 17, 2004. The press 
statement announcing the establishment of the Investigative 
Subcommittee also announced ``[a]t the conclusion of its inquiry, the 
investigative subcommittee is to report its findings, conclusions and 
recommendations to the full Committee,'' and that ``[a]nyone having 
first-hand knowledge of this matter is encouraged to contact the 
Committee office.''
---------------------------------------------------------------------------
    The resolution adopted by the Committee provides as 
follows:

          Whereas Representative Nick Smith has made public 
        statements that he received communications linking 
        support for the congressional candidacy of his son with 
        Representative Smith's vote on the Medicare 
        Prescription Drug Improvement and Modernization Act of 
        2003; and
          Whereas pursuant to Committee Rule 18(a) the Chairman 
        and Ranking Minority jointly engaged in informal fact-
        finding to gather additional information concerning 
        these allegations; and
          Whereas the conduct of a Member, officer, or employee 
        of the House, in connection with the aforementioned 
        allegations, may violate the Code of Official Conduct 
        or one or more law, rule, regulation, or other standard 
        of conduct applicable to the conduct of a Member, 
        officer, or employee of the House in the performance of 
        his or her duties or the discharge of his or her 
        responsibilities; and
          Whereas the Committee has authority to investigate 
        such conduct pursuant to House Rule XI, clauses 3(a)(2) 
        and (3)(b)(2), and pursuant to Committee Rules 14(a)(3) 
        and 18; and
          Whereas the Committee has determined pursuant to 
        Committee Rule 1(c) that the interests of justice 
        require the adoption of special procedures in order for 
        the Committee to carry out its investigative and 
        enforcement responsibilities with respect to the 
        aforementioned allegations;
          It is hereby resolved by the Committee
          1. That an Investigative Subcommittee be established 
        with jurisdiction to conduct a full and complete 
        inquiry and investigation into alleged communications 
        received by Representative Nick Smith linking support 
        for the congressional candidacy of his son with 
        Representative Smith's vote on the Medicare 
        Prescription Drug Improvement and Modernization Act of 
        2003;
          2. That the scope of the inquiry may extend to any 
        matters related to the jurisdiction of the 
        Investigative Subcommittee as set forth in this 
        resolution;
          3. That the Investigative Subcommittee is authorized 
        to advise the public at large that it is interested in 
        receiving information and testimony from any person 
        with first-hand information regarding communications 
        received by Representative Nick Smith linking support 
        for the congressional candidacy of his son with 
        Representative Smith's vote on the Medicare 
        Prescription Drug Improvement and Modernization Act of 
        2003;
          4. That at the conclusion of its inquiry, the 
        Investigative Subcommittee shall report to the 
        Committee its findings, conclusions, and 
        recommendations;
          5. That the Members of the Investigative Subcommittee 
        shall be designated pursuant to Committee Rule 19(a);
          6. That Committee Rules 7 (Confidentiality), 8(a) 
        (Subcommittees--General Policy and Structure), 9 
        (Quorums and Member Disqualification), and 10 (Vote 
        Requirements) are fully applicable to this inquiry by 
        the Investigative Subcommittee;
          7. That the Investigative Subcommittee is authorized 
        to obtain evidence and relevant information by the 
        means and in the manner set forth in Committee Rules 
        19(b)-(c), except as those rules apply to respondents;
          8. That witnesses before the Investigative 
        Subcommittee shall be furnished with a copy of the 
        special procedures for this inquiry (as set forth in 
        this resolution), as well as accorded the rights set 
        forth in Committee Rules 26(k)-(o);
          9. That the Committee intends that all witnesses who 
        provide testimony before the Investigative Subcommittee 
        should be sequestered and should not communicate with 
        any other witnesses regarding any aspect of their 
        testimony unless the Investigative Subcommittee permits 
        otherwise;
          10. That at any point during its inquiry, or at the 
        conclusion of its inquiry, the jurisdiction of the 
        Investigative Subcommittee may be expanded in 
        accordance with the requirements of Committee Rule 
        19(d) if the Investigative Subcommittee obtains 
        information indicating that a Member, officer, or 
        employee of the House may have committed a violation of 
        the Code of Official Conduct or any law, rule, 
        regulation, or other standard of conduct applicable to 
        the conduct of such Member, officer, or employee in the 
        performance of his or her duties or the discharge of 
        his or her responsibilities. If the scope of 
        jurisdiction of the Investigative Subcommittee is 
        expanded to investigate the conduct of an identified 
        Member, officer, or employee of the House, the inquiry 
        regarding the identified Member, officer, or employee 
        shall proceed before the same Investigative 
        Subcommittee and in accordance with all the Rules of 
        the Committee regarding an inquiry involving a 
        respondent;
          11. That except as otherwise provided in this 
        Resolution, the Rules of the Committee shall be 
        applicable in this matter and will be interpreted by 
        the Investigative Subcommittee and the Committee in a 
        manner not inconsistent with this Resolution.

    In a public statement issued on March 25, 2004, the 
Chairman and Ranking Minority Member of the Committee announced 
that Representative Kenny C. Hulshof would serve as Chairman of 
the Investigative Subcommittee, Representative Michael F. Doyle 
would serve as its Ranking Minority Member, and the other two 
members of the Investigative Subcommittee would be 
Representative John B. Shadegg and Representative William D. 
Delahunt.

                        B. INVESTIGATIVE PROCESS

    The Investigative Subcommittee was established on March 17, 
2004, and after its members were designated on March 25, 2004, 
the Investigative Subcommittee investigated this matter until 
early September 2004. The Investigative Subcommittee 
interviewed and deposed witnesses, and authorized the issuance 
of subpoenas for testimony and documents. The vast majority of 
witnesses that provided sworn testimony to the Investigative 
Subcommittee or consented to interviews with Investigative 
Subcommittee counsel did so on a voluntary basis.
    The most critical evidence procured by the Investigative 
Subcommittee was the approximately 1400 pages of transcribed 
sworn testimony and witness statements procured during 
proceedings before the Investigative Subcommittee or during 
interviews with Investigative Subcommittee counsel. In 
addition, approximately two thousand pages of documents were 
supplied to the Investigative Subcommittee pursuant to 
subpoena. Documents were obtained from Representative Nick 
Smith in both his personal and official capacities. Documents 
were also obtained from Brad Smith, as well as from Members of 
the House and House employees. In addition to subpoenaed 
materials, documents were also voluntarily supplied to the 
Investigative Subcommittee from several sources. The 
Investigative Subcommittee also obtained and reviewed the C-
Span videotape of the vote on H.R. 1 on November 22, 2003, and 
examined publicly-available records maintained by the Federal 
Election Commission.
    The documentary materials furnished by witnesses included, 
but were not limited to, personal, official, and campaign-
related written correspondence and records in both final and 
draft form, telephone records (including records of cellular 
phone communications), official and campaign-related e-mail, 
personal calendars or records, and other records memorializing 
meetings on critical days or otherwise related to consideration 
of Medicare legislation by Members of the House.
    During its inquiry, the Investigative Subcommittee formally 
deposed 17 Members of the House regarding matters within its 
jurisdiction, including Representative Nick Smith, the Chairs 
of House Committees and Subcommittees, Speaker J. Dennis 
Hastert, and Majority Leader Tom DeLay. A House employee (Jason 
Roe) and an individual not affiliated with the House (Brad 
Smith) were also deposed by the Investigative Subcommittee. 
Each of the witnesses who were deposed by the Investigative 
Subcommittee was placed under oath. See Committee Rule 
19(b)(6). At least two Members of the Investigative 
Subcommittee were present at all times for all sworn 
depositions as required by Committee rules, although in fact, 
all four Members were present for a majority of the depositions 
before the Investigative Subcommittee. In addition, as 
authorized by the Investigative Subcommittee, counsel for the 
Investigative Subcommittee interviewed ten other individuals. 
Each of the interviews was transcribed by a stenographer with 
the consent of the individual being interviewed. Answers (made 
under penalty of perjury) to written questions posed by the 
Investigative Subcommittee were provided by the Honorable Tommy 
G. Thompson, Secretary of Health and Human Services.\12\ 
Exhibits 16 and 17.
---------------------------------------------------------------------------
    \12\ Early in its inquiry, the Investigative Subcommittee also 
sought information from the White House regarding a meeting between a 
White House official and Representative Nick Smith in Representative 
Smith's congressional office prior to the vote on the Medicare 
Prescription Drug Act. The White House would not make the individual 
available to be interviewed by Investigative Subcommittee counsel, and 
further declined to respond to a written request for information. 
During the course of its inquiry, the Investigative Subcommittee did 
not find any link between the allegations made by Representative Nick 
Smith and any communication or other action undertaken by anyone 
employed within the White House. For this reason, the Investigative 
Subcommittee did not endeavor further to obtain information from the 
White House regarding this matter.
---------------------------------------------------------------------------
    The Investigative Subcommittee notes the cooperation of 
Members of the House with the Investigative Subcommittee's 
inquiry. No Member of the House that was asked to provide 
voluntary testimony declined to do so; indeed, no Member who 
testified voluntarily offered any resistance to testifying or 
any objection to questions posed to them. The Investigative 
Subcommittee appreciates the cooperation of the Members who 
voluntarily provided testimony to it, and who rearranged their 
official schedules--oftenon short notice--to accommodate the 
needs of the Investigative Subcommittee.\13\ The only Member of the 
House subpoenaed to give testimony was Representative Nick Smith.
---------------------------------------------------------------------------
    \13\ The Investigative Subcommittee similarly appreciates the 
cooperation of the many House employees that consented to be 
interviewed by Investigative Subcommittee counsel.
---------------------------------------------------------------------------
    As noted in the resolution it adopted on March 17, 2004, 
the Committee determined, pursuant to Committee Rule 1(c), to 
adopt special procedures for this inquiry. One of the special 
procedures included in the resolution provides that unless the 
Investigative Subcommittee permitted otherwise, witnesses who 
provided testimony to the Investigative Subcommittee should be 
sequestered from other witnesses. The purpose of this provision 
was to discourage communications between witnesses before the 
Investigative Subcommittee regarding their testimony, thereby 
maintaining the confidentiality and reliability of information 
provided by and asked of witnesses during this inquiry.
    The Investigative Subcommittee took appropriate measures to 
insure witnesses complied with the sequestration provision in 
the Committee's resolution. Not only was each witness provided 
with a copy of the resolution, but accompanying correspondence 
to witnesses noted the resolution's sequestration provision and 
further advised all witnesses of the intention of the 
Investigative Subcommittee to ``inquire on the record'' 
regarding witnesses'' compliance with the instruction that 
communications with the Investigative Subcommittee be kept 
confidential.\14\ In addition, every proceeding before the 
Investigative Subcommittee or its counsel began with an ``on 
the record'' inquiry regarding communications a witness may 
have had related to his or her contact with the Investigative 
Subcommittee, and every proceeding concluded with an 
admonishment that the witness should continue to comply with 
the resolution's sequestration provision. It was the position 
of the Investigative Subcommittee that Members and employees of 
the House were obligated to comply with the sequestration rule 
and not discuss any aspect of their testimony with anyone other 
than their counsel, and that failure to comply with this 
request could form the basis of disciplinary proceedings in the 
House in accordance with House and Committee rules.\15\
---------------------------------------------------------------------------
    \14\ Witnesses who provided statements during interviews with 
Investigative Subcommittee counsel were given a similar admonishment.
    \15\ In the view of the Investigative Subcommittee, private counsel 
engaged to represent Members and staff during proceedings before the 
Investigative Subcommittee were also required to comply with the 
sequestration rule and not discuss any aspect of the proceedings they 
attended with any other person. See Committee Rule 26(m).
---------------------------------------------------------------------------
    The Investigative Subcommittee encountered no violations of 
the sequestration provision contained in the resolution. 
Further, it found the provision's inclusion in the resolution 
to have been useful in maintaining the confidentiality of the 
Investigative Subcommittee's activities, and in the preventing 
orchestration or coordination of testimony by witnesses. The 
Investigative Subcommittee recommends that a ``sequestration of 
witnesses'' requirement be implemented in future inquires, 
whether by Committee policy, rule, or resolution.\16\
---------------------------------------------------------------------------
    \16\ A recent report of the Committee raised a concern over 
multirepresentation of witnesses by the same attorney. See In the 
Matter of Representative Earl F. Hilliard, H. Rep. 107-130, 107th 
Cong., 1st Sess. 98 (July 10, 2001) (describing multirepresentation of 
witnesses as ``inimical to the fact-finding process''). The 
Investigative Subcommittee in the instant matter did encounter 
instances of representation of more than one witness by the same 
attorney. In these instances, the Investigative Subcommittee found no 
indication that the attorney had disclosed the testimony of a witness 
with any other witness. Nonetheless, the Investigative Subcommittee 
believes that multirepresentation of witnesses by the same attorney 
poses a substantial risk to the integrity of an investigation, and if 
necessitated by the circumstances it would have considered steps to 
limit or prohibit the same attorney from attending the testimony of 
more than one witness.
---------------------------------------------------------------------------

                   III. Narrative Summary of Evidence


   A. EVENTS PRECEDING THE VOTE ON THE MEDICARE PRESCRIPTION DRUG ACT

1. Telephone Conversations Between Representative Nick Smith and a 
        Former Member of his Congressional Staff

    By Friday, November 21, 2003, the day preceding the House 
vote on the Conference version of the Medicare bill, 
Representative Nick Smith was expected to vote against the 
legislation. Representative Smith had voted against the House 
version of the legislation earlier in the year and had, at some 
point prior to November 21, communicated to his party's 
leadership his intention to vote against the final version of 
the bill. Earlier in the week, lobbyists from industry and a 
White House employee had visited Representative Smith in his 
congressional office and had presented him with arguments in 
favor of the Medicare legislation.\17\
---------------------------------------------------------------------------
    \17\ Transcript of Interview of Kurt Schmautz, Chief of Staff to 
Representative Nick Smith, at pages 7-11 (hereinafter Schmautz Int.)
---------------------------------------------------------------------------
    Representative Smith plans to retire at the end of the 
108th Congress and his son, Brad Smith, had formally announced 
his candidacy for his father's seat in Congress in October 
2003. Even prior to his formal announcement, it was known among 
many Members of Congress that Brad Smith would be running for 
his father's seat. It was apparent in his testimony before the 
Investigative Subcommittee, that Representative Smith wanted 
his son to be successful in his campaign.\18\ Several other 
Members who testified before the Investigative Subcommittee 
noted that Representative Smith had sought their support for 
Brad Smith's campaign.\19\
---------------------------------------------------------------------------
    \18\ See, e.g., Deposition of Representative Nick Smith 
(hereinafter Rep. N. Smith Dep.) at pages 166-167.
    \19\ See, e.g., Deposition of Representative Tom Reynolds 
(hereinafter Rep. Reynolds Dep.) at page 10; Deposition of 
Representative Jeff Flake (hereinafter Rep. Flake Dep.) at pages 19-20; 
Deposition of Representative Tom Tancredo (hereinafter Rep. Tancredo 
Dep.) at page 16; Deposition of Representative Tom Feeney (hereinafter 
Rep. Feeney Dep.) at pages 9-10).
---------------------------------------------------------------------------
    Sometime during the late afternoon on Friday November 21, 
prior to a Republican Conference meeting scheduled for 
approximately 7:00 p.m., Representative Smith received at least 
one call from a former staff member, Jason Roe. Mr. Roe had 
been employed as the Press Secretary in Representative Smith's 
congressional office from February through August 1999 and then 
again from July through December of 2001. In addition, during 
testimony before the Investigative Subcommittee, Representative 
Smith described Jason Roe as a friend from his congressional 
district whose family Representative Smith had known for 40 
years. Representative Smith told the Investigative Subcommittee 
that Jason Roe had ``been supportive of [his son's] campaign.'' 
\20\ Mr. Roe is currently Chief of Staff to Representative Tom 
Feeney.
---------------------------------------------------------------------------
    \20\ See Rep. N. Smith Dep. at page 18.
---------------------------------------------------------------------------
    Jason Roe testified that he remembers speaking with 
Representative Smith once during the afternoon or evening of 
Friday November 21 but concedes that he may have spoken with 
him more than once that day. According to notes Representative 
Smith made in his diary calendar approximately seven to ten 
days later, Mr. Roe called him at 5:30 p.m. on November 21 and 
then again at 6:30 that evening.\21\
---------------------------------------------------------------------------
    \21\ Relevant portions of Representative Smith's diary calendar for 
2003 were obtained by the Investigative Subcommittee pursuant to a 
subpoena for documents issued to Representative Smith. See Exhibit 19. 
Representative Smith testified that he used his diary calendar to make 
notes of certain events that occurred in connection with the Medicare 
vote after his allegations started receiving media attention. He told 
the Investigative Subcommittee that the notes in the diary calendar 
were made a week to ten days after the events occurred and were not 
made contemporaneously with the events. See Rep. N. Smith Dep. at page 
16.
---------------------------------------------------------------------------
    Both Representative Smith and Mr. Roe testified that their 
conversation or conversations on November 21 were brief. 
According to Representative Smith, during their conversations, 
Mr. Roe told him that there could be substantial support for 
Brad Smith's campaign if Representative Smith voted in favor of 
the Medicare bill and that he understood from a source close to 
Majority Leader Tom DeLay's office that Brad Smith could get a 
National Republican Congressional Committee (NRCC) endorsement 
if Representative Smith voted in favor of the legislation.\22\
---------------------------------------------------------------------------
    \22\ See Rep. N. Smith Dep. at page 18. In his notes, 
Representative Smith wrote: ``Jason Roe called at 5:30 and said 
Business would contribute `heavy' to Brad's campaign--IF--6:30 ALSO--
NRCC would endorse Brad if I would vote yes--said no--.'' (See Exhibit 
19) Representative Smith told the Investigative Subcommittee that the 
internal quotation marks around the word ``heavy'' in his notes were 
not meant to indicate that Mr. Roe had actually used the word in their 
conversation. See Rep. N. Smith Dep. at page 17.
---------------------------------------------------------------------------
    Jason Roe denied referring to a source close to the 
Majority Leader's office during his conversation, or 
conversations, with Representative Smith. He told the 
Investigative Subcommittee that he called Representative Smith 
because throughout the day on November 21, he had been hearing 
about pressure that was being put on Republicans who intended 
to vote against the Medicare bill and he wanted to discuss the 
vote and Representative Smith's own circumstances with him. Mr. 
Roe testified:

          There had been--. . . [during] the course of the day, 
        talking to various lobbyists and Mr. Feeney just 
        hearing about people switching votes and the pressure 
        that was being applied to some of the conservative 
        holdouts on the legislation. . . .--[A]fter hearing a 
        number of these stories . . . I just more out of 
        curiosity gave him a call and asked him what he thought 
        he was going to do. . . . And just based on people 
        telling me people were switching votes, I called him 
        and asked him about that; and we had a brief, maybe 
        four- or five-minute conversation, in my recollection, 
        about his vote.\23\
---------------------------------------------------------------------------
    \23\ See Deposition of Jason Roe (hereinafter Roe Dep.) at pages 
39-40.
---------------------------------------------------------------------------
    Mr. Roe told the Investigative Subcommittee that he and 
Representative Smith engaged in a discussion about hypothetical 
pros and cons of voting for or against the legislation. Mr. Roe 
told the Investigative Subcommittee that everything he might 
have said in that conversation, including any references to 
substantial support or endorsements for Brad Smith, were 
hypothetical.
    Mr. Roe told the Investigative Subcommittee:

          And [Representative Smith] said, you know, kind of 
        thinking out loud . . . what do you think? . . . Should 
        I stick to it? . . . So it was more or less talking 
        about what he was going to do and what the 
        repercussions were going to be of him voting no as it 
        applied to Brad.

           *         *         *         *         *

          . . . I think we probably talked about conservatives 
        are going to probably rally to you if you vote no. 
        There is [sic] probably benefits from the House 
        leadership that could help you for Brad, but, you know, 
        you are going to alienate the conservative base in 
        Michigan. . . . So just I guess kind of generally how 
        does this vote affect Brad as it relates to the 
        campaign.\24\
---------------------------------------------------------------------------
    \24\ See Roe Dep. at pages 44-45.
---------------------------------------------------------------------------
    A Member of the Majority Leader's staff, Deputy Chief of 
Staff Dan Flynn, stated in an interview conducted by staff 
counsel to the Investigative Subcommittee that he called Mr. 
Roe on Friday November 21 seeking information on Representative 
Smith's son's primary race. Mr. Flynn said that because Mr. Roe 
had ``previously . . . worked for Nick Smith'' he believed Mr. 
Roe would know ``more about the primary situation'' than Mr. 
Flynn himself knew.\25\ However, Mr. Flynn did not recall 
telling Mr. Roe that the Majority Leader would or might take 
any position on the primary and does not believe he asked Mr. 
Roe to call Representative Smith regarding Representative 
Smith's vote on the Medicare legislation. Mr. Flynn also said 
that he did not recall discussing an NRCC endorsement for Brad 
Smith with Mr. Roe or anyone else.\26\
---------------------------------------------------------------------------
    \25\ See Transcript of Interview with Dan Flynn (hereinafter Flynn 
Int.) at page 28-29.
    \26\ See Flynn Int. at pages 45-46.
---------------------------------------------------------------------------
    Mr. Roe testified that the subject of the Michigan Seventh 
District primary never came up during the multiple 
conversations he had with Mr. Flynn prior to the vote on the 
Medicare legislation. He testified that he spoke with Mr. Flynn 
several times prior to the vote, but that their conversations 
always focused on Mr. Flynn's attempts to persuade 
Representative Tom Feeney to vote in favor of the bill.\27\
---------------------------------------------------------------------------
    \27\ See Deposition of Jason Roe (Roe II) at pages 4-6. The 
Investigative Subcommittee does not find it necessary to determine 
whether the Majority Leader's Deputy Chief of Staff called Mr. Roe to 
ask about Brad Smith's primary. Mr. Flynn did not recall discussing any 
endorsements with Mr. Roe and did not recall asking or instructing Mr. 
Roe to call Representative Smith to relay any offers or information. If 
a conversation related to Brad Smith's campaign did occur between Mr. 
Roe and Mr. Flynn prior to the Medicare vote, and was in whole or in 
part the motivation behind Mr. Roe's decision to call Representative 
Smith, without a request or an instruction to him to convey an offer, 
Mr. Roe's conversation with Representative Smith remained mere 
speculation.
---------------------------------------------------------------------------
    Mr. Roe told the Investigative Subcommittee that he was not 
trying to influence Representative Smith's vote by calling him 
and he further testified that he did not call Representative 
Smith on behalf of any other person or entity.\28\ 
Representative Smith testified that Mr. Roe had not mentioned 
calling on behalf of any other person or entity. Representative 
Smith and Representative Tom Feeney, whom Mr. Roe had informed 
of his conversation with Representative Smith shortly after it 
occurred, told the Investigative Subcommittee that they did not 
believe Mr. Roe was trying to influence Representative Smith's 
vote.
---------------------------------------------------------------------------
    \28\ See Roe Dep. at pages 50-51, 53.
---------------------------------------------------------------------------
    Representative Smith told the Investigative Subcommittee 
that he did not regard the phone calls from Jason Roe as 
important immediately after speaking with his former staff 
member. He assumed what Mr. Roe was communicating was in the 
nature of rumor and, at that time, he did not give a lot of 
credibility to whether the things they discussed were actual 
fact or mere speculation. Representative Smith told the 
Investigative Subcommittee that his impression at that time was 
that what Mr. Roe was saying was closer to gossip than to hard 
information.\29\
---------------------------------------------------------------------------
    \29\ Under questioning from a Member of the Investigative 
Subcommittee, Representative Smith testified:

      Q: On a continuum between * * * personal advice and * * * 
      offering * * * a bribe from somebody else, did you have a 
      sense for which of these it was?
      A: Probably closer to--my impression at that time was 
      closer to gossip.
      Q: Gossip about what might happen----
      A: Yeah.
      Q: --or what things he heard?
      A: Correct.
      Q: Without any greater specificity than that?
      A: Correct.
See Rep. N. Smith at pages 24-25.
    The Investigative Subcommittee found no evidence that there 
was any consideration given to having the NRCC endorse 
Representative Smith's son in his primary race. Individuals 
appearing before the Investigative Subcommittee who were asked 
about whether they had knowledge of an offer of an NRCC 
endorsement expressed the view that such an endorsement would 
have been unusual and unlikely in a closely contested 
Republican primary involving five candidates, such as the race 
in the Michigan Seventh District primary. Representative Tom 
Reynolds, Chairman of the NRCC, testified that any 
consideration of an offer of endorsement in any primary would 
have come to his attention at some point. He said that there 
had been no consideration of an endorsement for Brad Smith in 
the Michigan District Seven primary and that he had no 
knowledge of an offer of an endorsement being made.\30\
---------------------------------------------------------------------------
    \30\ See Rep. Reynolds Dep. at pages 7-8, 19.
---------------------------------------------------------------------------
    Jason Roe who was, according to Representative Smith, the 
initiator of the discussion about a possible NRCC endorsement, 
told the Investigative Subcommittee that he would not have told 
Representative Smith that Brad Smith would receive an NRCC 
endorsement if Representative Smith voted for the Medicare bill 
and that he had ``no authority to offer the NRCC to anybody.'' 
\31\ Representative Smith also told the Investigative 
Subcommittee that he thought it would have been ``strange'' 
\32\ for the NRCC to have made an endorsement in the primary.
---------------------------------------------------------------------------
    \31\ See Roe Dep. at page 51.
    \32\ See Rep. N. Smith Dep. at page 18.
---------------------------------------------------------------------------
    Based on Representative Smith's schedule for November 21 
and his recollection of the events of that afternoon and 
evening, some time after he spoke with his former staff member, 
he attended the Republican Conference meeting. Representative 
Smith's recollection is that the Medicare legislation was the 
main topic of discussion at the conference meeting. He 
testified that no one directly attempted to influence his vote 
during the Conference meeting.\33\
---------------------------------------------------------------------------
    \33\ See Rep. N. Smith at page 14. See also Exhibit 22.
---------------------------------------------------------------------------

2. Conversation with Majority Leader Tom DeLay

    The record of roll call votes for November 21, 2003 
indicates there were several votes called between 7:09 and 
11:37 that evening.\34\ According to Representative Smith, on 
the House floor, during one of the votes that evening, Majority 
Leader DeLay approached him and told him that he would 
personally endorse Representative Smith's son in the Republican 
primary in Michigan District Seven if Representative Smith 
voted in favor of the Medicare legislation. In his testimony 
before the Investigative Subcommittee, Representative Smith 
stated that the Majority Leader said: ``I will personally 
endorse your son. That's my last offer.'' \35\ In handwritten 
notes in his diary calendar, Representative Smith 
wrote that he ``teared up'' in response to the Majority 
Leader's statement.\36\
---------------------------------------------------------------------------
    \34\ See Exhibit 20.
    \35\ See Rep. N. Smith Dep. at page 31.
    \36\ Representative Smith recorded the statement in notes he made 
in his diary calendar approximately seven to ten days after the vote on 
the Medicare legislation. (See Exhibit 19) In those notes, 
Representative Smith wrote: ``[T.D.] said he would personally endorse 
Brad. (I teared up).'' In the line immediately preceding this statement 
in Representative Smith's notes, he wrote ``More Pressure--1:30 AM.'' 
(See Exhibit 19 ) Representative Smith testified that his reference to 
pressure at 1:30 a.m. did not refer to the Majority Leader's offer of 
an endorsement. See Rep. N. Smith Dep. at pages 32, 96.
---------------------------------------------------------------------------
    Representative Smith testified that the exchange lasted 
about eight seconds. He recalls saying nothing to the Majority 
Leader in response, other than to perhaps thank him for the 
offer. Representative Smith told the Investigative Subcommittee 
that, although the Majority Leader used the phrase ``final 
offer'' or ``last offer'' in conveying the offer of 
endorsement, he had not in fact made previous offers of support 
for Representative Smith's son's campaign or offers of any 
other inducements to persuade Representative Smith to vote in 
favor of the Medicare legislation.\37\
---------------------------------------------------------------------------
    \37\ See Rep. N. Smith Dep. at page 160.
---------------------------------------------------------------------------
    According to Representative Smith, Representative Lamar 
Smith was sitting near him when the Majority Leader made his 
offer to personally endorse Representative Smith's son and 
witnessed the exchange.\38\ However, Representative Lamar Smith 
told the Investigative Subcommittee that he did not recall 
witnessing this interaction between the Majority Leader and 
Representative Smith. Rather, Representative Lamar Smith 
testified that, while the Medicare vote was open during the wee 
hours of Saturday November 22, he saw Representative Nick Smith 
sitting by himself. As part of his opening statement to the 
Investigative Subcommittee, Representative Lamar Smith 
testified as follows:
---------------------------------------------------------------------------
    \38\ See Rep. N. Smith Dep. at page 33.

          * * * Regarding the situation with Nick Smith, I did 
        not hear anyone say to him anything about his vote or 
        his son's candidacy for Congress.
          At one point during the evening, I saw Nick sitting 
        by himself. It was general knowledge that his vote was 
        considered important to passage of the Medicare bill. I 
        sat next to him and asked him what he was thinking. He 
        replied that he was told that his son would be endorsed 
        if he voted for the legislation. He did not mention who 
        told him that. The exchange was brief and it seemed to 
        me that the conversation lasted less than a minute.\39\
---------------------------------------------------------------------------
    \39\ See Deposition of Representative Lamar Smith (hereinafter Rep. 
L. Smith Dep.) at pages 3-4. The Majority Leader testified that he did 
not remember Representative Lamar Smith sitting next to Representative 
Nick Smith during his conversation with Nick Smith. The Majority Leader 
testified that ``there were people sitting next to [Representative Nick 
Smith] but I couldn't tell you who they were.'' See Deposition of 
Majority Leader Tom DeLay (hereinafter Majority Leader Dep.) at pages 
34-35.
---------------------------------------------------------------------------
    Representative Nick Smith told the Investigative 
Subcommittee that the Majority Leader did not say he would 
provide money to his son's campaign. However, during his 
testimony Representative Smith stated that he would have 
associated the offer of an endorsement with willingness to 
provide financial assistance in the form of contributions to 
his son's campaign.\40\
---------------------------------------------------------------------------
    \40\ See Rep. N. Smith Dep. at pages 43, 46.
---------------------------------------------------------------------------
    Majority Leader DeLay's account of his conversation with 
Representative Nick Smith differs in some respects from 
Representative Smith's testimony, but is materially consistent. 
The Majority Leader testified that he did say words to the 
effect of: ``I will personally endorse your son. That's my 
final offer'' to Representative Smith in connection with his 
efforts to persuade him to vote in favor of the Medicare 
legislation.\41\ However, the Majority Leader does not recall 
speaking with Representative Smith regarding the legislation 
before the time that the Medicare vote was open.
---------------------------------------------------------------------------
    \41\ See Majority Leader Dep. at page 35.
---------------------------------------------------------------------------
    Majority Leader DeLay told the Investigative Subcommittee 
that he does not believe he would have spoken to Representative 
Smith earlier than that because he did not believe that 
Representative Smith was open to persuasion to change his vote. 
Attempting to persuade Representative Smith to change his vote 
prior to the time that the vote was open would therefore have 
been, in the Majority Leader's view, an inefficient use of the 
time he had available to persuade others who might be willing 
to vote in favor of the bill. Majority Leader DeLay told the 
Investigative Subcommittee that, in his recollection: ``I might 
have been asked, but I didn't before the vote talk to Nick 
Smith, because I knew he was a no, and there was a waste of my 
time.'' \42\ Nonetheless, the Majority Leader said that it was 
possible he spoke to Representative Smith earlier than the time 
during which the vote on the Medicare legislation was open.\43\
---------------------------------------------------------------------------
    \42\ See Majority Leader Dep. at page 28-29.
    \43\ The Majority Leader told the Investigative Subcommittee that 
he recalls speaking with Representative Smith twice, both times while 
the vote on the Medicare legislation was open. He was seen engaged in 
conversation with Representative Smith on the House floor while the 
vote was open. See Deposition of Representative Randy ``Duke'' 
Cunningham (hereinafter Rep. Cunningham Dep.) at pages 12, 14.
---------------------------------------------------------------------------
    The Majority Leader told the Investigative Subcommittee 
that someone, he does not recall who, told him at some point 
between late on Friday November 21 and the time of the vote on 
the Medicare legislation, that Representative Smith was a 
``gettable'' \44\ vote.\45\ The Majority Leader did not believe 
the assessment of Representative Smith as a ``gettable vote'' 
but he nonetheless approached Representative Smith and asked 
him whether he would vote with the majority. Majority Leader 
DeLay's recollection is that Representative Smith's response to 
him was ``Well, maybe.'' \46\ They began to discuss the merits 
of the bill and the Majority Leader believed, based on past 
experience with Representative Smith, that he would be 
``stuck'' \47\ talking to him for a lengthy period of time.\48\
---------------------------------------------------------------------------
    \44\ See Majority Leader Dep. at page 31.
    \45\  The Majority Leader's Deputy Chief of Staff, Dan Flynn, 
indicated that late on November 21, prior to the Medicare vote and in 
the course of discussing various Members' anticipated votes on the 
legislation, he mentioned to the Majority Leader that several months 
earlier, a member of Representative Nick Smith's staff had asked him 
whether the Majority Leader would consider endorsing Brad Smith. Mr. 
Flynn stated that he believed it was possible that the offer of an 
endorsement for his son might persuade Representative Smith to vote in 
favor of the legislation. (See Flynn Int. at pages 15-17). However, he 
never learned whether the Majority Leader had used the information he 
provided in this way. (See Flynn Int. at pages 20-21.)
    The Majority Leader's Chief of Staff, Tim Berry, stated in an 
interview with Subcommittee counsel that, although he recalled that Mr. 
Flynn mentioned the inquiry about an endorsement for Brad Smith during 
the course of a discussion about various Members' anticipated votes, 
the Majority Leader was not present when Mr. Flynn raised this point. 
(See Transcript of Interview of Tim Berry (hereinafter Berry Int.) at 
pages 37-39).
    During an interview with Investigative Subcommittee counsel, Brett 
Shogren, the Majority Leader's Senior Advisor and Director of National 
Security Policy, said that he remembered the subject of an endorsement 
for Representative Smith's son coming up during the course of 
discussion about the Medicare vote that occurred during the evening or 
night preceding the vote. Mr. Shogren remembered the remark being made 
in the midst of a great deal of activity and discussion about the vote 
in the Majority Leader's office. Mr. Shogren remembered the Majority 
Leader being present when the remark was made. He did not remember who 
made the remark and did not himself discuss the issue with the Majority 
Leader. (See Transcript of Interview of Brett Shogren (hereinafter 
Shogren Int.) at pages 15-18; 20, 23-24.)
    \46\ See Majority Leader Dep. at page 31.
    \47\ See Majority Leader Dep. at page 31.
    \48\ Majority Leader DeLay told the Investigative Subcommittee that 
in past dealings with Representative Smith, he had learned that 
attempts to persuade him to reconsider his positions on legislative 
issues could lead to extensive and lengthy discussions. The Majority 
Leader was leery of getting caught up in such an extended discussion 
when he was trying to reach and persuade as many Members as possible. 
See Majority Leader Dep. at pages 27-29; 31, 35.
---------------------------------------------------------------------------
    According to Majority Leader DeLay, during their 
conversation, Representative Smith himself first raised the 
subject of his son's campaign. The Majority Leader believed 
that by doing so, Representative Smith was ``fishing to see 
what I would say'' in response.\49\ He believed Representative 
Smith was looking for an offer of an endorsement from the 
Majority Leader for his son. Majority Leader DeLay testified 
that Representative Smith had several weeks or months prior to 
the Medicare vote approached him about an endorsement and 
support for his son.\50\ The Majority Leader declined 
Representative Smith's request at that time, with the stated 
reason to Representative Smith being that he rarely provides 
endorsements in primaries.\51\
---------------------------------------------------------------------------
    \49\ See Majority Leader Dep. at page 32.
    \50\ See Majority Leader Dep. at page 20.
    \51\ See Majority Leader Dep. at pages 20, 24.
---------------------------------------------------------------------------
    Majority Leader DeLay indicated that at some point during 
their conversation on the House floor, he made the offer of a 
personal endorsement for Representative Smith's son. Although 
the Majority Leader used the phrase ``final offer,'' he 
testified that he used it as a way to end his conversation with 
Representative Smith and not because he had previously made 
other offers to endorse or otherwise support Representative 
Smith's son.\52\
---------------------------------------------------------------------------
    \52\ See Majority Leader Dep. at page 44.
---------------------------------------------------------------------------
    When asked by a Member of the Investigative Subcommittee 
what Representative Smith's response had been to his offer, the 
Majority Leader testified: ``I seem to remember it was, `That's 
not good enough,' something like that. And then he goes off . . 
. into a diatribe about how bad this bill is.'' \53\ The 
Majority Leader told the Investigative Subcommittee that if 
Representative Smith had changed his mind and voted in favor of 
the legislation, he would have made good on his promise and 
endorsed Brad Smith.\54\
---------------------------------------------------------------------------
    \53\ See Majority Leader Dep. at page 36.
    \54\ See Majority Leader Dep. at page 49.
---------------------------------------------------------------------------
    According to Representative Smith, the Majority Leader's 
offer of an endorsement for his son caused him to lend more 
credence to the comments his former staff member had made 
during their telephone conversations earlier that day. He told 
the Investigative Subcommittee that based on the combination of 
his interaction with the Majority Leader and his conversations 
with his former staff member, he came to believe his son's 
candidacy could be significantly impacted by his vote on the 
Medicare Prescription Drug Act. Representative Smith therefore 
decided to try to reach his son to talk to him before the vote 
on the Medicare legislation.\55\
---------------------------------------------------------------------------
    \55\ See Rep. N. Smith Dep. at pages 31-32; 113-116.
---------------------------------------------------------------------------

3. Representative Smith's Telephone Conversation with Brad Smith

    Representative Smith made at least one or two attempts to 
telephone his son and eventually left a voice message asking 
his son to call him. Brad Smith returned his father's call, 
leaving him a message on the answering machine in his 
Washington apartment urging him to maintain his resolve to vote 
against the Medicare bill. According to a transcript later made 
of Brad Smith's voice message on Representative Smith's 
answering machine, the message was recorded at 8:49 p.m. on 
Friday November 21. According to the transcription, Brad Smith 
left the following message on his father's answering machine at 
that date and time:

          Hi, Dad. It's Brad calling . . . about 10 to 8. I'm 
        sorry I missed your call. I left you a message on your 
        cell. Ah, it's about 10 to 9, rather. I was at a 
        fundraiser. I really hope that you pick this up . . . 
        and that you don't sway from your convictions and 
        support the Medicare bill. Who cares what they say 
        about me. This is our country we're talking about . . . 
        and your grandchildren's future. So, please stick to 
        your guns. Thanks, bye.\56\
---------------------------------------------------------------------------
    \56\ See Exhibit 21.
---------------------------------------------------------------------------
    Representative Smith was not able to produce the original 
tape of his son's message to the Investigative Subcommittee. He 
testified that he had his son's message transcribed because he 
wanted to save it.\57\ When asked why he wanted to save the 
message, Representative Smith said: ``I don't know. To put in 
my memoirs or put in Brad's memoirs or whatever.'' \58\ 
Representative Smith played the tape of the message for other 
people, including visitors to his congressional office and 
members of the Republican Study Committee.
---------------------------------------------------------------------------
    \57\ See Rep. N. Smith Dep. at page 105.
    \58\ See Rep. N. Smith Dep. at page 105.
---------------------------------------------------------------------------
    Representative Smith indicated that he would not have voted 
in favor of the Medicare legislation in order to benefit his 
son's campaign, even if his son had asked him to do so. He said 
that he called his son for two reasons; because he wanted his 
son to know ``what it might be like down here'' \59\ and 
because he believed his son should know that his vote on the 
legislation could have an impact on his candidacy.
---------------------------------------------------------------------------
    \59\ See Rep. N. Smith Dep. at page 96.
---------------------------------------------------------------------------
    Representative Smith testified that he finally reached his 
son in person just before going to a gathering with other 
Members of Congress at the Hunan Dynasty restaurant, just 
before 10:00 p.m. on Friday November 21. In that telephone 
conversation, as he had in the message he left on his father's 
answering machine, Brad Smith urged Representative Smith to 
maintain his resolve to vote against the Medicare legislation, 
regardless of whatever impact it might have on his 
candidacy.\60\
---------------------------------------------------------------------------
    \60\ Brad Smith testified before the Investigative Subcommittee 
that in response to a message from his father on the Friday evening 
before the vote on the Medicare Prescription Drug Act, he

        [T]ried to call Dad back several times at his apartment, 
      at his office, and on his cell phone, and I left a message 
      at his apartment saying that I wanted him to stick to his 
      guns and not change his vote.
        At about 10 o'clock that night, I was in a checkout line 
      in a grocery store and my cell phone rang. Dad was on his 
      way to a Chinese restaurant, and he was calling to check 
      in. He said he was with a bunch of people who were getting 
      out from the heat of the Chamber, and he basically 
      confirmed what Mom told me, that there were people that 
      were ready to give substantial support to my campaign if he 
      voted for the Medicare bill. I told him that it was a 
      terrible bill, that I was quite expressive and animated in 
      my opinions on the bill, and told him that he should not do 
      it and certainly not because of me.

See Deposition of Brad Smith (hereinafter B. Smith Dep.) at pages 6-7.
4. Remarks Made by Representative Smith to Fellow Members at the Hunan 
        Dynasty Restaurant
    The gathering of certain Members of the Republican Study 
Committee (RSC) at Hunan Dynasty restaurant had been planned in 
advance of Friday November 21 as a way for Members intending to 
vote against the Medicare legislation to get together in a 
mutually supportive environment before the vote.\61\ Based on 
testimony presented to the Investigative Subcommittee, there 
were as few as 10 and perhaps as many as 25 Members present at 
various points throughout the time that the gathering lasted. 
Only two individuals in attendance were not Members of 
Congress, the RSC's Executive Director, Neil Bradley, and Guy 
Short, Chief of Staff to Representative Marilyn Musgrave, who 
accompanied Representative Musgrave to the gathering.\62\
---------------------------------------------------------------------------
    \61\ The gathering had originally been scheduled for 8:15 p.m., 
according to Representative Smith's schedule. (See Exhibit 22) However, 
it was delayed to a later start because of votes and the GOP conference 
meeting.
    \62\ Both of these individuals were interviewed by staff counsel to 
the Investigative Subcommittee in this matter.
---------------------------------------------------------------------------
    At some point during the gathering, various Members began 
to describe efforts that had been directed at convincing them 
to vote in favor of the Medicare legislation. Representative 
Smith was among those who addressed the group. One Member who 
was present at Hunan Dynasty during the gathering, 
Representative Jeff Flake, told the Investigative Subcommittee 
that he believed it was at Hunan Dynasty that Representative 
Smith told him and others present that he had been promised 
support for his son in terms of money and an endorsement from 
the NRCC if he would back the legislation.\63\ Representative 
Flake told the Investigative Subcommittee that he recalled 
Representative Smith saying that, in the end, he had decided 
not to vote in favor of the Medicare legislation.\64\
---------------------------------------------------------------------------
    \63\ According to Brad Smith, the Saturday afternoon after the 
Medicare vote, his father also told him that he had been told by a 
former staff member that the ``NRCC would look to get involved in my 
primary race and get behind me.'' See B. Smith Dep. at pages 8-9. Brad 
Smith also testified that his father told him that afternoon that the 
former staff member had told him ``the pharmaceutical industry had 
prepared to back me . . . in the primary election and that the support 
would be substantial.'' See B. Smith Dep. at page 8-9.
    \64\ See Rep. Flake Dep. at page 7.
---------------------------------------------------------------------------
    Representative Flake also told the Investigative 
Subcommittee that Representative Smith did not mention having 
been offered a specific dollar amount for his son's campaign in 
exchange for a vote in favor of the Medicare legislation. He 
did not remember Representative Smith saying by whom the offer 
of an NRCC endorsement and money had been made. Representative 
Flake recalled that Representative Smith also told him and 
others present that his son had called him and urged him not to 
change his vote in response to the pressure.\65\
---------------------------------------------------------------------------
    \65\ See Rep. Flake Dep. at pages 8, 12-13, 28.
---------------------------------------------------------------------------
    Representative Gil Gutknecht, who was also present at the 
Hunan Dynasty gathering, told the Investigative Subcommittee 
that the ``story'' \66\ Representative Smith told the group 
gathered at the restaurant was the most compelling one he 
recalled being recounted that evening. Representative Gutknecht 
told the Investigative Subcommittee that Representative Smith 
said he had received a call or calls in which he was offered 
``a carrot and stick'' \67\ regarding his son.\68\ 
Representative Gutknecht remembered Representative Smith 
telling the group that if he voted for the bill, there would be 
people who would like to help his son in his election effort. 
But, Representative Gutknecht recalled, Representative Smith 
said he had been told that if he voted against it, there would 
be people who would make his son's task of succeeding him very 
difficult. In the Washington Post article dated December 23, 
2003 (see Exhibit 12), Representative Gutknecht was quoted as 
having said that ``people from leadership'' had offered 
Representative Smith money. With regard to the phrase ``people 
from leadership,'' Representative Gutknecht told the 
Investigative Subcommittee that he believes Representative 
Smith ``used that term in the conversation at the Chinese 
restaurant.'' \69\
---------------------------------------------------------------------------
    \66\ See Deposition of Representative Gil Gutknecht (hereinafter 
Rep. Gutknecht Dep.) at page 10.
    \67\ See Rep. Gutknecht Dep. at page 10.
    \68\ Representative Smith also used the analogy to a ``carrot'' and 
a ``stick'' in this way during a radio interview he did on a Michigan 
radio station. See Exhibit 7.
    \69\ See Rep. Gutknecht Dep. at pages 14-15.
---------------------------------------------------------------------------
    Although Representative Gutknecht does not recall 
Representative Smith mentioning a specific sum of money being 
offered for his son's campaign, he told the Investigative 
Subcommittee that Representative Smith made statements that 
left the group with the impression that large sums of money had 
been at least referred to if not offered as part of the effort 
to persuade him to vote in favor of the legislation. 
Representative Gutknecht also said he believed, based on what 
Representative Smith said, that the offer had to have come from 
someone in leadership who had the ability to raise a 
substantial amount of money for Representative Smith's son's 
campaign. \70\
---------------------------------------------------------------------------
    \70\ See Rep. Gutknecht Dep. at pages 15-17.
---------------------------------------------------------------------------
    Representative Tom Tancredo was also present at the Hunan 
Dynasty gathering. He testified that at some point during the 
evening ``[Representative] Smith said they offered me $100,000 
. . . [or] he may have said they promised $100,000 if [he] 
voted the right way.\71\ Representative Tancredo further 
testified that he remembered Representative Smith ``explaining 
the fact that they were talking about the possibility that his 
son could receive $100,000 if he were to vote for the bill'' or 
``it could also have been that . . . he would not receive 
$100,000 if he voted no.\72\ Representative Tancredo told the 
Investigative Subcommittee that his recollection on the point 
of Representative Smith's use of the $100,000 figure was clear 
and specific. He stated that his memory had not been influenced 
by a columnist's use of the figure in a column published in the 
Chicago Sun-Times on November 27, 2003.\73\ Representative 
Tancredo said that Representative Smith did not identify the 
source of the $100,000 offer but that, based on what 
Representative Smith had said, Representative Tancredo believed 
the offer was made by lobbyists. Representative Tancredo told 
the Investigative Subcommittee his inference that the offer was 
made by lobbyists was based on his belief that only large 
industry lobbyists would have ready access to as large a sum of 
money as $100,000 to be donated to a campaign.
---------------------------------------------------------------------------
    \71\ See Rep. Tancredo Dep. at pages 15-16.
    \72\ See Rep. Tancredo Dep. at page 16.
    \73\ As previously noted, the sum of $100,000 was cited as having 
been offered to Representative Smith in a Chicago Sun-Times column 
dated November 27, 2003. (See Exhibit 5) Representative Tancredo told 
the Investigative Subcommittee that he was not the source of 
information about the $100,000 figure cited in the column. See Rep. 
Tancredo Dep. at page 20.
---------------------------------------------------------------------------
    Representative Tom Feeney, who was also present at the 
Hunan Dynasty restaurant gathering, stated that during the 
gathering Representative Smith ``suggested'' \74\ that 
pharmaceutical companies were going to work against his son's 
campaign if Representative Smith voted against the Medicare 
bill. Representative Feeney recalled Representative Smith 
saying that when he told his son about the situation, Brad 
Smith had told him to do what was right regardless of what was 
said about his campaign. Representative Feeney indicated that, 
although he could not recall whether Representative Smith 
specifically said that pharmaceutical companies had made the 
offer, whatever term Representative Smith used had created the 
impression in Representative Feeney's mind that the 
pharmaceutical industry was behind the combined offer and 
threat.\75\
---------------------------------------------------------------------------
    \74\ See Rep. Feeney Dep. at pages 21-22.
    \75\ Representative Feeney told the Investigative Subcommittee that 
as he listened to Representative Smith that evening at Hunan Dynasty, 
it occurred to him that Representative Smith might have been referring 
to his conversation with Jason Roe, although it seemed to him that 
Representative Smith was characterizing their conversation in a much 
more ``aggressive'' way than had been described by Mr. Roe. 
Representative Feeney said: ``I didn't know for sure that he was 
talking about Jason's conversation or Jason's conversation alone, 
because . . . Nick's characterization of the conversation, the way he 
described it to the group was a lot more aggressive and assertive than 
what Jason told me he had relayed to Nick, a whisper down the lane type 
of thing.'' See Rep. Feeney Dep. at page 22.
---------------------------------------------------------------------------
    Representative Smith told the Investigative Subcommittee 
that he recalls telling the group at Hunan Dynasty that efforts 
to persuade him to change his vote on the Medicare legislation 
were ``about as tough as I've ever had it because it involves 
my son Brad. That there had been offers of big-time support for 
Brad's campaign, offers of endorsements by leadership'' \76\ 
and that, consequently, his vote on the Medicare legislation 
would be ``a tough decision.'' \77\ He also recalls telling the 
group: ``I'm sticking to my guns on voting no against the bill. 
And what's nice for me is Brad left me a message saying, Stick 
to your guns, I don't want to go to Congress that way.'' \78\ 
Representative Smith also recalled telling the group at the 
restaurant that he had been told his son could receive an NRCC 
endorsement if he voted in favor of the Medicare legislation.
---------------------------------------------------------------------------
    \76\ See Rep. N. Smith Dep. at pages 109-110.
    \77\ See Rep. N. Smith Dep. at page 110.
    \78\ See Rep. N. Smith Dep. at page 110.
---------------------------------------------------------------------------
    Brad Smith testified that his father told him about the 
events at the Hunan Dynasty gathering the night before the 
Medicare vote during a face-to-face conversation they had in 
Michigan the Saturday afternoon following the vote. According 
to Brad Smith, his father told him that when he told the people 
at the gathering that ``Brad had said, stick to my guns . . . 
the room erupted in applause.'' \79\
---------------------------------------------------------------------------
    \79\ See B. Smith Dep. at page 71. Representative Smith testified 
that he had no recollection of speaking with his son in Michigan the 
Saturday afternoon following the Medicare vote. He said that if his 
wife and son had not told him about their conversation, he would not 
have known that it occurred. See Rep. N. Smith Dep. at pages 150, 195.
---------------------------------------------------------------------------
    Representative Smith said his remarks to the group at Hunan 
Dynasty were based on the two telephone calls he received from 
his former staff member, Jason Roe, and the offer of a personal 
endorsement for his son that he had received from the Majority 
Leader. Representative Smith stated that neither the Majority 
Leader nor Mr. Roe mentioned a specific dollar amount in 
connection with any discussion of his vote on the Medicare 
legislation. He did not recall telling the group at Hunan 
Dynasty that he had been offered $100,000 or any other specific 
sum of money.\80\
---------------------------------------------------------------------------
    \80\ See Rep. N. Smith Dep. at pages 109-110.
---------------------------------------------------------------------------
    After reading press reports published in the wake of his 
allegations of wrongdoing in connection with the vote on the 
Medicare Prescription Drug Act, including the column published 
in the Chicago Sun-Times on November 27, 2003, Representative 
Smith called Neil Bradley, the RSC's Executive Director who had 
also been present at the Hunan Dynasty gathering, and asked him 
if he recalled Representative Smith referring to the $100,000 
figure when he spoke to the group at the restaurant. Mr. 
Bradley told Representative Smith that he did not cite the 
figure during his comments to the group. In an interview 
conducted by counsel to the Investigative Subcommittee, Mr. 
Bradley similarly stated that he had not heard Representative 
Smith cite the $100,000 figure during his remarks to the 
group.\81\
---------------------------------------------------------------------------
    \81\ See Transcript of Interview of Neil Bradley (hereinafter 
Bradley Int.) at page 18. Guy Short, Chief of Staff to Representative 
Musgrave, was also interviewed by Investigative Subcommittee counsel. 
Mr. Short said during the interview that there were ``many different 
conversations going on all at the same time'' during the gathering at 
Hunan Dynasty and that he did not hear any of the statements made by 
Representative Nick Smith that had been described by Representatives 
Tancredo, Gutknecht or Feeney. See Transcript of Interview of Guy Short 
(hereinafter Short Int.) at pages 15-19.
---------------------------------------------------------------------------
    Representative Smith told the Investigative Subcommittee 
that, regardless of what he might have said at Hunan Dynasty or 
in subsequent media comments, no one in fact offered him 
$100,000 or any other specific sum of money in exchange for 
changing his vote to one in favor of the Medicare 
legislation.\82\
---------------------------------------------------------------------------
    \82\ See Rep. N. Smith Dep. at pages 16, 77.
---------------------------------------------------------------------------
    The gathering at the Hunan Dynasty restaurant appears to 
have broken up some time after 10:00 p.m. on Friday, November 
21. Members who were still at the restaurant when the gathering 
ended remembered leaving because a vote had been called.\83\
---------------------------------------------------------------------------
    \83\ The restaurant apparently stayed open for some period of time 
after its normal closing time in order to accommodate the Members. The 
record indicates that a vote was called for 11:19 p.m. on Friday, 
November 21. (See Exhibit 20).
---------------------------------------------------------------------------

 B. EVENTS ON THE HOUSE FLOOR DURING AND IMMEDIATELY FOLLOWING THE VOTE

    As noted, the vote on the Medicare legislation was called 
at 3:00 a.m. on Saturday, November 22 and was held open until 
approximately 5:51 a.m. Representative Smith recalls casting 
his ``no'' vote early on during the time that the vote was 
open. He considered voting and leaving the floor early as well 
but then he ``decided if I was voting against the conference I 
should stay there and take my licks.'' \84\ Representative 
Smith also decided against staying in the company of other 
Republicans who had voted against the bill, as some of his 
fellow members of the RSC chose to do. Representative Smith 
told the Investigative Subcommittee that after he cast his vote 
he sat ``approximately eight rows up in the northwest quadrant 
of the Republican area.'' \85\
---------------------------------------------------------------------------
    \84\ See Rep. N. Smith Dep. at page 49.
    \85\ See Rep. N. Smith Dep. at page 50.
---------------------------------------------------------------------------
    Representative Smith told the Investigative Subcommittee 
that during the time the vote was open, between 20 and 30 
Members approached him or, while in close proximity to him, 
said things directed at him that were intended to persuade him 
to change his vote. All of these contacts occurred after 
Representative Smith had already cast his vote and all but one 
of the contacts occurred while the vote was open.\86\
---------------------------------------------------------------------------
    \86\ Jason Roe told the Investigative Subcommittee that 
Representative Smith called him from Michigan during the day on 
Saturday November 22 and recounted various incidents that had occurred 
on the House floor while the vote was open. Mr. Roe recalled that 
during the conversation, Representative Smith said that Representative 
David Dreier had offered to help Representative Smith's daughter find a 
job as an actress in Hollywood. (See Roe Dep. at page 47) 
Representative Smith did not recall this November 22 telephone 
conversation with Mr. Roe and denied that Representative Dreier had 
made an offer to help his daughter in connection with the vote on the 
Medicare legislation. (See Rep. N. Smith Dep. at pages 149-150.) 
Representative Dreier similarly told the Investigative Subcommittee 
that he had made no such offer in connection with the vote. See 
Deposition of Representative David Dreier (hereinafter Rep. Dreier 
Dep.) at pages 10-11.
---------------------------------------------------------------------------

1. Representative Smith's Interaction with Speaker Hastert and 
        Secretary Tommy Thompson

    The Investigative Subcommittee became aware of information 
that Representative Smith had been seen talking with Speaker J. 
Dennis Hastert and Health and Human Services Secretary Tommy 
Thompson on the House floor while the vote on the Medicare bill 
was open. For this reason, the Investigative Subcommittee 
requested information from the Speaker and Secretary Thompson 
regarding their communications with Representative Smith.
    Representative Smith testified that he recalled speaking 
with Speaker Hastert and Secretary Tommy Thompson while the 
vote was open. In a written response to interrogatories 
provided voluntarily and under penalty of perjury, Secretary 
Thompson informed the Investigative Subcommittee that he was in 
the House cloakroom while the vote was open and had been asked 
to be available to answer questions from Members regarding the 
Medicare legislation.\87\ He stated that someone asked him to 
speak to Representative Smith ``because he or she thought that 
Representative Smith could be convinced to change his mind and 
vote in favor'' \88\ of the legislation. He does not recall who 
asked him to speak to Representative Smith. Secretary Thompson 
stated that he spoke briefly with Representative Smith on the 
House floor, ``asking Representative Smith if he had any 
questions on the bill that I could answer, or if there was any 
information that I could provide to him. He said no.'' \89\ 
Secretary Thompson also asked Representative Smith ``if there 
was any chance that he would vote for the bill. He said no.'' 
\90\ While the Secretary was ``in the presence of 
Representative Smith,'' the Speaker joined them.\91\
---------------------------------------------------------------------------
    \87\ In his response to the Investigative Subcommittee's request 
for information, Secretary Thompson stated that he believed staff from 
the Department of Health and Human Services and from the White House 
were also in the cloakroom while the vote was open. Exhibit 17 at pages 
2-3.
    \88\ See Exhibit 17 at page 4.
    \89\ See Exhibit 17 at page 4.
    \90\ See Exhibit 17 at page 4.
    \91\ See Exhibit 17 at page 4.
---------------------------------------------------------------------------
    The Speaker told the Investigative Subcommittee that he 
prevailed on Representative Smith to vote in favor of the 
legislation based on the bill's merits. The Speaker testified 
that he spoke with Representative Smith for about ten minutes. 
He described their discussion as being ``pretty much focused on 
policy,'' \92\ including discussion of cost-containment 
measures the Speaker said he knew would be of interest to 
Representative Smith.
---------------------------------------------------------------------------
    \92\ See Deposition of Speaker J. Dennis Hastert (hereinafter 
Speaker Dep.) at page 11.
---------------------------------------------------------------------------
    Knowing that Representative Smith was going to retire after 
the 108th Congress, the Speaker recalls telling him that he had 
a legacy in the House of being very fiscally conservative and 
that if he wanted to pass on a legacy to his children and 
grandchildren, a vote in favor of the Medicare legislation 
would be a good vote for him because, the Speaker believed, the 
legislation started to ``bend the cost curve'' \93\ on 
Medicare. The Speaker also recalls that, because he presumed 
Representative Smith would be interested in them, he discussed 
health savings accounts and mentioned that this would be the 
only chance for Representative Smith to vote on health savings 
accounts.
---------------------------------------------------------------------------
    \93\ See Speaker Dep. at page 10.
---------------------------------------------------------------------------
    Representative Smith told the Investigative Subcommittee 
that he recalls the Speaker telling him a vote in favor of the 
legislation would ``be good for the Republican Party'' and 
``good for the President'' and ``that if we didn't vote this 
one then it could be . . . a real possibility that even a more 
serious vote'' would come ``from the Democrats'' that could 
``get to the floor and be passed.'' \94\ According to 
Representative Smith, neither the Speaker's comments nor those 
of Secretary Thompson formed any part of the basis for his 
subsequent allegations that ``bribes and special deals'' were 
offered to him in an effort to convince him to change his 
vote.\95\
---------------------------------------------------------------------------
    \94\ See Rep. N. Smith Dep. at page 56.
    \95\ In the notes in his diary calendar, Representative Smith 
wrote: ``Sec. T. Thompson and Speaker D. Hastert sat next to me and ask 
'personal' favor--.'' See Exhibit 19. The Speaker testified that in 
early December 2003, following the vote on the Medicare bill, he had 
occasion to ask Representative Smith about the allegations or 
wrongdoing he had made in connection with the vote. The Speaker said 
that Representative Smith told him ``it's just a misunderstanding.'' 
See Speaker Dep. at page 22. The Speaker also received a handwritten 
note from Representative Smith after the Medicare vote in which 
Representative Smith wrote that ``[i]t was so difficult to say no to 
someone I respect so much yesterday morning. . . . On the drug 
entitlement, we both felt strongly about our positions.'' See Exhibit 
23.
---------------------------------------------------------------------------

2. Representative Smith's Interaction with Representative William 
        Thomas and Representative Nancy Johnson

    The Investigative Subcommittee also became aware of 
information that Representative William Thomas, Chairman of the 
House Ways and Means Committee, and Representative Nancy 
Johnson, Chair of the Ways and Means Health Subcommittee, spoke 
with Representative Smith on the House floor while the vote on 
the Medicare legislation was open. For this reason, the 
Investigative Subcommittee requested testimony from 
Representative Thomas and Representative Johnson regarding 
their communications with Representative Smith.
    Chairman Thomas told the Investigative Subcommittee that he 
spoke to Representative Smith for ten or fifteen seconds early 
during the period in which the Medicare vote was open. He 
recalls telling Representative Smith ``[W]e need your vote, I'd 
like to have you vote for [the Medicare bill].'' \96\ 
Representative Smith said no and, having received what he felt 
was a ``hard no,'' \97\ Representative Thomas did not speak 
with Representative Smith again while the vote was open. 
Representative Smith told the Investigative Subcommittee that 
he did not recall speaking with Chairman Thomas at all while 
the vote was open.
---------------------------------------------------------------------------
    \96\ See Deposition of Representative William Thomas (hereinafter 
Rep. Thomas Dep.) at page 8.
    \97\ See Rep. Thomas Dep. at page 9.
---------------------------------------------------------------------------
    Representative Nancy Johnson testified that she recalls 
having spoken with Representative Smith ``probably . . . two, 
maybe three times, about changing his vote'' \98\ on the Medicare bill 
while the vote was open. Representative Johnson told the Investigative 
Subcommittee that Representative Smith ``felt very, very strongly about 
the budget implications and his vote was based on that.'' \99\ She told 
the Investigative Subcommittee that, as a result, she ``spent a great 
deal of time talking to him about how [she] felt the structure of the 
bill would control Medicare spending in the future, and, therefore, was 
a prodeficit reduction vote.'' \100\ In another instance while the vote 
was open, Representative Johnson talked to Representative Smith ``about 
the problem with the hospitals'' \101\ and the fact that the 
legislation was aimed at ``fixing a number of those problems.'' \102\ 
Representative Johnson said that she ``took various lines of reasoning 
to get him to change his vote'' \103\ but Representative Smith remained 
a no vote.
---------------------------------------------------------------------------
    \98\ See Deposition of Representative Nancy Johnson (hereinafter 
Rep. N. Johnson Dep.) at page 6.
    \99\ See Rep. N. Johnson Dep. at page 6.
    \100\ See Rep. N. Johnson Dep. at page 6.
    \101\ See Rep. N. Johnson Dep. at page 6.
    \102\ See Rep. N. Johnson Dep. at page 6.
    \103\ See Rep. N. Johnson Dep. at page 6.
---------------------------------------------------------------------------

3. Representative Smith's Interaction with Representative Candice 
        Miller

    During the course of its inquiry, the Investigative 
Subcommittee also obtained information that Representative 
Candice Miller and Representative Smith were involved in an 
exchange on the House floor while the Medicare vote was open. 
The Investigative Subcommittee therefore requested that 
Representative Miller provide testimony.
    Representative Miller told the Investigative Subcommittee 
that the first time she spoke to Representative Smith about his 
vote on the Medicare legislation was on the House floor while 
the vote was open, after Representative Smith had cast his 
vote. She estimated that she spoke with him during the first 
hour of the time that the vote was held open. Representative 
Miller saw Representative Smith's no vote on the board and she 
``didn't like the way that he voted.'' \104\ Representative 
Miller testified that, on her own initiative, she approached 
Representative Smith and said words to the effect of: ``Is this 
how you're going to vote; or, This is how you're going to vote? 
And he said, Obviously.'' \105\
---------------------------------------------------------------------------
    \104\ See Deposition of Representative Candice Miller (hereinafter 
Rep. C. Miller Dep.) at page 9.
    \105\ See Rep. C. Miller Dep. at page 9.
---------------------------------------------------------------------------
    Representative Miller recalled that she responded by saying 
words to the effect of: ``Well, I hope your son doesn't come to 
Congress, or I'm not going to support your son, or something to 
that effect.'' \106\ Representative Smith then ``rose up out of 
his seat and said, You get out of here.'' \107\ That was the 
end of the interaction between the two Members. Representative 
Miller estimated that the exchange lasted for about ten 
seconds. She told the Investigative Subcommittee that she did 
not at any point ask Representative Smith to change his vote on 
the Medicare legislation.
---------------------------------------------------------------------------
    \106\ See Rep. C. Miller Dep. at page 9.
    \107\ See Rep. C. Miller Dep. at page 9.
---------------------------------------------------------------------------
    Representative Miller told the Investigative Subcommittee 
that she approached Representative Smith after she saw that he 
had voted against the Medicare bill because she was angry he 
had voted against legislation that, in her view, would help 
``poor seniors'' get ``a break on prescription drugs.'' \108\ 
She told the Investigative Subcommittee that Representative 
Smith was obviously angered by her remarks about his son. She 
testified that Representative Smith was ``constantly asking 
[her] to support his son and help his son'' \109\ because she 
had been a statewide officeholder in their home state of 
Michigan before she was elected to Congress and had been ``the 
highest vote-getter in Michigan history.'' \110\ Representative 
Miller noted that she ``probably could have some impact on his 
son's election.'' \111\ She told the Investigative Subcommittee 
that, even after the Medicare vote, Representative Smith 
invited her to a fundraiser for his son. \112\
---------------------------------------------------------------------------
    \108\ See Rep. C. Miller Dep. at page 10.
    \109\ See Rep. C. Miller Dep. at page 10.
    \110\ See Rep. C. Miller Dep. at page 11.
    \111\ See Rep. C. Miller Dep. at page 11.
    \112\ Representative Miller told the Investigative Subcommittee 
that she had not in fact gotten involved in the Michigan Seventh 
District primary, nor had she worked against Brad Smith in any 
capacity, after the Medicare vote. See Rep. C. Miller Dep. at pages 11, 
16.
---------------------------------------------------------------------------
    Representative Smith denied ever having asked 
Representative Miller for support for his son's campaign. He 
also denied inviting her to a fundraiser at any time after the 
Medicare vote. Representative Smith's recollection of his 
interaction with Representative Miller on the House floor while 
the Medicare vote was open was substantially similar to 
Representative Miller's recollection except in one respect. 
Representative Smith told the Investigative Subcommittee that 
Representative Miller specifically threatened to work against 
his son if he did not change his vote. Representative Smith's 
recollection was that Representative Miller ``came up and said 
something like, I haven't been involved in this campaign 
before, but if you don't change your vote, I'll get involved, 
and I'll make sure Brad isn't elected.'' \113\
---------------------------------------------------------------------------
    \113\ See Rep. N. Smith Dep. at page 58. In his diary calendar, 
Representative Smith wrote: ``Candice M. said she would work against B. 
if I voted no /// Got mad.'' See Exhibit 19.
---------------------------------------------------------------------------
    Representative Howard P. (``Buck'') McKeon was sitting near 
Representative Smith during the time of his interaction with 
Representative Miller. Representative McKeon told the 
Investigative Subcommittee that he did not believe 
Representative Miller linked a demand that Representative Smith 
change his vote to her statement that she would work against 
his son Brad's campaign. Representative McKeon recalls that 
Representative Miller ``came up and said, you are really going 
to do this, Nick? And he said yeah. . . . [S]he got mad and she 
said, well, I'm going to do all I can to beat your son. And 
then they kind of swore at each other a little bit. It was not 
pleasant. And then she left.'' \114\
---------------------------------------------------------------------------
    \114\ See Deposition of Representative Howard ``Buck'' McKeon 
(hereinafter Rep. McKeon Dep.) at page 7.
---------------------------------------------------------------------------
    Representative Smith, Representative Miller and 
Representative McKeon recalled that Representative Curt Weldon 
was also sitting next to Representative Smith during his 
interaction with Representative Miller. Each of these Members 
recalledRepresentative Weldon trying to calm Representative 
Smith down after he got to his feet in response to Representative 
Miller's comments. However, although he remembers having to calm him at 
some point during the open vote, Representative Weldon told the 
Investigative Subcommittee that he did not recall the details of the 
interaction between Representatives Miller and Smith.\115\
---------------------------------------------------------------------------
    \115\ See Deposition of Representative Curt Weldon (hereinafter 
Rep. Weldon Dep.) at pages 6-8.
---------------------------------------------------------------------------

4. Representative Smith's Interaction with Representative James T. 
        Walsh

    While Representative McKeon was sitting near Representative 
Smith, Representative James Walsh also approached 
Representative Smith. Representative Walsh told the 
Investigative Subcommittee that he had ``worked very hard'' on 
the Medicare bill and was ``pretty invested in the success of 
[the] legislation'' because it would have a ``great impact on 
[his] community.'' \116\ Representative Walsh noted that his 
district ``had already lost one hospital . . . [that] was in 
bankruptcy'' and had another hospital ``on the ropes.'' \117\ 
He believed that the Medicare legislation would improve the 
situation in his home district.
---------------------------------------------------------------------------
    \116\ See Deposition of Representative James T. Walsh (hereinafter 
Rep. Walsh Dep.) at page 6.
    \117\ See Rep. Walsh Dep. at page 6.
---------------------------------------------------------------------------
    Most Members had already voted and Representative Walsh was 
feeling ``frustrated'' and ``impatient'' waiting for the 
outcome of the vote.\118\ These feelings led him to approach 
Representative Smith, knowing that Representative Smith had 
voted against the bill. Representative Walsh said that he made 
the decision to approach Representative Smith on his ``own 
initiative.'' \119\ He asked Representative Smith ``[C]an't you 
help us on this one?'' \120\ Representative Smith said no and 
Representative Walsh responded by saying words to the effect 
of: `` [W]ell . . . then, Nick, maybe you ought to think about 
sending me back that check that I sent to your son,'' referring 
to a campaign contribution Representative Walsh believed he had 
already made to Representative Smith's son's campaign.\121\
---------------------------------------------------------------------------
    \118\ See Rep. Walsh Dep. at pages 6, 9.
    \119\ See Rep. Walsh Dep. at page 6.
    \120\ See Rep. Walsh Dep. at page 6.
    \121\ See Rep. Walsh Dep. at page 6.
---------------------------------------------------------------------------
    Representative Walsh explained that, approximately ``3 or 4 
or 5 weeks prior'' \122\ to the time of the Medicare vote, 
Representative Smith had asked him to contribute to Brad 
Smith's campaign. He believed that he had between that time and 
the time of the Medicare vote instructed his campaign to make a 
$1,000 contribution to Brad Smith's campaign. At the time of 
the Medicare vote, he believed that the contribution had been 
made.
---------------------------------------------------------------------------
    \122\ See Rep. Walsh Dep. at page 6.
---------------------------------------------------------------------------
    Representative Walsh told the Investigative Subcommittee 
that he regretted making the statements to Representative Smith 
that he made during the Medicare vote. Representative Walsh 
said that he believed ``it was a stupid thing to say'' \123\ 
and that he had not planned to say it when he approached 
Representative Smith. Representative Walsh attributed his 
remarks to Representative Smith to ``a combination of 
frustration and fatigue and a desire to get the bill passed.'' 
\124\
---------------------------------------------------------------------------
    \123\ See Rep. Walsh Dep. at page 7.
    \124\ See Rep. Walsh Dep. at page 7.
---------------------------------------------------------------------------
    Representative Walsh told the Investigative Subcommittee 
that on the Monday or Tuesday after Congress was back in 
session after the Medicare vote, he ran into Representative 
Smith, who told him that he had not in fact made the 
contribution to Brad Smith's campaign. Representative Walsh 
told the Investigative Subcommittee that he responded to 
Representative Smith by saying that what he had said on the 
floor was ``stupid'' and that he was going to make the 
contribution to Brad Smith's campaign anyway.\125\
---------------------------------------------------------------------------
    \125\ See Rep. Walsh Dep. at page 7-8.
---------------------------------------------------------------------------
    Representative Smith's recollection of his interaction with 
Representative Walsh while the Medicare vote was open differed 
somewhat from Representative Walsh's recollection. 
Representative Smith told the Investigative Subcommittee that, 
prior to the Medicare vote, Representative Walsh had promised 
to contribute $1,000 to Brad Smith's campaign but that he told 
him while the vote was open that he was not going to make the 
contribution.\126\
---------------------------------------------------------------------------
    \126\ See Rep. N. Smith Dep. at page 151.
---------------------------------------------------------------------------
    Federal Election Commission records of disbursements from 
Representative Walsh's campaign indicate that on December 11, 
2003, his campaign made a $1,000 contribution to Brad Smith's 
campaign,\127\ thus apparently corroborating Representative 
Walsh's recollection of the interactions he had with 
Representative Smith during and subsequent to the Medicare 
vote.\128\ In addition, Representative McKeon recalls 
witnessing the exchange between Representatives Smith and 
Walsh. He told the Investigative Subcommittee, as 
Representative Walsh had, that Representative Walsh asked for 
his contribution back rather than saying he would not make the 
contribution.\129\
---------------------------------------------------------------------------
    \127\ See Exhibit 24.
    \128\ According to the record of roll call votes, the next votes 
after November 22 were called on Monday, December 8, 2003. See Exhibit 
20 If Representative Walsh saw Representative Smith after Members 
returned to the House on Monday December 8 or Tuesday December 9, he 
would have made his contribution to Brad Smith's campaign within two or 
three days after apologizing to Representative Smith.
    \129\ See Rep. McKeon Dep. at page 9.
---------------------------------------------------------------------------

5. Representative Smith's Interaction with Representative Randy 
        ``Duke'' Cunningham

    Representative Cunningham testified that, at some point 
while the vote on the Medicare legislation was open, someone on 
the whip team told him the names of various Members who were 
expected to vote against the legislation. Representative 
Cunningham told the Investigative Subcommittee that, based on 
that information, he approached several Members who were 
expected no votes to try to convince them to vote in favor of 
the bill. When he approached Representative Nick Smith, members 
of leadership were already sitting with him. Representative 
Cunningham took a seat nearthe group, ``three or four, maybe 
five people back'' \130\ from where Representative Smith was sitting. 
At some point, Representative Cunningham testified, Secretary Thompson 
was also part of the group talking to Representative Smith.
---------------------------------------------------------------------------
    \130\ See Rep. Cunningham Dep. at page 13.
---------------------------------------------------------------------------
    Representative Cunningham told the Investigative 
Subcommittee that he wanted to hear the arguments in favor of 
the legislation that were being made to Representative Smith so 
that he could use them to persuade others. He recalls Majority 
Leader DeLay, Speaker Hastert and Secretary Thompson being 
among the group talking with Representative Smith at that time. 
He recalled hearing them present Representative Smith with 
arguments in favor of the legislation including ``specifics on 
why the bill was good . . . why we had wanted the bill to 
pass.'' \131\ They argued that the bill ``was good for seniors; 
that we had invested a great deal of money''; that it ``was a 
compromise between the Republicans and Democrats [;] that 
originally they wanted this amount of money to go into it and 
we actually added more money to it.'' \132\ Representative 
Cunningham told the Investigative Subcommittee that while he 
was listening, he heard no one mention Representative Smith's 
son's campaign. \133\
---------------------------------------------------------------------------
    \131\ See Rep. Cunningham Dep. at page 15.
    \132\ See Rep. Cunningham Dep. at page 15.
    \133\ If Secretary Thompson was part of the group talking to 
Representative Smith when Representative Cunningham was observing them, 
it appears that Representative Cunningham would not have overheard the 
exchanges between Representative Walsh and Representative Smith or 
between Representative Candice Miller and Representative Smith that 
related to Representative Smith's son. Representative McKeon told the 
Investigative Subcommittee that he recalls Representative Smith's 
interactions with Representative Miller and Representative Walsh 
occurring prior to the time that the Secretary approached 
Representative Smith. See Rep. McKeon Dep. at pages 9-10.
---------------------------------------------------------------------------
    After listening to the discussion involving Representative 
Smith for some period of time, and while the vote was still 
open, Representative Cunningham recalls remarking to 
Representative Smith ``Nick, you know, Nancy Pelosi wants this 
bill to go down.'' \134\
---------------------------------------------------------------------------
    \134\ See Rep. Cunningham Dep. at page 13
---------------------------------------------------------------------------
    Representative Smith did not recall specifically what 
Representative Cunningham said to him while the vote was open. 
However, he told the Investigative Subcommittee that ``Duke 
Cunningham said something very briefly that . . . that led me 
to believe that he was suggesting that he would also work 
against Brad in his campaign.'' \135\
---------------------------------------------------------------------------
    \135\ See Rep. N. Smith at pages 62-63.
---------------------------------------------------------------------------
    Representative Cunningham told the Investigative 
Subcommittee that the only reference to Representative Smith's 
son's campaign that he heard the morning of the Medicare vote 
was one that he himself made after the vote was closed. 
Representative Cunningham told the Investigative Subcommittee 
that after most Members had left the House floor, and as he was 
walking out past Representative Smith, he said words to the 
effect of: ``[W]ell, if your son is as hard headed as you, I 
will be damned if I will vote for him or help him.'' \136\
---------------------------------------------------------------------------
    \136\ See Rep. Cunningham Dep. at page 16.
---------------------------------------------------------------------------
    Representative Smith told the Investigative Subcommittee 
that after the vote was over and Members were leaving the 
floor, Representative Cunningham walked by him and waved what 
appeared to be a billfold at him while saying something to the 
effect of: ``[W]e've got $10,000 already . . . to make sure 
your son doesn't get elected.'' \137\ When asked whether he 
waved a wallet or checkbook at Representative Smith while 
making such comments, Representative Cunningham said: ``I don't 
remember if I waved the checkbook. I don't remember if I did or 
not. But I don't know. But I'm sure about that not supporting 
him.'' \138\ Representative Cunningham denied mentioning 
$10,000 or any other specific sum of money in connection with 
his remarks about not supporting Brad Smith's candidacy.
---------------------------------------------------------------------------
    \137\ See Rep. N. Smith Dep. at page 63.
    \138\ See Rep. Cunningham Dep. at page 39.
---------------------------------------------------------------------------
    Representative Cunningham told the Investigative 
Subcommittee that he made those final remarks as he was leaving 
the House floor in part because he ``believed in the bill'' and 
was ``disappointed'' that Representative Smith had voted 
against it despite ``all the information that he had been 
given'' and the efforts that had been made by leadership and by 
Secretary Thompson to convince him to vote for the bill. \139\ 
Representative Cunningham testified that he regretted making 
the comments about Representative Smith's son almost 
immediately after having said them. He told the Investigative 
Subcommittee: ``I remember even thinking as I walked off the 
floor I shouldn't have said that to Nick in the heat of 
things.'' \140\ Representative Cunningham and Representative 
Smith both testified that Representative Cunningham apologized 
for making remarks about Representative Smith's son the first 
time he saw Representative Smith after Congress was back in 
session.
---------------------------------------------------------------------------
    \139\ See Rep. Cunningham Dep. at page 24.
    \140\ See Rep. Cunningham Dep. at page 41.
---------------------------------------------------------------------------

6. Representative Smith's Contacts with Unidentified Members

    Representative Smith told the Investigative Subcommittee 
that he could not recall every one of the 20 to 30 Members who 
spoke to him on the House floor while the Medicare vote was 
open.\141\ He said, for example, that someone had said that if 
he changed his vote to support the legislation, three out of 
the five members of House leadership would be willing to go to 
his home district to campaign for his son. Representative Smith 
testified:
---------------------------------------------------------------------------
    \141\ A February 12, 2004 Detroit News article stated that 
Representative Smith ``estimated that between 40 and 60 lawmakers 
pressured him'' while the vote was open. (See Exhibit 13) In his 
December 17, 2003 letter to the Chairman and Ranking Member of the 
Standards Committee, Representative Smith stated that he had 
``conversations with at least 30-40 members of Congress.'' (See Exhibit 
11) Representative Smith told the Investigative Subcommittee that that 
the estimate of 20-30 Members was the more accurate estimate. He said 
that he did not recall telling the Detroit News that he had been 
approached by between 40 and 60 lawmakers.

          A lot of it was fairly--look, Nick, help us if you 
        can. Nick, this could--this could be important to you 
        and your son. From the more subtle to the more 
        aggressive, that, look, three of the five--it seems 
        like I remember somebody saying three of the five 
        leadership would be willing to come to Michigan to 
        campaign for your son. Somebody saying, look, you've 
        got a pharmaceutical--you've got two 
pharmaceuticalcompanies in your district. There is [sic] important to 
them.\142\

    \142\ See Rep. N. Smith Dep. at page 68.
---------------------------------------------------------------------------
    Representative Smith testified that he could not recall 
specifically who made those comments. Representative Smith 
further testified that there seemed ``to be a constant stream 
of people coming by me to say, Nick, we really need your help 
on this one. Nick, this can be important to your future; and it 
can be important to your son's future. Nick--you know, just 
sort of a constant help us out on this one, and it can be 
important to you and your son.'' \143\ Various Members who 
appeared before the Investigative Subcommittee recalled seeing 
several people around Representative Smith at different points 
during the hours that the vote was open.\144\
---------------------------------------------------------------------------
    \143\ See Rep. N. Smith Dep. at pages 70-71.
    \144\ Staff counsel to the Investigative Subcommittee reviewed a C-
SPAN videotape of activity in the House chamber while the vote on the 
Medicare legislation was open. After the first approximately 15 minutes 
of the time that the vote was held open, the camera remained focused on 
the other side of the chamber from where Representative Smith was 
sitting.
---------------------------------------------------------------------------

C. REPRESENTATIVE SMITH'S ACTIONS AFTER THE VOTE AND HIS ALLEGATIONS OF 
                               WRONGDOING

    Representative Smith told the Investigative Subcommittee 
that after the vote was over, he felt ``beat . . . tired, 
physically and mentally. And angry, as you might guess.'' \145\ 
Representative Smith could not recall whether, after he left 
the House floor at the conclusion of the proceedings, he went 
home to his Washington apartment or if he went directly to his 
office in the Rayburn building to finish writing his weekly 
column. Representative Smith speculated that since he intended 
to finish the column, he probably went from the floor to his 
office without going to his apartment first.\146\
---------------------------------------------------------------------------
    \145\ See Rep. N. Smith Dep. at page 64.
    \146\ See Rep. N. Smith Dep. at pages 85-86.
---------------------------------------------------------------------------
    Representative Smith told the Investigative Subcommittee 
that he and his Chief of Staff had written the bulk of the 
November 23, 2003 column prior to the actual vote on the 
Medicare legislation.\147\ After the vote, Representative Smith 
himself added the first two paragraphs of the column in which 
he expressed publicly for the first time his allegations of 
wrongdoing in connection with the Medicare vote.
---------------------------------------------------------------------------
    \147\ In an interview conducted by Investigative Subcommittee 
staff, Kurt Schmautz, Representative Nick Smith's Chief of Staff, 
stated that he wrote the last four paragraphs of the column having to 
do with substantive aspects of the Medicare legislation on Friday, 
November 21, before the vote. Representative Smith made some revisions 
to what Mr. Schmautz had written and then added ``[m]ost of the stuff 
about Brad'' after the vote. (See Schmautz Int. at pages 31-32).
---------------------------------------------------------------------------
    As has been previously summarized (see Section I.A., 
above), in the first paragraph of the column, Representative 
Smith asserted that ``bribes and special deals were offered to 
convince members to vote yes.'' In the second paragraph of the 
column, he asserted that he had been ``targeted by lobbyists 
and the congressional leadership'' and that ``members and 
groups made offers of extensive financial campaign support and 
endorsements for my son Brad'' if he voted yes.\148\
---------------------------------------------------------------------------
    \148\ See Exhibit 1.
---------------------------------------------------------------------------
    When asked by the Investigative Subcommittee to state 
specifically what he was referring to when he said that 
``bribes and special deals'' had been offered, Representative 
Smith at first attempted to make a distinction between what he 
characterized as the legal definition of a bribe and the 
dictionary definition of a bribe. He, nevertheless, failed to 
state specifically what communications were made to him in 
connection with his vote on the Medicare legislation that would 
constitute a bribe under either a legal or a dictionary or 
colloquial definition of the word.
    Eventually, under persistent questioning from a Member on 
the Investigative Subcommittee, Representative Smith defined 
what he meant by the word ``bribe'' and what communications he 
was referring to when he used the word in his November 23, 2003 
column:

          A [By Representative Nick Smith] I think it 
        essentially says trying to offer somebody something for 
        doing something they might not otherwise do. But that's 
        certainly probably isn't the legal definition.

           *         *         *         *         *

          A I don't think what happened, trespassing on my 
        family, is the proper thing to do.

           *         *         *         *         *

          Q [by a Member of the Investigative Subcommittee] 
        . . .--[A]t least at some level, you used the word 
        bribe, not in the legal sense, in the dictionary sense, 
        what were you referring to?
          A Like I've said, that offers were made that were 
        very emotional involving the success or failure of my 
        son in his campaign to become a congressman.

           *         *         *         *         *

          Q So your use of the term bribes . . . isn't from 
        your conversations with Jason [Roe] but rather from 
        something that happened on the floor.
          A Correct.

           *         *         *         *         *

          A [by Representative Nick Smith] No. No. It's both a 
        threat--you know, I assume that leadership endorsements 
        of Brad and coming to the district, which I was told 
        could very well happen, means not only strong 
        Republican support for Brad in the Republican primary 
        but also probably in my mind means money. It means 
        fundraising.\149\
---------------------------------------------------------------------------
    \149\ See Rep. N. Smith Dep. at pages 45-46.

    When asked to identify by name individuals whose conduct 
had been inappropriate, Representative Smith said that anyone 
who had brought his family, specifically his son Brad, into any 
discussion of his vote on the Medicare legislation had 
``crossed the line of civility.'' \150\
---------------------------------------------------------------------------
    \150\ See Rep. N. Smith Dep. at page 119.
---------------------------------------------------------------------------
    Based on his testimony before the Investigative 
Subcommittee, Representative Smith characterized as bribes 
comments, some apparently made by Members he could not 
identify, referring to the possibility of endorsements from 
members of leadership for his son Brad. He found the conduct 
objectionable because the comments involved benefits, and in 
the case of perceived threats the suggestion of detriments, for 
his son's campaign based on Representative Smith's vote on the 
Medicare legislation. It was on this basis that Representative 
Smith made public allegations of serious wrongdoing in 
connection with the Medicare vote.

                    IV. Findings and Recommendations


                         A. SUMMARY OF FINDINGS

    As described in this Report, the Investigative Subcommittee 
carried out a full investigation into public statements made by 
Representative Nick Smith that he received communications 
linking support for his son's congressional candidacy with his 
vote on the Medicare Prescription Drug Act.
    The Investigative Subcommittee finds that the late-night 
timing of the vote, the extended period of time for which the 
vote was held open,\151\ and the unusual lobbying pressure on 
Members (which included the appearance on the House floor by a 
member of the President's Cabinet),\152\ exacerbated tensions 
on the House floor and contributed to an environment in which 
the usual traditions of civil discourse and decorum amongst 
Members were not always followed.
---------------------------------------------------------------------------
    \151\ The Investigative Subcommittee made no attempt to explore the 
history of the use of the device of the Chair holding a vote open to 
achieve a majority of votes for a particular piece of legislation. 
Based on its observations in the instant matter, however, regardless of 
when this device may have been utilized in the past, it is the view of 
the Investigative Subcommittee that the House is not well-served by 
repetition of this practice.
    \152\ The extraordinary involvement of the Executive Branch during 
House floor proceedings on the Medicare Prescription Drug Act included 
the presence on the House floor by the Secretary of Health and Human 
Services for the purpose of speaking directly with Members and 
answering their questions, and to assist in securing passage of the 
Medicare legislation. It is the view of the Investigative Subcommittee 
that the rules of the House should be revised so as to limit access to 
the House floor by Cabinet-level officials, except for such officials 
that are former Members. See House Rule IV, Clause 2(a)(12) (permitting 
``Heads of departments'' to ``the Hall of the House'').
---------------------------------------------------------------------------
    In addition, based on the record of evidence developed 
during its investigation, the Investigative Subcommittee 
reached the following conclusions regarding the public 
statements made by Representative Nick Smith:
    The Investigative Subcommittee finds that no group, 
organization, business interest, or corporation of any kind, or 
any individual affiliated with any such entities, offered 
$100,000 or any other specific sum of money to support the 
congressional candidacy of Brad Smith in order to induce 
Representative Nick Smith to vote in favor of the Medicare 
Prescription Drug Act.
    The Investigative Subcommittee finds that Representative 
Nick Smith was not offered an endorsement or financial support 
for his son's candidacy from the National Republican 
Congressional Committee in exchange for voting in favor of the 
Medicare Prescription Drug Act. There was no evidence adduced 
that any consideration or discussion of an endorsement was 
undertaken within the National Republican Congressional 
Committee with respect to the Republican primary election in 
the Seventh District of Michigan held on August 3, 2004. Any 
statements made by Representative Nick Smith in any setting 
related to an endorsement or other support for his son by the 
National Republican Congressional Committee appear to have been 
the result of speculation or exaggeration on the part of 
Representative Nick Smith and speculation on the part of Jason 
Roe, a former employee of Representative Smith.
    The Investigative Subcommittee finds that Representative 
Randall ``Duke'' Cunningham, Representative James T. Walsh, and 
Representative Candice Miller, acting independently from each 
other, and not in coordination with any other person or 
organization, made statements to Representative Nick Smith on 
the House floor after learning of Representative Nick Smith's 
vote in opposition to the Medicare Prescription Drug Act. Each 
of these statements referenced the congressional candidacy 
ofRepresentative Nick Smith's son. The statements made by 
Representative Walsh and Representative Miller were made before the 
vote on the Medicare Prescription Drug Act was closed. The statement 
made by Representative Cunningham was made after the vote on the 
Medicare Prescription Drug Act was concluded. All of the statements to 
Representative Nick Smith by these three Members were made after 
Representative Smith had cast his vote against the Medicare 
Prescription Drug Act.
    The Investigative Subcommittee finds that Majority Leader 
Tom DeLay, prior to the vote on the Medicare legislation on 
November 22, 2003 and most likely during a vote held on the 
evening of November 21, 2003, offered to endorse Brad Smith in 
exchange for Representative Nick Smith's vote in favor of the 
Medicare Prescription Drug Act.
    The Investigative Subcommittee finds that to the extent 
that other Members of the House or the Secretary of Health and 
Human Services attempted to persuade Representative Nick Smith 
to vote in favor of the Medicare Prescription Drug Act, such 
attempts did not involve any offers of improper ``special 
deals.'' Rather, such individuals attempted to persuade 
Representative Smith to vote in favor of the bill on the basis 
of policy or party loyalty.
    The Investigative Subcommittee finds that Representative 
Nick Smith failed to cooperate fully with the Chairman and 
Ranking Minority Member of the Committee on Standards of 
Official Conduct in their efforts to develop information 
informally about public statements made by Representative Nick 
Smith that he was the recipient of communications linking his 
vote on the Medicare Prescription Drug Act with support for his 
son's congressional candidacy.\153\ Given the nature of the 
allegations made publicly by Representative Smith, his complete 
cooperation still may not have eliminated the need for 
empanelment of this Investigative Subcommittee. Representative 
Nick Smith's early and complete cooperation, however, would 
have shortened and streamlined the Investigative Subcommittee's 
inquiry, and would have likely rendered unnecessary the 
testimony of several witnesses and other investigative steps 
undertaken by the Investigative Subcommittee.
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    \153\ Early and complete cooperation were lacking on the part of 
Representative Smith. He failed not only to provide the Committee with 
an explanation of inconsistent public statements made by him, but he 
did not respond to the specific request of the Chairman and Ranking 
Minority Member of the Committee that he identify the individual that 
he alleged was the impetus for his public statement that his son's 
campaign would receive ``substantial and aggressive support'' if he 
voted in favor of the Medicare Prescription Drug Act. Exhibit 8.
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    The Investigative Subcommittee finds that while 
Representative Nick Smith's initial public announcement of his 
allegations on November 23, 2003 may have been fueled by 
emotion and anger stemming from certain statements made to him 
by other Members in connection with his vote on the Medicare 
Prescription Drug Act, he failed to exercise reasonable 
judgment and restraint under the circumstances. Moreover, no 
mitigating circumstance exists for Representative Smith's 
continued publication of his allegations in the days and weeks 
following November 23, 2003.

               B. REVIEW OF RELEVANT STANDARDS OF CONDUCT

    Pursuant to House Rule XI, clauses 3(a)(2) and (3)(b)(2), 
and pursuant to Committee Rules 14(a)(3) and 18, the Committee 
has the authority to investigate any alleged violation by a 
Member, officer, or employee of the House, of the Code of 
Official Conduct or one or more law, rule, regulation, or other 
standard of conduct applicable to the conduct of a Member, 
officer, or employee of the House in the performance of his or 
her duties or the discharge of his or her responsibilities.
    In the discharge of its responsibilities, the Investigative 
Subcommittee considered what provisions of the Code of Official 
Conduct or other applicable laws and standards would be 
implicated by the information garnered by the Investigative 
Subcommittee during its investigation.
    The Code of Official Conduct of the House of 
Representatives is set forth in House Rule 23. The 
Investigative Subcommittee determined that only Clause 1 of 
House Rule 23 would be applicable to this matter. House Rule 
23, Clause 1 (the ``Code of Official Conduct'') provides that 
``[a] Member, Delegate, Resident Commissioner, officer, or 
employee of the House shall conduct himself at all times in a 
manner that shall reflect creditably on the House.'' As noted 
previously by the Committee, this provision (House Rule 23, 
Clause 1) is the most comprehensive provision of the Code of 
Official Conduct and was adopted in part so that the Committee, 
in applying the Code, would retain ``the ability to deal with 
any given act or accumulation of acts which, in the judgment of 
the committee, are severe enough to reflect discredit on the 
Congress.'' \154\ This provision serves ``as a safeguard for [ 
] the House as a whole.'' \155\
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    \154\ House Ethics Manual, 102d Cong., 2d Sess. (April 1992) at 12 
(quoting 114 Cong. Rec. 8778 (Apr. 3, 1968); In the Matter of 
Representative Earl F. Hilliard, H. Rep. 107-130, 107th Cong., 1st 
Sess. (July 10, 2001) at 12; In the Matter of Representative E.G. 
``Bud'' Shuster, H. Rep. 106-979, 106th Cong., 2d Sess. (Oct. 16, 2000) 
at 9.
    \155\ Inquiry into the Operation of the Bank of the Sergeant-At-
Arms of the House of Representatives, H. Rep. 102-452, 102d Cong., 2d 
Sess. (March 10, 1992) at 22 (citing H. Rep. 90-1176, 90th Cong., 2d 
Sess. at 17 (1968).
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    The Investigative Subcommittee concluded that the Code of 
Ethics for Government Service, which is applicable to Members 
and employees of the House, is also implicated in this 
matter.\156\ In particular, Clause 5 of the Code of Ethics for 
Government Service provides that ``[a]ny person in Government 
service should . . . [n]ever discriminate unfairly by the 
dispensing of special favors or privileges to anyone, whether 
for remuneration or not; and never accept for himself or his 
family, favors or benefits under circumstances which might be 
construed by reasonable persons as influencing the performance 
of his governmental duties.'' In addition, Clause 9 of the Code 
of Ethics for Government Service provides that ``[a]ny person 
in Government service should . . . [e]xpose corruption wherever 
discovered.''
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    \156\ See In the Matter of Representative James A. Traficant, Jr., 
H. Rep. 107-594, 107th Cong., 2d Sess. Vol. 1 (July 19, 2002) 
(Violations of the Code of Ethics for Government Service, along with 
violations of the Code of Official Conduct, formed the basis of a 
Statement of Alleged Violations adopted by an Investigative 
Subcommittee against a Member, and that led to the expulsion from the 
House of that Member.).
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    The Investigative Subcommittee also took notice of 18 
U.S.C. Sec. 201. This federal statute prohibits the offer or 
acceptance of bribes and gratuities by public officials, 
including Members of the House. The Investigative Subcommittee 
is aware that the Federal Bureau of Investigation was 
conducting its own inquiry into the allegations made by 
Representative Smith. Presumably, any violations of the cited 
federal statute inconnection with this matter will be addressed 
by that federal agency in the normal course of carrying out its law 
enforcement responsibilities.

        C. CONCLUSIONS REGARDING THE CONDUCT OF CERTAIN MEMBERS

1. Representative Nick Smith

    The Investigative Subcommittee concludes that 
Representative Nick Smith is accountable for his conduct 
related to his vote on the Medicare Prescription Drug Act, 
including his making of statements that impugned the reputation 
of the House of Representatives. The excesses of Representative 
Smith's rhetoric--initially made public in a press statement 
issued the day after the vote on the Medicare Prescription Drug 
Act, but continuing in subsequent press statements and press 
interviews--cannot be excused either by personal exhaustion or 
anger he may have felt following the vote on the Medicare 
Prescription Drug Act, or by his emotional attachment to his 
son and his personal belief that his vote in opposition to that 
legislation might have negative consequences for his son's 
congressional candidacy. Indeed, as discussed in this Report, 
the record indicates that Representative Smith's overstated 
account of events began as early as the evening before the vote 
during a gathering with his colleagues at the Hunan Dynasty 
restaurant.
    While this Report addresses the Investigative 
Subcommittee's significant concerns about improper statements 
made by certain Members to Representative Smith, it is 
Representative Smith who is responsible for making unsupported 
assertions in reacting to communications made to him related to 
his vote on the Medicare Prescription Drug Act. While some 
highly charged language or exaggeration can be excused in the 
wake of intense pressure to vote for or against a particular 
piece of legislation, Representative Smith went too far by 
making statements that erode public confidence in the integrity 
of this lawmaking institution, and by misleading the public 
with his assertion that he was offered $100,000 for his son's 
campaign in exchange for his vote in favor of the Medicare 
bill. The damage caused by Representative Smith to the 
reputation of the House was compounded by Representative 
Smith's continued publication in various media outlets of 
allegations that were unsupported by events as they actually 
occurred.\157\
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    \157\ The record further indicates that the controversy may have 
been utilized for political purposes by Brad Smith to promote the cause 
of his congressional candidacy, with the possible result of further 
exacerbating the harm caused by Representative Smith's publication of 
substantially unsupportable allegations.
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    The Investigative Subcommittee found that Representative 
Smith's press statement of December 4, 2003 (Exhibit 8)--in 
which he stated that ``no member violated any ethical rule''--
was not a mitigating act. Indeed, that statement did not 
retract fully his earlier allegations and, further, in the 
statement Representative Smith continued to suggest publicly 
that he had been offered ``substantial and aggressive 'support' 
and 'endorsements''' by ``interested groups.''
    Even if a reasonable basis existed for all the statements 
made by Representative Smith regarding his vote on the Medicare 
Prescription Drug Act, Representative Smith did not act in a 
responsible manner in seeking redress for the alleged improper 
conduct he believed he had witnessed. As noted, the Code of 
Government Ethics obligates Representative Nick Smith, and all 
other Members, to ``expose corruption wherever discovered.'' An 
allegation of ``bribery'' is an allegation of ``corruption.'' 
If Representative Smith believed that bribes had been offered 
and accepted, he was obligated under the Code of Ethics for 
Government Service to share the basis for his beliefs with the 
appropriate governmental authorities. At a minimum, 
Representative Smith was obligated to cooperate fully and 
candidly with the Committee on Standards of Official Conduct 
regarding his allegations. Instead, Representative Smith 
declined to cooperate fully, and required the Committee to 
authorize a costly and time-consuming investigation.
    In the view of the Investigative Subcommittee, were the 
Investigative Subcommittee's jurisdiction to be expanded to 
address the specific conduct of Representative Smith that is 
described in this Report, his conduct could support a finding 
that Representative Smith violated House Rule 23, Clause 1, 
which requires Members to conduct themselves at all times in a 
manner that shall reflect creditably on the House.
    However, even though the Investigative Subcommittee 
concluded that Representative Nick Smith did not meet the 
standard of conduct required of Members, the Investigative 
Subcommittee does not recommend that its jurisdiction be 
expanded pursuant to Committee Rule 19(d) and the resolution 
adopted by the full Committee on March 17, 2004. Such a step--
required to obtain a formal sanction under House and Committee 
rules--is not justified by the circumstances and facts 
presented, and is outweighed by the interest in bringing this 
matter to closure.\158\
---------------------------------------------------------------------------
    \158\ The Investigative Subcommittee notes that Representative 
Smith is retiring from the House at the end of this Congress. Due to 
Representative Smith's retirement, the Committee will lose jurisdiction 
over Representative Smith at the end of this Congress. Accordingly, as 
a practical matter, there is insufficient time remaining in the current 
Congress for an Investigative Subcommittee with expanded jurisdiction 
to complete the steps necessary under Committee Rules for 
Representative Smith to be charged formally with violations of the Code 
of Official Conduct, and to obtain sanctions as appropriate for such 
violations.
---------------------------------------------------------------------------

2. Representative James T. Walsh and Representative Randall ``Duke'' 
        Cunningham

    The Investigative Subcommittee concluded that the 
statements made by Representative Jim Walsh and Representative 
Randy ``Duke'' Cunningham that referenced the candidacy of 
Representative Smith's son were inconsistent with the civility 
generally expected of Members during a vote on the House floor. 
Nonetheless, it is not the view of the Investigative 
Subcommittee that either of these Members violated any rule 
within the jurisdiction of the Committee. To the extent that 
the comments made by these Members were regrettable, the 
Investigative Subcommittee concluded that such a finding was 
mitigated by the intensity of the circumstances, as well as by 
the personal, unsolicited, and independent apologies these 
Members made to Representative Smith in the days following the 
vote on the Medicare legislation. Further, in separate, candid 
testimony under oath before the Investigative Subcommittee, 
both Representative Cunningham and Representative Walsh 
acknowledged their conduct, and expressed contrition and regret 
for the statements they made to Representative Smith.

3. Representative Candice Miller

    In contrast to its conclusions regarding the statements 
made by Representative Cunningham and Representative Walsh, the 
Investigative Subcommittee viewed differently the statements 
made by Representative Candice Miller to Representative Smith 
during the vote on the Medicare legislation. Representative 
Miller's interaction with Representative Smith can fairly be 
characterized as a specific and unprovoked threat of 
retaliation against Representative Smith because of his vote in 
opposition to the Medicare Prescription Drug Act. Given 
Representative Miller's status as a well-known figure in 
Michigan politics, from the mindset of Representative Smith, 
Representative Miller could possibly have had a deleterious 
impact on Brad Smith's candidacy. Representative Miller never 
sought to mitigate her conduct by apologizing to Representative 
Smith, or by otherwise expressing contrition for her conduct. 
The Investigative Subcommittee concluded that Representative 
Miller's statements to Representative Smith on the House floor 
were improper and contributed to his decision to make his 
public allegations of alleged misconduct related to his vote on 
the Medicare Prescription Drug Act, and therefore 
Representative Miller shares a portion of the responsibility 
for a course of events that risked impugning the reputation of 
the House of Representatives.
    In the view of the Investigative Subcommittee, 
Representative Miller's conduct could support a finding that 
she violated House Rule 23, Clause 1, were the Investigative 
Subcommittee's jurisdiction to be expanded to address 
Representative Miller's specific conduct in this matter. The 
Investigative Subcommittee, however, does not recommend that 
its jurisdiction be expanded regarding Representative Miller's 
conduct. While Representative Miller committed a discrete 
violation of the rules, there was no evidence adduced of a 
pattern of misconduct. The Investigative Subcommittee concludes 
that further proceedings are not necessary to carry out the 
full Committee's oversight responsibilities.

4. Majority Leader Tom DeLay

    It is not controverted in this matter that Majority Leader 
Tom DeLay offered his personal endorsement of Brad Smith in 
exchange for Representative Nick Smith's vote in favor of the 
Medicare Prescription Drug Act. This offer was made personally 
by the Majority Leader to Representative Smith, most likely 
during a vote on November 21, 2003, on a matter unrelated 
matter to the Medicare Prescription Drug Act. The Investigative 
Subcommittee concludes that the interaction between the 
Majority Leader and Representative Smith, in significant part, 
precipitated the public allegations by Representative Smith 
that ultimately led to this inquiry. At the time the offer was 
made, Representative Smith believed that the endorsement of his 
son by the Majority Leader, combined with the publicity and 
substantial financial support for his son's campaign that 
Representative Smith believed would follow the Majority 
Leader's endorsement, would greatly assist, if not assure, his 
son's election in the primary held on August 3, 2004.
    The Investigative Subcommittee deliberated extensively over 
the ramifications of the Majority Leader's conduct in this 
matter. It is well-settled that the process of garnering a 
majority of legislators for the passage of legislation in a 
legislative body involves a process of political compromise and 
coalition-building through offers of reciprocal official 
support among fellow legislators. Such practices are common in 
the functioning of a representative democracy. There are 
limits, however, to the methods that may be used to bring 
legislators of different views together to achieve action. For 
example, the ``corrupt'' offer or acceptance of ``things of 
value'' such as remunerations, gifts, or other like benefits to 
a legislator is long-prohibited conduct.\159\ By contrast, the 
practice of what some have termed ``log-rolling'' is a 
longstanding and accepted part of the legislative process. The 
essence of this practice involves compromises based on 
legislative or official acts or programs within the official 
government process. In other words, under most circumstances it 
is an accepted practice for legislators to trade legislative 
votes to achieve policy goals or if to do so would serve the 
interests of constituents.
---------------------------------------------------------------------------
    \159\ See, e.g., 18 U.S.C. Sec. 201.
---------------------------------------------------------------------------
    The above-described practice is well-established in the 
House; there is nothing improper about a Member's conditioning 
support for particular legislation on, for example, future 
consideration by another Member of an official matter of 
importance to that Member's constituents or legislative agenda. 
It is also a long-established and recognized practice to seek 
to persuade a Member to vote a certain way on proposed 
legislation on the basis of maintaining party discipline. An 
appearance of impropriety might be created, however, if support 
for legislation were linked to a personal benefit, such as the 
promise of one Member to provide another Member with goods or 
services. Such incentives cannot be used to influence voting 
behavior.
    Such is the conclusion reached by the Investigative 
Subcommittee regarding the statements by the Majority Leader to 
Representative Smith in this matter. The promise of political 
support for a relative of a Member goes beyond the boundaries 
of maintaining party discipline, and should not be used as the 
basis of a bargain for Members to achieve their respective 
goals. The endorsement of a political candidate is not related 
to the functioning of government, and the promise of such an 
endorsement is not a proper offer, and therefore should not be 
made or accepted, in exchange for a vote in favor or against a 
particular piece of legislation. While the political 
consequences of a Member's vote on legislation are usually 
inherent and exist even if unspoken, the use of political 
incentives to obtain passage of legislation, or the mixing of 
political and official incentives to obtain such a goal, risks 
undermining the confidence of the public that legislation was 
supported or opposed by Members on the basis of the interests 
of the public, and no other interest.
    Accordingly, the Investigative Subcommittee concludes that 
it is improper for a Member to offer or link support for the 
personal interests of another Member as part of a quid pro quo 
to achieve a legislative goal. In the view of the Investigative 
Subcommittee, depending on the circumstances, such conduct may 
violate House Rule 23, Clause 1. Another provision implicated 
by the acceptance of such an improper offer is Clause 5 of the 
Code of Ethics for Government Service, which provides that 
``[a]ny person in Government service should . . . [n]ever 
discriminate unfairly by the dispensing of special favors or 
privileges to anyone, whether for remuneration or not; and 
never accept for himself or his family, favors or benefits 
under circumstances which might beconstrued by reasonable 
persons as influencing the performance of his governmental duties.'' 
(Emphasis added).
    The issues raised by the conduct of the Majority Leader in 
this matter are novel in that conduct of this nature and the 
implications of such conduct have never before been addressed 
or resolved by the Committee on Standards of Official Conduct. 
Indeed, the Majority Leader's testimony indicates that he did 
not believe he acted improperly under House rules during his 
encounter with Representative Nick Smith. In addition, the 
Investigative Subcommittee believes that the relevant facts 
related to the Majority Leader's conduct--described in detail 
in this Report--already have been fully developed. In the view 
of the Investigative Subcommittee, these factors mitigate 
against further investigation and proceedings in this 
matter.\160\
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    \160\ The Investigative Subcommittee reached a similar conclusion 
regarding the conduct of Dan Flynn in this matter. As noted, Mr. Flynn 
serves as Deputy Chief of Staff in the Office of the Majority Leader, 
and he stated during an interview with Investigative Subcommittee 
counsel that in this capacity he contacted Jason Roe on November 21, 
2003 to ascertain information about primary election candidates in the 
Seventh District of Michigan. During his interview, he stated that the 
purpose of the call was to assess whether the Majority Leader's 
endorsement of Representative Smith's son in that election could be 
used to obtain Representative Smith's vote for the Medicare 
Prescription Drug Act. To the extent that Mr. Flynn may have contacted 
Jason Roe, no evidence was adduced that Mr. Flynn undertook this action 
at the request or direction of the Majority Leader. Under the 
circumstances presented, the Investigative Subcommittee did not find 
that Mr. Flynn violated House rules. Nonetheless, in the view of the 
Investigative Subcommittee, it is not appropriate for congressional 
staff to research the status of congressional election contests for the 
purpose of obtaining information to influence a Member's vote on 
pending legislation.
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                     D. ADDITIONAL RECOMMENDATIONS

    The Investigative Subcommittee further recommends that the 
Committee adopt this Report as the Report of the full Committee 
and approve its dissemination to the House and to the public. 
It is the intention of this Investigative Subcommittee that 
publication of this Report will serve as a public admonishment 
by the Committee to Representative Smith, Representative 
Miller, and Majority Leader DeLay regarding their conduct in 
this matter. The Investigative Subcommittee also intends that 
the publication of this Report will serve as an advisory for 
all Members, employees, and officials of the House that the 
linking of official actions with political considerations in 
the manner described in this Report is impermissible and 
violates House rules.

                              Exhibit List

Exhibit 1: Rep. Nick Smith's column dated 11/23/03
Exhibit 2: Rep. Nick Smith's press release dated 11/24/03
Exhibit 3: Washington Post article dated 11/23/03
Exhibit 4: Human Events Online column dated 11/26/03
Exhibit 5: Column appearing in Chicago Sun-Times dated 11/27/03
Exhibit 6: Slate.com article dated 12/1/03
Exhibit 7: Transcript of Rep. Nick Smith's WKZO-Kalamazoo radio 
        interview on 12/1/03
Exhibit 8: Rep. Smith's press release dated 12/4/03
Exhibit 9: Lansing State Journal article dated 12/5/03
Exhibit 10: Letter from Chairman and Ranking Minority Member of 
        Committee on Standards of Official Conduct to Rep. Nick 
        Smith dated 12/8/03
Exhibit 11: Letter from Rep. Nick Smith to Chairman and Ranking 
        Minority Member of Committee on Standards of Official 
        Conduct dated 12/17/03
Exhibit 12: Washington Post article dated 12/23/03
Exhibit 13: Detroit News article dated 2/12/04
Exhibit 14: Letter from Chairman and Ranking Minority Member of 
        Committee on Standards of Official Conduct to Rep. Nick 
        Smith dated 2/13/04
Exhibit 15: Letter from counsel to Rep. Nick Smith to Chairman 
        and Ranking Minority Member of Committee on Standards 
        of Official Conduct dated 3/5/04
Exhibit 16: Letter from Investigative Subcommittee to Secretary 
        Tommy Thompson dated 7/8/04
Exhibit 17: Letter to Investigative Subcommittee from General 
        Counsel of Department of Health and Human Services and 
        accompanying statement from Secretary Tommy Thompson 
        dated 8/4/04
Exhibit 18: Subpoena to Rep. Nick Smith dated 6/21/04
Exhibit 19: Notes from Rep. Nick Smith's diary calendar for 11/
        17-12/14/03
Exhibit 20: Relevant portions of record of roll call votes for 
        11/21/03
Exhibit 21: Transcript of voicemail message left by Brad Smith 
        for Rep. Nick Smith on 11/21/03
Exhibit 22: Rep. Nick Smith's schedule for 11/19-11/23/03
Exhibit 23: Letter to Speaker J. Dennis Hastert from Rep. Nick 
        Smith dated 11/23/03
Exhibit 24: Excerpt from Walsh for Congress Committee report to 
        Federal Election Commission disclosing contribution to 
        Brad Smith for Congress on 12/11/03

        
        
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