[House Report 112-193]
[From the U.S. Government Publishing Office]


                                                  House Calendar No. 67

112th Congress                                                   Report
 1st Session            HOUSE OF REPRESENTATIVES                112-193
_______________________________________________________________________
 
        IN THE MATTER OF ALLEGATIONS RELATING TO MICHAEL COLLINS

                               __________

                              R E P O R T

                                 of the

                          COMMITTEE ON ETHICS




   August 5, 2011.--Referred to the House Calendar and ordered to be 
                                printed

                                _____

                  U.S. GOVERNMENT PRINTING OFFICE
99-006                    WASHINGTON : 2011














                          COMMITTEE ON ETHICS

JO BONNER, Alabama                   LINDA T. SANCHEZ, California
  Chairman                             Ranking Member
MICHAEL T. McCAUL, Texas             JOHN A. YARMUTH, Kentucky
K. MICHAEL CONAWAY, Texas            DONNA F. EDWARDS, Maryland
CHARLES W. DENT, Pennsylvania        PEDRO R. PIERLUISI, Puerto Rico
GREGG HARPER, Mississippi            JOE COURTNEY, Connecticut

                              Report Staff

            Daniel A. Schwager, Chief Counsel/Staff Director
             Deborah Sue Mayer, Director of Investigations
              Kelle A. Strickland, Counsel to the Chairman
            Daniel J. Taylor, Counsel to the Ranking Member
               Clifford C. Stoddard, Jr., Senior Counsel
                      Christopher R. Tate, Counsel














                         LETTER OF TRANSMITTAL

                              ----------                              

                          House of Representatives,
                                       Committee on Ethics,
                                    Washington, DC, August 5, 2011.
Hon. Karen L. Haas,
Clerk, House of Representatives,
Washington, DC.
    Dear Ms. Haas: Pursuant to clauses 3(a)(2) and 3(b) of rule 
XI of the Rules of the House of Representatives, we herewith 
transmit the attached Report, ``In the Matter of Allegations 
Relating to 
Michael Collins.''
            Sincerely,
                                   Jo Bonner,
                                           Chairman.
                                   Linda T. Sanchez,
                                           Ranking Member.













                            C O N T E N T S

                              ----------                              
                                                                   Page
 I. Introduction......................................................1
II. House Rules, Laws, Regulations, or Other Standards of Conduct.....2
III.Background........................................................3

IV. Findings and Conclusions..........................................6
 V. Statement Under Rule 13, Clause 3(c) of the Rules of the House of 
    Representatives...................................................7
Appendix A: Report and Findings of the Office of Congressional 
  Ethics Regarding Michael Collins (Review No. 11-4518)..........     8
Appendix B: Michael Collins' Response to the Report and Findings 
  of the Office of Congressional Ethics..........................    90






112th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    112-193

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




                          COMMITTEE ON ETHICS




        IN THE MATTER OF ALLEGATIONS RELATING TO MICHAEL COLLINS

                                _______
                                

                             August 5, 2011

                                _______
                                

   Mr. Bonner, from the Committee on Ethics, submitted the following

                              R E P O R T

                            I. INTRODUCTION

    On May 18, 2011, the Office of Congressional Ethics (OCE) 
forwarded to the Committee on Ethics (Committee) a Report and 
Findings related to the receipt of outside income in 2007, 
2008, and 2009 by Michael Collins, which he failed to properly 
report on his 2009 federal income tax returns and his 2007, 
2008, and 2009 Financial Disclosure Statements.\1\ OCE further 
indicated in its referral that Mr. Collins received income in 
2009 that exceeded the outside earned income limit for senior 
staff. OCE recommended that the Committee further review the 
matter.
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    \1\OCE's Report and Findings regarding Michael Collins, Review No. 
11-4518, can be found at Appendix A.
---------------------------------------------------------------------------
    On May 23, 2011, the Committee provided Mr. Collins, 
through his attorney, a copy of OCE's Report and Findings and 
offered him the opportunity to respond to OCE's allegations. 
Mr. Collins submitted a response through his attorney on June 
9, 2011.\2\
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    \2\Michael Collins's response to OCE's allegations against him in 
OCE's Report and Findings can be found at Appendix B.
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    The Committee initiated an investigation into the matter 
referred by OCE pursuant to Committee Rule 18(a). On July 1, 
2011, the Chairman and Ranking Member of the Committee issued a 
statement announcing they had jointly decided to extend the 
Committee's consideration of OCE's transmittal regarding Mr. 
Collins for an additional 45-day period.\3\
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    \3\House Rule XI, clause 3(b)(8)(A), and Committee Rule 17A(c)(1).
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    This Report, adopted by the Committee on August 1, 2011, 
resolves the matter forwarded by OCE. The Committee has 
unanimously determined that the evidence presently before the 
Committee supports a determination that Mr. Collins violated 
House rules, laws, regulations, or other standards of conduct 
by failing to report outside income he had received from 2005 
through 2010 on both his Financial Disclosure statements and 
his federal income taxes for each year. Mr. Collins has 
admitted that he did not report money he received between 2005 
and 2009 as outside earned income. For his violation of House 
rules, laws, regulations, or other standards of conduct, Mr. 
Collins has agreed to accept a series of sanctions and remedies 
as discussed below.

   II. HOUSE RULES, LAWS, REGULATIONS, OR OTHER STANDARDS OF CONDUCT


House Rule 26, clause 2

    ``[T]he provisions of title I of the Ethics in Government 
Act of 1978 shall be considered Rules of the House as they 
pertain to Members, Delegates, the Resident Commissioner, 
officers, and employees of the House.''

Ethics in Government Act

    ``Any individual who is an officer or employee described in 
subsection (f) during any calendar year and performs the duties 
of his position or office for a period in excess of sixty days 
in that calendar year shall file on or before May 15 of the 
succeeding year a report containing the information described 
in section 102(a).''\4\
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    \4\5 U.S.C. app. 4 Sec. 101(d).
---------------------------------------------------------------------------
    ``Each report filed pursuant to section 101 (d) and (e) 
shall include a full and complete statement with respect to . . 
. [t]he source, type, and amount or value of income (other than 
income referred to in subparagraph (B)) from any source (other 
than from current employment by the United States Government). 
. . .''\5\
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    \5\5 U.S.C. app. 4 Sec. 102(a).
---------------------------------------------------------------------------
    ``The head of each agency . . . each congressional ethics 
committee, or the Judicial Conference, as the case may be, 
shall refer to the Attorney General the name of any individual 
which such official or committee has reasonable cause to 
believe has willfully failed to file a report or has willfully 
falsified or willfully failed to file information required to 
be reported. . . .''\6\
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    \6\5 U.S.C. app. 4 Sec. 104.
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    ``[A] Member or an officer or employee who is a noncareer 
officer or employee and who occupies a position . . . for which 
the rate of basic pay is equal to or greater than 120 percent 
of the minimum rate of basic pay payable for GS-15 of the 
General Schedule, may not in any calendar year have outside 
earned income attributable to such calendar year which exceeds 
15 percent of the annual rate of basic pay for level II of the 
Executive Schedule under section 5313 of title 5, United States 
Code, as of January 1 of such calendar year.''\7\
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    \7\5 U.S.C. app. 4 Sec. 501(a)(1).
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    ``[T]he outside earned income limit for Members and senior 
staff for calendar year 2009 is $26,550.''\8\
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    \8\Memorandum from Committee on Standards of Official Conduct for 
All Members, Officers, and Employees, dated February 12, 2009 (emphasis 
in original).
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Internal Revenue Code

    ``Any person who willfully attempts in any manner to evade 
or defeat any tax imposed by this title or the payment thereof 
shall, in addition to other penalties provided by law, be 
guilty of a felony and, upon conviction thereof, shall be fined 
not more than $100,000 ($500,000 in the case of a corporation), 
or imprisoned not more than 5 years, or both, together with the 
costs of prosecution.''\9\
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    \9\26 U.S.C. 7201.
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House Rule 25, clause 1(a)(1)

    ``Except as provided by paragraph (b), a Member, Delegate, 
Resident Commissioner, officer, or employee of the House may 
not--
        (1) have outside earned income attributable to a 
        calendar year that exceeds 15 percent of the annual 
        rate of basic pay for level II of the Executive 
        Schedule under section 5313 of title 5, United States 
        Code, as of January 1 of that calendar year.''

                            III. BACKGROUND


OCE Allegations

    On May 18, 2011, the OCE referred to the Committee a matter 
involving Mr. Michael Collins, Chief of Staff to Representative 
John Lewis, for further review. In its referral, OCE determined 
that there was ``substantial reason to believe that Mr. Collins 
violated House rules and federal law by exceeding the outside 
earned income limit and failing to report the income on his 
Financial Disclosure Statements and federal income tax 
returns.''\10\ OCE further determined that Mr. Collins was 
subject to an outside earned income limit of $26,550.\11\ 
According to OCE's Report and Findings, Mr. Collins did not 
report income earned from the campaign on his 2007, 2008, or 
2009 Financial Disclosure Statements.\12\ OCE further reported 
that Mr. Collins exceeded the outside earned income limit for 
2009 because he received $27,000 from the campaign that 
year.\13\ Furthermore, Mr. Collins did not disclose the income 
he received in 2009 on his federal income tax return.\14\
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    \10\See Appendix A at 1.
    \11\Id.
    \12\Id.
    \13\Id.
    \14\Id.
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Mr. Collins' Employment History

    Mr. Collins has paid federal income taxes for the last 29 
years of his life. Mr. Collins began his career with 
Representative Lewis as his floor assistant in 1999; less than 
a year later he was promoted to Chief of Staff. Mr. Collins has 
received training from the Committee directed at senior staff 
(including training on outside earned income limits and 
financial disclosures) every year since the Committee 
instituted such training.

Payments from the Campaign to Mr. Collins

    Committee staff, pursuant to the authority granted to the 
Chairman and Ranking Member under Committee Rule 18(a), 
reviewed Federal Election Commission (FEC) records from the 
John Lewis for Congress campaign from 2000 through 2010. The 
campaign began paying a ``consulting fee'' for either 
fundraising or political strategy to Mr. Collins beginning in 
2005 and continued to make such payments each year from 2005 
through 2010 as indicated in Chart 1, below.

          CHART 1--INCOME PAYMENTS FROM CAMPAIGN TO MR. COLLINS
------------------------------------------------------------------------
           Payment date                 Amount          Description
------------------------------------------------------------------------
3/2/2005..........................     $5,000.00   Fundraising
                                                    Consulting Fee
11/6/2006.........................      7,000.00   Fundraising
                                                    Consulting Fee
12/18/2007........................      5,000.00   Consulting Fee/
                                                    Political Strategy
12/11/2008........................     10,000.00   Campaign Management
                                                    Consulting Fee
8/19/2009.........................     12,000.00   Fundraising
                                                    Consulting Fee
12/14/2009........................     15,000.00   Fundraising
                                                    Consulting Fee
------------------------------------------------------------------------

    According to these same FEC records, the John Lewis for 
Congress campaign paid Mr. Collins for certain expenses and 
reimbursed him for outlays he made to the campaign with his own 
funds. Some of these outlays also appear to violate campaign 
finance laws and House rules. Chart 2, below, lists the expense 
and reimbursement payments Mr. Collins received from the 
campaign according to FEC records.\15\
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    \15\  See Appendix A, Exhibit 3-5.

  CHART 2--POSSIBLE REIMBURSEMENT PAYMENTS FROM CAMPAIGN TO MR. COLLINS
------------------------------------------------------------------------
           Payment Date                 Amount          Description
------------------------------------------------------------------------
1/31/2007.........................     $1,071.76   Fundraising event
                                                    expenses
5/23/2007.........................        892.32   Volunteers
                                                    appreciation event
7/13/2007.........................      1,595.68   Expenses
9/20/2007.........................        973.06   Expenses
11/21/2007........................        475.29   Expenses
2/7/2008..........................        499.36   Expenses
2/25/2008.........................        475.00   Reimbursement
1/29/2009.........................      1,148.72   Reimbursement of
                                                    credit card charges
2/1/2009..........................      7,000.00   Reimbursement for
                                                    storage unit rent
------------------------------------------------------------------------

    Mr. Collins, in interviews with OCE\16\ and with Committee 
staff,\17\ admitted that he had received payments in the form 
of a consulting fee from the campaign. Mr. Collins, in his 
interview with the Committee, stated that he was never employed 
by the campaign as an employee, but performed work on his own 
time for the campaign and was compensated as an ``agent.'' He 
explained that he viewed this payment as a ``bonus,'' and noted 
that he was unable to receive a bonus directly from 
Representative Lewis' office due to his salary level. He also 
admitted that he had received reimbursements for expenses from 
the campaign.\18\
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    \16\OCE interviewed Mr. Collins on March 9, 2011. See Appendix A at 
Exhibit 2.
    \17\Committee staff interviewed Mr. Collins on July 28, 2011.
    \18\Mr. Collins, in his interview with Committee staff, was unable 
to recall when he began receiving consulting fees, as opposed to 
reimbursements. When Committee staff explained that they were unable to 
find records of income prior to 2005, Mr. Collins stated that it was 
likely he began receiving income in that year.
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Mr. Collins' Financial Disclosure Statements

    OCE reviewed Mr. Collins' Financial Disclosure Statements 
from 2007 through 2009. OCE found that, in each year, Mr. 
Collins did not report any outside earned income, despite the 
payments from the John Lewis for Congress campaign as listed in 
Chart 1, supra.\19\
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    \19\See Appendix A at 11-13.
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    Committee counsel also reviewed Mr. Collins' Financial 
Disclosure Statements; because the Committee is not subject to 
OCE's limitations period, Committee counsel's review comprised 
those reports filed between 2000 and 2010. Committee counsel's 
review confirmed OCE's findings for the reports filed from 2007 
through 2009, and also discovered that Mr. Collins did not 
report any outside earned income from 2000 through 2007, 
despite the payments from the John Lewis for Congress campaign 
as listed in Chart 1, supra. In total, Mr. Collins failed to 
report $54,000 in income from 2005 to 2009. Mr. Collins, after 
his interview with OCE, filed an amended Financial Disclosure 
Statement reporting the $27,000 he received from the campaign 
in 2009.
    Mr. Collins stated in his interview with OCE that his 
failure to disclose the income received from the John Lewis for 
Congress campaign on his Financial Disclosure Statements was 
due to ``negligence.''\20\ Similarly, in Mr. Collins' interview 
with the Committee, he indicated that because the John Lewis 
for Congress campaign never sent him a Form W-2 or 1099 to 
document his payments, he never thought about the payments in 
terms of income, and so never reported them. Mr. Collins stated 
that he now
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    \20\See Appendix A, Exhibit 2 at para.17.
---------------------------------------------------------------------------
    *understands the need to list all outside earned income on 
his Financial Disclosure Statements, and stated his intention 
and willingness to amend all affected forms.

Mr. Collins' income tax returns

    OCE reviewed Mr. Collins' Form 1040 federal income tax 
return for calendar year 2009. OCE determined that Mr. Collins 
had not reported the income he received from the campaign on 
his Form 1040.\21\ Committee counsel reviewed Mr. Collins' 2009 
Form 1040 and confirmed the finding of OCE that the $27,000 
received from the campaign was not reported on his tax 
return.\22\ In the course of its investigation, OCE obtained a 
1099-MISC form indicating that Mr. Collins received $27,000 in 
nonemployee compensation from John Lewis for Congress.\23\ Mr. 
Collins, after his interview with OCE, filed an amended tax 
return reporting the $27,000 he received from the campaign in 
2009. Mr. Collins admitted in his interview with OCE that he 
did not report the $27,000 he received in 2009 on his federal 
income taxes and explained his failure to report was because he 
believed it was ``not reportable income.''\24\
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    \21\See Appendix A at para.53.
    \22\See Appendix A, Exhibit 12.
    \23\See Appendix A, Exhibit 7.
    \24\See Appendix A, Exhibit 2 at para.para.20, 48, and 54.
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    When asked by Committee counsel to explain his failure to 
report the consulting fees that the campaign paid him on his 
tax return, Mr. Collins stated that because the John Lewis for 
Congress campaign never sent him a Form W-2 or 1099 to document 
the payments he received, he never thought about the payments 
in terms of income, and so never reported them. Mr. Collins 
acknowledged that if he had received this money as a ``bonus'' 
paid as a part of his House employment, it would have appeared 
on his Form W-2 and would consequently have been taxed. Mr. 
Collins stated that he now understands the need to list all 
income on his tax returns, and stated his intention and 
willingness to amend any and all affected tax returns.

Exceeding the outside earned income limit

    Mr. Collins received $27,000 from the John Lewis for 
Congress campaign in 2009. In that year, the outside earned 
income limit for senior staff was $26,550.\25\ Because of his 
House rate of pay, Mr. Collins was considered senior staff for 
the purpose of the outside earned income limit.\26\
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    \25\See Appendix A at 15.
    \26\Id. at 16.
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                      IV. FINDINGS AND CONCLUSIONS

    As a result of its review of OCE's Report and Findings, and 
additional investigative activity by the Committee, the 
Committee has reached the following findings and conclusions.
    1. Michael Collins received $5,000 income from the John 
Lewis for Congress campaign in 2005 and failed to disclose that 
amount of outside income or its source on his Financial 
Disclosure Statement for 2005 or his federal income tax return 
for 2005, and failed to pay income taxes thereon.
    2. Michael Collins received $7,000 income from the John 
Lewis for Congress campaign in 2006 and failed to disclose that 
amount of outside income or its source on his Financial 
Disclosure Statement for 2006 or his federal income tax return 
for 2006, and failed to pay income taxes thereon.
    3. Michael Collins received $5,000 income from the John 
Lewis for Congress campaign in 2007 and failed to disclose that 
amount of outside income or its source on his Financial 
Disclosure Statement for 2007 or his federal income tax return 
for 2007, and failed to pay income taxes thereon.
    4. Michael Collins received $10,000 income from the John 
Lewis for Congress campaign in 2008 and failed to disclose that 
amount of outside income or its source on his Financial 
Disclosure Statement for 2008 or his federal income tax return 
for 2008, and failed to pay income taxes thereon.
    5. Michael Collins received $27,000 income from the John 
Lewis for Congress campaign in 2009 and failed to disclose that 
amount of outside income or its source on his Financial 
Disclosure Statement for 2009 or his federal income tax return 
for 2009, and failed to pay income taxes thereon.
    For his violation of House rules, laws, regulations, or 
other standards of conduct, in satisfaction of the sanctions 
and remedies unanimously adopted by the Committee, Mr. Collins 
has agreed to:
          (1) Waive all further procedural steps and rights he 
        may be entitled to in this matter under House and 
        Committee rules;
          (2) Accept a letter of reproval;
          (3) Amend his Financial Disclosure Statements for the 
        years 2005 through 2008 to correct all errors or 
        omissions;
          (4) Pay a $1,000 fine (equivalent to five years of 
        late Financial Disclosure filing fines) by December 31, 
        2011;
          (5) Provide to the Committee by September 30, 2011, 
        an affidavit confirming that he has personally reviewed 
        his income tax returns and Financial Disclosure 
        Statements for the last six years for any and all 
        errors or omissions and that he has made all necessary 
        corrections and amendments;
          (6) Amend his income tax returns for the years 2005 
        through 2010 to correct all errors or omissions by 
        September 30, 2011;
          (7) Report to the Committee immediately upon a 
        determination of what additional taxes or penalties he 
        owes;
          (8) Pay all unpaid taxes, penalties, and interest 
        owed for the years 2005 through 2010, either to the IRS 
        or the U.S. Treasury, regardless of any statute of 
        limitations, by a date to be set by the IRS or the 
        Committee after it receives the report required under 
        paragraph 7;
          (9) Verify with the Federal Election Commission that 
        the $450 he returned to the campaign at the direction 
        of OCE is a permissible payment. If not, the Campaign 
        will need to return the $450 to Mr. Collins to avoid an 
        impermissible contribution, and Mr. Collins will need 
        to contribute $450 to a charitable organization 
        properly registered and qualified under section 
        501(c)(3) of the Internal Revenue Code, by September 
        30, 2011, so that Mr. Collins does not retain the 
        excessive outside earned income; and
          (10) Provide the Committee with evidence of all of 
        the above steps by the date indicated or to be set by 
        the IRS or the Committee where applicable.
    Mr. Collins understands that failing to meet any of the 
above conditions at any time in this or future Congresses could 
result in further Committee action. Based on his admission and 
acceptance of responsibility for his actions, and his agreement 
to the above sanctions and remedies, the Committee has 
determined that this matter is closed, subject to Mr. Collins 
fulfilling the above conditions.
    The Chair is directed, upon providing the notices required 
pursuant to House Rule XI, clause 3(b)(8)(A), and Committee 
Rule 17A(a)(2), to file this Report with the House, together 
with a copy of OCE's Report and Findings in this matter, along 
with any responses filed, all of which are made a part of this 
Report and appended hereto.\27\ The filing of this Report, 
along with its publication on the Committee's Web site, shall 
serve as publication of OCE's Report and Findings in this 
matter, pursuant to House Rule XI, clause 3(b)(8)(A), and 
Committee Rules 17A(b)(3) and 17A(c)(2).
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    \27\House Rule XI, clauses 3(a)(2) and 3(b).
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 V. STATEMENT UNDER RULE 13, CLAUSE 3(c) OF THE RULES OF THE HOUSE OF 
                            REPRESENTATIVES

    The Committee made no special oversight findings in this 
Report. No budget statement is submitted. No funding is 
authorized by any measure in this Report.



                                  
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