[House Report 112-336]
[From the U.S. Government Publishing Office]


112th Congress  }                                             {  Report
  1st Session   }        HOUSE OF REPRESENTATIVES             { 112-336
_______________________________________________________________________

                                                 House Calendar No. 103


                      IN THE MATTER OF ALLEGATIONS

                              RELATING TO

                        REPRESENTATIVE DON YOUNG

                               __________

                              R E P O R T

                                 of the

                          COMMITTEE ON ETHICS

                [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


   December 20, 2011.--Referred to the House Calendar and ordered to 
                               be printed

                               ----------
                         U.S. GOVERNMENT PRINTING OFFICE 

19-006 PDF                      WASHINGTON : 2011 












                          COMMITTEE ON ETHICS

JO BONNER, Alabama, Chairman         LINDA T. SANCHEZ, California, 
MICHAEL T. McCAUL, Texas                 Ranking Member
K. MICHAEL CONAWAY, Texas            JOHN A. YARMUTH, Kentucky
CHARLES W. DENT, Pennsylvania        DONNA F. EDWARDS, Maryland
GREGG HARPER, Mississippi            PEDRO R. PIERLUISI, Puerto Rico
                                     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
                       Sheria A. Clarke, Counsel
                     Miguel Toruno, Senior Counsel
                Brittany M. Bohren, Investigative Clerk
                          LETTER OF SUBMITTAL

                              ----------                              

                     U.S. House of Representatives,
                                       Committee on Ethics,
                                 Washington, DC, December 20, 2011.
Hon. Karen L. Haas,
Clerk, U.S. 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 Representative Don Young.''
            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, and Other Standards of Conduct...3
III. Facts............................................................4

IV. Findings and Conclusions..........................................7
 V. Statement Under Rule XIII, Clause 3(c) of the Rules of the House of 
    Representatives..................................................10
Appendix A: Report and Findings of the Office of Congressional 
  Ethics Regarding Representative Don Young (Review No. 11-3175).    11
Appendix B: Representative Don Young's Response to the Report and 
  Findings of the Office of Congressional Ethics.................   134
Appendix C: Revised Legal Expense Fund Regulations, Adopted by 
  the Committee on December 14, 2011.............................   138
                                                 House Calendar No. 103
112th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    112-336

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



 
  IN THE MATTER REGARDING ALLEGATIONS RELATING TO REPRESENTATIVE DON 
                                 YOUNG

                                _______
                                

 December 20, 2011.--Referred to the House Calendar and ordered to be 
                                printed

                                _______
                                

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

                              R E P O R T

                            I. INTRODUCTION

    The Committee on Ethics (the Committee) submits this Report 
pursuant to Rule XI, clause 3(a)(2), of the Rules of the U.S. 
House of Representatives (House Rules), 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 any law, rule, regulation, or other 
standard applicable to the conduct of such Member, officer, or 
employee.
    On December 31, 2007, Representative Don Young entered into 
a trust agreement establishing the Congressman Don Young Legal 
Expense Trust (the Trust). In a letter dated January 2, 2008, 
Representative Young sought formal approval of the Trust from 
the Committee in accordance with the Committee's Legal Expense 
Fund Regulations. On January 9, 2008, the Committee approved 
the Trust.
    On April 20, 2011, Representative Young filed the Trust's 
required quarterly report with the Committee for the reporting 
period ending March 31, 2011. The quarterly report indicated 
that, among other donations, twelve limited liability 
corporations (LLCs) located in Louisiana each contributed 
$5,000 to the Trust. The LLCs were owned by the same individual 
or group of individuals.
    On June 23, 2011, the Office of Congressional Ethics (OCE) 
commenced a preliminary review of allegations that 
Representative Young had accepted contributions to his Trust in 
excess of the limits established by applicable rules. Pursuant 
to its organizing resolution, OCE was required to notify both 
Representative Young and the Committee that it had begun a 
preliminary review. In a letter dated July 6, 2011, 
Representative Young sought guidance from the Committee related 
to the $5,000 contributions from the twelve LLCs located in 
Louisiana. Representative Young indicated that, prior to 
accepting the contributions, guidance was sought from Gail R. 
Schubert, the trustee of his Trust, regarding whether 
contributions from companies that are separate legal entities 
and operate under separate financial records were subject to 
the same contribution limit. The trustee's opinion was that 
such contributions are permissible and not subject to the same 
contribution limit if the companies are separate legal entities 
and operate under separate financial records.
    On October 13, 2011, the Committee received a referral from 
OCE recommending further review of allegations that 
Representative Young ``may have accepted contributions to his 
legal expense trust in excess of the limitations of $5,000 per 
calendar year from any individual or organization.''\1\ Upon 
receipt of OCE's Report and Findings (Report and Findings), the 
Committee sent a copy of the Report and Findings to 
Representative Young and offered him an opportunity to respond. 
Representative Young submitted a response to OCE's Report and 
Findings on November 4, 2011.\2
\\---------------------------------------------------------------------------
    \1\Report and Findings in the Matter of Representative Don Young, 
OCE Review No. 11-3175, October 13, 2011. A copy of OCE's Report and 
Findings is attached as Appendix A to this Report.
    \2\Letter from Representative Young to the Committee, November 4, 
2011. A copy of Representative Young's response to OCE's Report and 
Findings is attached as Appendix B to this Report.
---------------------------------------------------------------------------
    On November 17, 2011, the Chairman and Ranking Member 
authorized an investigation pursuant to Committee Rule 18(a) to 
gather additional information related to the allegations in 
OCE's Report and Findings. The Committee also conducted a 
review of the advice generally given to individuals with legal 
expense trust funds in interpreting the Legal Expense Fund 
Regulations issued by the Committee on June 10, 1996 (1996 LEF 
Regulations). Based on the information gathered during the 
18(a) investigation, as well as the Committee's review of the 
advice generally given, the Committee voted unanimously to 
resolve the issues surrounding Representative Young's 
outstanding request for guidance from the Committee and the 
allegations regarding Representative Young by OCE, by issuing a 
letter to Representative Young and releasing this report.\3
\\---------------------------------------------------------------------------
    \3\Pursuant to Committee Rule 3(j), the Committee will not release 
any of its letters to Representative Young at this time.
---------------------------------------------------------------------------
    With respect to Representative Young's request for guidance 
from the Committee, the Committee, in guidance issued 
contemporaneously with this Report, determined that the 
contributions by the twelve Louisiana LLCs to Representative 
Young were permissible under the 1996 LEF Regulations issued by 
the Committee, and that the Trust's acceptance of the 
contributions did not violate House rules. The Committee also 
adopted revised LEF Regulations, issued contemporaneously with 
this Report, that provide clarity on several matters related to 
legal expense funds, including restrictions on contributions 
from multiple entities owned by the same individual or 
individuals.\4
\\---------------------------------------------------------------------------
    \4\The Committee adopted revised Legal Expense Fund Regulations in 
order to provide greater guidance and clarity on several issues related 
to legal expense funds, including the issue addressed in this Report. 
The Committee also elected to define contributions from multiple 
entities owned by the same individual or individuals in a manner 
consistent with the Federal Election Commission's definition used for 
campaign donations from multiple entities owned by the same individual 
or individuals. See 11 C.F.R. Sec. 110.1(e)(1). The Committee 
recognized that adopting this definition would help to prevent the 
formation of shell companies for the purpose of evading the 
contribution limits. A copy of the Legal Expense Fund Regulations 
adopted by the Committee on December 14, 2011, is attached as Appendix 
C to this Report.
---------------------------------------------------------------------------
    With respect to the referral from OCE, the Committee 
determined that, based on the 1996 LEF Regulations and long-
standing Committee advice, multiple entities owned by the same 
individual or individuals were permitted to make contributions 
up to $5,000 per entity if they were separate legal entities. 
The twelve Louisiana LLCs are separate legal entities and are 
separately registered with the Louisiana Secretary of State. 
Further, the entities provide separate and distinct products or 
services and were formed at different times.
    Because the contributions by the twelve LLCs were 
permissible under the Committee's 1996 LEF Regulations, the 
Committee dismissed the allegations in the OCE referral. 
However, the Committee is concerned that the identical 
ownership of the twelve entities challenges the principles of 
the contribution limits of the 1996 LEF Regulations. Because 
the 1996 LEF Regulations did clearly permit contributions from 
multiple entities owned by the same individual or individuals, 
and because Representative Young did appear to inquire of the 
nature of the entities and their permissibility, the Committee 
does not believe a violation of House Rule XXIII, clause 2 may 
be found as it does not appear Representative Young himself 
intended to violate the spirit of the 1996 LEF Regulations. 
However, to prevent this situation in the future the Committee 
is amending the LEF Regulations to attribute contributions by 
certain types of entities, such as LLCs, to the owners of those 
entities. The revised LEF Regulations will take effect on 
January 1, 2012, and will apply to all existing LEFs and all 
LEFs approved by the Committee in the future.

  II. HOUSE RULES, LAWS, REGULATIONS AND OTHER STANDARDS OF CONDUCT\5
\\
---------------------------------------------------------------------------
    \5\Beyond the rules and regulations cited in this section, OCE also 
points to guidance issued in the 2008 House Ethics Manual as 
controlling. The guidance states ``[a] gift received from an individual 
affiliated with an organization counts against the annual gift 
limitations of both the individual and the organization.'' 2008 House 
Ethics Manual at 6. In a footnote, OCE's Report and Findings also 
discusses guidance provided by the Senate Select Committee on Ethics. 
The Senate guidance states that although the Senate Committee 
``generally recognizes the separate legal status of related entities 
(e.g. a parent and its subsidiary entity will be treated as distinct 
sources for the purposes of the Gifts Rule), such entities will NOT be 
accorded separate source status if the entities are acting in concert 
or as agent for the other with respect to a particular gift.'' OCE 
acknowledges that guidance provided by the Senate is not controlling.
---------------------------------------------------------------------------

House Rule XXV, clause 5(a)(3)(E)

    ``The restrictions in subparagraph (1) [generally, the 
House gift rule] do not apply to the following:

          (E) Except as provided in paragraph (e)(3), a 
        contribution or other payment to a legal expense fund 
        established for the benefit of a Member, Delegate, 
        Resident Commissioner, officer or employee of the House 
        that is otherwise lawfully made in accordance with the 
        restrictions and disclosure requirements of the 
        Committee on Ethics.''

1996 Legal Expense Fund Regulations, para.8

    ``A Legal Expense Fund shall not accept more than $5,000 in 
a calendar year from any individual or organization.''

House Rule XXIII, clause 1

    ``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.''

House Rule XXIII, clause 2

    ``A Member, Delegate, Resident Commissioner, officer, or 
employee of the House shall adhere to the spirit and letter of 
the Rules of the House and to the rules of duly constituted 
committees thereof.''

                               III. FACTS

    Based on OCE's referral, the Committee's review of 
information gathered during the 18(a) investigation, and 
relevant Committee guidance, the following is the background in 
this matter.

                A. ESTABLISHMENT OF LEGAL EXPENSE TRUST

    Representative Young is the representative for Alaska At-
Large. On December 31, 2007, Representative Young established 
the Congressman Don Young Legal Expense Trust (the Trust) to 
pay legal expenses related to an ongoing investigation by the 
Department of Justice concerning his conduct as a Member of the 
House of Representatives. Representative Young signed a trust 
agreement on December 31, 2007, naming Gail R. Schubert, an 
attorney, as trustee.\6\ The Committee, by letter dated January 
9, 2008, approved the Trust.
---------------------------------------------------------------------------
    \6\Letter from the Committee to Representative Young, January 9, 
2008.
---------------------------------------------------------------------------
    According to quarterly reports of the Trust filed with the 
Committee, the Trust began receiving contributions during the 
reporting period ending July 30, 2008. Over the course of the 
next two-and-a-half years, the Trust continued to receive 
contributions from donors. However, there was no organized 
fundraising plan in place.
    During the reporting period ending March 31, 2011, the 
Trust received contributions from twelve LLCs owned by the same 
individual or group of individuals. Each LLC contributed $5,000 
to the Trust--the maximum permissible contribution under the 
1996 LEF Regulations for any year--via checks dated January 6 
or 7, 2011.
    On May 3, 2011, Roll Call published an article entitled ``A 
Family Comes to Rep. Young's Defense.'' The article reported 
that Gary Chouest, President of Edison Chouest Offshore, and 
other members of the Chouest family, controlled twelve entities 
that each made a $5,000 contribution to Representative Young's 
legal expense trust. The article questioned whether the 
contributions were permissible under the 1996 LEF regulations 
or were a circumvention of House rules.
    OCE's preliminary review began on June 23, 2011. On July 6, 
2011, Representative Young requested an advisory opinion from 
the Committee as to whether contributions by the twelve 
Louisiana companies were permissible.

                  B. OCE AND COMMITTEE INVESTIGATIONS

    OCE commenced its initial review of this matter on June 23, 
2011.\7\ On July 22, 2011, OCE voted to initiate a second-phase 
review. OCE voted to extend the second-phase review on August 
13, 2011.\8\ OCE voted to refer the matter to the Committee on 
September 27, 2011, and transmitted its Report and Findings to 
the Committee on October 13, 2011.\9\ Upon receipt of OCE's 
Report and Findings, the Committee sent a copy of the Report 
and Findings to Representative Young and offered him an 
opportunity to respond. Representative Young submitted a 
response to OCE's Report and Findings on November 4, 2011.\10\ 
On November 17, 2011, the Chairman and Ranking Member 
authorized an investigation pursuant to Committee Rule 18(a) to 
gather additional information related to the allegations in 
OCE's Report and Findings. On December 5, 2011, Representative 
Young submitted an additional response to the Committee.
---------------------------------------------------------------------------
    \7\Report and Findings in the Matter of Representative Don Young, 
OCE Review No. 11-3175, October 13, 2011.
    \8\Id.
    \9\Id.
    \10\Representative Young Letter to Committee, November 4, 2011.
---------------------------------------------------------------------------
    OCE's investigation revealed that sometime around December 
2010 and January 2011, Representative Young had a telephone 
conversation with Gary Chouest. During the conversation, Mr. 
Chouest offered to raise funds for Representative Young's legal 
expense trust. The funds would be contributions from the 
companies owned by the Chouest family. After the conversation, 
Representative Young's Chief of Staff contacted the trustee of 
the Trust to ask whether it was permissible to accept 
contributions from the companies.\11\ According to the Chief of 
Staff, the trustee advised that contributions up to $5,000 
would be permissible from each company that filed separate tax 
returns and held separate insurance policies.
---------------------------------------------------------------------------
    \11\OCE's Report and Findings para.para.39, 40. According to OCE's 
Report and Findings, the trustee did not recall this conversation with 
Representative Young's Chief of Staff. However, the trustee did 
acknowledge a general discussion with the Chief of Staff about 
contributions from affiliated entities.
---------------------------------------------------------------------------
    On or around January 14, 2011, Representative Young 
attended a fundraising event in Texas hosted by Mr. Chouest. At 
the event, Mr. Chouest gave Representative Young an envelope. 
According to Representative Young, he never opened the 
envelope. The envelope and its contents were forwarded to the 
trustee for deposit into the Trust account. Checks from twelve 
companies in the amount of $5,000 each were deposited into the 
Trust account on March 31, 2011.\12\ Neither Mr. Chouest nor 
any other Chouest family member contributed personal funds to 
Representative Young's legal expense trust.
---------------------------------------------------------------------------
    \12\OCE's Report and Findings para.para.44-46. According to OCE's 
Report and Findings, Representative Young recalled sending the envelope 
directly to the trustee. However, Representative Young's Chief of Staff 
recalls that Representative Young gave the checks to her and she sent 
them to the trustee.
---------------------------------------------------------------------------
    According to information provided to the Committee during 
its 18(a) inquiry, the owners of the twelve companies 
authorized that checks be issued to Representative Young's 
legal expense trust from each company. Each company issued a 
check from an account owned by that company. No check was drawn 
on the same account. The checks were all issued on January 6, 
or 7, 2011, and were all signed by Dionne Chouest Austin, the 
registered agent for each of the companies.\13
\\---------------------------------------------------------------------------
    \13\Ms. Austin also serves in various capacities, such as manager, 
of most of the companies.
---------------------------------------------------------------------------
    Based on the Committee's review of information gathered 
during the 18(a) investigation, the twelve companies that 
contributed to Representative Young's legal expense trust are a 
part of the Edison Chouest Offshore (ECO) family of companies. 
The twelve ECO companies that each contributed $5,000 to 
Representative Young's Trust are:
         Alpha Marine Services, LLC
         C-Innovation, LLC
         C-Port, LLC
         C-Port 2, LLC
         Galliano Marine Services, LLC
         Marine Technologies, LLC
         Martin Holdings, LLC
         Nautical Solutions, LLC
         Nautical Ventures, LLC
         Offshore Support Services, LLC
         North American Fabricators, LLC
         North American Shipbuilding LLC
    Each of the companies listed above, as well as ECO, are 
registered with the Louisiana Secretary of State as separate 
entities. Each company has a unique tax identification number 
and, for the companies that file income tax returns, they file 
separately. The companies provide different services or 
products related to the maritime industry. Several of the 
companies maintain separate Web sites that are directly 
accessible or accessible through links from the ECO Web site.
    Based on public records, Edison Chouest Offshore, LLC was 
registered in 1970.\14\ North American Fabricators, LLC was 
registered on October 17, 1996. Galliano Marine Service, LLC 
was registered on December 24, 1996. Alpha Marine Services, LLC 
was registered on December 24, 1996. North American 
Shipbuilding, LLC was registered on December 24, 1996. C-Port 
2, LLC was registered on December 12, 1997. Offshore Support 
Services, LLC was registered on November 4, 1998. Martin 
Holdings, LLC was registered on October 4, 2000. Nautical 
Ventures, LLC was registered on September 20, 2001. Marine 
Technologies, LLC was registered on July 3, 2002. C-Port, LLC 
was registered on January 10, 2006. C-Innovation, LLC was 
registered on April 9, 2007. Nautical Solutions, LLC was 
registered on August 16, 2007.
---------------------------------------------------------------------------
    \14\The corporation was initially registered on May 27, 1970, as 
Chouest Boat Rental, Inc., Edison. After several mergers and name 
changes, the corporation is currently registered as Offshore Service 
Vessels, LLC.
---------------------------------------------------------------------------
    According to the information obtained by the Committee, 
eleven of the contributing companies are owned by Gary Chouest, 
his wife, and their five children (though the interests of two 
children are held in trust) or some combination of those seven 
individuals. One separate company which partly or wholly owns 
four of the contributing companies is itself owned by the 
Chouest family as well. One of the contributing companies is 
wholly owned by another separate company that is wholly owned 
by Gary Chouest alone. Each of the owners has the authority to 
sign checks on behalf of the companies. Gary Chouest and other 
members of the Chouest family are listed as registered agents 
or officers of each ECO company. The corporate registrations 
list Gary Chouest as a registered agent and a member of the 
North American Fabricators, LLC; North American Shipbuilding, 
LLC; and C-Innovation, LLC. Mr. Chouest is listed as a 
registered agent and manager of Nautical Solutions, LLC; 
Galliano Marine Services, LLC; and Alpha Marine Services, LLC. 
Mr. Chouest is also listed as a manager of Nautical Ventures, 
LLC. Dionne Chouest Austin is listed as a registered agent for 
each of the twelve companies and also serves as a manager or 
member of five of the corporations. Several other Chouest 
family members serve in various capacities for the 
corporations.
    The companies appear to provide separate and distinct 
products or services. Several of the companies have offices, 
including principal offices, in foreign countries and on 
different continents. Several of the companies have presidents 
from, and serving in the foreign countries.
    During its 18(a) investigation, the Committee received 
information from Gary Chouest, Director of Edison Chouest 
Offshore, via a telephone interview and through documents 
submitted by Mr. Chouest. The information provided by Mr. 
Chouest demonstrated that each company is a separate legal 
entity. Each company has a board of directors. The companies 
are owned by Mr. Chouest, his wife, and their five children, or 
some combination of those seven individuals. Each of the owners 
has the authority to sign checks on behalf of the companies. In 
addition, the companies each have separate tax identification 
numbers and file separate tax returns, although three of the 
companies did not file tax returns because they are 
``disregarded entities of a parent company.''\15
\\---------------------------------------------------------------------------
    \15\Mr. Chouest first told the Committee that each company filed 
separate tax returns, but later clarified that three companies do not 
file returns.
---------------------------------------------------------------------------

                      IV. FINDINGS AND CONCLUSIONS


            A. COMMITTEE'S RESPONSE TO REQUEST FOR GUIDANCE

1. Restrictions on Contributions to Legal Expense Funds

            a. Legal Background
    Under the gift rule, ``a contribution or other payment to a 
legal expense fund established for the benefit of [the 
official] that is otherwise lawfully made in accordance with 
the restrictions and disclosure requirements of the Committee 
on Ethics'' is a permissible gift.\16\ Under the 1996 LEF 
Regulations, a Member may not receive or solicit donations to 
such a fund without prior approval of the trust agreement by 
the Committee.\17
\\---------------------------------------------------------------------------
    \16\House Rule XXV, clause 5(a)(3)(E). See generally 2008 House 
Ethics Manual at 63-65.
    \17\1996 LEF Regulations para.para.1, 11.
---------------------------------------------------------------------------
    The 1996 LEF Regulations also provide the following 
restrictions on contributions made to a legal expense fund:
          1. A Legal Expense Fund shall not accept more than 
        $5,000 in a calendar year from any individual or 
        organization;\18
\\---------------------------------------------------------------------------
    \18\1996 LEF Regulations para.8.
---------------------------------------------------------------------------
          2. A Legal Expense Fund shall not accept any 
        contribution from a registered lobbyist or an agent of 
        a foreign principal;\19
\\---------------------------------------------------------------------------
    \19\1996 LEF Regulations para.9.
---------------------------------------------------------------------------
          3. Other than as specifically barred by law or 
        regulation, a Legal Expense Fund may accept 
        contributions from any individual or organization, 
        including a corporation, labor union, or political 
        action committee (PAC).\20
\\---------------------------------------------------------------------------
    \20\1996 LEF Regulations para.10.
---------------------------------------------------------------------------
    The 1996 LEF Regulations do not explicitly limit 
contributions from business entities controlled by the same 
individual or group of individuals.
            b. Analysis
    Representative Young's legal expense trust received $60,000 
from twelve LLCs controlled by a businessman and his family 
members. Each of these LLCs is a separate legal entity with 
separate financial records. As a result, each LLC is a separate 
organization under the 1996 LEF Regulations and Representative 
Young's legal expense trust was permitted to receive, and 
therefore is permitted to retain, these donations.
    However, the Committee has adopted revised Legal Expense 
Fund Regulations that will prohibit similar contributions in 
the future.

             B. COMMITTEE'S DISPOSITION OF THE OCE REFERRAL

    According to the OCE referral, during the reporting period 
ending March 31, 2011, twelve LLCs owned by members of the 
Chouest family each made contributions of $5,000 to 
Representative Young's legal expense trust. Based on the 
Committee's review of information gathered during the 18(a) 
investigation, the 1996 LEF Regulations, and long-standing 
Committee advice, multiple, legally separate organizations 
owned by the same individual or individuals were permitted to 
make contributions up to $5,000 per organization. Therefore, 
the Committee votes to dismiss the allegations, but is amending 
its LEF Regulations to prohibit similar contributions in the 
future.

1. Contributions in Excess of the Annual Limit

            a. 1996 LEF Regulations
    As noted above, contributions to a legal expense fund are 
limited to $5,000 per year from an individual or organization, 
and, except as barred by law or regulation, contributions may 
be accepted from any individual or organization other than a 
federally registered lobbyist or an agent of a foreign 
principal. The 1996 LEF Regulations do not impose any 
limitation on contributions from entities or organizations 
controlled or owned by the same individual or individuals.
    The gift rule includes a general rule on the acceptance of 
gifts and 23 provisions that describe specific kinds of gifts 
that may be accepted.\21\ The general rule prohibits the 
acceptance of gifts from a registered lobbyist, an agent of a 
foreign principal, or a private entity that retains or employs 
such individuals, and limits the value of any gift from 
acceptable donors to less than $50 per gift, and a total annual 
limit of less than $100.\22\ In its guidance regarding the 
general gift rule, the Committee has stated that a gift from an 
individual affiliated with an organization is a gift from both 
the individual and the organization.\23\ The Committee's 
guidance states that this ruling specifically applies to the 
general gift rule.\24\ However, the guidance also makes it 
clear that provisions applicable to the general gift rule are 
not necessarily applicable to specific gift rule exceptions, 
such as contributions to a legal expense fund.\25
\\---------------------------------------------------------------------------
    \21\See 2008 House Ethics Manual at 30. House Rule XXV, cl. 5.
    \22\House Rule XXV, cl. 5(a)(1)(A)(ii) and 5(a)(1)(B)(i).
    \23\2008 House Ethics Manual at 36.
    \24\Id.
    \25\Id. at 38.
---------------------------------------------------------------------------
    In addition, the 2008 House Ethics Manual also provides 
that a gift that meets one of the specific exceptions to the 
gift rule may be accepted even if it does not meet the 
requirements of the general gift rule exception.\26\ For 
example, if a gift meets all the requirements of a specific 
provision, the gift would be acceptable even when the donor is 
a registered lobbyist, an agent of a foreign principal, or an 
entity that retains or employs such individuals.\27\ Committee 
guidance provides:
---------------------------------------------------------------------------
    \26\Id.
    \27\Id.

          When a gift satisfies each of the requirements of any 
        of the specific provisions of the gift rule on 
        acceptable gifts--for example, a book under the 
        ``informational materials'' provision (House Rule 25, 
        clause 5(a)(3)(I))--the gift may be accepted even if 
        its value is $50 or more. Furthermore, in that 
        circumstance, the value of the gift does not count 
        against the donor's annual gift limitation of less than 
        $100.\28
\\---------------------------------------------------------------------------
    \28\Id. (emphasis in original).

    The universe of rules applicable to a legal expense fund is 
contained within the legal expense fund regulations issued by 
the Committee--currently the 1996 LEF Regulations. 
Contributions to a legal expense fund are an exception to the 
gift rule which prohibits Members, officers, and House 
employees from receiving gifts. Whether a contribution to a 
legal expense fund is an exception to the gift rule, and 
therefore permissible, is solely governed by the 1996 LEF 
Regulations issued by the Committee. This interpretation is 
consistent with the Committee's guidance regarding other 
exceptions to the gift rule. For example, the Committee's 
advice regarding the Foreign Gifts and Decorations Act (FGDA), 
and the Mutual Educational and Cultural Exchange Act (MEACA) 
has been that the universe of rules applicable to a gift under 
these provisions is contained within the relevant statute, and 
guidance provided by the Committee on aspects of the general 
gift rule does not apply to these types of gifts.
    The contributions made by the twelve LLCs to Representative 
Young's legal expense trust were from separate entities, did 
not exceed $5,000, and were not from a lobbyist or an agent of 
a foreign principal. As such, the contributions were 
technically permissible under the 1996 LEF Regulations.
            b. House Rule XXIII, clause 2
    House Rule XXIII, clause 2 is applicable to conduct that 
may technically comply with relevant House Rules, but 
circumvents the spirit of the applicable Rule. Thus, even 
though the contributions were technically permissible under the 
1996 LEF Regulations, if the contributions circumvented the 
spirit of the 1996 LEF Regulations governing contributions to a 
legal expense fund with Representative Young's knowledge, 
Representative Young's acceptance of the contributions may be 
perceived as violative of clause 2 of House Rule XXIII.
    The 1996 LEF Regulations establish a $5,000 contribution 
limit per individual or organization.\29\ The Regulations also 
specifically state that contributions may be accepted from 
``any individual or organization, including a corporation . . 
.'' other than as specifically barred by law or regulation.\30\ 
No law or regulation specifically prohibits contributions to a 
legal expense fund from separate organizations that are owned 
by the same individual or group of individuals--such as the 
corporations in this matter. Because the 1996 LEF Regulations 
permit contributions from any organization, including 
corporations, and there is no law or regulation that prohibits 
contributions from corporations that are owned by the same 
individual or individuals, Representative Young's acceptance of 
the contributions falls squarely within the language of the 
1996 LEF Regulations.
---------------------------------------------------------------------------
    \29\An organization is defined by Black's Law Dictionary as, ``[a] 
body of persons (such as a union or corporation) formed for a common 
purpose.'' Black's Law Dictionary (9th ed. 2009), organization.
    \30\1996 LEF Regulations para.10 (emphasis added).
---------------------------------------------------------------------------
    Furthermore, the evidence indicates that Representative 
Young inquired of his trustee about the requirements for 
related entities, and the advice he was given did appear to 
apply to the relevant corporate entities. The companies are 
separate legal entities, with separate functions, services, or 
products. While they are all owned by members of the same 
family, and the checks were all signed by the same family 
member, none of these facts clearly violate the plain rules or 
the advice of the trustee.
    To be clear, the Committee is concerned that five people 
and two trusts were in essence making twelve maximum 
contributions. However, the evidence, as described above, did 
not convince the Committee that Representative Young intended 
to violate the spirit of the 1996 LEF Regulations. Therefore, 
based on its findings, because the contributions did not 
violate any rule and because Representative Young's conduct did 
not clearly violate the spirit of the Rules, the Committee 
determined that OCE's referral should be dismissed.
    The Committee directed the Chairman, upon providing the 
notices required pursuant to House Rule XI, clause 3(b)(8)(A), 
and Committee Rule 17A(b)(2), to file this Report with the 
House, and copies of OCE's Report and Findings in this matter, 
along with any response filed, all of which are made a part of 
this Report and appended hereto.\31\ 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 Rule 17A(b)(3) and 17A(c)(2).
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    \31\See House Rule XI, clauses 3(a)(2) and 3(b).
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V. STATEMENT UNDER RULE XIII, 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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