[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). --------------------------------------------------------------------------- \31\See House Rule XI, clauses 3(a)(2) and 3(b). --------------------------------------------------------------------------- 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. [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]