[House Report 113-664]
[From the U.S. Government Publishing Office]


                                                House Calendar No. 152

 113th Congress     }                                {         Report
 
 2d Session         }   HOUSE OF REPRESENTATIVES     {        113-664   
 
_______________________________________________________________________

                                     

                                                 

                      IN THE MATTER OF ALLEGATIONS

                              RELATING TO

                      REPRESENTATIVE PHIL GINGREY

                               __________

                              R E P O R T

                                 of the

                          COMMITTEE ON ETHICS




 December 11, 2014.--Referred to the House Calendar and ordered to be 
                                printed
                                
                                
                                
   
   49-006                U. S. GOVERNMENT PRINTING OFFICE
                                WASHINGTON: 2014
                                
                                
                                
                          COMMITTEE ON ETHICS

K. MICHAEL CONAWAY, Texas            LINDA T. SAANCHEZ, California
  Chairman                             Ranking Member
CHARLES W. DENT, Pennsylvania        PEDRO R. PIERLUISI, Puerto Rico
PATRICK MEEHAN, Pennsylvania         MICHAEL E. CAPUANO, Massachusetts
TREY GOWDY, South Carolina           YVETTE D. CLARKE, New York
SUSAN W. BROOKS, Indiana             TED DEUTCH, Florida

                              REPORT STAFF

              Thomas A. Rust, Chief Counsel/Staff Director
             Deborah Sue Mayer, Director of Investigations
               Jackie M. Barber, Counsel to the Chairman
            Daniel J. Taylor, Counsel to the Ranking Member

                    Patrick McMullen, Senior Counsel
                    Brittany M. Bohren, Investigator
                  C. Tucker Carr, Investigative Clerk
                  
                         LETTER OF TRANSMITTAL

                              ----------                              

                          House of Representatives,
                                       Committee on Ethics,
                                 Washington, DC, December 11, 2014.
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 Representative Phil Gingrey.''
            Sincerely,
                                   K. Michael Conaway,
                                           Chairman.
                                   Linda T. Saanchez,
                                           Ranking Member.
                                           
                            C O N T E N T S

                              ----------                              
                                                                   Page
 I. INTRODUCTION......................................................1
 II HOUSE RULES, LAWS, REGULATIONS, AND OTHER STANDARDS OF CONDUCT....2
III.BACKGROUND........................................................2

IV. FINDINGS..........................................................4
        A. EFFORTS TO ASSIST COMMUNITY BANKS.....................     4
        B. FINANCIAL INTEREST IN BANK OF ELLIJAY.................    10
        C. HOUSE RULE XXIII, CLAUSE 3............................    11
        D. THE CODE OF ETHICS....................................    12
            1. SECTION 5, CLAUSE 1...............................    13
            2. SECTION 5, CLAUSE 2...............................    17
        E. HOUSE RULE XXIII, CLAUSES 1 AND 2.....................    20
        F. REPRESENTATIVE GINGREY'S LEGAL ARGUMENTS..............    21
 V. CONCLUSION.......................................................24
VI. STATEMENT UNDER HOUSE RULE XIII, CLAUSE 3(C).....................24
    APPENDIX A: LETTER OF REPROVAL...................................25
    
                                                 House Calendar No. 152
                                                 
113th Congress     }                                 {          Report
                        HOUSE OF REPRESENTATIVES
 2d Session        }                                 {          113-664

======================================================================
 
IN THE MATTER OF ALLEGATIONS RELATING TO REPRESENTATIVE PHIL GINGREY

                                _______
                                

 December 11, 2014.--Referred to the House Calendar and ordered to be 
                                printed

                                _______
                                

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

                              R E P O R T

    In accordance with House rule XI, clauses 3(a)(2) and 3(b), 
the Committee on Ethics (Committee) hereby submits the 
following Report to the House of Representatives:

                            I. INTRODUCTION

    In November 2011, press reports alleged that Representative 
Gingrey received stock warrants from two Georgia community 
banks--Bank of Ellijay and Westside Bank--as compensation for 
serving on their boards of directors, and that he advocated 
legislation that would benefit the banks. In the Spring of 
2012, the Chairman and Ranking Member of the Committee for the 
112th Congress authorized Committee staff to investigate these 
and related allegations pursuant to Committee Rule 18(a). 
Separately, the Office of Congressional Ethics (OCE) initiated 
a review of the compensation-related allegation, and ultimately 
recommended that it be dismissed. On August 2, 2012, the 
Committee voted unanimously to close its review of the 
compensation allegation, while continuing its review of 
allegations related to Representative Gingrey's advocacy on 
behalf of the banks.
    In the course of its review, the Committee determined that 
Representative Gingrey invested $250,000 in Bank of Ellijay, 
and subsequently took official actions to assist the bank. The 
Committee found no evidence that Representative Gingrey's 
actions resulted in any financial benefit to him, or were taken 
with that intent. However, the Committee concluded that 
Representative Gingrey's efforts to assist Bank of Ellijay 
violated two provisions of the Code of Ethics for Government 
Service (Code of Ethics), which prohibit dispensing special 
favors to anyone, ``whether for remuneration or not,'' and the 
acceptance of benefits that could be seen as influencing a 
Member's official duties. Representative Gingrey's actions also 
did not reflect creditably on the House or comport with the 
spirit of the House Rules regarding conflicts of interest.
    For his violations of House rules, law, regulations, or 
other standards of conduct, the Committee has issued a public 
letter of reproval to Representative Gingrey.

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

    The Code of Ethics, section 5, provides that any person in 
government service should ``never discriminate unfairly by the 
dispensing of special favors or privileges to anyone, whether 
for remuneration or not; and never accept, for himself or his 
family, favors or benefits under circumstances which might be 
construed by reasonable persons as influencing the performance 
of his governmental duties.'' The House Ethics Manual notes 
that the Committee ``has cautioned all Members `to avoid 
situations in which even an inference might be drawn suggesting 
improper action.'''\1\
---------------------------------------------------------------------------
    \1\Code of Ethics for Government Service para. 5; House Ethics 
Manual at 27 (2008) (hereinafter Ethics Manual).
---------------------------------------------------------------------------
    House rule XXIII, clause 3, states that a Member ``may not 
receive compensation and may not permit compensation to accrue 
to the beneficial interest of such individual from any source, 
the receipt of which would occur by virtue of influence 
improperly exerted from the position of such individual in 
Congress.''
    Federal law provides that ``appropriations shall be applied 
only to the objects for which the appropriations were made 
except as otherwise provided by law.''\2\ The Committee and the 
Committee on House Administration have noted that funds 
appropriated for the Members' Representational Allowance, which 
are used for staff salaries, among other things, are meant ``to 
support the conduct of the official and representational duties 
of a Member . . . with respect to the district from which the 
Member is elected.''\3\
---------------------------------------------------------------------------
    \2\2 U.S.C. Sec. 1301(a).
    \3\Ethics Manual at 310 (citing 2 U.S.C. Sec. 57b and quoting Comm. 
on House Admin., U.S. House of Representatives, Members' Congressional 
Handbook, Regulations Governing the Members' Representational Allowance 
(2001) (emphasis in original)).
---------------------------------------------------------------------------
    Finally, House rule XXIII, clauses 1 and 2, provide that a 
Member ``shall behave at all times in a manner that shall 
reflect creditably on the House,'' and ``shall adhere to the 
spirit and the letter of the Rules of the House. . . .''

                            III. BACKGROUND

    The Committee opened its investigation regarding 
Representative Gingrey in the Spring of 2012. Separately, OCE 
initiated a review of the allegation that the bank stock 
warrants Representative Gingrey obtained were impermissible 
compensation for his service as a board member and referred 
that allegation to the Committee with a recommendation that it 
be dismissed. Following its independent review of the matter, 
the Committee did dismiss that allegation, but continued its 
investigation of other issues. The Committee's investigation 
took an extended amount of time, in part because Representative 
Gingrey's factual explanations changed substantially during the 
course of the investigation, requiring the Committee to obtain 
clarifications and further information from Representative 
Gingrey and other witnesses.
    On June 8, 2012, the then-Chairman and Ranking Member of 
the Committee sent a Request for Information (RFI) to 
Representative Gingrey. Representative Gingrey responded to the 
RFI, through counsel, on July 6, 2012, and provided both a 
narrative submission and relevant documents (July 6, 2012 
Submission). The submission, which Representative Gingrey 
signed and attested to, referenced two official actions by 
Representative Gingrey that related to community banks, neither 
of which had been mentioned in press reports at the time. 
First, on November 14, 2008, Representative Gingrey co-signed a 
letter to then-Treasury Secretary Henry Paulson urging him to 
provide community banks with access to funds from the Troubled 
Asset Relief Program (TARP).\4\ Second, Representative Gingrey 
set up ``an office meeting with Treasury Department officials . 
. . for two of his constituents in January 2009.''\5\ The 
submission stated that ``[t]his meeting allowed these 
constituents and the Congressman to once again alert Treasury 
officials to the need for equal TARP access for both large and 
small financial institutions.''\6\ On February 6, 2013, the 
Committee requested a clarification of this portion of 
Representative Gingrey's submission. Representative Gingrey's 
counsel provided a response, with additional documents, on 
February 20, 2013 (February 20, 2013 Submission).\7\
---------------------------------------------------------------------------
    \4\Letter from S. Passantino to D. Schwager, July 6, 2012, at 15.
    \5\Id.
    \6\Id.
    \7\Letter from S. Passantino to P. McMullen, Feb. 20, 2013.
---------------------------------------------------------------------------
    After reviewing Representative Gingrey's submissions and 
documents, Committee staff conducted eleven interviews, 
including interviews of Representative Gingrey, his Chief of 
Staff, and persons who arranged and attended the Treasury 
Department meeting.\8\ Committee staff also received and 
reviewed documents from the Treasury Department regarding the 
meeting.
---------------------------------------------------------------------------
    \8\The Chairman and Ranking Member participated in the interview 
with Representative Gingrey.
---------------------------------------------------------------------------
    On January 14, 2014, the Committee asked Representative 
Gingrey's counsel for a legal analysis of Representative 
Gingrey's actions with respect to setting up the Bank of 
Ellijay meetings. Representative Gingrey's counsel provided 
that analysis on February 12, 2014 (February 12, 2014 
Submission).\9\ On February 20, 2014, the Committee asked 
Representative Gingrey's counsel to clarify a statement in the 
February 12 submission related to the constituent status of 
Bank of Ellijay and its officers. Representative Gingrey's 
counsel provided a response on March 5, 2014 (March 5, 2014 
Submission).\10\
---------------------------------------------------------------------------
    \9\Letter from S. Passantino to P. McMullen, Feb. 12, 2014.
    \10\Letter from S. Passantino to P. McMullen, Mar. 5, 2014.
---------------------------------------------------------------------------
    Before the Committee decided how to resolve this matter, 
Representative Gingrey was invited to address the full 
Committee, and did so. The Committee carefully considered all 
of Representative Gingrey's written submissions and oral 
remarks in resolving the matter.

                              IV. FINDINGS


                  A. EFFORTS TO ASSIST COMMUNITY BANKS

    In or around 2006, a bank holding company was established, 
with the goal of opening five community banks in Georgia. Two 
organizers of the holding company, who lived in Representative 
Gingrey's district, asked him to join the board of directors of 
one of the banks. Representative Gingrey told the Committee 
that he had hoped to be selected for the board of Bank of 
Canton, which was near his congressional district. Instead, he 
was asked to join the board of Bank of Ellijay, which was 
located further from his district than Canton, in an area where 
he ``knew a few people'' but ``didn't know nearly as many 
people.''\11\ At the same time that Representative Gingrey 
joined the bank's board, he was allowed to purchase $250,000 in 
warrants of the bank's stock, which entitled him to purchase 
stock in Bank of Ellijay at a defined strike price.\12\ 
Representative Gingrey borrowed $200,000 from another Georgia 
bank in order to make this investment.
---------------------------------------------------------------------------
    \11\18(a) Interview of Representative Gingrey.
    \12\Representative Gingrey also joined the board of directors of 
Westside Bank, and invested $250,000 in that bank. However, Westside 
Bank never submitted an application for TARP funding, and the evidence 
did not reveal any official actions by Representative Gingrey that 
could have benefitted Westside Bank. Accordingly, the Committee did not 
find that Representative Gingrey acted improperly with respect to 
Westside Bank.
---------------------------------------------------------------------------
    Bank of Ellijay made substantial loans to real estate 
developers in Georgia, and as the housing market declined in 
2007 and 2008, the bank's financial condition deteriorated.\13\ 
In mid or late 2008, Bank of Ellijay submitted an application 
with the Federal Deposit Insurance Corporation (FDIC) for TARP 
funding. Former officers of Bank of Ellijay told Committee 
staff that FDIC forwarded the bank's TARP application to the 
Treasury Department.\14\
---------------------------------------------------------------------------
    \13\Bank of Ellijay ultimately failed in September 2010, and was 
placed into receivership. As a result, Representative Gingrey lost his 
entire investment in the bank.
    \14\Treasury Department staff have stated that they could not 
locate Bank of Ellijay's TARP application.
---------------------------------------------------------------------------
    On November 14, 2008, Representative Gingrey and two other 
Members of Congress signed a letter to then-Secretary of the 
Treasury Paulson.\15\ The letter generally advocated for the 
disbursement of TARP funds to all banks on equal terms, rather 
than limiting such funds to large financial institutions.\16\ 
The letter thus asserted that ``[c]ommunity financial 
institutions, including those that are privately held . . . 
should have the same level of access to the [TARP] program as 
larger institutions . . .''\17\ Representative Gingrey's Chief 
of Staff told Committee staff that he drafted the letter at 
Representative Gingrey's request, but he did not know what 
motivated Representative Gingrey to send it. Representative 
Gingrey stated that he could not recall whether his staff 
drafted the letter, or why it was sent. The Chief Financial 
Officer (CFO) of Bank of Ellijay told Committee staff that he 
told Representative Gingrey, during a Bank of Ellijay board 
meeting in October or November 2008, that the TARP program was 
not helping community banks.
---------------------------------------------------------------------------
    \15\Representative Gingrey provided the Committee with a letter 
from Representatives Gingrey, Greg Walden, John Shimkus, and Joe 
Wilson, to then-Secretary of the Treasury Henry Paulson, dated November 
14, 2008. However, the Treasury Department provided the Committee with 
a version of the letter that is identical in substance but is signed 
only by Representatives Gingrey, Walden, and Shimkus. Treasury 
Department documents indicate that the letter was faxed from 
Representative Gingrey's office, and Representative Gingrey's signature 
appears first on the letter.
    \16\The letter argued against any approach that ``places smaller 
companies at a competitive disadvantage for taxpayer funds originally 
intended to address the systemic lack of available credit.'' Id.
    \17\Id.
---------------------------------------------------------------------------
    On Friday, January 9, 2009, Bank of Ellijay's CFO sent 
Representative Gingrey an email, copying Representative 
Gingrey's office manager, saying that the bank's Chairman asked 
the CFO to request ``a meeting with members of Congress 
regarding Community Banks and the TARP program.'' He stated:

          As a non-publicly traded Community Bank, we are at a 
        disadvantage with the publicly traded institutions that 
        have received the TARP Capital Purchase Program funds. 
        Our correspondent banks are making it difficult for us 
        to continue to conduct day-to-day business. If the non-
        publicly traded Community Banks were given the TARP 
        Capital Purchase Program funds, you would see the 
        credit begin to flow. As it currently stands, the 
        larger institutions are hoarding the capital and not 
        allowing it to flow through the system. The Community 
        Banks are the ones that will help solve the mortgage 
        crisis by working with the borrowers. Let me know when 
        you would like to discuss this further. I urge Congress 
        to listen to the Community Bankers, not lobbyists, 
        which have to deal with the legislation, regulation, 
        and customers on a daily basis. Anyone that feels that 
        we are unregulated or have had our regulatory burden 
        eased during the last administration has not worked in 
        a Bank.\18\
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    \18\The language of the CFO's request is notably similar to the 
text of Representative Gingrey's letter to then-Treasury Secretary 
Paulson. Further, while the CFO's email discusses community banks 
generally, the reference to the ability to ``continue day-to-day 
business'' appears to relate specifically to Bank of Ellijay, as the 
CFO was not associated with any other community bank at the time. The 
Chairman of Bank of Ellijay, in his second (but not first) interview 
with Committee staff, did recall discussing the need for TARP funding 
for community banks generally with the head of a Georgia community 
banking association around the time of the Treasury Department meeting. 
However, he recalled that only Bank of Ellijay's TARP application was 
discussed in the congressional and Treasury Department meetings.

The CFO and Chairman both told Committee staff that they never 
lived in Representative Gingrey's congressional district.\19\ 
Despite the fact that neither the CFO, Chairman, or the bank 
itself were constituents of Representative Gingrey, 
Representative Gingrey's office manager replied to the CFO's 
email, copying the Chief of Staff, on Monday, January 12, 2009. 
The office manager informed the CFO that ``we are working on 
this request'' and asked when Bank of Ellijay representatives 
could come to Washington, D.C.
---------------------------------------------------------------------------
    \19\The three Bank of Ellijay representatives who attended the 
congressional and Treasury Department meetings--the Chairman, CFO, and 
Chief Executive Officer (CEO)--provided their current and past home 
addresses to Committee staff. The Chairman and CFO of Bank of Ellijay 
do not currently live in Representative Gingrey's district and have 
never lived in the district. In a submission to the Committee, 
Representative Gingrey's counsel stated that the CEO of Bank of Ellijay 
``is believed by the Congressman to be living in Canton but to have 
previously lived in his Eleventh Congressional District (Marietta, 
Georgia). The Congressman is not certain whether he moved prior to, or 
after, participating in relevant board discussions with Congressman 
Gingrey.'' Mar. 5 Submission at 2. However, based on the testimony of 
the CEO and Representative Gingrey, it is clear the CEO became a 
resident of Representative Gingrey's district after the 2009 Treasury 
Department meeting, as a result of redistricting.
---------------------------------------------------------------------------
    Representative Gingrey and his Chief of Staff provided 
different accounts of their communications after the CFO's 
email was received. The Chief of Staff stated that he discussed 
the CFO's request with Representative Gingrey soon after the 
request was made. The Chief of Staff stated that Representative 
Gingrey directed him to schedule meetings for the Bank of 
Ellijay representatives with House Members and staff, and told 
him ``I want you to set up what you can, but I don't want you 
to do anything above and beyond what you would do for a normal 
constituent, you know.''\20\ According to the Chief of Staff, 
during this conversation, the Chief of Staff suggested asking 
Anna Cabral, who was then the Treasurer of the United States 
and was also the Chief of Staff's mother-in-law, to set up a 
meeting for the Bank of Ellijay representatives with officials 
from the Treasury Department. In his interview with the 
Committee, Representative Gingrey was asked ``Do you recall 
having any discussion with [your Chief of Staff] between--in 
that short window of time [between the CFO's email to 
Representative Gingrey and the Chief of Staff's email to Ms. 
Cabral] about the request from [the CFO]?'' He replied ``No, 
no, I don't.''\21\ However, later in his interview, 
Representative Gingrey did recall calling the Chief of Staff 
after he received the CFO's email, and telling him that the 
Bank of Ellijay representatives ``would like to come and 
inquire about the status of their [TARP] application.''\22\ 
Representative Gingrey did not recall the Chief of Staff 
mentioning the Treasury Department meeting during their phone 
call. In fact, Representative Gingrey stated that he did not 
find out about the Treasury Department meeting until after it 
had occurred.\23\
---------------------------------------------------------------------------
    \20\18(a) Interview of Representative Gingrey's Chief of Staff.
    \21\18(a) Interview of Representative Gingrey.
    \22\Id.
    \23\Representative Gingrey stated: ``That [Treasury Department] 
meeting was set up by my chief of staff, and I was--I was not aware of 
that at the time, and I don't know any other details about it. I don't 
know if they specifically asked him to set up a meeting both with the 
Financial Services Committee and the Department of Treasury. But I was 
not aware of that meeting at all until after the fact.'' Id.
---------------------------------------------------------------------------
    While it is impossible, on the current factual record, to 
prove that Representative Gingrey was aware of the Treasury 
Department meeting before it occurred, the evidence supports 
the conclusion that he was. To start, Representative Gingrey's 
July 6, 2012, submission stated that the Treasury Department 
meeting was ``set up by Congressman Gingrey for two of his 
constituents in January 2009.''\24\ Attached to the letter was 
a signed declaration from Representative Gingrey that, ``under 
penalty of perjury . . . the response and factual assertions 
contained in the attached letter . . . are true and accurate.'' 
Further, each of the three Bank of Ellijay representatives 
stated that they visited Representative Gingrey's office before 
the congressional and Treasury Department meetings. The bank's 
Chairman said that he spoke with Representative Gingrey for ten 
or fifteen minutes, and that they discussed the scheduled 
meeting with the Treasury Department.\25\ The bank's CEO also 
recalled meeting with Representative Gingrey before the other 
meetings, and said that ``there were conversations about the 
banking environment in general and what our schedule might be 
that day.'' It seems likely that the Treasury Department 
meeting would be part of any discussion of the day's schedule. 
Finally, it seems unlikely that the Chief of Staff, who was 
promoted to that position shortly before the CFO's request, 
would arrange a meeting with high-ranking Treasury Department 
officials, on Representative Gingrey's behalf and using his 
name, without notifying Representative Gingrey. Representative 
Gingrey stated that it was ``not unusual'' for his Chief of 
Staff to arrange meetings for constituents on his own 
initiative, without informing Representative Gingrey, but also 
not ``frequent.''\26\ In this case, given Representative 
Gingrey's initial assertion that he set up the Treasury 
Department meeting, his difficulty in recalling other salient 
facts regarding other meetings arranged for the Bank of Ellijay 
representatives, and the Chief of Staff's clear recollection of 
discussing the Treasury Department meeting with Representative 
Gingrey, it is likely that Representative Gingrey was aware of 
the scheduled Treasury Department meeting prior to its 
occurrence, as well as his staff's general efforts to arrange 
the meeting.\27\
---------------------------------------------------------------------------
    \24\July 6, 2012, Submission at 15.
    \25\Bank of Ellijay's Chairman stated this in October 2012. 
Committee staff interviewed him a second time in January 2014, at which 
time he said he could not recall whether he ever discussed the Treasury 
Department meeting with Representative Gingrey. He did recall 
discussing the meeting at Bank of Ellijay board meetings, both before 
and after the trip to Washington, D.C. Thus, if Representative Gingrey 
attended those board meetings, he would have learned of the Treasury 
Department meeting. However, neither Representative Gingrey nor the 
Bank of Ellijay representatives interviewed in this matter could 
provide the Committee with copies of the bank's board minutes.
    \26\18(a) Interview of Representative Gingrey.
    \27\Even if Representative Gingrey was not aware of his staff's 
efforts to arrange the Treasury Department meeting, using his name, the 
Committee's precedents support holding him responsible for his staff's 
actions. See, e.g., House Comm. on Standards of Official Conduct, In 
the Matter of Rep. E.G. ``Bud'' Shuster, H. Rep. 106-979, 106th Cong., 
Sess. 31 (2000) at 64 (Committee found Member misued official resources 
for campaign purposes, despite finding ``no direct evidence that [the 
Member] was aware that this [campaign-related] activity was taking 
place.''). The Committee has not applied this standard in certain 
instances, such as where the Member took appropriate steps to ensure 
that their staff was acting properly, and in a manner consistent with 
the House Rules. See, e.g., Comm. on Ethics, In the Matter of 
Representative Maxine Waters, H. Rept. 112-690, 112th Cong. 2d Sess. 7-
8 (2012) (hereinafter Waters) (finding Member was not responsible for 
her Chief of Staff's violation of conflict of interest rules because 
she told her Chief of Staff not to work on certain matters). Here, 
Representative Gingrey stated that he was aware that his Chief of Staff 
sometimes arranged meetings with executive agencies without informing 
him of the details of those requests. Thus, Representative Gingrey 
should be held accountable for his staff's actions in setting up the 
Bank of Ellijay's meeting with the Treasury Department. See Comm. on 
Standards of Official Conduct, Investigation Into Officially Connected 
Travel of House Members to Attend the Carib News Foundation Multi-
National Business Conferences in 2007 and 2008, H. Rept. 111-422, 111th 
Cong. Sess. 2d 192-93 (2010) (``[B]ased upon the Standards Committee's 
longstanding precedent . . . the Subcommittee finds that it would not 
well serve the House as an institution to allow its Members to escape 
responsibility by delegating authority to their staff to take actions 
and hide behind their lack of knowledge of the facts surrounding those 
actions.'')
---------------------------------------------------------------------------
    Putting aside the question of Representative Gingrey's 
knowledge of the Treasury Department meeting, the process of 
requesting and scheduling the meeting was well documented. Less 
than an hour after Bank of Ellijay's CFO emailed Representative 
Gingrey, the Chief of Staff, who was not copied on the email 
from the CFO to Representative Gingrey, sent an email to Ms. 
Cabral stating, in part:

          My boss is concerned about the priority being given 
        to community banks in the TARP process and if the next 
        tranche of TARP funds will be steered to community 
        banks. Some good constituent community bankers have 
        asked us to help them speak in person with some 
        Treasury officials next week--and my boss wants to make 
        sure we make this happen. Is this possible and do you 
        know who we could contact on this?

Ms. Cabral immediately forwarded the Chief of Staff's email to 
a number of Treasury Department officials in the Legislative 
Affairs and Policy offices, and asked that officials 
responsible for administering the TARP program meet with the 
Bank of Ellijay representatives. While the Chief of Staff's 
email did not mention the bank's TARP application, a Treasury 
Department official subsequently asked Representative Gingrey's 
staff if the bank had applied for TARP funding, and was told 
that it had.
    In a submission to the Committee, Representative Gingrey 
stated that the Treasury Department meeting ``was arranged for 
his constituents out of a desire to aid in their search for 
additional information regarding the TARP application process 
due to the fact that Treasury had not responded to their 
repeated inquiries.''\28\ Representative Gingrey went on to 
state that the meeting was not ``designed to encourage federal 
financial support for the Bank, or to advocate for policies 
that would unfairly advantage community banks over other 
financial institutions.''\29\ With the exception of one 
witness, persons who attended the Treasury Department meeting 
agreed that the central purpose of the meeting was to determine 
the status of Bank of Ellijay's TARP application and to assess 
whether the bank could qualify for TARP funds at all.\30\ Other 
evidence, including ``talking points'' which the CFO said he 
discussed in the Treasury Department meeting, indicates that 
the bank's representatives also advocated for disbursing TARP 
funds to community banks generally, and used Bank of Ellijay as 
an example of the problems community banks were encountering 
because they could not access TARP funds.\31\
---------------------------------------------------------------------------
    \28\Feb. 20, 2013 Submission at 2.
    \29\Id.
    \30\The CFO stated that he did not believe Bank of Ellijay's TARP 
application was discussed during the Treasury Department meeting. 
However, he also stated that there were multiple conversations 
overlapping at certain points, and that due to his position at the 
table, he could not hear everything said during the meeting.
    \31\The talking points stated that Bank of Ellijay ``had 2 
customers close accounts since we did not have TARP CPP [Capital 
Purchase Program] funds.'' The CFO stated that these two accounts were 
substantial, and would have held at least $250,000 each. Representative 
Gingrey's first submission to the Committee stated that the Treasury 
Department meeting ``allowed [Bank of Ellijay representatives] to once 
again alert Treasury officials to the need for equal TARP access for 
both large and small financial institutions.'' July 6, 2012, Submission 
at 15.
---------------------------------------------------------------------------
    The Bank of Ellijay representatives also met with a Counsel 
to Representative Barney Frank, who was at that time the 
Chairman of the House Financial Services Committee (Financial 
Services Committee). The Counsel's portfolio included work on 
that committee's issues. The Bank of Ellijay representatives 
met separately with the then-Ranking Member of the Financial 
Services Committee, Representative Spencer Bachus. 
Representative Gingrey stated that he personally approached 
Representative Bachus and discussed the CFO's meeting request 
with him. According to Representative Gingrey, Representative 
Bachus suggested that the Bank of Ellijay representatives meet 
with him and with someone from Representative Frank's office. 
Representative Gingrey stated that he did not recall whether he 
informed Representative Bachus of his financial interest in 
Bank of Ellijay, but said he thought that was something 
Representative Bachus would want to know. Representative 
Gingrey's February 20, 2013, submission to the Committee stated 
that he attended the meeting with Representative Bachus but not 
the meeting with the Counsel to Representative Frank.\32\ 
However, in his Committee interview, Representative Gingrey 
recalled the opposite.
---------------------------------------------------------------------------
    \32\See Feb. 20, 2013 Submission at 3, 5.
---------------------------------------------------------------------------
    Representative Gingrey's submission asserted that the 
congressional meetings were ``organized for purely 
informational purposes and [were] in no way designed to 
pressure . . . personal or committee staff with regard to the 
Bank's TARP application.''\33\ When asked during his interview 
whether the congressional meetings were set up to allow the 
bank's representatives to ``talk about their TARP application'' 
or advocate for TARP funding for community banks generally, 
Representative Gingrey said ``I think both.''\34\ The bank 
representatives also told the Committee that the congressional 
meetings focused on the need to disperse TARP funds to Georgia 
community banks generally. Consistent with this testimony, 
Representative Gingrey's Chief of Staff told the Committee that 
the bank representatives' discussion with Representative Bachus 
``centered around'' ``a philosophical question about or 
discussion about, well, should community banks get this [TARP 
funding] or should it only go to institutions that are too big 
to fail.''\35\
---------------------------------------------------------------------------
    \33\Id.
    \34\18(a) Interview of Representative Gingrey.
    \35\18(a) Interview of Representative Gingrey's Chief of Staff.
---------------------------------------------------------------------------
    Representative Gingrey's counsel has asserted that 
Representative Gingrey would not have arranged for Bank of 
Ellijay's representatives to meet with Members of the Financial 
Services Committee and their staff in order to advocate for 
directing TARP funds to community banks because ``it was well 
known that the House Financial Services Committee had no 
jurisdiction or authority to grant [that] request!''\36\ While 
it may be true that the Financial Services Committee did not 
administer TARP directly, that committee drafted the 
legislation establishing TARP and had oversight 
responsibilities for the Executive agencies implementing the 
program. To cite one example, on December 10, 2008--one month 
before the CFO's meeting request--the Financial Services 
Committee held a hearing on TARP accountability, at which the 
Treasury official responsible for implementing the TARP program 
appeared and testified.
---------------------------------------------------------------------------
    \36\Letter from S. Passantino to D. Mayer and P. McMullen, Oct. 8, 
2014, at 8 (emphasis in original).
---------------------------------------------------------------------------
    Further, any assertion that the Financial Services 
Committee had no influence in the disbursement of TARP funds 
generally is belied by the sequence of events here. The CFO and 
Chairman of Bank of Ellijay specifically requested meetings 
with Members of Congress in order to advocate for disbursement 
of TARP funds to community banks, and Representative Gingrey 
responded by arranging for the bank's representatives to meet 
with Representative Frank's Counsel and Representative Bachus. 
Indeed, Representative Gingrey himself stated that, after 
receiving the meeting request, he asked his staff ``to find out 
who would be the right people to talk to,'' and that inquiry 
resulted in the Financial Services Committee meetings.\37\ 
Representative Gingrey further explained that he asked 
Representative Bachus ``how do we go about this?''\38\ 
According to Representative Gingrey:
---------------------------------------------------------------------------
    \37\18(a) Interview of Representative Gingrey.
    \38\Id.

          [H]e said, well, let me look into it. And I'm pretty 
        sure it was his recommendation, I don't think directly 
        to me, but maybe he had his chief call my chief or 
        something to that effect and said, well, such and such 
        general counsel for the majority will be glad to meet 
        with them. And that is subsequently what happened.\39\
---------------------------------------------------------------------------
    \39\Id.

Likewise, Representative Gingrey's Chief of Staff told the 
---------------------------------------------------------------------------
Committee staff:

          I think when they, Phil and [Representative Gingrey's 
        office manager] got that email asking to be able to 
        meet with Members of Congress that intuitively--I don't 
        know whose call that was, but the people they would 
        meet with were on the Financial Services Committee.\40\
---------------------------------------------------------------------------
    \40\18(a) testimony of Representative Gingrey's Chief of Staff.

    Presumably, Representative Gingrey would not have arranged 
for the Bank of Ellijay representatives to meet with Financial 
Services Committee representatives if he believed that 
committee had no responsibility or authority with respect to 
the result Bank of Ellijay sought--disbursement of TARP funds 
to community banks. Thus, even if Representative Gingrey's 
counsel is correct that the Financial Services Committee could 
not influence the Treasury Department's decisions regarding 
disbursement of TARP funds to community banks--which is 
questionable, given that committee's legislative and oversight 
roles--it is clear that Representative Gingrey believed, at the 
time he arranged the Financial Services Committee meetings, 
that that committee had some say in such decisions.
    Although Representative Gingrey's submissions asserted that 
he did not violate any law, rule, or other standard of conduct 
by arranging meetings for the Bank of Ellijay representatives, 
he stated that he and his Chief of Staff ``generally were aware 
of a conflict of interest'' with respect to the bank's request, 
and of the need to be ``very, very careful, above board,'' in 
responding to the request.\41\ Representative Gingrey explained 
that he knew ``we could not advocate on behalf or specifically 
request that something be granted to the Bank of Ellijay,'' but 
rather that ``this had to be a generic meeting, an information-
gathering meeting, and to find out specifically about the 
application that they could not seem to get information 
on.''\42\
---------------------------------------------------------------------------
    \41\18(a) Interview of Representative Gingrey.
    \42\Id.
---------------------------------------------------------------------------
    Ultimately, the FDIC advised Bank of Ellijay to withdraw 
its TARP application, and the bank never received any funding 
from TARP. Bank of Ellijay subsequently failed. It was closed 
by the Georgia Department of Banking & Finance in September 
2010, and the Federal Deposit Insurance Corporation was named 
Receiver.

                B. FINANCIAL INTEREST IN BANK OF ELLIJAY

    There is no question that Representative Gingrey had a 
financial interest in Bank of Ellijay's receipt of TARP funds. 
As the Ethics Manual notes in the context of a Member's 
advocacy for appropriations earmarks, ``a financial interest 
would exist in an earmark when it would be reasonable to 
conclude that the provision would have a direct and foreseeable 
effect on the pecuniary interests of the Member.''\43\ The 
Ethics Manual further explains that ``a Member's direct 
ownership of stock, even a small number of shares in a widely 
held company, likely would constitute a financial interest 
under Rule 23.''\44\ Here, Representative Gingrey invested 
$250,000 in Bank of Ellijay. Bank of Ellijay representatives 
told Committee staff that by the time of the Washington, D.C., 
meetings, the bank's financial condition was deteriorating. 
When the bank ultimately failed due to lack of funding, 
Representative Gingrey lost the entire value of his investment. 
It is reasonable to conclude that TARP funding would have 
strengthened the bank's financial position, and thus 
Representative Gingrey had a financial interest in facilitating 
the bank's request for such funds.\45\
---------------------------------------------------------------------------
    \43\Ethics Manual at 239.
    \44\Id.
    \45\The CFO described the receipt of TARP funding as ``critical to 
the survival of the bank.'' 18(a) Interview of Bank of Ellijay CFO.
---------------------------------------------------------------------------
    Given this interest, the Committee considered whether it 
was permissible for Representative Gingrey to send a letter to 
the then-Secretary of the Treasury advocating for allocation of 
TARP funds to community banks, and to arrange meetings between 
Bank of Ellijay representatives and congressional offices and 
Treasury Department officials.

                     C. HOUSE RULE XXIII, CLAUSE 3

    House rule XXIII, clause 3 states that ``a Member . . . may 
not receive compensation and may not permit compensation to 
accrue to the beneficial interest of such individual from any 
source, the receipt of which would occur by virtue of influence 
improperly exerted from the position of such individual in 
Congress.''
    The nature of Members as proxies for their constituents in 
the federal government makes it impossible to require recusal 
on every issue in which a Member has a financial interest. The 
Committee, therefore, views conflicts of interest differently 
based on the nature of the personal financial interest relative 
to the scope of the action. If a Member seeks to act on a 
matter where he might benefit as a member of a large class, 
such action does not require recusal. Thus, ``Members who 
happen to be farmers may nonetheless represent their 
constituents in communicating views on farm policy to the 
Department of Agriculture.''\46\ By contrast, where a Member's 
actions would serve his own narrow financial interests, the 
Member should refrain from acting.\47\ The Committee's guidance 
on this point advises Members to engage in ``added 
circumspection'' any time a Member is deciding whether to take 
official action ``on a matter that may affect his or her 
personal financial interests.''\48\
---------------------------------------------------------------------------
    \46\Ethics Manual at 314.
    \47\Id.
    \48\Id. at 237.
---------------------------------------------------------------------------
    In The Matter of Representative Maxine Waters, the 
Committee reiterated the commonly understood guidance that 
Members ``cannot take official actions that would assist a 
single entity in which the Member has a significant interest, 
particularly when that interest would clearly be affected by 
the assistance sought.''\49\ In that case, while the Committee 
believed that the Member had properly recused herself from 
issues related directly to a single bank in which she had a 
financial interest, and had provided clear instruction to her 
staff to refrain from working on those issues, her Chief of 
Staff nevertheless persisted in official activity on that 
bank's behalf. Based on his actions, the Committee issued the 
Chief of Staff a public letter of reproval.
---------------------------------------------------------------------------
    \49\Waters at 11.
---------------------------------------------------------------------------
    Likewise in The Matter of Representative Shelley Berkley, 
the Committee considered the Member's inquiries to the Veterans 
Administration (VA), through her staff, regarding the agency's 
non-payment of medical claims submitted by Representative 
Berkley's husband's medical practice, and found the casework 
``troublingly intertwined with her financial interest,'' in 
violation of House rule XXIII, clause 3.\50\
---------------------------------------------------------------------------
    \50\See Comm. on Ethics, In the Matter of Allegations Relating to 
Representative Shelley Berkley, H. Rept. 112-716 2d Sess. 49 (2012) 
(hereinafter Berkley).
---------------------------------------------------------------------------
    The facts here bear some relation to Waters and Berkley, 
yet are also distinguishable in important ways. On their face, 
Representative Gingrey's actions are contrary to the guidance 
in Waters that Members are ``prohibited from providing official 
assistance to entities in which the Member has a significant 
financial interest.'' However, in Waters and Berkley, the 
Member or their staff took specific steps to advocate for 
financial assistance or payments to an entity the Member had a 
financial interest in. There is no evidence that Representative 
Gingrey advocated for Bank of Ellijay in this way.\51\ On the 
other hand, Bank of Ellijay was not a constituent of 
Representative Gingrey, unlike the entities in Waters and 
Berkley. Further, to the extent Representative Gingrey 
advocated for the interests of community banks generally, he 
acted as a member of a large class of community bank customers 
and investors, and thus did not violate House rule XXIII, 
clause 3.
---------------------------------------------------------------------------
    \51\In The Matter of Representative William H. Boner, 
Representative Boner arranged for a constituent to meet with VA 
officials about a contract bid the constituent had submitted, and 
inquired with the VA about the status of the bid decision. The 
Committee itself did not reach any final conclusions regarding 
Representative Boner's conduct, as Representative Boner resigned from 
the House before the Committee's investigation was complete. However, 
in light of the unique circumstances of that matter, the Committee 
voted to release as a Committee print a staff report which addressed a 
number of allegations under review. The staff report concluded that 
there was likely no violation of House rule XXIII, clause 3, because 
arranging meetings for constituents is a basic function of representing 
one's district, and because in making a ``status check'' on the bid 
process, ``Representative Boner did not attempt to influence the VA's 
decision.'' See Comm. on Standards of Official Conduct, Staff Report in 
the Matter of Representative William H. Boner, H. Rept. 78-177, 100th 
Cong. 2d Sess. 28 (1987) (hereinafter Boner).
---------------------------------------------------------------------------

                         D. THE CODE OF ETHICS

    The Code of Ethics was adopted by the House to assist 
federal employees, including officeholders, ``in guiding and 
correcting any tendency toward cynicism of the high trust 
associated with public service.''\52\ It thus reaffirmed 
standards of conduct ``to which all federal employees 
unquestionably should adhere.''\53\ In this spirit, Section 5 
includes two prohibitions that are applicable to House Members: 
(1) ``never discriminate unfairly by the dispensing of special 
favors or privileges to anyone, whether for remuneration or 
not;'' and (2) ``never accept for himself or his family, favors 
or benefits under circumstances which might be construed by 
reasonable persons as influencing the performance of his 
governmental duties.'' It bears emphasis that, unlike House 
rule XXIII, clause 3, where finding a violation requires proof 
of a connection between an official action and compensation to 
the acting Member, neither clause of Section 5 requires proof 
of such a connection.
---------------------------------------------------------------------------
    \52\Comm. on Post Office and Civil Service, Code of Ethics for 
Government Service, H. Rept. 1208, 85th Cong. 1st Sess. 1 (1957).
    \53\Id. at 2.
---------------------------------------------------------------------------
    While all Members are expected to know and ``unquestionably 
. . . adhere'' to these provisions, Representative Gingrey had 
particular reason to be aware of them: the Committee discussed 
them in a letter to him in March 2007.\54\ The Committee's 
March 2007 guidance, though in a different factual context, 
provided Representative Gingrey with notice regarding the 
requirements of the Code of Ethics and House rule XXIII, 
clauses 1 and 2. However, the record here suggests that 
Representative Gingrey did not abide by those standards of 
conduct.
---------------------------------------------------------------------------
    \54\Letter from then-Chair Stephanie Tubbs Jones and then-Ranking 
Member Doc Hastings to Representative Gingrey, Mar. 21, 2007, at 2. 
Representative Gingrey sought guidance on whether his campaign could 
hire his daughter as a fundraising consultant. The Committee informed 
Representative Gingrey that he could do so, subject to the constraints 
of House Rule XXIII, clause 3, Section 5 of the Code of Ethics, and 
House Rule XXIII, clauses 1 and 2, and noted that ``the Committee has 
cautioned all Members `to avoid situations in which even an inference 
might be drawn suggesting improper action.'''
---------------------------------------------------------------------------

1. Section 5, clause 1

    Official actions of the kind Representative Gingrey took on 
behalf of Bank of Ellijay would typically be described as 
``casework'' or ``constituent service,'' and would be perfectly 
permissible, when done on behalf of most constituents. Indeed, 
this Committee recognizes that ``a[n] important aspect of a 
House Member's representative function is to act as a `go-
between' or conduit between the Member's constituents and 
administrative agencies of the federal government.''\55\ 
However, ``[i]n taking any such action, a Member or staff 
person must observe certain ethical principles,''\56\ including 
the prohibition in Section 5, clause 1, on ``discriminat[ing] 
unfairly by the dispensing of special favors or privileges to 
anyone, whether for remuneration or not.''
---------------------------------------------------------------------------
    \55\Ethics Manual at 299.
    \56\Id. at 300.
---------------------------------------------------------------------------
    The Committee has applied these principles in two matters. 
In Berkley, the Committee found that Representative Berkley did 
not dispense special favors to her husband by assisting him in 
obtaining payments from the VA--even though he ``enjoyed an 
unusually close relationship with her office''--because ``she 
treated her husband as any other constituent,'' and did not 
``engage in favoritism when performing casework'' for him.\57\ 
Likewise, In the Matter of Representative Newt Gingrich, the 
Committee found that Representative Gingrich did not violate 
Section 5, clause 1, when he intervened with federal agencies 
to assist a constituent campaign donor because it found no 
evidence ``that Representative Gingrich dispensed special 
favors to [the donor] that were withheld from others.''\58\ In 
both of these matters, the Member had a financial interest in 
assisting a particular constituent, but the Committee found no 
violation of Section 5, clause 1, because the constituent was 
treated like all others.
---------------------------------------------------------------------------
    \57\Berkley at 54-55.
    \58\See Statement of the Comm. on Standard of Official Conduct 
Regarding Complaints Against Representative Newt Gingrich, Mar. 8, 
1990, at 66 (hereinafter Gingrich).
---------------------------------------------------------------------------
    Here, unlike in Berkley and Gingrich, there is substantial 
evidence that Representative Gingrey treated Bank of Ellijay 
and its representatives differently than other non-constituents 
based on his financial investment in the bank and position on 
the board of directors. Specifically, the evidence indicates 
that Representative Gingrey provided special treatment to Bank 
of Ellijay and its representatives by (1) arranging meetings 
between the representatives and Representative Frank's Counsel, 
Representative Bachus, and high-ranking Treasury Department 
officials; and (2) attending the meeting between the Bank of 
Ellijay representatives and either Representative Frank's 
Counsel or Representative Bachus.
    In reaching this conclusion, it is significant that neither 
Bank of Ellijay nor any of the bank's representatives who 
requested or attended the meetings were residents of 
Representative Gingrey's district, and therefore were not his 
``constituents.''\59\ Representative Gingrey has not denied 
this fact, but his counsel has suggested other individuals--
including two persons who recruited him to serve on the bank's 
board in 2006 and other members of the bank's board of 
directors--were his constituents.\60\ With respect to the 
constituents who asked Representative Gingrey to serve on the 
bank's board, there is no connection between their request that 
Representative Gingrey sit on the board of Bank of Ellijay and 
Representative Gingrey's efforts, three years later, to arrange 
meetings for the bank's representatives. Likewise, there is no 
evidence that the bank's board as a whole--which did include 
constituents--asked Representative Gingrey to facilitate the 
Washington, D.C., meetings.\61\ Indeed, Representative Gingrey 
himself stated that he did not recall any discussions before he 
received the CFO's email requesting meetings with Members of 
Congress about the possibility Bank of Ellijay representatives 
would come to Washington.\62\ Further, the fact that three of 
the board's twelve members were Representative Gingrey's 
constituents\63\ does not make the bank a constituent, and is 
irrelevant given that none of the constituent board members 
asked Representative Gingrey to arrange meetings for the bank 
in Washington, D.C.\64\
---------------------------------------------------------------------------
    \59\See Ethics Manual at 310 (referring to ``non-constituents'' as 
``individuals who live outside the [Member's] district'').
    \60\Representative Gingrey's counsel has stated that the board of 
directors for the Bank of Ellijay asked, during a board meeting that 
Representative Gingrey attended, ``whether community banks were going 
to be eligible to apply for TARP funding and what financial metrics 
were going to be applied in making that determination.'' Counsel also 
noted that ``several of those board members were current constituents 
of Congressman Gingrey's at the time of that inquiry.'' Mar. 5, 2014 
Submission at 2.
    \61\According to Representative Gingrey's counsel, the board's 
request related to whether community banks would be eligible for TARP 
funding. See id. However, the bank's CFO and Chairman requested the 
meetings with Members of Congress to persuade them to make TARP funds 
available to community banks--which would include Bank of Ellijay. 
Thus, the nature and purpose of the CFO and Chairman's meeting request 
was qualitatively different than the board of director's questions to 
Representative Gingrey concerning the TARP program.
    \62\18(a) Interview of Representative Gingrey.
    \63\The board of directors of Bank of Ellijay had thirteen members, 
including Representative Gingrey, but Representative Gingrey cannot 
consider himself the ``constituent'' who requested the Washington, D.C. 
meetings.
    \64\Representative Gingrey stated that a former President and CEO 
of Bank of Ellijay may have asked him to arrange the meetings, during a 
meeting with the CFO and Chairman, and Representative Gingrey's counsel 
has suggested that the former President and CEO was a resident of 
Representative Gingrey's district. See Feb. 12, 2014 Submission at 6 & 
n.21. However, Representative Gingrey's testimony about a conversation 
that included the former President and CEO contradicts his statement 
that he did not recall any such conversations before receiving the 
CFO's emailed request. Further, Representative Gingrey's testimony 
suggested that he was merely speculating that a conversation with the 
former President and CEO, the CFO, and the Chairman prompted the CFO's 
email request. Representative Gingrey was asked: ``Do you know if that 
happened or is that what you think might have happened?'' He replied: 
``That's what I think might have happened.'' Finally, even if the 
former President and CEO did live in Representative Gingrey's district, 
the evidence indicates that he left Bank of Ellijay by mid-2008, and it 
is thus unlikely that he asked Representative Gingrey to arrange 
meetings for the bank in January 2009.
---------------------------------------------------------------------------
    Thus, despite Representative Gingrey's conflicting 
explanations, all of the evidence indicates that the 
Washington, D.C. meetings were requested by non-constituents, 
and there is no evidence that any of Representative Gingrey's 
constituents, including the Bank of Ellijay's board of 
directors, asked for those meetings. As the Ethics Manual 
explains:

          The statute that establishes the Members' 
        Representational Allowance provides that the purpose of 
        the allowance is ``to support the conduct of the 
        official and representational duties of a Member of the 
        House of Representatives with respect to the district 
        from which the Member is elected.''\65\
---------------------------------------------------------------------------
    \65\Ethics Manual at 310 (emphasis in original).

The Ethics Manual includes limited exceptions to this rule--
such as where the non-constituent's matter is ``similar to 
those facing constituents,'' or the Member ``serve[s] on a 
House committee that has the expertise and ability to provide 
the requested help,'' or ``has personal knowledge regarding a 
matter'' and ``communicate[s] that knowledge to agency 
officials.'' Outside of those exceptions, ``a Member should not 
devote official resources to casework for individuals who live 
outside the district.''\66\
---------------------------------------------------------------------------
    \66\Id. This guidance was included in the 1992 version of the House 
Ethics Manual and appears verbatim in the current 2008 version.
---------------------------------------------------------------------------
    None of the specific exceptions to this rule appears 
applicable here: Representative Gingrey did not serve on any 
banking-related committees, and he has not asserted that banks 
in his district applied for TARP funds, or explained how any 
such applications would relate to Bank of Ellijay's 
application. Further, to the extent Representative Gingrey had 
any knowledge of Bank of Ellijay's TARP application, he has 
never asserted that he communicated that knowledge to the 
Member, staff, or Treasury Department officials the bank's 
representatives met with.\67\
---------------------------------------------------------------------------
    \67\Moreover, even if Representative Gingrey had ``personal 
knowledge'' related to the bank's TARP application, it was likely based 
on his own position on the bank's board of directors and his financial 
investment in the bank. If Representative Gingrey took official actions 
on the bank's behalf because of his position and financial interest in 
the bank, that cannot be a defense to the charge of dispensing special 
favors to the bank.
---------------------------------------------------------------------------
    Representative Gingrey's counsel has noted that in Waters, 
the Committee found no violation of Section 5, even though 
Representative Waters arranged for a non-constituent entity to 
meet with officials of the Treasury Department. However, Waters 
is distinguishable in at least three respects. First, the 
Committee found that Representative Waters believed the meeting 
was for the National Bankers Association, a national trade 
association of minority and women owned banks.\68\ The 
Committee further adopted the report of the outside counsel in 
Waters, which noted that ``the evidence demonstrates that 
[minority banks], including OneUnited, serve Representative 
Waters' district,'' and ``[t]hus, her constituents have an 
interest in [minority banks].''\69\ Thus, even if the Treasury 
Department meeting ultimately focused on a single bank that 
Representative Waters had a financial interest in--OneUnited 
Bank--Representative Waters did not know that would be the case 
when she arranged the meeting. Moreover, as noted above, when 
Representative Waters later determined OneUnited was pursuing 
action that would affect it uniquely, she properly recused 
herself from issues that would affect a single bank in which 
she had a financial interest, and provided clear instruction to 
her staff to refrain from working on those issues. Here, 
Representative Gingrey knew that the only attendees to the 
meetings he arranged would be from a single bank that he had a 
financial interest in, and that those attendees would be 
representing their bank. Second, contrary to the suggestion of 
Representative Gingrey's counsel, OneUnited Bank was a 
constituent entity of Representative Waters. Although it was 
headquartered in Massachusetts, the bank had a branch in 
Representative Waters' district.\70\ In contrast, 
Representative Gingrey stated that Bank of Ellijay never had a 
branch in his district. Finally, Representative Waters was 
``the most senior African-American Member of the Financial 
Services Committee and . . . the Ranking Member of the 
Subcommittee on Capital Markets and Government Sponsored 
Enterprises.''\71\ The Treasury Department meeting she arranged 
focused on the impact of the devaluation of shares of two 
Government Sponsored Enterprises (GSEs)--Fannie Mae and Freddie 
Mac--on minority banks that owned shares of the GSEs. OneUnited 
was one such bank. Thus, even if Representative Waters had 
arranged the Treasury Department meeting for a non-constituent 
bank, that would have been a circumstance where the Committee's 
guidance expressly permitted non-constituent service, i.e., 
where ``the Member . . . serve[s] on a House committee that has 
the expertise and ability to provide the requested help.''\72\
---------------------------------------------------------------------------
    \68\See Waters at 6-7.
    \69\Id. at 228.
    \70\Id. at 173.
    \71\Id. at 167-68.
    \72\Ethics Manual at 309-10. Of course, this ``exception'' applies 
only to the general question of whether Representative Waters could 
have properly assisted a non-constituent entity; it would not permit 
her to assist such an entity where she had a financial interest in the 
entity.
---------------------------------------------------------------------------
    The inference that Representative Gingrey provided 
``special favors or privileges'' by assisting non-constituents 
associated with Bank of Ellijay is further supported by 
Representative Gingrey's own congressional Web site. The Web 
site--both at the time of the Bank of Ellijay meetings and 
currently--states ``Regrettably, I am unable to reply to any 
email from constituents outside of the 11th District of 
Georgia.'' This statement appropriately reflects the guidance 
from this Committee and the Committee on House Administration 
regarding the proper response to requests for assistance from 
non-constituents. It further reflects an apparent policy of 
Representative Gingrey's office not to respond to non-
constituents, at least on the official web site.
    Representative Gingrey told the Committee that he has 
arranged meetings with Members for non-constituents on prior 
occasions. However, in both of the instances Representative 
Gingrey recalled, the non-constituent appeared to have some 
personal connection with Representative Gingrey. If a Member 
only assists non-constituents who are personal friends, that 
would seem to support, rather than rebut, the inference of 
special treatment.
    Of course, the beneficiary of Representative Gingrey's 
official actions here was not merely a non-constituent, it was 
a non-constituent bank in which Representative Gingrey had 
invested $250,000. In light of this financial interest, 
Representative Gingrey's response to the email from Bank of 
Ellijay's CFO--a non-constituent--is particularly troubling. 
Representative Gingrey appears to have immediately discussed 
the CFO's request with his Chief of Staff, who, using his 
personal relationship with the then-Treasurer of the United 
States, immediately forwarded the request to the Treasury 
Department. Further, Representative Gingrey personally spoke 
with Representative Bachus, who was at the time the Ranking 
Member of the House Financial Services Committee about the 
request, and then had his staff arrange meetings with both 
Representative Bachus and Representative Frank's Counsel. 
Representative Gingrey attended one of these meetings in 
person. The House Financial Services Committee authored the 
bill establishing TARP and oversaw its implementation.
    Thus, the totality of the evidence indicates that 
Representative Gingrey dispensed special favors or benefits to 
Bank of Ellijay and its representative, contrary to Section 5, 
clause 1 of the Code of Ethics. Further, even if Representative 
Gingrey complied with the letter of that clause--which the 
evidence does not support--his actions were contrary to the 
spirit of the ``special favors'' rule, and did not reflect 
creditably on the House of Representatives.

2. Section 5, clause 2

    Section 5 of the Code of Ethics also prohibits a Member 
from ``accept[ing] for himself or his family, favors or 
benefits under circumstances which might be construed by 
reasonable persons as influencing the performance of his 
governmental duties.'' The Committee has addressed alleged 
violations of this provision on several occasions, and has 
found such violations, or evidence of them, even in the absence 
of a quid pro quo between a benefit to a Member and official 
actions that would establish a violation of House Rule XXIII, 
clause 3 (discussed above). Thus, In the Matter of 
Representative Mario Biaggi, the Committee found a violation of 
the ``favors or benefits'' clause of Section 5 even though it 
could not determine whether the Member would have taken the 
official actions at issue absent the benefits the Member 
received. As the Committee explained, ``[w]hile the Committee 
does not argue, nor can it be determined, that Representative 
Biaggi would not have interceded [with federal officials] in 
the absence or because of [the] gratuities to the congressman, 
it is nevertheless clear that at a minimum, an appearance is 
raised that such was the case. Accordingly, the Committee 
concluded that such improper appearance supported a 
determination that Representative Biaggi violated Clause 5 of 
the Code of Ethics for Government Service.''\73\
---------------------------------------------------------------------------
    \73\Comm. on Standards of Official Conduct, In the Matter of 
Representative Mario Biaggi, H. Rept. 100-506, 100th Cong. 2d. Sess. 9 
(1988).
---------------------------------------------------------------------------
    Likewise, in Berkley, the Investigative Subcommittee 
(Berkley ISC) credited Representative Berkley's assertion that 
when her staff asked executive agencies for ``status updates'' 
regarding payment claims filed by her husband's medical 
practice, and asked the agencies to speed up their evaluation 
of those claims, she was not motivated by her husband's 
financial interests. However, the Berkley ISC explained that 
``the Committee has consistently prohibited acting on matters 
in which a Member has a financial interest precisely because 
the public would construe such action as self-dealing, whether 
the Member engaged in the action for that reason or not.''\74\ 
As the Berkley ISC explained:
---------------------------------------------------------------------------
    \74\Berkley at 55.

          If Representative Berkley had simply and solely 
        engaged in policymaking aimed at more efficient claims 
        processing by the VA, even though it would have 
        benefited her husband along with a number of other 
        doctors, she would not have violated [Section 5]. If 
        she had assisted any other medical practice in her 
        district with the issue, that also would have been 
        proper. But she was barred from doing so for her 
        husband, in part because reasonable people would 
        construe the benefit she received as her motivation, 
        whether it was or not.\75\
---------------------------------------------------------------------------
    \75\ Id. at 56.

    In Boner, the Committee staff report concluded that 
Representative Boner's official actions on behalf of a 
constituent he had financial dealings with consisted solely of 
``arranging meetings and requesting status reports,'' and that 
``Representative Boner and his staff did not attempt to 
influence the outcome of the VA's decision'' regarding the 
constituent's contract bid.\76\ The staff thus concluded that 
there was ``no impropriety'' in Representative Boner's actions 
that would establish a violation of House rule XXIII, clause 
3.\77\ However, the staff believed that, ``by taking the 
official action of intervening with a government agency on 
behalf of someone with whom he was involved in numerous 
business ventures and by whom his wife was employed,'' 
Representative Boner's actions ``raise a question of whether he 
violated [Section 5 of the Code of Ethics] by accepting a 
benefit under circumstances which might be construed by 
reasonable persons as having influenced the performance of his 
governmental duties.''\78\
---------------------------------------------------------------------------
    \76\Boner at 28. As noted previously, the Committee itself did not 
reach any final conclusions regarding Representative Boner's conduct, 
as Representative Boner resigned from the House before the Committee's 
investigation was complete. However, in light of the unique 
circumstances of that matter, the Committee voted to release as a 
Committee print a staff report which addressed a number of allegations 
under review.
    \77\Id.
    \78\Id. at 29.
---------------------------------------------------------------------------
    Finally, in a matter involving Representative Robert Sikes, 
the Committee found that Representative Sikes did not violate 
House rule XXIII, clause 3, by ``purchasing 2,500 shares of [a] 
Bank's privately held stock following the active and continuing 
involvement on his part'' in obtaining federal authorization 
for placing the bank at a Naval air station.\79\ However, the 
Committee did conclude that Representative Sikes violated 
Section 5 of the Code of Ethics by accepting the ``benefit'' of 
the opportunity to purchase shares of the bank's stock while he 
was intervening with federal officials on the bank's 
behalf.\80\
---------------------------------------------------------------------------
    \79\Comm. on Standards of Official Conduct, In the Matter of a 
Complaint Against Representative Robert L.F. Sikes, H. Rept. 94-1364, 
94th Cong. 2d. Sess. 21 (1976) (hereinafter Sikes).
    \80\See id.
---------------------------------------------------------------------------
    In this case, Representative Gingrey received a benefit 
from Bank of Ellijay: the opportunity to invest in the bank, an 
investment Representative Gingrey made based on advice that it 
was ``a can't lose situation'' and ``almost a no-brainer.''\81\ 
He subsequently took official actions to assist Bank of 
Ellijay, namely arranging for Bank of Ellijay representatives 
to meet with Representative Frank's Counsel, Representative 
Bachus, and high-level Treasury Department officials 
responsible for managing the TARP program. The bank's 
representatives used these meetings to advocate for TARP 
funding for community banks generally and to inquire about the 
status and prospects for the bank's own TARP application. As in 
the prior matters discussed above, it is not possible to 
establish that Representative Gingrey arranged the meetings for 
Bank of Ellijay because of his financial investment in the 
bank. However, Section 5 of the Code of Ethics does not require 
proof of a quid pro quo. The only question is whether 
``reasonable persons'' ``might construe'' Representative 
Gingrey's opportunity to invest in Bank of Ellijay ``as 
influencing the performance of his governmental duties.'' More 
generally, the Committee has cautioned that where an individual 
who has requested intercession with an executive agency ``has 
contributed . . . [to] causes in which [the Member] has a 
financial . . . interest,'' the Member ``must be mindful of the 
appearance that may be created and take special care to try to 
prevent harm to the public's trust . . .''\82\
---------------------------------------------------------------------------
    \81\Representative Gingrey explained: ``I was a physician by 
profession, but, you know, and I sought advice about, you know, 
investing in a community bank, and all of the advice I got was it's a 
can't lose situation, you know. It's slow, but it's steady, and at the 
end of the day, if you're patient, you know, it's almost a no-
brainer.'' See 18(a) Interview of Representative Gingrey. It bears 
emphasis that Representative Gingrey did not violate any law, rule, or 
other standard of conduct merely by making an investment in Bank of 
Ellijay. As noted above, in addition to the Committee's investigation, 
OCE reviewed whether his purchase of stock warrants was impermissible, 
and recommended that the Committee dismiss that allegation. Following 
its independent review of the matter, the Committee dismissed that 
specific allegation, but continued its investigation of other issues.
    \82\Ethics Manual at 309.
---------------------------------------------------------------------------
    Thus, several factors suggest that Representative Gingrey's 
actions violated the ``favors or benefits'' provision of 
Section 5. First and foremost, Representative Gingrey invested 
$250,000 in Bank of Ellijay, and thus had a significant 
interest in the bank's receipt of TARP funding. Second, at 
least with respect to Representative Frank's Counsel and the 
Treasury Department, it does not appear that Representative 
Gingrey disclosed his financial stake in Bank of Ellijay prior 
to arranging meetings with them. While such disclosure would 
not have fully avoided any appearance of impropriety, the 
absence of such disclosure raises questions about why 
Representative Gingrey was not fully transparent in his actions 
on behalf of Bank of Ellijay, particularly given his professed 
belief in full transparency when dealing with casework 
requests.\83\ Third, he has provided no explanation for why he 
assisted the bank and its representatives in this matter, even 
though they did not reside in his district. Fourth, while 
neither Representative Gingrey nor the Bank of Ellijay 
representatives specifically advocated for TARP funding for the 
bank in the congressional or Treasury Department meetings, they 
did assert the need to disburse TARP funds to community banks 
generally. That message, which was presented by representatives 
of a single bank and accompanied by specific questions about 
the status of the bank's own TARP application, and the 
prospects for its approval, could reasonably be construed as 
advocacy for the bank's receipt of TARP funds, even if the 
bank's representatives did not intend to connect those issues. 
Finally, this was not a situation where Representative Gingrey 
stood ``to derive some incidental benefit along with others in 
the same class,'' as where a Member is a farmer but advocates 
for farmers nationwide.\84\ Rather, Representative Gingrey's 
actions were more akin to those that ``would serve [the 
Member's] own narrow, financial interests as distinct from 
those of their constituents.''\85\
---------------------------------------------------------------------------
    \83\When asked whether he thought Representative Bachus would have 
wanted to know that Representative Gingrey had invested in Bank of 
Ellijay, Representative Gingrey stated: ``Any time I'm--people come to 
me, come to us, we Members every day lobbying on behalf of something, 
and you want to--you want to have full disclosure and transparency and 
understand[ing].'' 18(a) Interview of Representative Gingrey.
    \84\Ethics Manual at 314.
    \85\Id.
---------------------------------------------------------------------------
    It is true that Representative Gingrey told his Chief of 
Staff to do no more for Bank of Ellijay than for any other 
constituent, and Representative Gingrey's office appears to 
have merely arranged meetings for the bank. But those meetings 
were of obvious importance to the bank, and thus to 
Representative Gingrey. Further, as the Berkley ISC explained:

          In this case the ISC finds, based on the totality of 
        the evidence, that Representative Berkley and her staff 
        saw their intercessions as a natural form of 
        constituent service to an important and beneficial 
        constituent within their district. It does not matter 
        that she treated her husband [Dr. Lehrner] as any other 
        constituent. Relevant rules, Committee guidance and 
        precedent require that Members refrain from acting in a 
        manner which would benefit the Member's narrow 
        financial interest, regardless as to whether the action 
        is ordinary or extraordinary relative to the office's 
        day-to-day activities. Accordingly, just because Dr. 
        Lehrner was treated similarly to other providers, it is 
        not necessarily the case that Representative Berkley 
        should have treated him similarly, given clause 2 of 
        Section 5.\86\
---------------------------------------------------------------------------
    \86\Berkley at 55.

Thus, with respect to the ``favors or benefits'' clause of 
Section 5, the issue is not that Representative Gingrey treated 
Bank of Ellijay's request for assistance differently than those 
of any other petitioner--although it appears he did so merely 
by responding to a non-constituent's request. Rather, the 
problem is that Representative Gingrey did not recognize that 
the public might, and reasonably could, view his response to 
the request as motivated by his substantial financial 
investment in the bank.

                  E. HOUSE RULE XXIII, CLAUSES 1 AND 2

    Finally, even if Representative Gingrey did not violate the 
letter of either clause of Section 5 of the Code of Ethics, his 
actions implicated clauses 1 and 2 of rule XXIII. Press reports 
have already raised questions regarding Representative 
Gingrey's advocacy on behalf of the two Georgia banks he 
invested in, and the appearance issues involved in having his 
Chief of Staff ask the Chief of Staff's mother-in-law to 
arrange a meeting with Treasury Department officials, without 
disclosing any conflict of interest, are plain. Further, 
although Members are generally permitted to contact an 
executive branch agency on a constituent's behalf, the 
Committee has cautioned Members to take extra care when doing 
so implicates their own financial interests. As the Ethics 
Manual explains:

          [C]ontacting an executive branch agency . . . 
        entail[s] a degree of advocacy above and beyond that 
        involved in voting, and thus a Member's decision on 
        whether to take any such action on a matter that may 
        affect his or her personal financial interests requires 
        added circumspection. . . . Whenever a Member is 
        considering taking any such action on a matter that may 
        affect his or her personal financial interests, the 
        Member should first contact the Standards Committee for 
        guidance.\87\
---------------------------------------------------------------------------
    \87\Ethics Manual at 237.

In addition, the Committee ``has cautioned all Members to avoid 
situations in which even an inference might be drawn suggesting 
improper action.''\88\ Here, Representative Gingrey did not 
contact the Committee before arranging the meetings for Bank of 
Ellijay, in contrast to a prior instance when he had questions 
about ethical rules,\89\ even though he stated that he was 
aware of a conflict of interest with respect to the bank and 
the need to be ``very, very careful.''\90\ While a Member is 
not required to consult the Committee when considering taking 
actions the Member perceives as a ``close call'' with respect 
to the House Rules, the failure to do so may be a factor the 
Committee considers when such actions are found to violate the 
rules. In this case, Representative Gingrey did not take 
appropriate steps to avoid a situation which could easily be 
misconstrued. To the extent he ignored the Committee's previous 
guidance, and his actions did not reflect creditably on the 
House, Representative Gingrey violated House Rule XXIII, clause 
1. Further, even if Representative Gingrey followed the letter 
of Section 5 of the Code of Ethics--which does not appear to be 
the case--his actions were not consistent with the spirit of 
that provision, and thus were not consistent with House Rule 
XXIII, clause 2.
---------------------------------------------------------------------------
    \88\Id. at 27.
    \89\See Section IV.D. & n.54.
    \90\18(a) Interview of Representative Gingrey.
---------------------------------------------------------------------------

              f. representative gingrey's legal arguments

    Representative Gingrey has asserted that, under the 
Committee's precedents, he did not violate the Code of Ethics 
by merely arranging meetings for representatives of Bank of 
Ellijay, where they could advocate for the disbursement of TARP 
funds to community banks generally and inquire about the status 
of the bank's own TARP application. In the abstract, these 
actions raise a lesser appearance of impropriety than the 
actions at issue in matters such as Sikes, Berkley, or Waters. 
However, there are also troubling factors here that were not 
present in those other matters. Those include (1) the size of 
Representative Gingrey's investment in Bank of Ellijay;\91\ (2) 
the fact that the beneficiaries of Representative Gingrey's 
actions were not his constituents; (3) Representative Gingrey's 
awareness of a conflict of interest and the risks involved in 
arranging the meetings; and (4) Representative Gingrey's 
understanding that the bank's representatives would be 
presenting a dual message, which included both an appeal for 
TARP funds for community banks generally and questions about 
the status of the bank's own pending TARP application, 
including questions about whether the bank satisfied the 
criteria for obtaining TARP funds at all. Given these facts, 
and Representative Gingrey's failure to request guidance from 
the Committee regarding Bank of Ellijay's request, despite his 
recognition of a conflict of interest,\92\ the Committee 
believes that Representative Gingrey did violate the Code of 
Ethics and House Rules, and that a public letter of reproval is 
appropriate.
---------------------------------------------------------------------------
    \91\Only in Waters did the size of the financial investment at 
issue compare to Representative Gingrey's $250,000 investment in Bank 
of Ellijay. Representative Waters' husband owned stock in OneUnited 
Bank valued at $350,000 at the time Representative Waters arranged for 
the National Bankers Association to meet with Treasury Department 
officials. However, the Committee found that Representative Waters did 
not know she was actually arranging a meeting for representatives of 
OneUnited Bank. When Representative Waters later determined OneUnited 
was pursuing legislative and/or executive branch actions that would 
affect it uniquely, she properly recused herself from issues that would 
affect a single bank in which she had a financial interest, and 
provided clear instruction to her staff to refrain from working on 
those issues. With respect to Representative Waters' Chief of Staff, 
there was no evidence that he had any financial interest in OneUnited 
Bank.
    \92\See Comm. on Standards of Official Conduct, In the Matter of 
Representative Newt Gingrich, H. Rep. 105-1, 105th Cong., 1st Sess. 92 
(1997) (where the Committee concluded a Member ``was reckless in not 
taking care that, as a Member of Congress, he made sure that his 
conduct conformed with the law in an area where he had ample warning 
that his intended course of conduct was fraught with legal peril,'' 
that conduct ``was improper, did not reflect creditably on the House, 
and was deserving of sanction.'') (Emphasis added).
---------------------------------------------------------------------------
    As a threshold matter, the legal analysis submitted by 
Representative Gingrey's counsel never acknowledged or 
incorporated the fact of Representative Gingrey's $250,000 
investment in Bank of Ellijay. Further, the analysis appeared 
to be premised on the assumption that Representative Gingrey 
was responding to a request from a constituent when he set up 
the meetings for Bank of Ellijay, an assumption the facts do 
not support.\93\ The February 12, 2014, Submission also 
repeatedly asserted that ``Representative Gingrey had no 
financial interest in the outcome of [the] meetings.'' Yet this 
is not the proper question.\94\ The first clause of Section 5 
prohibits dispensing special favors ``for renumeration or 
not,'' meaning a financial interest in the effect or recipient 
of the favor is not required. And the second clause of Section 
5 applies where a Member has received a benefit--here the 
opportunity to make an investment in Bank of Ellijay that the 
Member was told was a ``can't miss'' opportunity\95\--that 
``might be construed by reasonable persons'' as influencing 
their official actions. Thus, with respect to the second clause 
of Section 5, the question is not whether Representative 
Gingrey could have benefitted financially from the meetings he 
arranged, but whether a reasonable person might believe that he 
arranged the meetings because he had a $250,000 investment in 
Bank of Ellijay. Given Representative Gingrey's admission that 
he and his Chief of Staff ``generally were aware of a conflict 
of interest'' with respect to the bank's request, a reasonable 
person might also infer the same conflict.\96\
---------------------------------------------------------------------------
    \93\For example, the February 12, 2014, Submission compared the 
present matter to the Berkley matter, and states ``[i]f individualized 
casework activities on behalf of a single medical practice and a single 
university medical program do not rise to the level of special favors 
or privileges under Section 5, then the Committee cannot possibly 
believe that the organization of three information-gathering meetings 
for a group of constituents somehow violates Section 5's ethical 
tenets.'' Feb. 12, 2014 Submission at 18. As previously discussed, the 
purported ``group of constituents'' provided their current and past 
home addresses during the investigation. None are, or have ever been, 
residents of Representative Gingrey's district.
    \94\See, e.g., Graves at 19-20 (``To establish a violation under 
section 5 of the Code of Ethics in connection with inviting a witness 
to testify before a committee hearing requires a showing that a Member 
improperly used his or her official position by making that invitation. 
It is not necessary for a Member to receive a benefit from a witness's 
testimony to violate section 5 of the Code of Ethics.'')
    \95\18(a) Interview of Representative Gingrey.
    \96\See id. Representative Gingrey's counsel stated that ``the 
Committee tends to find Section 5 violations only in those matters 
where there is probative evidence of a tangible or financial benefit 
received by the Member or staffer, or where there is proof of a 
cognizable conflict of interest (either personal or financial) 
motivating the actions of the Member or staffer.'' Feb. 12, 2014 
Submission at 21. Again, these ``requirements'' do not square with the 
language of Section 5. It is also notable that in Sikes, the Committee 
defined the relevant ``benefit'' accepted as the opportunity to 
purchase stock in a bank, not the opportunity to later sell it at a 
profit. See Sikes at 21.
---------------------------------------------------------------------------
    Nonetheless, the Committee has considered each of the 
precedents cited by Representative Gingrey's counsel. With 
respect to the Code of Ethics' prohibition on ``dispensing of 
special favors or privileges to anyone,'' Representative 
Gingrey's counsel first asserted that the Committee ``has made 
clear . . . that standard administrative contacts for or on 
behalf of constituents and other similarly-situated third 
parties are by no means contrary to the language or spirit of 
Section 5.''\97\ However, the Committee has never approved of 
such contacts where the Member has a substantial financial 
interest in the subject matter, and the Committee has expressly 
distinguished between a Member's appropriate role as a ``go-
between'' for constituents seeking Executive agency actions and 
such official actions for non-constituents.
---------------------------------------------------------------------------
    \97\See Feb. 12, 2014 Submission at 2.
---------------------------------------------------------------------------
    Regarding the second clause of Section 5 of the Code of 
Ethics, Representative Gingrey's counsel made a number of 
overly broad assertions regarding the Committee's precedents. 
First, counsel asserted that the Committee always considers 
three factors in analyzing Section 5, clause 2 allegations: 
``(1) the nature of the benefit provided; (2) the people or 
entities that could benefit from the official action; and (3) 
the Member's or staffer's motive in taking the action.''\98\ 
With respect to motive, counsel stated that the Committee 
``typically asks whether there is `direct evidence' [of] . . . 
`improper motive'.''\99\ However, counsel merely identified 
some of the factors the Committee has considered in discrete 
cases; the Committee has never indicated that all of these 
factors must be established to find a violation of Section 5, 
clause 2 of the Code of Ethics.\100\ Further, it would be 
illogical to require direct evidence of an improper motive with 
respect to a standard of conduct that turns on whether actions 
``might be construed by reasonable persons'' as improper.\101\ 
The question in such instances is what reasonable persons might 
infer, not what they can definitively prove.
---------------------------------------------------------------------------
    \98\Id. at 5.
    \99\Id.
    \100\Even with respect to the individual matters in which these 
factors have been considered, counsel overstated their importance. For 
example, counsel cited the Committee's report regarding Representative 
St. Germain for the proposition that the Committee can only find a 
violation of the ``favors or benefits'' clause of Section 5 where there 
is ``direct evidence'' of improper motive, yet the Committee's report 
in that matter focused on an alleged violation of the Code of Official 
Conduct--House Rule XXIII, clause 3--not Section 5 of the Code of 
Ethics. See Comm. on Standards of Official Conduct, Investigation of 
Financial Transactions Participated in and Gifts of Transportation 
Accepted By Representative Fernand J. St. Germain, H. Rept. 100-46, 
100th Cong. 1st Sess. 2, 42-43 (1987).
    \101\See supra at 18 & nn. 74, 75 (discussing lack of evidence of 
improper motive in Berkley).
---------------------------------------------------------------------------
    Representative Gingrey's counsel has also asserted that the 
House Rules regarding conflicts of interest are too unclear to 
support the Committee's findings and actions in this matter. 
Certainly, the Committee agrees, and acknowledged in Berkley, 
that the House Rules regarding conflicts of interest could be 
clearer. To that end, in keeping with the recommendation of the 
Berkley ISC, the Committee has formed a working group to 
consider the conflict of interest rules, and that working group 
will report to the Committee when it has concluded its work. 
However, it bears emphasis that the Berkley ISC recommended, 
and the Committee voted, to publicly reprove Representative 
Berkley for violations of the House conflict of interest rules, 
as they were, rather than finding that the rules were too 
unclear to support finding such violations. The same is true 
here. The Committee's precedents and public guidance during the 
relevant period here (2009) made clear that a Member could not 
take actions on behalf of non-constituents where the Member had 
a financial interest in the issue the actions related to, even 
if those actions, if taken in different circumstances, might be 
permissible. Representative Gingrey himself acknowledged that 
he knew he was in a potentially difficult area, yet he did not 
ask the Committee for advice or assistance. Thus, the conflict 
of interest rules were not unclear or ambiguous with respect to 
Representative Gingrey's conduct in 2009.
    Thus, the Committee determined that its prior precedents 
support a finding that Representative Gingrey violated the Code 
of Ethics and House Rules, and that he should be publicly 
reproved.

                             V. CONCLUSION

    Having considered the totality of the circumstances 
surrounding Representative Gingrey's official actions to 
arrange meetings for Bank of Ellijay representatives with House 
Members, staff, and Treasury Department officials, as well as 
the Committee's precedents and guidance regarding such official 
actions, the Committee found that Representative Gingrey 
violated Section 5 of the Code of Ethics and that his actions 
did not reflect creditably on the House or comport with the 
spirit of the House Rules. In reaching this conclusion, the 
Committee acknowledged that Representative Gingrey took some 
care to limit the scope of his official actions on behalf of 
Bank of Ellijay. Further, the Committee credited Representative 
Gingrey's assertion that he believed his actions were 
consistent with House Rules. However, given Representative 
Gingrey's substantial financial investment in Bank of Ellijay, 
and his significant interest in the bank's application for TARP 
funding, he should have taken additional steps to ensure that 
his conduct was consistent with House Rules, including seeking 
guidance from the Committee, before taking official actions 
that he recognized could, and which actually did, create 
improper appearances.\102\
---------------------------------------------------------------------------
    \102\See Berkley at 10 (``The ISC found that Representative Berkley 
mistakenly believed the rules governing what assistance her office 
could provide to her husband's practice required only that they treat 
him in the same manner by which they treated any other constituent. 
This is incorrect.'')
---------------------------------------------------------------------------
    For Representative Gingrey's violations of House Rules, 
law, regulations, or other standards of conduct, the Committee 
has determined to publicly reprove him. Upon the issuance of 
the Letter of Reproval and publication of this Report, the 
Committee will consider this matter closed.

            VI. STATEMENT UNDER HOUSE RULE XIII, CLAUSE 3(C)

    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.