[House Report 115-618]
[From the U.S. Government Publishing Office]
House Calendar No. 136
115th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 115-618
_______________________________________________________________________
IN THE MATTER OF ALLEGATIONS RELATING TO REPRESENTATIVE
BOBBY L. RUSH
__________
R E P O R T
of the
COMMITTEE ON ETHICS
March 22, 2018.--Referred to the House Calendar and ordered to be
printed
_________
U.S. GOVERNMENT PUBLISHING OFFICE
79-006 WASHINGTON : 2018
COMMITTEE ON ETHICS
SUSAN W. BROOKS, Indiana THEODORE E. DEUTCH, Florida
Chairwoman Ranking Member
KENNY MARCHANT, Texas YVETTE D. CLARKE, New York
LEONARD LANCE, New Jersey JARED POLIS, Colorado
MIMI WALTERS, California ANTHONY BROWN, Maryland
JOHN RATCLIFFE, Texas STEVE COHEN, Tennessee
REPORT STAFF
Thomas A. Rust, Chief Counsel/Staff Director
Brittney Pescatore, Director of Investigations
Megan H. Savage, Counsel to the Chairwoman
Daniel J. Taylor, Counsel to the Ranking Member
Molly N. McCarty, Investigator
Andrew Kleiman, Investigative Clerk
LETTER OF TRANSMITTAL
----------
House of Representatives,
Committee on Ethics,
Washington, DC, March 22, 2018.
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 Bobby L. Rush.''
Sincerely,
Susan W. Brooks,
Chairwoman.
Theodore E. Deutch,
Ranking Member.
C O N T E N T S
----------
Page
I. INTRODUCTION.....................................................1
II. PROCEDURAL HISTORY...............................................2
III. HOUSE RULES, LAWS, REGULATIONS, AND OTHER STANDARDS OF CONDUCT...3
IV. BACKGROUND.......................................................4
A. Representative Rush's Career as an Elected Official. 4
B. Representative Rush's Office Space in Lake Meadows
Shopping Center.................................... 4
1. The 1989 Lease and Draper and Kramer's Efforts to
Collect and Track Unpaid Rent.................... 4
2. Representative Rush's Use of the Office Space..... 8
C. Citizens for Rush Donations to the BCCC............. 9
1. The BCCC.......................................... 9
2. Representative Rush's Son Worked at the BCCC...... 9
3. July 23, 2013, Donation........................... 10
4. October 9, 2014, Donation......................... 10
V. FINDINGS........................................................11
A. Representative Rush accepted gifts of office space
that exceeded the Gift Rule limits................. 11
1. Rent-Free Use of the Office Was a Gift............ 11
2. Rent-Free Use of the Office Did Not Amount to a
Campaign Contribution............................ 11
3. Value of the Gift of Office Space................. 14
B. Conversion of Campaign Funds to Personal Use........ 23
C. House Rule XXIII, Clauses 1 and 2................... 23
D. Disclosure of Impermissible Gifts................... 25
VI. CONCLUSION......................................................25
VII. STATEMENT UNDER HOUSE RULE XIII, CLAUSE 3(C)...................26
APPENDIX A: REPORT AND FINDINGS OF THE OFFICE OF CONGRESSIONAL
ETHICS (REVIEW NO. 14-8751).................................... 27
APPENDIX B: REPRESENTATIVE RUSH'S RESPONSE TO THE OFFICE OF
CONGRESSIONAL ETHICS REFERRAL.................................. 448
APPENDIX C: EXHIBITS TO COMMITTEE REPORT......................... 480
House Calendar No. 136
115th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 115-618
======================================================================
IN THE MATTER OF ALLEGATIONS RELATING TO REPRESENTATIVE BOBBY L. RUSH
_______
March 22, 2018.--Referred to the House Calendar and ordered to be
printed
_______
Mrs. Brooks of Indiana, 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
On June 10, 2014, the Office of Congressional Ethics (OCE)
transmitted to the Committee a Report and Findings (OCE's
Referral) relating to Representative Rush. OCE's Referral
discussed two allegations, recommending further review of one
and dismissal of the other.
OCE recommended the Committee further review an allegation
that Representative Rush has occupied and used office space in
a Chicago shopping center for over two decades, without paying
any rent. OCE found substantial reason to believe that the free
use of office space represented serial in-kind contributions to
Representative Rush's state and federal electoral campaigns,
and that the value of these campaign contributions exceeded
state and federal limits. OCE recommended dismissal of a
separate allegation that Representative Rush improperly
converted campaign funds to personal use. That allegation
centered on a donation that Representative Rush's federal
campaign committee, Citizens for Rush, reported making to the
Beloved Community Christian Church (BCCC), which for some
period employed and paid his son. OCE found that the donation,
made in July 2013, was actually misreported and made to a
different entity. OCE thus recommended the Committee dismiss
this allegation.
In the latter part of 2014, while the Committee was
reviewing OCE's Referral and supplemental materials,
Representative Rush's federal campaign committee reported
another donation to BCCC. Given this additional donation, the
Chairman and Ranking Member authorized Committee staff to
investigate the issues surrounding both alleged donations to
BCCC, as well as the allegation involving Representative Rush's
receipt of free office space.
Following its investigation, the Committee concluded that
the rent-free office space was a gift to Representative Rush,
which he accepted in violation of House rules and federal law.
With respect to Representative Rush's donations of campaign
funds to the BCCC, the Committee concurred in OCE's finding
that the July 2013 donation was made not to the BCCC but to an
entity that did not employ and compensate any members of
Representative Rush's family. As for the 2014 donation, the
Committee found that Representative Rush's son was not on the
BCCC's payroll when the BCCC received those funds. Accordingly,
the Committee concluded that Representative Rush did not
violate laws or House Rules that prohibit the conversion of
campaign funds to personal use.
This Report discusses the Committee's findings and
conclusions in this matter. The Committee unanimously voted to
adopt this Report, which will serve as a reproval of
Representative Rush for accepting an impermissible gift.
Furthermore, the Committee unanimously found that
Representative Rush must repay the value of the impermissible
gift, amend his Financial Disclosure Statements to reflect the
gift, and either vacate the office space or commence paying for
the space within six weeks of the publication of this Report.
Finally, the Committee unanimously voted to dismiss the
allegations related to donations of campaign funds to the BCCC.
II. PROCEDURAL HISTORY
OCE undertook a preliminary review of this matter on
January 29, 2014. On February 28, 2014, OCE initiated a second-
phase review. On May 29, 2014, the OCE Board unanimously voted
to adopt the Findings and refer the matter to the Committee
with a recommendation for further review. The Committee
received OCE's Referral on June 10, 2014.
Representative Rush then submitted a response to the
Committee, through counsel.\1\ After the Committee received
OCE's Referral and Representative Rush's response, Citizens for
Rush disclosed in a report to the Federal Election Commission
(FEC) that on October 9, 2014, it made a donation to the BCCC
in the amount of $10,000.\2\ Thereafter, the Committee
published OCE's Referral and Representative Rush's response,
and publicly announced that the Committee would investigate the
matter under Committee Rule 18(a).\3\
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\1\Letter from Scott E. Thomas and Jen Carrier to Tom Rust, July
11, 2014 (hereinafter July 11, 2014 Submission).
\2\Pre-General Election FEC Report, filed on October 23, 2014.
\3\Committee Rule 18(d) states that ``[a]n inquiry shall not be
undertaken regarding any alleged violation that occurred before the
third previous Congress unless a majority of the Committee determines
that the alleged violation is directly related to an alleged violation
that occurred in a more recent Congress.'' The Committee unanimously
voted to make this determination in this matter with respect to the
allegation that Representative Rush received an impermissible gift of
office space during the period from 1993 to the present.
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Some of the allegations reviewed by the Committee occurred
before the 112th Congress, prior to the Committee's general
investigative jurisdiction, which includes the current and
three previous Congresses. However, pursuant to House Rule XI,
clause 3(b)(3) and Committee Rule 18(d), the Committee voted to
determine that these allegations were directly related to
alleged violations that occurred within the Committee's general
jurisdiction and did investigate those allegations.\4\
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\4\As discussed further in this Report, the allegations are that
Representative Rush received improper gifts, special favors, or
campaign contributions, in the form of free rent, from January 3, 1993,
to present. While the allegations dating from January 5, 2011, to
present are within the Committee's jurisdiction, the allegations from
1993 to January 5, 2011, are not. However, the allegations in
connection with non-payment of rent from 1993 to January 4, 2011,
appear to be directly related to the allegations that are within the
Committee's three-Congress jurisdiction.
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In the course of its investigation, the Committee issued
requests for information to Representative Rush and to the
entities that own and manage the office space leased to
Representative Rush. In response to those requests, the
Committee received and reviewed over 1,400 pages of materials.
The Committee also interviewed ten individuals, including
Representative Rush, who appeared voluntarily before the
Committee. Representative Rush fully cooperated with the
Committee's investigation.
In December 2017, the Committee notified Representative
Rush that it was considering the adoption of a public report
that would serve as a reproval of him regarding this matter.
Before the Committee decided how to resolve this matter, in
accordance with House Rules, Representative Rush was invited to
be heard by the Committee in writing and/or in person.\5\
Representative Rush declined the invitation to be heard by the
Committee. Ultimately, the Committee determined that the
appropriate resolution of this matter was to issue this Report,
which will serve as a reproval of Representative Rush's
conduct.
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\5\House Rule XI, cl. 3(a)(2).
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III. HOUSE RULES, LAWS, REGULATIONS, AND OTHER STANDARDS OF CONDUCT
A federal statute, 5 U.S.C. Sec. 7353, prohibits federal
officials, including Members of Congress, from soliciting or
accepting anything of value, except as provided in rules and
regulations issued by their supervising ethics office. For
House Members, either the Committee or the ``House of
Representatives as a whole'' is the ``supervising ethics
office.''\6\ Accordingly, the House, through House Rule XXV,
clause 5 (the Gift Rule), has defined the gifts Members may
accept consistent with federal law. The Gift Rule prohibits a
Member from knowingly accepting a gift unless it fits within
one of the rule's enumerated exceptions.\7\ The Gift Rule
defines a ``gift'' broadly, as ``a gratuity, favor, discount,
entertainment, hospitality, loan, forbearance, or other item
having monetary value.''\8\
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\6\5 U.S.C. Sec. 7353(d).
\7\House Rule XXV, cl. 5(a)(1)(A)(i). If no exception applies,
House Rules permit a Member to accept a gift not otherwise prohibited
if the Member ``reasonably and in good faith believes''' the gift has a
value of less than $50 and a cumulative value from one source during a
calendar year of less than $100. House Rule XXV, cl. 5(a)(1)(B)(i).
\8\House Rule XXV, cl. 5(a)(2)(A).
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House Rule XXIII, clause 6(a), requires that a Member keep
his campaign funds separate from personal funds. House Rule
XXIII, clause 6(b) prohibits a Member from converting
``campaign funds to personal use in excess of an amount
representing reimbursement for legitimate and verifiable
campaign expenditures.''
Similarly, the Federal Election Campaign Act (FECA), 52
U.S.C. Sec. 30114(b), prohibits the conversion of campaign
contributions to personal use. FEC regulations specify that a
donation of campaign funds to a charitable organization may be
deemed to be a prohibited conversion if ``the candidate
receives compensation from the organization before the
organization has expended the entire amount donated for
purposes unrelated to his or personal benefit.''\9\ In its
advisory opinions, the FEC has indicated that the prohibition
applies to receipt of compensation not just by candidates but
also by members of their family.\10\
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\9\See 11 CFR Sec. 113.1(g)(2).
\10\See, e.g., FEC Advisory Ops. 2005-06, 2012-05. Even so, the FEC
has permitted significant contributions of campaign funds to a
charitable organization that employed a candidate's family member where
the organization represented that the family member would not be
compensated from the donated funds.
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Finally, House Rule XXIII, clauses 1 and 2, state 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.''
IV. BACKGROUND
A. REPRESENTATIVE RUSH'S CAREER AS AN ELECTED OFFICIAL
In 1983, Representative Rush was elected as Alderman to
represent Ward 2 of the City of Chicago. In 1984 and in 1990,
respectively, he also became the Committeeman for Ward 2 and
the State Committeeman for the 1st District of Illinois. As a
Ward and State Committeeman, Representative Rush supported and
promoted candidates for local office and interfaced with
constituents.
In 1992, Representative Rush was elected to the U.S. House
of Representatives as the Representative for Illinois' 1st
Congressional District. After he was sworn in as a Member of
Congress in 1993, Representative Rush gave up his Alderman
post. In 2008, he also ceded his position as Ward Committeeman.
Representative Rush continues to serve as a State Committeeman.
B. REPRESENTATIVE RUSH'S OFFICE SPACE IN LAKE MEADOWS SHOPPING CENTER
1. The 1989 lease and Representative Rush's failure to pay rent
In August 1989, while he served as Alderman for the City of
Chicago, Representative Rush signed a one-year lease for office
space located at 3361 S. Martin Luther King Drive, Unit C-6,
Chicago, Illinois (1989 Lease).\11\ The office was situated in
Lake Meadows Shopping Center, which was located in
Representative Rush's eventual congressional district. Lake
Meadows Shopping Center was owned by Lake Meadows Associates,
an Illinois limited partnership. Lake Meadows Associates was
itself owned by three limited liability companies. Pursuant to
a management agreement, Lake Meadows Associates delegated all
day-to-day management responsibilities, including rent
collection, to Draper and Kramer, Inc. (Draper and Kramer).\12\
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\11\Exhibit 1.
\12\At the time the lease was signed, Draper and Kramer operated
under the name of Harold J. Carlson Associates, Inc. and was one of
three general partners of Lake Meadows Associates. Exhibit 2.
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The 1989 Lease named ``Bobby Rush, an individual'' as the
tenant.\13\ Although Representative Rush signed the lease as an
individual, the lease specified that the office would be used
as ``an aldermanic office for Alderman Rush's local Chicago
political ward, known as the Second Ward.''\14\ The lease also
stated that the ``Tenant's Trade Name'' was ``Alderman Bobby
Rush,''\15\ although it made clear that the ``trade name'' is
not the identity of the ``tenant'' bound by the lease.\16\
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\13\Exhibit 1.
\14\Id. at Sec. 1.1(H).
\15\Id. at Sec. 1.1(I).
\16\Id. at Sec. 6.1.
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By signing the 1989 Lease, Representative Rush agreed to
pay a monthly rent of $1,126.49, which was comprised of a fixed
minimum rent of $627.00, a common area use charge of $343.87,
an insurance charge of $10.04, and a real estate tax charge of
$145.58.\17\ Representative Rush also agreed to remit a
security deposit of $1,881.00.\18\ An executed copy of the
lease was forwarded to Representative Rush in December
1989.\19\ Because a third party occupied the office space and
was delayed in vacating it, Draper and Kramer permitted
Representative Rush to make his first rental payment in January
1990, approximately seven months after the lease was
executed.\20\
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\17\Exhibit 3.
\18\Exhibit 1.
\19\Exhibit 4.
\20\Exhibit 3; Exhibit 5; Exhibit 6.
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Representative Rush told the Committee the City of Chicago
had paid the rent for his previous Aldermanic office, and that
he expected the City to also pay for the Lake Meadows
office.\21\ However, this never happened. Representative Rush
did not make the first required rent payment in January 1990,
and apparently never paid the security deposit specified by the
1989 Lease. Draper and Kramer's records indicate that
throughout 1990, Representative Rush was repeatedly asked to
pay rent, and he made several promises to pay, even delivering
two checks that were returned for insufficient funds.\22\ Both
checks were drawn from the same account, which one of the
checks identified as the ``Alderman Bobby Rush Contingency
Account.''\23\
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\21\18(a) Interview of Representative Rush.
\22\Exhibit 6; Exhibit 7; Exhibit 5; Exhibit 8.
\23\See Exhibit 8.
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By September 1990, Representative Rush's unpaid rent
balance had grown to $14,937.19.\24\ In an internal Draper and
Kramer memo dated September 19, 1990, the property manager
stated that she had not issued a notice of eviction to
Representative Rush, ``pending direction of ownership,'' and
concluded: ``I believe that in order to have him vacate at the
end of his lease term, we will be forced to take legal
action.''\25\ The property manager recommended that Draper and
Kramer ``proceed with action to remove the alderman from space
C-6.''\26\
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\24\Exhibit 6.
\25\Id.
\26\Id.
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Despite this recommendation, Draper and Kramer never sent
Representative Rush a notice that it intended to initiate legal
action against him, and it never petitioned a court to evict
Representative Rush or force him to pay back rent. Instead, on
November 5, 1990, Draper and Kramer notified Representative
Rush that his one-year lease had expired (as of October 31,
1990) and that he would be considered a month-to-month tenant
``at the same terms and conditions outlined in the initial
lease document.''\27\
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\27\Exhibit 9.
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Representative Rush told the Committee he did not recall
ever receiving this notice, which was included in a letter sent
to his home address.\28\ Nor did he recall ever being told that
Draper and Kramer, or anyone else, considered him to be a
tenant in the Lake Meadows office space after the 1989 Lease
expired, with continuing obligations under the lease.\29\
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\28\18(a) Interview of Representative Rush.
\29\Id.
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Despite Representative Rush's lack of recollection, the
documentary record is clear that, for several years after the
lease expired and Representative Rush converted to a month-to-
month tenancy, Draper and Kramer continued trying to collect
rent from Representative Rush.\30\ These collections efforts
consisted of phone calls to Representative Rush, in-person
discussions with him, and written requests. Draper and Kramer's
collections log shows that in response to these efforts,
Representative Rush made additional promises to pay between
1990 and 1992.\31\ Representative Rush also told Draper and
Kramer he would set up an arrangement with the City of Chicago
to cover the rent.\32\ However, neither Representative Rush nor
the City of Chicago actually paid any rent.
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\30\See Exhibit 7. Draper and Kramer provided a collections log
that covered the time period of 1990 through 1992. The Committee
requested all similar collections documents for other years, but Draper
and Kramer was unable to find or produce additional documents.
\31\See Id.
\32\Exhibit 10.
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Sometime in the mid-1990s, several years after
Representative Rush was elected to Congress, Draper and
Kramer's senior management instructed the property manager who
oversaw Lake Meadows Shopping Center to suspend all collections
efforts involving Representative Rush.\33\ Despite numerous
queries to current and former Draper and Kramer employees, the
Committee could not conclusively determine who at Draper and
Kramer issued the instruction to suspend collections efforts,
precisely when it was issued, or what motivated the decision.
Several witnesses told the Committee that Representative Rush's
position as Alderman, as well as his other political
associations, may have been a factor.\34\ These witnesses
acknowledged this was speculation, and not based on any
conversations with Draper and Kramer employees or owners.\35\
However, two documents produced to the Committee lend some
credence to these suppositions. According to a 1997 inter-
office memorandum, by January 1991--one year after the
commencement of Representative Rush's lease, and several months
after the lease expired--the unpaid rent balance was over
$19,000, ``with numerous promises to pay having been made over
the prior year.''\36\ Immediately following this recitation,
the memo stated ``(It must be noted that at this time we were
asking [for] the Alderman's assistance with the termination of
the Newsstand's right to occupy the North-East corner of King
Dr.)''\37\ Of course, this preceded Representative Rush's
election to Congress by nearly two years. Another internal
Draper and Kramer memo, written in 1999, six years after
Representative Rush joined the House, stated: ``This tenant
[Representative Rush] owes $25,272.10 in rent and charges. The
last rental payment was made in June 1997. In light of the
political issues associated with this tenant, how do we want to
proceed?''\38\ Neither the author nor the recipient of this
memo was able to explain to the Committee the meaning of
``political issues.''\39\ For his part, Representative Rush
denied providing any assistance to Draper and Kramer, or any of
the owners of the Lake Meadows Shopping Center, at any time
during his tenure in Congress.\40\ The Committee found no
evidence that Representative Rush was ever asked for, or
provided, such assistance.
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\33\18(a) Interview of Property Manager A.
\34\18(a) Interview of Senior Vice President A; 18(a) Interview of
Property Manager B; 18(a) Interview of Property Manager A.
\35\See 18(a) Interview of Property Manager B.
\36\Exhibit 5 at 1.
\37\Id. King Drive is one of the streets that borders Lake Meadows
Shopping Center. The Committee learned that in 1991, Draper and Kramer
and Lake Meadows Associates were concerned that a particular Newsstand
(a kiosk that sold newspapers, magazines and other print publications)
was encroaching on the shopping center's property line. See 18(a)
Interview of Chief Executive Officer. It is unclear whether
Representative Rush in fact assisted with relocating the Newsstand or
if the issue was resolved in some other way. Representative Rush did
not recall providing any such assistance. See 18(a) Interview of
Representative Rush.
\38\Exhibit 11. Draper and Kramer's accounting documents contain no
record of Representative Rush making any rental payments in June 1997.
Likewise, Representative Rush has not found any banking records or
other documents showing that he made such payments.
\39\18(a) Interview of Property Manager B; 18(a) Interview of
Senior Vice President B.
\40\18(a) Interview of Representative Rush.
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Even after Draper and Kramer stopped actively seeking rent
payments from Representative Rush, the company continued to
treat him like a bona fide tenant in other respects, both
internally and in sporadic communications with Representative
Rush. For instance, accounting records show that through the
1990s, 2000s, and to the present, Draper and Kramer itemized
what Representative Rush was supposed to have paid each month
in rent and fees.\41\ In conjunction with this detailed
accounting, Draper and Kramer appears to have sent
Representative Rush certain billing statements that summarized
his unpaid rent balance. For example, a September 2000
statement noted that Representative Rush owed $57,031.52.\42\
Additionally, Draper and Kramer periodically contacted
Representative Rush with reminders of the responsibilities he
had to maintain the appearance and condition of his leased
space. In a 1997 letter, a then-vice president of operations
requested that Representative Rush fix broken windows, remove
dirt and obsolete campaign signs from windows, and coordinate
with the gas company to avoid losing heating in the space.\43\
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\41\Exhibit 12; Exhibit 13. The records show that while the monthly
rent for the office space has been a fixed charge of $627, the ``common
area use'' costs have generally increased over the years.
\42\Exhibit 12.
\43\Exhibit 14.
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In a similar letter in 2004, a property manager asked
Representative Rush to reimburse Draper and Kramer for plumbing
work done at the office and to obtain liability insurance.\44\
Although the letter was sent to Representative Rush's House
district office, and addressed to his longtime Executive
Assistant, Representative Rush did not recall receiving the
letter or being told of it.\45\ In the letter, the property
manager noted that the lease required Representative Rush to
provide the landlord with a certificate of insurance, and
failure to do so ``can be considered a default of the terms of
your lease agreement.''\46\ The property manager told the
Committee that the ``lease'' she referenced in the letter was
the month-to-month tenancy arrangement of which Representative
Rush was notified in 1990, after the 1989 Lease expired.\47\
The property manager also told the Committee that
Representative Rush never responded to the 2004 letter,
reimbursed the landlord for the plumbing work, or provided a
certificate of insurance.\48\
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\44\Exhibit 15.
\45\18(a) Interview of Representative Rush.
\46\Exhibit 15.
\47\18(a) Interview of Property Manager C.
\48\Id.
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2. Representative Rush's use of the office space
Representative Rush does not dispute that for 27 years he
has been the sole occupant and primary user of the office space
at Lake Meadows Shopping Center. In submissions to the
Committee, Representative Rush has asserted that he used the
office space for two primary purposes. First, the space was
used as storage for a variety of items, including a
photocopier, old campaign materials, files from Representative
Rush's tenure as an alderman, and ``a few old desks, old file
cabinets, and old sets of shelves dating back 20 years.''\49\
According to Representative Rush, this storage use of the
space, though constant from the time Representative Rush joined
the House to the present, has been of limited value,
particularly in recent years. Representative Rush has described
the current contents of the office as ``junk'' that is
``useless''' or ``essentially worthless.''\50\
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\49\See July 11, 2014 Submission at 1-2.
\50\See Id. at 1.
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Representative Rush has also stated that he used the Lake
Meadows office between 1993 and 2008, sporadically and for
irregular periods, for a variety of other purposes, including
(1) meetings between Representative Rush as Ward or State Party
Committeeman and prospective local candidates; (2) meetings
between Representative Rush and his federal campaign committee
Treasurer; (3) as the campaign headquarters for his sister, in
1995, when she ran for a Chicago Alderman position; (4) social
meetings with residents of the area surrounding the office; and
(5) classes offered by a non-profit organization in the 2007-
2008 period. Representative Rush has asserted that any use of
the office for meetings and other non-storage purposes wound
down after he gave up his position as Chicago Ward Committeeman
in 2008, and the Committee found no evidence to the contrary.
As Representative Rush stated in July 2014, the office space
``has not been used by anyone at all for any meetings or
gatherings the last two years, and at most has served as the
dormant repository for abandoned `junk' that has been there for
many years now.''\51\ Representative Rush told the Committee in
2017 that he had not vacated the office space since the OCE
investigation began in 2013 because he ``didn't want to
interfere with any investigations or what have you, tampering
with anything.''\52\
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\51\Letter from Scott E. Thomas to Nadia Konstantinova, Aug. 10,
2015 (hereinafter August 10, 2015 Submission).
\52\18(a) Interview of Representative Rush.
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Representative Rush has estimated that all of his uses of
the office, other than for the non-profit classes, totaled 5
days per year (at 8 hours per day) from the time he became a
House Member in 1993 through 2008.\53\ Representative Rush
estimated the non-profit organization he lent the Lake Meadows
office to in 2007 and 2008 used the space for approximately 120
hours.\54\
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\53\July 11, 2014 Submission at 2.
\54\Id.
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C. CITIZENS FOR RUSH DONATIONS TO BELOVED COMMUNITY CHRISTIAN CHURCH
1. BCCC
Representative Rush founded BCCC,\55\ a 501(c)(3)
charitable organization, in approximately 2002.\56\ Since its
early days, Representative Rush has been BCCC's pastor and
teacher, and a member and leader of its core group, which makes
decisions for the church.\57\ He receives no payments from the
church.\58\
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\55\Presently, the BCCC is called the Beloved Community Christian
Church of God in Christ, abbreviated BCCCOGIC.
\56\OCE Interview of Representative Rush (OCE's Referral, Ex. 1) at
2-4.
\57\Id. at 3-4.
\58\Id. at 15-16; Letter from Scott Thomas to Paul Solis, May 27,
2014 (hereinafter May 27, 2014 Submission to OCE) at 3.
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BCCC uses a single operating account to hold donations to
the church and to pay bills and salaries.\59\ Representative
Rush has no control over that account, and while he can sign
checks drawn on the account, two additional signatures are
required.\60\ As the manager of BCCC's finances, the secretary
is responsible for receiving, depositing, and cataloguing all
donations, and for writing checks to cover bills and to pay
salaries to BCCC's employees.\61\ Over the years, BCCC has paid
salaries to three of its musicians and the custodial
engineer.\62\
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\59\18(a) Interview of Church Administrative Assistant.
\60\OCE Interview of Representative Rush (OCE's Referral, Ex. 1) at
6.
\61\18(a) Interview of Church Administrative Assistant.
\62\Id.
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2. Representative Rush's son worked at BCCC
Representative Rush's son began working for BCCC as a
custodial engineer in July 2013.\63\ He was paid $300 per week,
at the same rate as his predecessor.\64\ He received his salary
payments on a bi-weekly basis.\65\ During Representative Rush's
son's employment with BCCC, there were several periods when the
church did not have enough money to pay him. Representative
Rush's son estimated that BCCC still owes him around $2,200 in
back pay.\66\
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\63\OCE Interview of Representative Rush's Son (OCE's Referral, Ex.
8) at 2, 9-10.
\64\Id. at 9.
\65\Id. at 11.
\66\18(a) Interview of Representative Rush's Son.
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Representative Rush's son told the Committee he stopped
working for BCCC in the spring of 2014,\67\ and the last
payment he received from the church was in March 2014.\68\
BCCC's secretary had a different recollection, believing that
Representative Rush's son worked at BCCC until the fall of
2014.\69\ Representative Rush told the Committee his son was no
longer on BCCC's payroll in October 2014.\70\
---------------------------------------------------------------------------
\67\Id.
\68\Id.
\69\18(a) Interview of Church Administrative Assistant.
\70\18(a) Interview of Representative Rush.
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3. July 23, 2013, donation of campaign funds
In its October 2013 Quarterly FEC report, Citizens for Rush
disclosed that on July 23, 2013, it made a $2,100 donation to
BCCC.\71\ On April 15, 2014, Citizens for Rush amended this
report to reflect that the $2,100 donation had instead been
made to Beloved Community Family Services (BCFS), a different
non-profit entity.\72\ BCFS's bank statement confirmed that on
July 23, 2013, BCFS deposited $2,100 into its account.\73\
BCCC's secretary, the individual responsible for receiving and
recording BCCC's incoming donations, told the Committee that
she had been unaware of the July 23, 2013, donation's existence
until this matter came under investigation in 2014.\74\
---------------------------------------------------------------------------
\71\2013 October Quarterly FEC report.
\72\2013 October Quarterly FEC report, amended.
\73\OCE's Referral at 20 (Ex. 19).
\74\18(a) Interview of Church Administrative Assistant.
---------------------------------------------------------------------------
In his communications with OCE, Representative Rush
affirmed that the July 23, 2013, donation was intended for and
made to BCFS, not BCCC.\75\ Although Representative Rush had
been involved in helping BCFS during its formation, he has not
served as an officer or a member of its board.\76\ Over the
years, various members of Representative Rush's family have sat
on the BCFS board, but they did not receive compensation for
those services.\77\
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\75\OCE's Referral at 19-20; May 27, 2014 Submission to OCE at 4.
\76\July 11, 2014 Submission at Attachment 1 Sec. 6.
\77\OCE's Referral at 19; July 11, 2014 Submission at Attachment 1
Sec. B.
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4. October 9, 2014, donation of campaign funds
In a Pre-General Election FEC Report that Citizens for Rush
filed on October 23, 2014, the campaign committee disclosed
that on October 9, 2014, it made a disbursement to BCCC in the
amount of $10,000. BCCC's secretary told the Committee that she
received the $10,000 check from Representative Rush.\78\ When
he handed her the check, Representative Rush issued no
instructions other than asking that the money be deposited into
BCCC's account.\79\
---------------------------------------------------------------------------
\78\ 18(a) Interview of Church Administrative Assistant.
\79\ Id.
---------------------------------------------------------------------------
BCCC's secretary told the Committee that when she received
and deposited the $10,000 donation into BCCC's single operating
account, Representative Rush's son was still employed by the
church.\80\ The secretary could not, however, recall whether at
that time, in October 2014, BCCC was paying Representative
Rush's son for his work or if this was one of the periods when
BCCC was in arrears on salaries.\81\ In an August 2015 letter,
Representative Rush advised the Committee that his son ``has
not been compensated for quite some time'' because BCCC's
stained glass window collapsed in late October 2014 and the
church had been experiencing financial difficulties.\82\
Representative Rush's son told Committee staff that BCCC did
not pay him in 2014, and that the church in fact owed him back
pay, which he never received.\83\
---------------------------------------------------------------------------
\80\Id.
\81\Id.
\82\August 10, 2015 Submission at 3.
\83\18(a) Interview of Representative Rush's Son.
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V. FINDINGS
A. REPRESENTATIVE RUSH ACCEPTED A GIFT OF OFFICE SPACE THAT EXCEEDED
THE GIFT RULE LIMITS
1. Representative Rush received a gift of rent-free office space
The Gift Rule prohibits a Member from knowingly accepting a
gift unless it fits within one of the Rule's enumerated
exceptions.\84\ A ``gift'' is defined as ``a gratuity, favor,
discount, entertainment, hospitality, loan, forbearance, or
other item having monetary value.''\85\ The Committee
considered whether the arrangement between Draper and Kramer
and Representative Rush, which allowed the Member to occupy and
use office space for his entire tenure in the House without any
payment of rent, was a ``forbearance,'' i.e., Draper and Kramer
had a legal right to demand payment of rent from Representative
Rush at all times and chose not to. If so, the value of the
gift to Representative Rush would be simple: the full value of
the forbearance, which would be the amount of rent that was not
paid. Ultimately, the Committee concluded Draper and Kramer
likely waived its legal right to collect rent. However, the
Committee also concluded the office space was an ``item having
monetary value.'' As such, the office space was a gift, and was
subject to the strict limits of the Gift Rule. That rule
permits a Member to accept a gift (not otherwise prohibited)
only if it fits within one of the enumerated exceptions. If no
exception applies, then the gift may be accepted only if the
Member ``reasonably and in good faith believes'' it has a value
of less than $50 and a cumulative value from one source during
a calendar year of less than $100.\86\
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\84\House Rule XXV, cl. 5(a)(1)(A)(i). The rule does not have an
exception that would permit Representative Rush to accept this type of
gift. See House Rule XXV, cl. 5(a)(3).
\85\House Rule XXV, cl. 5(a)(2)(A).
\86\House Rule XXV, cl. 5(a)(1)(B)(i).
---------------------------------------------------------------------------
2. Rent-free use of the office did not amount to a campaign
contribution
The Gift Rule has one exception that, in light of how OCE
interpreted the facts of this matter, bears examining.
Specifically, the Gift Rule exempts from its prohibitions the
receipt of a ``contribution, as defined in section 301(8) of
the Federal Election Campaign Act of 1971 (2 U.S.C. 431) that
is lawfully made under that Act, a lawful contribution for the
election to a State or local government office, or attendance
at a fundraising event sponsored by a political organization
described in section 527(e) of the Internal Revenue Code of
1986.''\87\ OCE found substantial reason to believe Draper and
Kramer made recurring in-kind contributions to the campaign
committees for Representative Rush's state and federal
positions--Citizens for Rush and Friends of Bobby Rush--by
allowing those committees to use the Lake Meadows office
without taking legal action to force Representative Rush to pay
rent. Based on its method of valuing the office space, OCE
concluded that the campaign contributions exceeded the limits
set by federal law, and from 2011 on, by Illinois law.\88\ OCE
thus found substantial reason to believe the contributions were
not ``lawfully made under the Act'' and did not fit within the
exception to the Gift Rule.\89\ Accordingly, any campaign
contributions in excess of federal and state limits represented
gifts to Representative Rush, which the Gift Rule did not allow
him to accept or retain.
---------------------------------------------------------------------------
\87\The statute has been recodified as 52 U.S.C.Sec. 30101. House
Rule XXV, cl. 5(a)(3)(B).
\88\Prior to January 1, 2011, Illinois had no legal limit on the
contributions a single donor could make to a state candidate on an
annual basis. See S.B. 1466, 96th Gen. Assembly. In 2011, Illinois
established the following statutory limits: $5,000 from an individual;
$10,000 from a corporation, labor union, or association; $50,000 from a
political action committee or another candidate political committee.
See id. Sec. 9-8.5.
\89\OCE's Referral at 17.
---------------------------------------------------------------------------
The Committee also concluded that the Gift Rule and its
limitations applied to Representative Rush's receipt of the
rent-free office space. However, the Committee found the office
space was a gift to Representative Rush personally, not a
contribution to his federal and state campaigns. The Federal
Election Campaign Act of 1971 (FECA) defines a campaign
contribution as ``any gift, subscription, loan, advance, or
deposit of money or anything of value made by any person for
the purpose of influencing any election for Federal
office.''\90\ (Emphasis added). The Illinois Campaign Financing
Act includes a similar definition.\91\ FECA further specifies
that an in-kind contribution is made by any person ``in
cooperation, consultation, or concert with, or at the request
or suggestion of, a candidate, his authorized political
committees, or their agents.''\92\ Accordingly, when
considering whether a candidate's receipt of a free or
discounted good or service should be considered a contribution
to the candidate's electoral campaign, the intent of the person
providing the good or service is important.\93\
---------------------------------------------------------------------------
\90\52 U.S.C. 30101(8)(A)(i); see also 11 CFR Sec. 100.52(a).
\91\The Act defines a contribution as ``a gift, subscription,
donation, dues, loan, advance, deposit of money, or anything of value,
knowingly received in connection with the nomination for election,
election, or retention of any candidate or person to or in public
office or in connection with any question of public policy.'' 10 ILCS
5/9-1.4(A)(1).
\92\52 U.S.C. 30116(a)(7)(B)(i).
\93\Cf. McCormick v. United States, 500 U.S. 257, 271 (in
determining ``whether payments made to an elected official are in fact
campaign contributions''' or were unlawful payoffs as part of an
extortion scheme, ``the intention of the parties is a relevant
consideration.'').
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In this case, there is no evidence that Draper and Kramer,
or the owner of the Lake Meadows Shopping Center, Lake Meadows
Associates, knowingly provided free office space to
Representative Rush's state or federal campaign committees, or
that they did so for the purpose of influencing, or in
connection with, any of Representative Rush's campaigns.
Indeed, the available evidence is all to the contrary. Most
importantly, the lease provided that the office would be used
as an Aldermanic office, and not for any other purpose.\94\
Thus, Draper and Kramer expressly did not authorize use of the
office for Representative Rush's state and federal campaigns.
Under a similar set of facts, the FEC found that where a
landlord leased office space to a person who was not a
candidate or campaign committee, and that person allowed a
campaign committee to use the space free of charge, the
landlord did not intend to make an in-kind contribution to the
campaign committee.\95\ As in this case, the terms of the lease
permitted use of the space for a specific, non-campaign,
purpose, and the lease prohibited the tenant who signed the
lease from subletting the space to any other tenant without the
landlord's express permission.\96\ It is also significant that,
according to the President and CEO of Draper and Kramer, he
believed Representative Rush had vacated the Lake Meadows
office soon after he became a month-to-month tenant in late
1991.\97\ His surprise that Representative Rush occupied the
space for the next twenty years is obviously inconsistent with
any intent to make an in-kind contribution to Representative
Rush's campaigns.
---------------------------------------------------------------------------
\94\See Exhibit 1 at Sec. 1.1(H) (``Use (Article VI): As an
Aldermanic office for Alderman Rush's local Chicago political Ward,
known as the Second Ward.''); id. at Sec. 6.1 (``Tenant agrees that the
Leased Premises shall be used and occupied by Tenant or anyone else
claiming under Tenant only for the purpose specified as the use thereof
in Section 1.1.H. and for no other purpose or purposes without the
prior consent of Landlord.'')
\95\See, e.g., FEC, Factual and Legal Analysis regarding Pettit
Square Partners, LLC, MUR 6463, May 7, 2012, at 3 (available at http://
eqs.fec.gov/eqsdocsMUR/12044321389.pdf) (where lessor of office space
allowed the Democratic National Committee to use the space without
notice to the landlord, and the lease expressly prohibited subletting
the space without the landlord's consent, the landlord ``may not have
authorized the DNC to occupy the space or otherwise make an in-kind
contribution under the Act. Under these circumstances, the Commission
dismisses the allegations related to [the landlord].'').
\96\See id.; see also Exhibit 1 at Sec. 12.1 (``Tenant shall not
transfer, assign, sublet, enter into a license or concession agreement
or hypothecate this Lease or Tenant's interest in and to the Leased
Premises, or permit any transfer of Tenant's Interest created hereby .
. . or permit the use or occupancy of the Leased Premises or any part
thereof by anyone other than Tenant, without first obtaining the prior
written consent of Landlord.'')
\97\18(a) Interview of Chief Executive Officer.
---------------------------------------------------------------------------
The FEC's General Counsel reached a different conclusion
with respect to an apartment that Representative Charlie Rangel
rented as a residential unit but used as a campaign office.\98\
However, the facts in this case are distinguishable from
Representative Rangel's circumstances. In the Representative
Rangel matter, the FEC's General Counsel noted that the lease
required residential use of the unit, and prohibited subletting
without the landlord's consent,\99\ but nonetheless found that
the landlord made in-kind contributions to Representative
Rangel's campaign committees by allowing the committees to use
the unit for rent that was below-market for a comparable office
space. It appears the FEC's General Counsel was willing to
``look past'' the lease restrictions because the evidence
showed that the landlord's employees or executives knew or
should have known Representative Rangel was using the unit as a
campaign office, contrary to the terms of the lease. The
evidence for this conclusion included the landlord's receipt of
rent checks from the campaign committees, and emails from the
committees including the apartment address and unit number, as
well as testimony from a senior executive of the landlord
company that he knew the campaign committees were using the
apartment as an office.\100\ None of those facts exist in this
case, and each relevant fact is to the contrary: (1)
Representative Rush's campaign committees never paid rent to,
or communicated with, the landlord, Draper and Kramer; (2) the
President of Draper and Kramer, along with other company
officers and employees, had no idea the committees were using
the office space;\101\ (3) while one Draper and Kramer
executive may have known that Representative Rush was still
occupying the office space as late as 2009, internal
communications to the executive indicated the tenant was the
``2nd Ward Democratic Party''; (4) the signage on the outside
of the Lake Meadows office reads ``2nd Ward Regular Democratic
Party Bobby Rush,''\102\ which refers to Representative Rush's
former position as the Alderman of Chicago's Second Ward; there
is no indication on the exterior of the office that it has ever
housed Representative Rush's state or federal campaign
committees. Consistent with all of this evidence, Draper and
Kramer's internal records of the rent due on the Lake Meadows
office continued to identify it as the ``Second Ward Office''
or ``Second Ward Democratic Party'' until at least 2009, and
there is no reason to believe that designation has changed
since then.\103\
---------------------------------------------------------------------------
\98\See FEC, In the Matter of Fourth Lenox Terrace Associates, Gen.
Counsel's Rept. #2, Aug. 11, 2011 (available at http://eqs.fec.gov/
eqsdocsMUR/12044312868.pdf).
\99\See id. at 5.
\100\See id. at 9-12, 19.
\101\See 18(a) Interview of Senior Vice President A (Senior Vice
President in charge of property management) (``Q. Do you know what the
office was used for? A. I don't know that either.''); OCE Interview of
Property Manager C (Property Manager of Lake Meadows Shopping Center,
who worked in the shopping center two doors down from Representative
Rush's office from 2002 to 2013, had never heard the name of
Representative Rush's congressional campaign committee).
\102\The word ``committeeman'' is printed in a different font and
color below this statement, but it is unclear whether this refers to
Representative Rush's former position as a city committeeman or his
current position as a state committeeman.
\103\See Exhibit 17; Exhibit 13.
---------------------------------------------------------------------------
Thus, based on the factors the FEC has considered in other
matters, the failure of Draper and Kramer, and Lake Meadows
Associates, to collect rent on the Lake Meadows office which
Representative Rush leased as ``Bobby Rush, an individual,'' to
house a local elected office--did not result in an in-kind
contribution to Representative Rush's state or federal campaign
committees because the lease only permitted the office to be
used as an Aldermanic office and the evidence does not show
that Draper and Kramer or Lake Meadows Associates knew or
should have known the campaign committees were the ``true''
tenants.
There is also no evidence that Representative Rush viewed
the office space as a contribution to his state or federal
campaigns. He never disclosed it as such on state or federal
campaign filings before OCE began its investigation, and when
he subsequently revised those filings, he listed the unpaid
rent as debts of his state committeeman and federal campaign
committees, not as contributions (which would not incur an
obligation to repay).
Thus, there is no indication that the rent-free office
space Representative Rush received was ever intended to be, or
would fit within the legal definition of, a campaign
contribution. Accordingly, the Committee found the rent-free
office space was a gift to Representative Rush, not a
contribution to his campaigns.
3. Value of the gift of office space
The Committee has a longstanding practice of finding
Members should repay the value of improper gifts they
accept.\104\ Although the Committee has not previously
addressed the issue of a gift in the form of free office space,
In the Matter of Representative Don Young, the Committee found
Representative Young must repay the value of free lodging he
accepted in violation of the Gift Rule.\105\ Likewise, In the
Matter of Representative Jean Schmidt, the Committee found
Representative Schmidt must repay over $500,000 for legal
services she received but was not billed for, even though she
was unaware that a private entity had paid for them.\106\
---------------------------------------------------------------------------
\104\See House Comm. on Ethics, In the Matter of Allegations
Relating to Representative Don Young, H. Rep. 113-487, 113th Cong., 2d
Sess. (2014) (hereinafter Young); House Comm. on Ethics, In the Matter
of Allegations Relating to Representative Jean Schmidt, H. Rep. 112-
195, 112th Cong., 1st Sess. (2011) (hereinafter Schmidt); House Comm.
on Standards of Official Conduct, In the Matter of the Investigation
into Officially Connected Travel of House Members to Attend the Carib
News Foundation Multinational Business Conferences in 2007 and 2008, H.
Rep. 111-422, 111th Cong. 2nd Sess. (2010) (hereinafter Carib News).
\105\See Young at 4.
\106\See Schmidt at 16-17.
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As previously discussed, Representative Rush signed a lease
for the Lake Meadows office in August of 1989, which required
him to pay $1,126.49 per month, inclusive of both rent and
``common access charges'' for shared services such as security
and sanitation, for the one-year lease term. When the written
lease expired, the landlord mailed a letter to Representative
Rush's home, notifying him that ``your occupancy is on a month-
to-month basis only, at the same terms and conditions outlined
in the initial lease document.''\107\ The notice further stated
that the landlord ``reserves the right to terminate this lease
upon 30 days written notice.''\108\ Draper and Kramer never
provided notice of termination of the lease. Thus, by both the
terms of the letter and in the view of the company's
employees,\109\ Representative Rush remains a month-to-month
tenant today.
---------------------------------------------------------------------------
\107\Exhibit 9.
\108\Id.
\109\See, e.g., 18(a) Interview of Property Manager C.
---------------------------------------------------------------------------
Representative Rush told the Committee he has no
recollection of receiving any notice that he was bound by the
lease for the Lake Meadows office after the original lease
expired on October 31, 1990.\110\ The Committee accepts
Representative Rush's lack of recollection, but there is no
reason to believe he did not receive the notice mailed to his
home. Moreover, the lease Representative Rush signed states:
``Notice and demands [to the tenant] shall be deemed to have
been given when mailed.''\111\ Finally, as previously
discussed, Draper and Kramer sent Representative Rush numerous
letters over the years, to his home address, his House District
office, and the Lake Meadows office, indicating that he was
still a ``tenant,'' and that he remained bound by the terms of
the lease. Indeed, some of these notices informed
Representative Rush that he continued to accrue an increasingly
substantial balance of past-due rent.\112\
---------------------------------------------------------------------------
\110\18(a) Interview of Representative Rush.
\111\See Exhibit 1 at Sec. 24.11.
\112\See, e.g., Exhibit 18 (noting ``your past due balance of
$29,517.10'' and stating this ``past due balance is due with your May
1999 charges above.''); Exhibit 17 (September 2000 rent statement
addressed to Representative Rush at the Lake Meadows office, with a
``balance due'' of $57,031.52).
---------------------------------------------------------------------------
Given this, there is an argument that Lake Meadows
Associates, the owners of the Lake Meadows office, had a legal
right to require Representative Rush to pay the full monthly
charges specified in the 1989 Lease, from the start of the
lease to the present. Once Representative Rush was sworn in as
a House Member in January 1993, he was subject to the Gift
Rule, which currently prohibits a Member from accepting any
gift unless it fits within an enumerated exception to the Gift
Rule. If no exception applies, and the gift is not otherwise
prohibited, the Member may accept a gift valued at less than
$50, or totaling less than $100 from a single source in a
year.\113\ The Gift Rule defines such a gift broadly, and
includes a ``forbearance.'' Although the Gift Rule does not
define that term, a forbearance is generally defined as ``[t]he
act of refraining from enforcing a right, obligation, or
debt.''\114\ Thus, if Lake Meadows Associates, or its agent
Draper and Kramer, had a legal right to collect the amount
specified in the 1989 Lease from Representative Rush, and that
right continued until the present, then the total value of the
gift to Representative Rush during the 24 years he has been
subject to the Gift Rule as a Member is the amount he was
obligated to pay, under the 1989 Lease, from 1993 to the
present.
---------------------------------------------------------------------------
\113\The Gift Rule has changed several times since 1993. See p. 21.
\114\Black's Law Dictionary (Tenth Ed.) at 760.
---------------------------------------------------------------------------
While this formulation of the value of the gift is both
simple and clear, the Committee did not find it appropriate as
a matter of law. The failure to collect rent from
Representative Rush was a forbearance only if Draper and
Kramer, acting as the agent for Lake Meadows Associates, had a
legal right to collect the rent. But it is likely that, at some
point during Representative Rush's tenure in the House, Draper
and Kramer effectively forfeited this right. Indeed, this
appears to have been an intentional waiver. In a 1990 memo,
written before Representative Rush was elected to Congress, the
property manager for the Lake Meadows office recommended to her
superiors that they take legal action to evict Representative
Rush and collect the overdue rent. Draper and Kramer never did
so. Instead, sometime in the mid-1990's, management directed
the property managers to cease all efforts to collect the rent.
While the occasional automated reminder of a past-due balance
may have gone out, Draper and Kramer never issued a formal
demand for payment to Representative Rush or initiated any
legal action to evict him or obtain a money judgement against
him.
Given this course of conduct, it appears that Draper and
Kramer waived its right to collect rent from Representative
Rush. Under Illinois law, ``[p]arties to a contract have the
power to waive provisions placed in the contract for their
benefit and such a waiver may be established by conduct
indicating that strict compliance with the contractual
provisions will not be required.''\115\ Waiver of a contractual
right can be implied or express.\116\ ``An implied waiver of a
legal right may arise when conduct of the person against whom
waiver is asserted is inconsistent with any other intention
than to waive it.''\117\ Where the non-breaching party to a
contact ``has intentionally relinquished a known right, either
expressly or by conduct inconsistent with an intent to enforce
that right, he has waived it and may not thereafter seek
judicial enforcement.''\118\ Further, ``[a] party to a contract
may not lull another into a false assurance that strict
compliance with a contractual duty will not be required and
then sue for noncompliance.''\119\ Here, the record is clear
that Draper and Kramer's management decided, before
Representative Rush was elected to the House, that it would not
enforce its legal right to sue him for nonpayment of rent.
Thus, Draper and Kramer engaged in ``conduct inconsistent with
an intent to enforce that right . . . and may not thereafter
seek judicial enforcement.''\120\
---------------------------------------------------------------------------
\115\Whalen v. K Mart Corp., 166 Ill. App. 3d 339, 343 (Ill. App.
Ct. 1st Dist. Feb. 2, 1988).
\116\See National Tea Co. v. Commerce & Industry Ins. Co., 119 Ill.
App. 3d 195 (Ill. App. Ct. 1st Dist. Oct. 28, 1983).
\117\Whalen, 166 Ill. App. 3d at 343 (citing Saverslak v. Davis-
Cleaner Produce Co., 606 F.2d 208, 213 (7th Cir. 1979), cert. denied
444 U.S. 1078 (1980)).
\118\Id.
\119\Id.
\120\Id.
---------------------------------------------------------------------------
The common law doctrine of laches may also apply in these
circumstances. The Supreme Court of Illinois has defined laches
as ``a neglect or omission to assert a right, taken in
conjunction with a lapse of time of more or less duration, and
other circumstances causing prejudice to an adverse party, as
will operate to bar relief in equity.''\121\ For laches to
apply, a plaintiff must have knowledge of his right, yet fail
to assert it in a timely manner.\122\ Here, there is no
question that Draper and Kramer believed it had a right to
initiate a legal action to evict Representative Rush from the
Lake Meadows office and force him to pay the past-due
rent.\123\ Yet Draper and Kramer never acted to enforce its
rights, and made an explicit decision not to do so. The
prejudice to Representative Rush is clear: if he believed a
court would one day force him to pay 27 years of back rent,
there is little doubt he would have vacated the Lake Meadows
office long ago.\124\
---------------------------------------------------------------------------
\121\Meyers v. Kissner, 149 Ill.2d 1, 12 (1992).
\122\See Bremer v. Bremer, 411 Ill. 454, 468, 104 N.E.2d 299
(1952).
\123\See Exhibit 6.
\124\While laches is a defense generally applicable in actions for
equitable relief--while a suit for unpaid rent would be an action at
law--the Illinois Supreme Court has held that ``laches analysis is no
longer mechanically applied to all actions denominated equitable,
particularly where such an application would frustrate the intent of
the legislature.'' See Sundance Homes v. County of Du Page, 195 Ill. 2d
257, 271 (Ill. Feb. 16, 2001). Further, laches may apply where a
plaintiff seeks both legal and equitable remedies. See General Auto
Service Station, LLC v. Garrett, 2016 IL App (1st) 151924, at 4 (Mar.
2, 2016). It appears that would be true if Draper and Kramer sought to
enforce the lease with Representative Rush, as it would sue for both
legal relief (unpaid rent) and the equitable remedy of eviction.
---------------------------------------------------------------------------
Under either a theory of waiver or laches, the Committee
believes Draper and Kramer forfeited any legal right to collect
unpaid rent from Representative Rush long ago. Accordingly, as
a matter of law, Representative Rush did not receive the
benefit of a forbearance from the payment of rent for the Lake
Meadows office.
However, this does not mean the office space was not a gift
to Representative Rush, or that the gift had no value. The
House Ethics Manual states:
[W]hen a Member . . . is offered a tangible item, a
service, or anything else, he or she must first
determine whether the item has monetary value. If it
does, then the individual may accept it only in
accordance with provisions of the gift rule. This is so
even if the donor obtained the gift without
charge.\125\
---------------------------------------------------------------------------
\125\House Ethics Manual (2008) at 32 (hereinafter Ethics Manual).
---------------------------------------------------------------------------
This statement is immediately followed by an example:
A Member has been invited to play golf by an
acquaintance who belongs to a country club, and under
the rules of the club, the guest of a club member plays
without any fee. Nevertheless, the Member's use of the
course would be deemed a gift to the Member from his
host, having a value of the amount that the country
club generally charges for a round of golf.\126\
---------------------------------------------------------------------------
\126\Id.
While the facts here are more complex, the same principle
applies: even if Draper and Kramer at some point waived its
right to collect overdue rent from Representative Rush, and
even if Draper and Kramer lost nothing by allowing
Representative Rush to use the space, the office still had
value to Representative Rush. That value was a gift to
Representative Rush.
The facts here bear some resemblance to those in the Carib
News matter, where several Members accepted gifts of travel
from a private trip sponsor. An investigative subcommittee
(ISC) determined that some of the travel expenses were in fact
paid by other entities, which could not sponsor private
travel.\127\ The ISC thus attempted to determine the value of
these impermissible gifts to the Members. One sticking point
was the air travel several Members accepted; according to the
airline that provided tickets to the private trip sponsor, the
tickets were ``promotional,'' and were thus supplied at no
cost.\128\ Given this, the Committee found that the value of
the tickets ``should have been reported . . . at the fair
market value pursuant to the gift rule because the tickets had
no face value.''\129\ This presented a different issue: the
airline ``advised the Subcommittee that an actual value for the
tickets could not be determined because of the nature of the
promotional tickets. However, they subsequently provided the
walk-up fare that would have been charged if the tickets were
purchased the day of travel at the ticket counter.''\130\
Ultimately, the ISC concluded that Members should be required
to repay this ``walk-up fare'' for their flights,\131\ even
though the private trip sponsor would not have waited until the
last minute to arrange Member travel, and the walk-up fare was
likely higher than the fare for an advance purchase.
---------------------------------------------------------------------------
\127\See Carib News at 111.
\128\See id. at 111-13.
\129\See id. at 119. The Committee applied House Rule XXV, clause
5(a)(1)(B)(ii): ``A gift of a ticket to a sporting or entertainment
event shall be valued at the face value of the ticket or, in the case
of a ticket without a face value, at the highest cost of a ticket with
a face value for the event. The price printed on a ticket to an event
shall be deemed its face value only if it also is the price at which
the issuer offers that ticket for sale to the public.''
\130\See id. at 118, n.387.
\131\Id. at IV.
---------------------------------------------------------------------------
In this case, the Lake Meadows office did have a ``face
value''--the amount specified in the lease--when Representative
Rush rented it. However, because the landlord slept on its
rights to collect the rent from 1990 to the present, the office
is now more akin to the ``promotional fare'' that Members
received for air travel in Carib News, meaning a price that is
artificial, and does not reflect the item's true market value.
In Carib News, flights from the United States to Antigua had a
promotional fare of $0. Here, the landlord effectively charged
Representative Rush $0 in rent, even when it had the right to
collect the rent specified in the lease, and ultimately waived
its right to collect even that amount.
The fact that Draper and Kramer effectively, and
intentionally, waived its right to collect rent from
Representative Rush for the Lake Meadows office means only that
the gift of office space to him cannot be valued solely by
reference to the lease Representative Rush signed. However,
Representative Rush still received a thing of value. Given
this, the Committee was required to find an alternative way to
calculate the fair market value of the gift. In Carib News, the
fair market value of the flights was based on a hypothetical
day-of-travel purchase, which was likely higher than the rate
any Member or sponsor, booking travel months in advance, would
have actually paid. In this case, the alternative value, based
on Representative Rush's actual use of the office space, is
lower than the rent specified in the lease. In light of the
uncommon, fact-specific circumstances in both matters, the
Committee felt comfortable utilizing these alternative market
valuations.
Ultimately, given the passage of time and the limited
evidence from third-party sources regarding how the Lake
Meadows office was used, and to what degree, the Committee
largely accepted the valuation proposed by Representative Rush
himself, which is based on Representative Rush's own estimates
of how and when he used the office. This estimate relies on the
replacement value of the office space, meaning what
Representative Rush would have had to pay to use similar space
to a similar extent.
As previously discussed, Representative Rush has asserted
that he used the office space for two primary purposes: for
storage of old office equipment and records from his time as a
Chicago Alderman, and, more intermittently, for a variety of
meetings, campaign activities (both his own and of other
candidates), and classes offered by a non-profit organization
to educate at-risk youth.
If Representative Rush had moved out of the Lake Meadows
office when he was sworn in to the House in 1993, and chosen to
find storage space for his old Aldermanic files and file
cabinets, along with a few tables, a photocopier, and other
office equipment, he would have had to pay something for that
space. Representative Rush has asserted that a comparable
storage space in the same area would cost him $250 per
month.\132\ However, the Committee did not find that this
storage value of the space represented a gift to Representative
Rush because it is clear from Representative Rush's testimony
to OCE and the Committee, and from the rest of the factual
record, that Representative Rush would not have paid the
replacement cost of the space. Instead, Representative Rush has
stated, and the Committee has no reason to doubt, that he views
the items stored in the Lake Meadows office as ``junk'' that is
``useless''' or ``essentially worthless.''\133\ Consistent with
this view, Representative Rush told OCE in 2014 he ``sees no
value in keeping the old Aldermanic or Committeeman records,
sees no value in the old copy machines stored there, and is
perfectly willing to clear out the space, and hand over the
keys immediately because the space really has no practical
value to his Committeeman operation.''\134\ He made a similar
statement to the Committee, saying he was ``perfectly willing
to empty out the space today, [and] discard the old equipment,
records, and other items stored there.''\135\ Given these
statements, and the low value Representative Rush assigned to
the contents of the Lake Meadows office, the Committee
determined that if the landlord of the space had ever demanded
payment of rent, Representative Rush would have simply disposed
of whatever items the office contained. Accordingly, it was not
necessary or appropriate for the Committee to calculate the
replacement value of the storage components of the office
space, because that usage would not have been replaced.
---------------------------------------------------------------------------
\132\See July 11, 2014 Submission at 1.
\133\See id. at 1.
\134\See May 27, 2014 Submission to OCE at 3.
\135\See July 11, 2014 Submission at 6.
---------------------------------------------------------------------------
The same cannot be said of the use of the office as a
meeting space. Representative Rush told OCE he used the office
space for a variety of in-person meetings over the years, and
that many of those meetings were necessary to the performance
of his roles as a Ward and State Committeeman.\136\ Thus, the
Committee found Representative Rush would have had to find, and
presumably pay for, meeting space to replace the Lake Meadows
office. Of course, the office was not used continuously, and it
seems to have been used less and less over the years. Indeed,
the primary use of the space, as a Ward Committeeman office,
ended in 2008 when Representative Rush relinquished that
office.\137\
---------------------------------------------------------------------------
\136\See OCE Interview of Representative Rush (OCE's Referral, Ex.
1) at 33 (``Then when I became a Member of Congress, that office--
because I was a Ward Committeeman, we started having meetings in that
office and Ward meetings. . . . if you're involved in Ward politics,
you got to have a place where your precinct captains could meet, where
your precinct captains could conduct their business, and you have
regular Ward meetings. So we did that for a few years.''); see also id.
at 33-34. (``And I'm a state party official . . . so I supported a
number of candidates. That office was used primarily for meeting with
those candidates, me gathering material from those candidates, me
circulating material for those candidates, and that was all the way up
until, I'd say [2007 or 2008], maybe longer.'')
\137\See id. at 41 (``Since I stopped being a Ward Committeeman,
then there was no need to have that office.'')
---------------------------------------------------------------------------
Representative Rush has estimated that all of the non-
storage uses of the office, with the exception of the non-
profit organization's classes, totaled 5 days per year (at 8
hours per day) from the time he became a House Member in 1993
through 2008.\138\ The Committee found the record consistent
with this estimate.\139\ The record also supports
Representative Rush's estimate that the non-profit organization
used the space for approximately 120 hours in 2007 and
2008.\140\ However, these estimates includes uses of the space
by people other than Representative Rush. Representative Rush
did not lead, and was not responsible for, the non-profit's
classes, and there is no reason to think he would have paid to
rent space to hold the classes, if he did not have the empty
Lake Meadows office. Likewise, Representative Rush's estimates
include other candidates' use of the space for their local
office campaigns. There is no indication Representative Rush
would have rented campaign offices for any unrelated
candidates.\141\ Thus, these uses of the Lake Meadows office
had no replacement value to Representative Rush because he
would not have paid to replace them. Further, to the extent
Representative Rush allowed a non-profit organization or other
candidates to use the office, the free space was a gift to
them, not to Representative Rush.
---------------------------------------------------------------------------
\138\See July 11, 2014 Submission at 2.
\139\Although there is no daily record of use of the Lake Meadows
office from 1993 through the present, contemporaneous accounts from the
staff of the management company suggest the office was infrequently
occupied. See, e.g., Exhibit 14 (March 24, 1997, letter to
Representative Rush: ``We have noticed that your Lake Meadows Shopping
Center office has not been utilized for several months. Many area
residents and business professionals have stopped at our office
demonstrating their frustration with their inability to contact you at
this location.''); Exhibit 19 (June 7, 2011 email to Representative
Rush's Executive Assistant: ``Since someone is not always in the
office, I'm wondering how we could show the space to a prospective
tenant, as that need may arise.''); Exhibit 20 (March 6, 2012, letter
to Representative Rush: ``someone is not always in that office.''); see
also 18(a) Interview of Property Manager A (former Property Manager of
Lake Meadows Shopping Center, discussing the period from 1996 to 1998:
``most of the time it was, you could see that it was dark from within,
so I guess the occasional use was what I could best typify as my
experience with [Representative Rush].''); 18(a) Interview of Senior
Vice President B (employee of the Lake Meadows management company from
1997 to 2014: ``I also never saw anyone in there, you know . . . and I
was, you know, at the property off and on over the years, kind of--I
didn't really view it as occupied.'')
\140\See July 11, 2014 Submission at 2.
\141\It appears Representative Rush did allow his sister to use the
Lake Meadows office as a campaign office for her own race for Chicago
Alderman in 1995. See 18(a) Interview of Representative Rush. Although
this usage appears to have been sporadic and quite limited, the
Committee attributed it to Representative Rush, as it benefitted his
family member.
---------------------------------------------------------------------------
Accordingly, the Committee did not calculate a replacement
value for use of the Lake Meadows office by the non-profit
organization to teach classes to at-risk youth. The Committee
also subtracted from Representative Rush's estimate of the
total use of the office space the Committee's own estimate of
usage by other candidates. These calculations were necessarily
imprecise. However, the Committee believed they reflected a
fair assessment of the value of the Lake Meadows office
attributed to Representative Rush's own use of the space. The
Committee thus estimated Representative Rush himself used the
Lake Meadows office for approximately three days a year, at
eight hours a day, from 1993 to 2008, for a total of 384 hours.
Representative Rush has stated that a meeting space with
the same capacity as the Lake Meadows office, in the same area,
currently rents for $65 per hour.\142\ However, it appears the
rental rate was significantly lower in previous years, and the
Committee estimated the YMCA meeting space, or similar space,
would have rented for no more than $40 between 1993 and
2008.\143\ Accordingly, for a total of 384 hours of usage
between 1993 and 2008, the Committee estimated the replacement
value of the Lake Meadows office for meeting space at $15,360.
---------------------------------------------------------------------------
\142\See July 11, 2014 Submission at 2.
\143\Rental rates are only publicly available from 2011 to present.
---------------------------------------------------------------------------
Although the Committee's valuation of the gift to
Representative Rush is largely based on the Member's own
estimate of the replacement value of the space, Representative
Rush has also asserted that the space may have had no value, or
that his occupancy of the office provided a value to the Lake
Meadows Shopping Center, which offset whatever he received in
free use of the space.
Several current and former Draper and Kramer employees told
Committee staff that the Lake Meadows office was
``unleasable,''\144\ by which they seemed to mean that, in the
years between 1989 and the present, no tenant could be found
who would pay the rent Representative Rush agreed to pay. This
was in part due to the physical condition and surroundings of
the shopping center, which have varied from bleak to improved
over the years, and in part due to the location of the Lake
Meadows office, in a dark and somewhat isolated corner of the
shopping center. However, no Draper and Kramer witnesses
suggested that the office space was unleasable at any price,
and there is no reason to think the space had literally zero
value to its owners. Even if that were true, as previously
discussed, an item that has no cost (or value) to the giver of
a gift may still have value to the recipient.\145\ In this
case, the office space clearly had value to Representative
Rush, although his use of the space varied over time. Indeed,
Representative Rush has acknowledged that he would have been
required to pay some amount for storage and meeting space if he
could not use the Lake Meadows office for those purposes.
Accordingly, the free use of that space was subject to the Gift
Rule.
---------------------------------------------------------------------------
\144\See, e.g., 18(a) Interview of Shopping Center Manager.
\145\See Ethics Manual at 32 (Member may only accept an item if it
fits within the value limits of the Gift Rule ``even if the donor
obtained the gift without charge.'')
---------------------------------------------------------------------------
Representative Rush has also argued that the presence of
his office in a downtrodden shopping center was of some benefit
to Draper and Kramer, and this benefit should offset the rent
he did not pay.\146\ But the Gift Rule cannot be applied in
this way. A lobbyist who invites a Member on a trip with
clients may obtain a significant benefit from the Member's
presence. However, that value does not decrease the value of
the gift of travel to the Member. Likewise, in this case it is
likely that Lake Meadows Shopping Center derived some benefit
from having Representative Rush as a tenant; his office
increased foot traffic in a corner of the shopping center and
may have lent some prestige to the complex. Yet this does not
lessen the value of the space to Representative Rush. That
value to the Member is the basis for valuing the gift to
Representative Rush.
---------------------------------------------------------------------------
\146\See July 11, 2014 Submission at 3.
---------------------------------------------------------------------------
During the years when Representative Rush was actively
using the Lake Meadows office for meetings, the Gift Rule
varied in the treatment of gifts a Member could accept. From
1993, when Representative Rush was sworn in to the House,
through 1995, Members could accept gifts from a single source
of up $250 per year. Thus, for that period, Representative Rush
exceeded the Gift Rule limit by $710 per year. From 1996
through 1998, Members could accept a gift only if it fit within
one of the exceptions to the Gift Rule, which the gift of
office space to Representative Rush did not. Finally, from 1999
to the present, the Gift Rule has permitted a Member to accept
a gift if it fits within an exception to the rule, or, if no
exception applies, the gift was valued at less than $50. Under
this version of the Gift Rule, a Member may accept several
gifts from a single source in a calendar year that total less
than $100 in value, as long as none of the gifts from that
source are valued at $50 or more. According to the framework of
the Gift Rule for the period from 1996 to present, the free
office space Representative Rush received during those years
exceeded the allowable amount by $960 per year. In total,
inclusive of the period from 1993 to 2008, Representative Rush
exceeded the gift limit by $14,610.
This is a substantial sum, and the Committee recognizes, as
it has in other matters, that requiring repayment imposes a
burden on the Member.\147\ However, in these circumstances and
in light of its precedents, the Committee has no other
option.\148\ Under the Committee's precedents and the clear
requirements of the Gift Rule and federal law, a Member may not
retain, and must return, any gift in excess of what the rules
allow.\149\ In this case, that means Representative Rush must
repay the value of the free office space he received.\150\ In
doing so, Representative Rush must use personal funds, as the
gift was made to Representative Rush personally, and was not
meant to be, and did not carry any indicia of, a campaign
contribution. However, because Representative Rush's state and
federal campaigns were the actual users of the office,
Representative Rush may charge them reasonable rents.\151\
Accordingly, while Representative Rush must repay the
impermissible gift out of personal funds, his state and federal
campaign committees may pay him rent in the amount of the fair
market value of the space.\152\
---------------------------------------------------------------------------
\147\See, e.g., Schmidt at 19 (``The Committee recognizes that the
lawyers . . . have been representing Representative Schmidt for more
than two years . . . and the legal fees for this work are substantial.
For this reason, the Committee does not expect Representative Schmidt
to fully pay the lawyers . . . immediately. However, Representative
Schmidt must ensure that TCA does not make any further payments on her
behalf to the lawyers . . . and must begin paying the lawyers . . . as
soon as funds are available.'')
\148\The hardship to a Member of repaying a gift is not, and cannot
be, the basis for valuing the gift or determining whether payment is
required. In prior cases, the Committee has required Members to make
substantial repayments, even where the Member was unaware of the
receipt or value of a gift. See, e.g., id. at 3 (Member required to
repay a gift of $500,000 in legal fees, ``[d]espite [the Member's]
apparent lack of knowledge of this arrangement,'' because ``it was in
fact improper and constituted an impermissible gift.''); see also supra
at n.102.
\149\See n.102, supra.
\150\A Member who receives a gift the Member cannot accept is
typically directed to either return the gift to the giver or pay that
person or entity the fair market value of the gift. Here, the owner of
the office space, Lake Meadows Associates, waived its right to recover
rent from Representative Rush. Further, the Committee found Lake
Meadows Associates actually had a part in creating the conditions that
necessitated this investigation. Thus, given the landlord's lack of a
legal right to the repayment, the Committee did not find payment to the
landlord to be the appropriate remedy. Therefore, the Committee finds
that Representative Rush should repay the value of the impermissible
gift, $13,310, to the U.S. Treasury.
\151\Representative Rush told OCE his federal campaign committee
did not use the Lake Meadows office. See OCE Interview of
Representative Rush (OCE's Referral, Ex. 1) at 42. However, the
documentary record suggests at least some use of the office by Citizens
for Rush over the years, including as an occasional meeting space for
Representative Rush's campaign Treasurer.
\152\See Ethics Manual at 170-71 (``At times a Member . . . has
office space or other property that the person wishes to lease to the
Member's campaign. . . . Such a transaction is permissible under the
House Rules only if (1) there is a bona fide campaign need for the
goods, services, or space, and (2) the campaign does not pay more than
fair market value in the transaction. Whenever a Members campaign is
considering entering into a transaction with either the Member or one
of his or her family members, it is advisable for the Member to seek a
written advisory opinion on the transaction from the Standards
Committee. . . . A Member and the Member's campaign staff should also
review the FEC regulations on campaign transactions with a candidate or
a family member of the candidate before entering into any such
transaction.'')
---------------------------------------------------------------------------
B. CONVERSION OF CAMPAIGN FUNDS TO PERSONAL USE
The Committee did not find that Representative Rush
converted campaign funds to personal use. With respect to the
allegation OCE referred to the Committee, with a recommendation
of dismissal, the Committee concurred with OCE's finding that
Representative Rush's federal campaign committee did not
actually make a donation to BCCC in 2013, but instead donated
funds to a separate entity, which never employed or compensated
Representative Rush or his family members. The Committee found
that Representative Rush's federal campaign committee did make
a $10,000 donation to BCCC in October 2014, and that the church
at one time employed Representative Rush's son. However, the
record did not establish that Representative Rush's son was on
BCCC's payroll on or after the date of the donation. While
witnesses had conflicting memories regarding the timeline of
Representative Rush's son's work for BCCC, tax filings and
other records do not show any payments to Representative Rush's
son in or after October 2014. Accordingly, the Committee did
not find that any part of the donated campaign funds were used
for the personal benefit of Representative Rush or any member
of his family.
C. HOUSE RULE XXIII, CLAUSES 1 AND 2
As stated in previous reports, the Committee observes two
basic principles when applying the first two clauses of the
Code of Conduct. First, Members must at all times act in a
manner that reflects creditably upon the House. Second, the
Code of Conduct and other standards of conduct governing the
ethical behavior of the House community are not criminal
statutes to be construed strictly, but rather--under clause 2
of House Rule XXIII--must be read to prohibit violations not
only of the letter of the rules, but of the spirit of the
rules. Ethical rules governing the conduct of Members were
created to assure the public of ``the importance of the
precedents of decorum and consideration that have evolved in
the House over the years.''\153\ The standard ``provide[s] the
House with the means to deal with infractions that rise to
trouble it without burdening it with defining specific charges
that would be difficult to state with precision.''\154\ The
practical effect of clause 2 is to allow the Committee to
construe the ethical rules broadly, and prohibit Members from
doing indirectly what they would be barred from doing directly.
The Ethics Manual states that ``a narrow technical reading of a
House Rule should not overcome its `spirit' and the intent of
the House in adopting that and other rules of conduct.''\155\
---------------------------------------------------------------------------
\153\House Comm. on Standards of Official Conduct, Report Under the
Authority of H. Res 418, H. Rept. 90-1176, 90th Cong. 2d Sess. 17
(1968).
\154\114 Cong. Rec. 8778 (Apr. 3, 1968) (Statement of
Representative Price).
\155\Ethics Manual at 17 (citing House Select Comm. On Ethics,
Advisory Opinion No. 4, H. Rept. 95-1837, 95th Cong. 2d Sess. App. 61
(1979)).
---------------------------------------------------------------------------
The Committee, after analyzing the conduct at issue in this
matter under these standards, found that Representative Rush
violated House Rule XXIII, clauses 1 and 2, by accepting gifts
of free office space over the entire length of his time in
Congress, a period of 24 years. Representative Rush has
explained that he viewed the Lake Meadows office space as
having very little value, that Draper and Kramer never
initiated legal action to evict or force him to pay rent, and
that he made only minimal use of the space, particularly since
2008.\156\ When asked to explain why he believed he could
occupy and use the office space without ever paying rent,
Representative Rush stated ``I never really thought about
it.''\157\ The Committee accepted Representative Rush's
explanations as genuine, including his assertion that, had the
landlord taken legal action against him, he would have vacated
the office space, or at least re-negotiated the rent.\158\
However, these explanations are not excuses. Further, even if
Representative Rush's explanations demonstrated compliance with
the letter of the Gift Rule--which they do not--he clearly did
not follow the rule's spirit. Representative Rush knew, for
more than two decades, that he occupied and made use of office
space without paying for it. He should have known, as several
Draper and Kramer employees confirmed, that this was a highly
unusual commercial arrangement.\159\ Yet he appears to have
never questioned whether it was appropriate, particularly in
light of the strict limits on gifts a Member may receive. In
this respect, Representative Rush's actions are comparable of
those the Committee considered in The Matter of Representative
Don Young, where the Member ``was, at best, blithe with respect
to the question of gift rule compliance,'' and exhibited a
``casual attitude'' regarding the relevant rules.\160\
---------------------------------------------------------------------------
\156\See July 11, 2014 Submission at 1-3; 18(a) Interview of
Representative Rush.
\157\18(a) Interview of Representative Rush.
\158\Id.
\159\See, e.g., 18(a) Interview of Senior Vice President A.
\160\See Young at 69.
---------------------------------------------------------------------------
In numerous matters, the Committee has found that Members
violated House Rules without any intent to do so, merely
because they did not pay attention to the applicable standards
of conduct.\161\ As the Committee explained in the Young
matter, such inattention to the rules, which results in
significant or repeated violations, can justify a public
reproval:
---------------------------------------------------------------------------
\161\See House Comm. on Ethics, In the Matter of Allegations
Relating to Representative Phil Gingrey, H. Rep. 113-664, 113th Cong.,
2d Sess. (2014) (hereinafter Gingrey) at 25; House Comm. on Ethics, In
the Matter of Allegations Relating to Representative Shelley Berkley,
H. Rep. 112-716, 112th Cong., 2d Sess. (2012) (hereinafter Berkley) at
10; House Comm. on Standards of Official Conduct, In the Matter of
Representative Richard H. Stallings, H. Rep. 100-382, 100th Cong., 1st
Sess. (1987) (hereinafter Stallings) at 5.
[T]here is no evidence that [the Member] actually
intended to receive inappropriate gifts, or
purposefully violated the rules . . . But there are a
range of mindsets between completely innocent and
unforgivably corrupt. Somewhere along that span sit
Members who fail to exercise care that a reasonable
Member would exercise in similar circumstances to
ensure compliance with the Code of Conduct. And in
cases where a Member fails to exercise that care --
where they `should have known' . . . or they `lack[ed]
. . . discernible policies' for compliance . . . the
Committee has consistently reproved the offending
Members.\162\
---------------------------------------------------------------------------
\162\Young at 70.
---------------------------------------------------------------------------
In this case, Representative Rush should have known
that he could not accept the use of office space, over
a 24 year period, without making any effort to
determine whether the Gift Rule allowed it. The
resulting violations were both foreseeable and entirely
avoidable. Thus, consistent with its precedent, the
Committee has decided to publicly reprove
Representative Rush.\163\
---------------------------------------------------------------------------
\163\See Gingrey at 25; Berkley at 11; Stallings at 6.
---------------------------------------------------------------------------
D. DISCLOSURE OF IMPERMISSIBLE GIFTS
The Ethics in Government Act (EIGA) requires disclosure of
gifts received during the year, from someone other than a
relative, whose aggregate value exceeds minimal value,'' as
defined by that statute.\164\ Over the period Representative
Rush has occupied the Lake Meadows office, the statutory
definition of ``minimal value'' has varied, but has always been
less than the annual value of the gifts office space
Representative Rush received.\165\ Any required disclosures are
made on Schedule VI of a Member's annual Financial Disclosure
Statement.
---------------------------------------------------------------------------
\164\41 C.F.R. Sec. 102-42.10 (2011).
\165\Minimal value for purposes of disclosure under EIGA is the
same as that for the Foreign Gifts and Decorations Act, 5 U.S.C.
Sec. 7342(a)(5).
---------------------------------------------------------------------------
From 1993 to 2008, Representative Rush received gifts of
office space from Draper and Kramer that exceeded the annual
gift limit for each year. These gifts were not disclosed on
Representative Rush's Financial Disclosure Statements for the
relevant period. Given that Representative Rush did not believe
the free use of the Lake Meadows office was a ``gift'' to him,
it is not surprising that he did not make the necessary
disclosures.\166\ However, now that the Committee has
determined Representative Rush received gifts of free rent, he
must disclose them on his Financial Disclosure Statements
unless and until the gifts are repaid.\167\
---------------------------------------------------------------------------
\166\See, e.g., Schmidt at 19-20.
\167\See id. at 19 (``Until Representative Schmidt has paid the
lawyers associated with TALDF for all fees originally paid by TCA,
Representative Schmidt must disclose on Schedule V of her annual
Financial Disclosure Statement all outstanding TALDF-related fees which
were originally paid by TCA.'') Representative Rush may avoid amending
his Financial Disclosure Statements by immediately repaying the value
of the gifts of office space to the U.S. Treasury. Once repayment is
made, there is no longer any ``gift'' to disclose.
---------------------------------------------------------------------------
VI. CONCLUSION
In 1989, two years before his election to Congress, Bobby
Rush was a Chicago Alderman, seeking an Aldermanic office in
the heart of his city Ward. Representative Rush signed a
standard commercial lease, as an individual, for a space in the
Lake Meadows Shopping Center, filled the office with furniture,
equipment, and records, and opened it for city business.
However, Alderman Rush did not pay the security deposit or rent
due under the lease, and over time his back rent continued to
increase. When the lease expired in 1991, Alderman Rush was
told he would be treated as a month-to-month tenant, with no
change to his obligations under the lease. Still, Alderman Rush
did not pay the rent, and in January 1993, he became
Congressman Rush, and quickly resigned from his Aldermanic
post. If the story of Representative Rush's Lake Meadows office
ended there, the Committee's investigation of this matter would
have never begun.
Unfortunately, Representative Rush neither vacated the
office in 1993 nor commenced paying rent. Instead, from his
election to Congress through the present, Representative Rush
has continued to occupy the Lake Meadows office, using it, or
allowing others to use it, for a variety of purposes in the
early years and solely for storage of old records and ``junk''
since 2008. Representative Rush has offered a variety of
reasons for his failure to pay any rent in this time, but the
simplest explanation seems the most likely: the landlord
stopped asking for payment more than two decades ago, and
Representative Rush never considered whether this informal,
unstated arrangement was a gift he could not accept.
Ultimately, the Committee concluded Representative Rush did
receive a gift, which exceeded the strict limits of the House
Gift Rule. Thus, Representative Rush is required by the rules
and under the Committee's precedent to personally repay the
gift's value. Representative Rush must also vacate the Lake
Meadows office, or commence paying for his use of the space,
within six weeks of the publication of this Report.
The Committee accepted Representative Rush's assertion that
he did not intend to accept an impermissible gift, but found
that the violation in this case was caused by inattention to
the relevant rules. Consistent with its precedent, the
Committee decided to reprove Representative Rush for his
significant, though unintentional, violation of the Gift Rule,
and to require him to repay the value of the gift he could not
accept. Representative Rush has accepted the Committee's
findings, and the Committee appreciates that he has accepted
responsibility for his conduct. While commendable,
Representative Rush's acceptance of responsibility does not
overcome the need for reproval. Thus, the Committee issued this
Report as a reproval of Representative Rush, and will consider
the matter closed upon Representative Rush's repayment of the
amount specified herein.
VII. 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.
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