Will Ethics Committee Investigate New Allegation Against Maxine Waters?

The House Ethics Committees says it will take up its charges against Rep. Maxine Waters (D-CA) following its trial of Rep. Charles Rangel (D-NY). But what exactly will it consider?

Last August, the congresswoman was charged with violating House ethics rules, for allegedly helping to steer over $12 million in federal bailout funds to a bank in which her husband had a substantial financial stake. Investigators say that Rep. Waters violated conflict-of-interest rules when she set up a meeting between OneUnited Bank officials and the U.S. Treasury Department.

In the interim, the Washington Times reported that Waters co-sponsored legislation that directly benefited one of the top clients of a lobbying group that had her husband on the payroll.

Lobbying records show that lobbyist Mike Roos paid Rep. Waters’ husband Sidney Williams $15,000 for his work as a consultant on a Los Angeles real estate project during the first quarter of 2009. During the same time period, Rep. Waters co-sponsored a bill that Roos was lobbying for, which aimed to overturn a federal ban on seller-funded down-payment assistance programs.

One of Roos’ highest-paying clients, Nehemiah Corp. of America, was the largest seller-funded down-payment assistance programs in the U.S. before the ban was enacted in 2008. The nonprofit provided financing to homebuyers who could not afford to make the minimum down payment needed in order to qualify for federally-insured mortgages. Home sellers would “donate” the amount of the down payment to Nehemia, as well as an additional fee, and the nonprofit would then “gift” this money to the prospective buyer.

In 2006, the Internal Revenue Service ruled that these types of programs were “scams” and issued public warnings about “organizations claiming to be charities are being used to funnel down payment assistance from sellers to buyers through self-serving, circular-financing arrangements.”

Rep. Waters denied that Roos’ $15,000 payment to her husband had any impact on her legislative work, and said that she has supported programs like Nehemia for years. She told the Washington Times that her husband “was hired for his stellar track record and knowledge of local government. Any suggestion to the contrary is unfounded and irresponsible.”

The congresswoman has opposed federal prohibitions on seller-funded down payment assistance programs for several years, and has sponsored legislation that would prevent or overturn these bans on three occasions. Currently, the ban still remains in effect.

The congresswoman denied the allegations, and has vowed to fight the charges. “Neither my staff nor I engaged in any improper behavior,” she said. “And we did not influence anyone and we did not gain any benefit.”

The House Ethics Committee trial for Rep. Waters is scheduled to begin on Nov. 29.

Alana Goodman is NLPC’s Capitol Hill Reporter.