Court Ruling Emasculates Financial-Disclosure Rules: Congressional Accountability

By Crabtree, Susan | Insight on the News, May 20, 1996 | Go to article overview

Court Ruling Emasculates Financial-Disclosure Rules: Congressional Accountability


Crabtree, Susan, Insight on the News


In the aftermath of a Supreme Court decision last May, filing false financial-disclosure forms carries no criminal penalty for members of Congress. This loophole can be closed only by ... Congress.

I do not recall, senator." Countless citizens and lawmakers alike have hidden behind that obfuscation to avoid lying to Congress while testifying in a hearing or congressional investigation. But last year the Supreme Court overturned the umbrella statute that made it a crime to lie to Congress - a setback for prosecutors who had used the statute to indict members of Congress for everything from filing false financial disclosures to operating ghost-employee schemes.

To most people, lying to Congress conjures images of Iran-Contra figure Oliver North, who admitted to giving spurious testimony during a congressional hearing. But illicit trifling with the truth in congressional matters had taken several forms in the 40 years that it was a crime covered in 18 U.S. Code 1001. While the law still makes it a crime to lie under oath, Section 1001 was most noted for its use in prosecuting federal lawmakers for mendacious financial disclosure, and it carried stiff sentences for the deceiver. Some of the "fallen angels" who recently were indicted for this offense are former Democratic Reps. Dan Rostenkowski of Illinois, Mary Rose Oakar of Ohio and Joe Kolter of Pennsylvania.

But last May, in Hubbard vs. United States, the Supreme Court ruled that the act that had made it a criminal offense to lie to any "departments or agency" of the government applies only to the executive branch and not to the legislative or judicial branches, and that federal prosecutors could not charge officials with unsworn lies to Congress. The actual case reversed a Michigan conviction of John Hubbard for lying to a bankruptcy court, but overturned the key precedent against lying to Congress.

Following the decision, judges and prosecutors dismissed charges against a handful of indicted and convicted ex-members. Lawyers dropped four counts against Rostenkowski that alleged he had filed false vouchers with the House Finance Office. A charge that Oakar failed to account for $50,000 in liabilities on her financial-disclosure forms also disappeared. These former lawmakers were, however, indicted on other charges, reducing the impact of the Supreme Court ruling.

The early release of former Rep. George Hansen, an Idaho Republican who had served 35 months for bank fraud caused the biggest sensation. On March 8, U.S. District Judge Edward J. Lodge in Boise, Idaho, ruled that Hansen's sentence should be curtailed because the former congressman had served six months for an earlier conviction of filing a false financial disclosure form, a charge Hubbard made obsolete. Lodge awarded him $40,000 in restitution, saying his life was forever altered by a wrongful prosecution, which may have caused his election loss in 1984.

Does this mean that ordinary citizens and public officials suddenly can thumb their collective noses at the truth in the face of Congress and walk away with impunity? Of course not. Perjury statutes guard against lying to Congress in the traditional sense - under oath and in the presence of two or more people. And lawmakers are not above prosecutorial reproach.

The Justice Department can file civil actions concerning false financial disclosures and the ethics committees can strip members of committee chairmanships and even remove them from office. But filing false financial disclosures, false disbursement forms and other false statements that are not submitted under oath currently carry no criminal penalty. Many prosecutors and citizens are outraged at what they consider a double standard for federal lawmakers. "If average citizens falsify records to the IRS, they get slammed " says Dana Johnson, spokeswoman for Rep. Bill Martini, freshman Republican from New Jersey.

Last July, Martini introduced a bill that would rewrite and clarify the law. …

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