Cantor's Wall Street Move Highlights Disclosure Law Loophole

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It was no secret that Virginia Rep. Eric Cantor, who lost in his June GOP primary, spent the summer job-hunting. But it came as a surprise when the CEO of a Wall Street investment bank announced this week that he had hired the former House majority leader as managing director — for at least $3 million in cash and stock over the next year and a half.

Wasn't Cantor supposed to disclose the job negotiations to the House Ethics Committee? And wasn't that supposed to be made public? Isn't there a law about that?

The answers: Yes. No. And we only thought so.

Negotiations for post-Congress work was a key feature in the Honest Leadership and Open Government Act of 2007. Congress was embarrassed by the Jack Abramoff lobbying scandal, which sent one congressman to prison. Only slightly less awkward were the departures of some lawmakers and senior staffers to work for industries they had just been regulating.

The prime example was former Rep. Billy Tauzin, R-La. As chairman of the Energy and Commerce Committee, he oversaw the writing of the Medicare prescription-drug benefit. A little later, he resigned and went to work for PhRMA, the lobbying association for prescription-drug producers.

The solution that Congress came up with: require lawmakers and high-level staffers to publicly disclose when they start negotiating with a prospective employer. Not when the deal is sealed, but when the serious talking begins. If there are conflicts with ongoing legislation, recusals would be required.

This wasn't a new idea. Republicans had approved it in 2006, when they controlled the House. In 2007, with Democrats in charge, the proponents were Sens. Russ Feingold of Wisconsin and Barack Obama of Illinois, and Rep. John Conyers of Michigan, then-chairman of the House Judiciary Committee.

But when Conyers' committee began working on the provision, a small change was made. The original draft would have had job-seeking lawmakers report their negotiations to the clerk of the House. The Judiciary Committee changed it without explanation. Those eager-to-leave lawmakers would report to the House Ethics Committee instead. (The panel was then known as the House Committee on Standards of Official Conduct.)

House Ethics has historically resisted disclosure. Here, it decided that when a lawmaker discloses to the committee, that's disclosure enough. Besides, the law doesn't say "public disclosure," and neither did many House members or reform advocates as they discussed it. By comparison, the House clerk is a model of transparency, responsible for publicly disclosing, among other things, travel by House members, office budgets and lobbyists' activity.

The watchdog group Public Citizen calculates that since the law took effect, 212 House members have lost or retired. Just three of them reported negotiating for post-Congress employment — all in the first year after enactment.

As for Cantor, he resigned his House seat two weeks ago, two months after his surprise primary loss — and more than a month after published reports say he began talking with his new employer, Moelis & Co. Which means the disclosure law appears to have misfired again.

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