from the inquiring-minds-want-to-know dept
A bunch of folks keep asking just how Devin Nunes is paying for all of his various lawsuits against news organizations, journalists, political operatives, critics, and, most famously, a satirical internet cow. And now, a watchdog group, the Campaign Legal Center, has sent quite a letter, asking the Office of Congressional Ethics to investigate whether Nunes is violating any ethics rules in how these cases are financed.
We write to request that the Office of Congressional Ethics (?OCE?) investigate whether
Representative Devin Nunes is receiving free legal services in violation of the Rules of
the House of Representatives (?House rules?). Specifically, Representative Nunes
retained an attorney who represents him in several defamation lawsuits in various courts
where he seeks a total of nearly $1 billion in damages. House rules prohibit a Member
from receiving free legal services, unless the Member establishes a Legal Expense Fund
(?LEF?). According to the House Legislative Resource Center, Representative Nunes
has not filed any of the required reports to establish an LEF. The relevant facts detailed
below establish that the OCE Board should authorize an investigation of Representative
Nunes.
Representative Nunes?s overt involvement with the highly-publicized lawsuits threatens
to establish a precedent that the Legal Expense Fund (?LEF?) regulations no longer apply
to Members. Although Representative Nunes is entitled to legal representation and he
may pursue any legal action to protect and defend his interests, he must comply with
House rules. An OCE investigation will preserve Representative Nunes?s legal right to
counsel while upholding well-established House rules and precedent.
As the letter explains, even if Nunes’ lawyer, Steven Biss, is providing his services pro bono, ethics rules apply:
Free (pro bono) legal services are subject to the gift rule and may only be accepted under
the LEF regulations. Pursuant to the LEF regulations, a Member ?who wishes to solicit
and/or receive donations for a Legal Expense Fund, in cash or in kind, to pay legal
expenses shall obtain the prior written permission of the Committee on Ethics.? Within
one week of the approval of the LEF, documentation showing the existence of the fund
must be provided to the Legislative Resource Center for public disclosure. The Member
must also file quarterly disclosure reports for the LEF.
While there are a few exceptions to those rules (such as if a Member of Congress is filing an amicus brief or challenging a federal law), it does not apply to the various defamation lawsuits Nunes is filing. And thus, the group is wondering what’s going on here and how it can possibly comply with House ethics rules.
There are three permissible sources of payment for Mr. Biss?s legal services under House
rules: a legal expense fund, campaign funds, or Representative Nunes?s personal funds.
Representative Nunes has not disclosed any of the required public reports necessary to
establish that he has properly paid for the legal services using any permissible source.
First, Representative Nunes has not filed LEF reports from 2019 to present. As
explained above, a House Member who receives free legal services or legal services paid
by a third party, must contact the Committee on Ethics and establish an LEF. The LEF
regulations require the Representative to file an initial report and periodic reports. As a
result of the lack of any LEF reports, it appears that an LEF is not paying for
Representative Nunes?s legal services.
Second, Representative Nunes?s campaign committee reports from 2019 to present do not
list any payments to Mr. Biss. Representative Nunes may use campaign funds to pay for
certain legal expenses after consultation with the Committee on Ethics and the Federal
Election Commission (?FEC?). However, such expenditures must be included in the
periodic campaign committee reports filed with the Federal Election Commission.
Required FEC disclosures lack any record of campaign expenditures for Mr. Biss?s
services. Therefore, it appears that Representative Nunes?s campaign committee is not
paying for his legal services.
Finally, even if Representative Nunes argues that he is using his personal funds to pay for
the legal services, he cannot accept any discount from Mr. Biss without violating House
gift rules. Mr. Biss?s legal services include work that has spanned over nine months, five
courts, and over eight defendants. The work includes lengthy and legally complex court
filings, as well as demand letters to public officials. The legal services are time
consuming and expensive, which has raised reported questions about whether
Representative Nunes?s congressional salary can cover such legal expenses. Even if
Representative Nunes is paying for the legal services himself, he cannot receive them at a
price that is lower than what Mr. Biss charges other clients for similar matters.
Without any known sources of payment for Representative Nunes?s significant and
growing legal expenses, there is a basis to investigate the matter and determine whether
he is complying with all applicable House rules governing legal expenses.
The letter goes on to note that even if he somehow convinced Biss to take these cases on contingency (which would be surprising for a variety of reasons), that would still be a gift that requires reporting. Reporting that has not occurred.
Representative Nunes may argue the he has not disclosed payments for legal services
because he retained his attorney under a contingency fee payment agreement (i.e., the
lawyer will be reimbursed for costs he incurs if Representative Nunes prevails in the
lawsuits). However, House gift rules do not have an exception for contingency fee
agreements, and an OCE fact gathering is necessary to review such a claim.
Legal services provided under a contingency fee agreement can violate the gift rule as a
result of the expenses the lawyer incurs on behalf of the Member in anticipation that the
Member will later use money recovered from the suit to reimburse all or some of the
expenses. In other words, the lawyer is providing ?payment[s] in advance,? which are
prohibited under the gift rule. Although it is reasonable to assume that the Committee
on Ethics may approve certain contingency fee agreements on a case by case basis, there
is no precedent establishing that all contingency fee agreements are permissible.
Indeed, the letter notes that the Committee on Ethics rejected a contingency fee agreement in a past situation involving a Congressional Representative filing a defamation lawsuit.
I have little faith that anything will actually come of this, but it’s good to see at least some are paying attention to these questions and wondering just how Nunes is paying for Biss.
Filed Under: congress, devin nunes, ethics, financing, gifts, legal expense fund, legal services, oce, steven biss
Companies: campaign legal center
