CLC asking House committee to demand Whitaker address financial conflicts of interest
Today, the public learned that acting Attorney General Matthew Whitaker rejected the advice of Department of Justice (DOJ) ethics officials and will not recuse from special counsel Robert Mueller’s investigation into Russian interference in the 2016 election.
Ethics officials advised that Whitaker should step aside from overseeing the Russia probe to avoid the appearance of a conflict of interest, according to news reports. Whitaker had previously criticized the investigation.
A narrow reading of the ethics rules doesn’t mandate recusal--but the purpose of the ethics program is to protect the public’s trust in the impartiality of government institutions. Whitaker’s failure to recuse undermines that trust.
But Whitaker’s potential conflicts don’t end with the Mueller probe.
In the three years before Whitaker joined the DOJ, anonymous sources paid Whitaker $1.2 million. Whitaker likely knows the identity of the donor or donors who funded his salary, but the public and Congress do not.
This gives Whitaker the unique ability to use the power of his office to benefit the person or people who paid his salary without the public oversight usually made possible by financial disclosure.
CLC is demanding that Whitaker address these conflicts of interest.
On December 19, 2018, vice president of litigation and strategy, Paul Smith, sent a letter to the House Oversight committee, writing:
From October 2014 to September 2017, Whitaker was executive director of the Foundation for Accountability and Civic Trust (“FACT”), a nonprofit organization operating under Section 501(c)(3) of the Internal Revenue Code. During that period, he was paid a total of $1.2 million by the organization, according to reports filed with the Internal Revenue Service (“IRS”). In each of those years, Whitaker’s salary was the group’s single largest expense, and in two of those years, 2015 and 2016, Whitaker was the organization’s only full-time employee. This salary from FACT constituted the majority of Whitaker’s income in the years before he entered public office, according to Whitaker’s financial disclosure reports.
DonorsTrust provided the entirety of FACT’s funding during those years, and as a result, was the single source of Whitaker’s $1.2 million in income from FACT.
DonorsTrust is a donor-advised fund — an entity that makes charitable contributions with money that individuals deposit and direct the fund how to disburse. DonorsTrust itself emphasizes that “[o]ur unique philosophical cornerstone is a commitment to preserving and defending donor intent.”
DonorsTrust protects donors against having their names disclosed to the public, but not necessarily from being disclosed to grant recipients. Indeed, DonorsTrust explicitly promotes its services to donors by offering “to work with you to ensure accountability from a grant recipient.” As the executive director (and generally the only full-time employee) of FACT, one of Whitaker’s responsibilities would have been engaging with donors and raising funds for the organization. As a result, it appears likely that he knows the true source of the funding that paid his $1.2 million salary—but the public and Congress do not.
The letter notes that “Federal ethics laws and regulations recognize that a public official’s impartiality can be influenced by the financial interests of a former employer or client—or, put another way, by the individuals or entities that previously paid an official’s salary:”
For example, an employee must disclose the identity of any client who paid over $5,000 for their services, so if Whitaker had worked at a law firm before joining DOJ, he would have been required to disclose the clients who had paid the firm over $5,000 for his services. Under President Trump’s ethics pledge, he would then have had a two-year recusal obligation with respect to any particular matter involving specific parties directly and substantially related to those former clients. But because an anonymous donor or anonymous donors funded FACT through a donor-advised fund, and FACT then paid Whitaker, he was not required to disclose the identity of the persons or entities who entirely funded his salary.
The letter emphasizes that:
The public has a right to expect the highest standards of integrity, including full financial disclosure, from the person exercising the powers of Attorney General. The purpose of the financial disclosure system is to deter and identify potential conflicts through a systematic review of an employee’s financial interests. But in these unique circumstances, the minimum disclosure requirements and ethical standards are not serving that purpose.