A House committee chairman came under heavy fire yesterday for allegedly pressuring the mutual fund industry to hire a Republican lobbyist, as House Democrats considered breaking a six-year ethics truce among lawmakers by calling for a congressional investigation into his tactics.
Minority Whip Steny H. Hoyer (D-Md.) said Democratic leaders will meet as early as today to determine how to respond to allegations that top aides to Rep. Michael G. Oxley (R-Ohio) suggested that a congressional probe of mutual fund companies might ease if the industry dismissed one of its most prominent Democratic lobbyists or hired a Republican. As chairman of the House Financial Services Committee, Oxley oversees mutual fund companies.
"That is an extraordinarily serious allegation," Hoyer said. If proven true, "it's both unethical and frankly borders on perhaps being criminal." Several Democratic officials said party leaders plan to force an ethics investigation but do not want to be seen as targeting Oxley for partisan reasons.
Common Cause, the watchdog group that led the fight for new campaign finance laws, yesterday called on the House ethics committee to launch a probe. "The threat of conducting, or abating, a formal congressional investigation as a weapon of pressure for partisan purposes would be an especially egregious abuse of authority, and in violation of the rules," Common Cause acting president Donald J. Simon wrote in a letter to the ethics committee.
An investigation of Oxley could have broad ramifications for the House and for Washington lobbyists. Republicans privately warned they would retaliate by filing ethics charges against House Democratic leader Nancy Pelosi (Calif.) and perhaps other Democrats facing allegations of wrongdoing. The Federal Election Commission is investigating charges that Pelosi last year operated two leadership political action committees at the same time, a potential violation of election laws.
"I find it very dangerous for the comity of the House for people to play politics by filing ethics charges that have no basis," Majority Leader Tom DeLay (R-Tex.) told reporters yesterday.
Hoyer said he sees the Oxley matter as a microcosm of a burgeoning GOP campaign to strong-arm companies and trade association to purge Democrats from important lobbying jobs. "It's part and parcel of a pattern pursued" by Republicans since they launched what they called the "K Street Project" shortly after winning control of Congress in 1994, Hoyer said.
The K Street Project, which involves top Republican lawmakers and party officials, was designed to track the party affiliation and political contribution of hundreds of lobbyists in Washington. The data are made available to lawmakers -- so they can deny access to Democrats if they so choose -- and to top party officials so they can lobby companies and trade associations to hire Republicans for top-paying jobs.
The ethics committee in 1998 admonished then-Majority Whip DeLay for pressuring the Electronic Industry Association not to hire former Rep. David McCurdy (D-Okla.) to run the group.
Democrats said they would base their call for an investigation of Oxley on a Feb. 15 report in The Washington Post that detailed how Oxley and his staff have leaned on the Investment Company Institute -- the mutual fund industry's main lobbying arm -- to oust Democratic lobbyist Julie Domenick. Six sources, Republicans among them, told The Post that two of Oxley's top aides told industry officials that a House investigation of the industry was linked to ICI's strong ties to Democrats. Oxley spokeswoman Peggy Peterson said, "Rumors of some quid pro quo are exactly that: rumors."
House rules prohibit congressmen and staff from using their positions to "coerce or induce another person . . . to provide any benefit, financial or otherwise." A 1999 ethics committee memo said members and staff are "prohibited from taking or withholding any official action on the basis of . . . partisan affiliation."
Oxley repeatedly has declined requests to comment on the ICI matter.