More Questions on the Congressional Harassment Slush Fund

More than $15 million in public funds has reportedly been paid out to settle sexual harassment claims against members of Congress, with the approval of Congress's Office of Compliance

The House Committee on Ethics' announcement that it is now investigating Representative Patrick Meehan (R-Pa.), and has removed him from serving on that committee, now raises additional questions regarding the fiscal aspects of the settlement process.

(I will note here for the record that Meehan and I were law school classmates.)

As reported in the Philadelphia Inquirer:

Meehan confirmed the outline of the [New York] Times story, which said the married 62-year-old expressed his romantic desires to his aide after she began a serious relationship with someone else, then grew hostile when she did not reciprocate.  After filing her complaint, she received a settlement and ultimately left the job, and reportedly felt traumatized by the entire experience.

But he denied harassing her, and said any hostility he may have exhibited stemmed from stress around high-pressure votes last year over the Affordable Care Act.  He said that he sought to remain loyal to his wife, and that he used his office funds to settle the harassment claim so he and the aide could move on and keep the issue private.

In the interview, Meehan answered nearly every question asked, but would not disclose the size of the payout, which he called "severance," not a settlement.  Asked why he [had] chose[n] to confidentially settle the claim using taxpayer money, Meehan said House attorneys advised him it was a practice that had been used before.

Some questions and observations:

1. As matters currently stand, there seem to be two sources from the public fisc from which an allegedly harassing congressmember can draw funds to settle with the accuser – namely, the much touted slush fund effectively administered by the Office of Compliance and the congressional member's office operating fund.  Patrick Meehan has admitted using the latter option (and has suggested that some of his colleagues have done likewise).  What is the operating relationship, if any, between those two piles of money?

2. Per 2 U.S.C. § 1415(a):

[O]nly funds which are appropriated to an account of the Office in the Treasury of the United States for the payment of awards and settlements may be used for the payment of awards and settlements under this chapter. There are appropriated for such account such sums as may be necessary to pay such awards and settlements.

Are funds from the congressmembers' office operating account legally available to pay settlements of harassment claims?

3. Is it proper, as Patrick Meehan seems to have done, to recolor the settlement funds as salary adjustments?

4. There is currently legislation pending in Congress that, if enacted substantially in its current form, would, among other things, publicize the names of those congresscritters who benefit from hush fund payouts and require that they make reimbursement to the fund.

5. The Government Accountability Office typically investigates agencies of the Executive Branch at the behest of one or more members of Congress.  How effectively can the GAO investigate Congress itself and/or a government agency of the Legislative Branch?

6. How do Internal Revenue Service policy and practice characterize and enforce the settlement transactions currently used, and how will they characterize and enforce those that would take place if the aforementioned legislation is enacted?

7. What other fiscal issues will emerge regarding congressional harassment settlements as this "hush fund" saga continues to unfold?

Kenneth H. Ryesky is a freelance writer who has taught business law and taxation at Queens College CUNY.   He formerly served as an attorney for the IRS and as a senior adviser with Ernst & Young's Tel Aviv affiliate office's U.S. Tax Desk.

More than $15 million in public funds has reportedly been paid out to settle sexual harassment claims against members of Congress, with the approval of Congress's Office of Compliance

The House Committee on Ethics' announcement that it is now investigating Representative Patrick Meehan (R-Pa.), and has removed him from serving on that committee, now raises additional questions regarding the fiscal aspects of the settlement process.

(I will note here for the record that Meehan and I were law school classmates.)

As reported in the Philadelphia Inquirer:

Meehan confirmed the outline of the [New York] Times story, which said the married 62-year-old expressed his romantic desires to his aide after she began a serious relationship with someone else, then grew hostile when she did not reciprocate.  After filing her complaint, she received a settlement and ultimately left the job, and reportedly felt traumatized by the entire experience.

But he denied harassing her, and said any hostility he may have exhibited stemmed from stress around high-pressure votes last year over the Affordable Care Act.  He said that he sought to remain loyal to his wife, and that he used his office funds to settle the harassment claim so he and the aide could move on and keep the issue private.

In the interview, Meehan answered nearly every question asked, but would not disclose the size of the payout, which he called "severance," not a settlement.  Asked why he [had] chose[n] to confidentially settle the claim using taxpayer money, Meehan said House attorneys advised him it was a practice that had been used before.

Some questions and observations:

1. As matters currently stand, there seem to be two sources from the public fisc from which an allegedly harassing congressmember can draw funds to settle with the accuser – namely, the much touted slush fund effectively administered by the Office of Compliance and the congressional member's office operating fund.  Patrick Meehan has admitted using the latter option (and has suggested that some of his colleagues have done likewise).  What is the operating relationship, if any, between those two piles of money?

2. Per 2 U.S.C. § 1415(a):

[O]nly funds which are appropriated to an account of the Office in the Treasury of the United States for the payment of awards and settlements may be used for the payment of awards and settlements under this chapter. There are appropriated for such account such sums as may be necessary to pay such awards and settlements.

Are funds from the congressmembers' office operating account legally available to pay settlements of harassment claims?

3. Is it proper, as Patrick Meehan seems to have done, to recolor the settlement funds as salary adjustments?

4. There is currently legislation pending in Congress that, if enacted substantially in its current form, would, among other things, publicize the names of those congresscritters who benefit from hush fund payouts and require that they make reimbursement to the fund.

5. The Government Accountability Office typically investigates agencies of the Executive Branch at the behest of one or more members of Congress.  How effectively can the GAO investigate Congress itself and/or a government agency of the Legislative Branch?

6. How do Internal Revenue Service policy and practice characterize and enforce the settlement transactions currently used, and how will they characterize and enforce those that would take place if the aforementioned legislation is enacted?

7. What other fiscal issues will emerge regarding congressional harassment settlements as this "hush fund" saga continues to unfold?

Kenneth H. Ryesky is a freelance writer who has taught business law and taxation at Queens College CUNY.   He formerly served as an attorney for the IRS and as a senior adviser with Ernst & Young's Tel Aviv affiliate office's U.S. Tax Desk.