The McCain campaign claims Sen. McCain had no obligation to report gambling winnings on his personal financial disclosure reports.  That’s wrong; gambling winnings are earned income that must be disclosed.  It’s not even a close call.

Pages 33-34 of the Senate Ethics Manual (pdf available here) state “the staffer who appears on Jeopardy and becomes a grand champion may keep her prize money and other winnings as may the Senator who purchases the winning Powerball ticket.”  The manual continues, “Such winnings must be reported by disclosing individuals as earned income.”  What possible distinction can there be between lottery and game show winnings and money won at a craps table?

Second, some have suggested that because the IRS allows a person to net out his winnings and losses and report only the gain, the same rule must apply to personal financial disclosure forms.  Wrong again. The IRS rules are designed to determine a person's total income, but the Ethics in Government Act's disclosure requirements are designed to identify all of a Member's sources of income.  So under IRS rules, if Sen. McCain won $2,000 at the MGM Grand on Saturday and then lost it all at the Venetian on Sunday, he wouldn't have to report any net income from gambling.  Under the Ethics in Government Act, however, he would still have to report the $2,000 he won at the MGM Grand as income of more than $200 from a specific source.  Other members of Congress, including Sen. Judd Gregg (R-NH), House Minority Leader John Boehner (R-OH), and Rep. Paul Kanjorski (D-PA), all understand this rule and reported such winnings.  Former Rep. Bob Ney (R-OH), on the other hand, went to prison, in part, for failing to properly disclose gambling winnings on his personal financial disclosure form.

In a strongly worded dissent to a denial by the Texas Third Circuit Court of Appeals to rehear a case, Democratic Justice Diane Henson wrote that her three Republican colleagues on the bench delayed resolving an issue regarding the breadth of the state’s money laundering statute for years, “effectively tying the hands of prosecutors for several years and delaying the resolution of charges of public corruption that undermine the very core of our political system . . .”  Justice Henson also criticized the other justices for concluding that in 2002, the state’s money laundering statute did not cover checks, but only cash.  She had urged all six justices on the court, not just the original three judge entirely Republican panel, rehear the case.  All four Republicans voted not to rehear the matter while the court’s only other Democrat voted with Justice Henson.    

Rep. DeLay and his aides, Jim Ellis and John Colyandro, were charged with laundering $190,000 in corporate checks into campaign donations during the 2002 state legislative elections, despite a law banning corporate contributions after Colyandro and Ellis sent $190,000 in corporate contributions to an arm of the Republican National Committee and just two weeks later, the RNC donated $190,000 in non-corporate money to seven state legislative races in Texas.  

Colyandro and Ellis were indicted in 2004 and DeLay in 2005.

"What we did was perfectly legal and appropriate." That’s John McCain rationalizing his use of Cindy McCain's corporate jet for a fraction of the cost rate after having argued in favor of limiting senators’ use of corporate jets in last year’s ethics reform debate.

Remind you of anything? How about "There is no controlling legal authority that says this was in violation of law." Al Gore in 1997, describing the fundraising phone calls he made from the White House. Gore was rightly pilloried for his comments, which instantly entered the pantheon of classic evasions of responsibility – not far removed from "mistakes were made."

Virtuous reformer John McCain's ill considered remark deservedly should suffer a similarly ignominious fate.

McCain's use of his wife's corporate jet is just another reason we need a functioning FEC. Get the FEC back in action – Go to CREW's new website today at FixtheFEC.org.

Why does the House need to protect itself from the Department of Justice?

As reported in the post below, the House General Counsel’s Office is helping House Appropriations Committee staffer Greg Lankler resist a grand jury subpoena issued as part of the investigation into Appropriations Committee Ranking Member Jerry Lewis (R-CA). Mr. Lankler is arguing that the Justice Department’s demand for records and testimony is inconsistent with the rights and privileges of the House. In other words, he is claiming that the Constitution’s Speech or Debate Clause prevents him from complying with the subpoena. But the truth is the Speech or Debate Clause privilege can be waived. Appropriations Committee Chairman David Obey and Ranking Member Lewis could allow Mr. Lankler to tell the grand jury what he knows.

The “cleanest Congress in history” should not be using the Speech or Debate Clause to impede House staffers from testifying about congressional corruption. It is the people who need protection from corrupt members of Congress, not corrupt members who need protection from the Justice Department.