"You don't use your chits for nothing. You call when there is an important issue."
- Rep. Maxine Waters, D-California, quoted by Office of Congressional Ethics.
The House Ethics Committee today charged Rep. Maxine Waters of California with unspecified violations, making her the second House Democrat in two weeks to face ethics problems as the November elections approach.
The committee said the board found "substantial reason" to believe that Waters may have violated House rules after assessing a report prepared by the Office of Congressional Ethics (OCE).
The charges stem from a meeting that Waters requested at the onset of the financial crisis in September 2008 with then-Treasury Secretary Hank Paulson. Waters and Paulson did not attend the meeting, but Treasury officials and members of the National Bankers Association (NBA), a trade organization representing over 100 minority-owned firms, did.
At that meeting and in follow-up conversations, the report determined that "the discussion centered on a single bank – OneUnited," where Waters' husband was a board member from 2004 to 2008. According to her 2008 financial disclosure forms, Waters' husband owned two investments in OneUnited valued between $500,000 and $1 million.
When asked by the panel how often she called cabinet-level officials such as Paulson, Waters replied, "You don't use your chits for nothing. You call when there is an important issue."
According to the report, Waters told an unidentified congressman that she knew she should say no to the "OneUnited people" who were coming to her for help. "Stay out of it," the congressman told her, instructing her on several occasions not to get involved in the matter.
Shortly after the meeting, the Massachusetts bank received a $12 million in taxpayer aid from the $700 billion Wall Street bailout. It has yet pay it back.
Ultimately, concluded the House Ethics panel, Waters' conduct could have helped her financially and violated conflicts of interest rules.
Today Waters vowed to fight the charges.
"I have not violated any House rules," she said in a statement. "Therefore, I simply will not be forced to admit to something I did not do and instead have chosen to respond to charges made by the House Committee on Standards of Official Conduct in a public hearing."
Rep Maxine Waters Charged with Ethics Violations
Waters said she was merely "advocating on behalf of minority banks," she never concealed her interests in OneUnited, and she did not benefit or act improperly in any way.
"In sum, the case against me has no merit," said Waters, who in 2008 was re-elected to her tenth term in Congress, winning 80 percent of the votes in her district of south-central Los Angeles. "No benefit, no improper action, no failure to disclose, no one influenced: no case."
Citizens for Responsibility and Ethics in Washington (CREW), a non-profit legal watchdog, called for Waters to step down immediately from her post as chair of the House Subcommittee on Housing and Community Opportunity.
Earlier this summer Rep. Charles Rangel of New York was charged by the ethics panel with 13 ethics violations. His trial is set to start in September.
The charges are a political headache for Democrats, who vowed to "drain the swamp" of political corruption in the House when they came to power four years ago. "Drain the swamp," said House Speaker Nancy Pelosi last Thursday. "We did it because this was a terrible place and we made a tremendous difference and I take great pride in that."
ABC News' Steven Portnoy contributed to this report.