Some lawmakers have ties to bailout recipients
WASHINGTON -- As Congress began considering a financial industry rescue plan last fall, Rep. Jean Schmidt called the House ethics committee staff with a question: Did she have to sit out any votes on the package because her husband is a Smith Barney financial adviser?
The answer was no, said Schmidt spokesman Bruce Pfaff. "They advised her that because the legislation didn't address a particular business, that decisions were left up to the Treasury secretary, it would be permissible to vote on that bill," he said.
Citigroup, Smith Barney's parent company, eventually received $50 billion from the package that Schmidt, R-Ohio, voted to approve. Schmidt voted in January to oppose release of the program's second $350 billion.
"At no point was there ever a discussion of, 'How does that benefit us?' " between Schmidt and her husband, Pfaff said.
Schmidt is one of two dozen members of Congress with substantial financial ties to the banks and other companies getting a piece of the $700 billion financial rescue package, according to a USA TODAY analysis of disclosure reports covering 2007, the most recent available. Schmidt and three other House members have spouses who work for recipients of the money, and seven senators and 13 representatives had investments worth more than $100,000 in at least one of thecompanies that received funds, their reports show.
Those members voted two-to-one in favor of creating the program, with 16 supporting it and eight opposing. That's a slightly higher rate than Congress as a whole: 337 members voted for it and 196 against.
House and Senate ethics rules say lawmakers should abstain from voting only on legislation that specifically affects their personal financial interests. Both houses have ruled that owning stock in a publicly traded corporation does not disqualify a lawmaker from voting on bills affecting that company.
It is not known how many members held investments at the time of October's vote. Because lawmakers only report their financial holdings once a year in May, voters don't have up-to-date information about potential conflicts of interest, said Ryan Alexander, president of the non-partisan watchdog group Taxpayers for Common Sense.
Related Stories
ABC News Live