Rep. Maxine Waters to Face Reporters Friday to Address Ethics Charges

2010-08-12— -- After a week of staying off the radar and away from television cameras and reporters camped outside her office, ABC News confirms that Rep. Maxine Waters, D-Calif., will address ethics charges with reporters on Capitol Hill Friday morning at 10 a.m.

Waters will be joined by her chief of staff Mikael Moore, who is also her grandson. Waters is expected to read a prepared statement in front of cameras, followed by a presentation conducted by Moore refuting the statement of alleged violations issued by the Ethics Committee earlier this month.

After the 32-year-old Moore's presentation concludes, television cameras will be asked to leave for an on-the-record, but off-camera Q & A session with both Waters and Moore. Waters had considered holding the meeting with reporters earlier in the week, but those plans were put on hold after embattled Rep. Charles Rangel, Democrat of New York, went to the House floor Tuesday to deliver an impassioned speech defending himself against his own 13 alleged ethics violations.

The ethics charges stem from a meeting that Waters' congressional office requested with then-Treasury Secretary Hank Paulson at the start of the financial crisis in September 2008. Waters and Paulson did not attend the meeting, but senior 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, an ethics report found that "the discussion centered on a single bank – OneUnited," where Waters' husband Sidney Williams was a board member from 2004 to 2008. In fact, Kevin L. Cohee, the chief executive of OneUnited, was the top official representing the NBA at the meeting. Waters and her husband reported owning $352,089.64 worth of stock at OneUnited in June 2008 on financial disclosure forms. By the end of September of that year, the value of the stock had plummeted to $175,000. What remained was salvaged thanks to a portion of the $700 billion Wall Street bailout.

According to the ethics committee's statement of alleged violations against Waters, OneUnited, which requested $50 million in federal aid and ultimately obtained more than $12 million in TARP funds – would have likely failed without intervention from Waters' office.

The ethics report determined that Waters' stock would have been rendered worthless if OneUnited failed, thus the violations "constitute compensation accruing to the beneficial interest of [Waters]," according to the committee.

Documents Detail Ethics Allegations

Pursuant to House Rule XXIII, "A member…may not receive compensation and may not permit compensation to accrue to the beneficial interest of such individual from any source, the receipt of which would occur by virtue of influence improperly exerted from the position of such individual of Congress."

According to documents released by the ethics committee earlier this month, Moore created the appearance that Waters "was actively involved in assisting OneUnited representatives with their request for capital from Treasury and crafting legislation to authorize Treasury to grant the request." To date, the bank still has not paid back the bailout money.

The committee's report takes Waters to task for conduct it deems does not reflect credibility on the House of Representatives. When asked by the ethics investigative 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."

Among the details released in documents this week, after the meeting with Treasury officials and at the onset of the financial crisis, Waters allegedly approached the powerful chairman of the House Financial Services Committee, Democratic Rep. Barney Frank of Massachusetts, to confess her husband's association with OneUnited. Frank reportedly did not know that Waters held stock there and told her "not to get involved." Frank, however, assured Waters that he would handle the business with OneUnited.

But, the committee says, Waters failed to instruct Moore, her chief of staff to stay out of the negotiations and Moore continued corresponding with Frank's staffers. "Once [Waters] realized that she 'should not be involved' in assisting OneUnited, [Waters] should have instructed her Chief of Staff…to refrain from assisting OneUnited," the statement reads.

Waters' lawyers say that Moore acted without Waters' knowledge or instruction and compared the controversy to one involving Missouri Republican Rep. Sam Graves, who was cleared by the ethics committee last year. Graves had invited a business partner of his wife's to testify before a committee hearing covering an industry in which the witness and Graves's wife were investors, but Graves did not disclose the relationship at the hearing.

On August 2, the ethics committee announced that an investigative subcommittee found reason to believe that Waters had broken House rules and she would face an ethics trial composed of eight House colleagues and evenly divided between Democrats and Republicans. Waters appealed to the panel to dismiss the charges, but her motion was denied. A trial date has not been announced.