House Panel Expected to Clear Waters of Ethics Violations

WASHINGTON — The House Ethics Committee is expected Friday to clear Rep. Maxine Waters, D-Calif., of any wrongdoing, paving the way for her to become the lead Democrat on the House Financial Services Committee next year.

The vote will dissipate a cloud that has hung over Waters since 2010, as well as one of the strangest ethics complaints of recent years, involving not just accusations against a single lawmaker but also allegations of impropriety by those investigating the California Democrat.

Waters was initially accused of improperly helping minority-owned OneUnited Bank secure Troubled Asset Relief Program funds two years earlier, even though her husband had a financial interest in the institution. Waters had previously disclosed her husband's financial ties to the bank and denied the accusations.

The panel's investigation ran into trouble, however, after Politico published a story raising questions about whether the panel's inquiry had been compromised. The story cited an allegation by the committee's former staff director that two committee lawyers secretly communicated with GOP members of the panel.

The committee hired outside counsel Billy Martin in July 2011 to look into those charges as well as determine whether a new investigation should proceed against Waters. In February, six of the 10 Ethics Committee members recused themselves from the case but it was left unclear if Waters would face formal charges from the panel.

Speaking at a public hearing on Friday, Acting Chairman Bob Goodlatte said Martin had determined there was not enough evidence to investigate Waters.

"Mr. Martin made recommendations based on the question of whether we should impanel a new Investigative Subcommittee in this matter," said Goodlatte in a written statement.

"His recommendation is that we should not, because there is not sufficient evidence in the record to prove violations by a clear and convincing standard, which is necessary before formal sanctions are recommended to the House of Representatives. We are prepared to accept that recommendation pending the outcome of this hearing."

A final vote is expected as early as today.

The vote likely means that Waters will serve as chief Democrat on the Financial Services Committee next year, succeeding retiring Rep. Barney Frank, D-Mass. Indeed, should Democrats regain control of the House, which most political analysts think is unlikely but still possible, Waters would probably become chairman of the Financial Services Committee.

While she is expected to be cleared of wrongdoing, it is possible that her staff may be reprimanded. During the hearing on Friday, committee members said they still had questions for Waters' grandson and chief of staff Mikael Moore.

"Mr. Martin has been clear about his concerns regarding Mr. Moore's credibility throughout this process, and has recommended that the Committee make its own credibility determinations to decide if any other action is appropriate," Goodlatte said in the statement.

Goodlatte said the panel is considering a letter of reproval against Moore. Should the committee finalize that letter, it would state that he violated certain rules and standards, but that his actions don't warrant a formal sanction.

Martin and the committee also concluded that Waters' due process rights were not violated during the investigation, according to Goodlatte.