October 5, 2015 Government, In The News, News

Group files ethics complaint against Sessions, Hensarling, and Neugebauer; cites donations from payday loan industry

Photo: David Woo

By Michael A. Lindenberger, Dallas Morning News, 10/5/2015

Note: We’ve asked for comment from the offices of the three Texas congressmen mentioned in this piece, and will update the post upon receipt of any statements.-ML

WASHINGTON—Three Texas congressmen are at the center of an ethics complaint filed Monday by a watchdog group that wants investigators to examine a series of steps taken in support of the payday loan industry that came in close proximity to campaign contributions by members of that industry.

Reps. Jeb Hensarling, R-Dallas, Pete Sessions, R-Dallas, and Randy Neugebauer, R-Lubbock, and eight other members are the subject of the complaint by the Campaign for Accountability, a new, Democrat-leaning watchdog group based in Washington. Nine of the 11 congressmen named are Republicans and two are Democrats.

All three Texas members have been vocal critics of the new Consumer Financial Protection Bureau, a large federal agency created by the Dodd Frank Wall Street reform act that was aimed at reigning in the abuses by banks and others that helped create the 2008 financial crisis.

One of the CFPB’s powers is to regulate the payday loan industry, something the industry naturally has opposed vociferously.

A report last week showed that key steps taken by the congressmen in attempting to scale back the CFPB’s power over the payday industry came either shortly before or shortly after significant campaign contributions were made to them by the industry.

“It seems payday loans taken out by their constituents helped fund big paydays for members of Congress who used their positions to advocate on behalf of this unscrupulous industry,” Campaign for Accountability executive director Anne Weismann said Monday.

“The Office of Congressional Ethics should immediately investigate whether these members of Congress were abusing the public trust by carrying the water of the payday lending industry in exchange for contributions.”

In particular, last week’s report alleged:

Sessions co-sponsored HR 1121 on March 16, 2011 — just a month after receiving two separate $5,000 contributions from Cash American International, and that he had received $1,000 contribution on March 1 from Mary Jackson of Cash America International, Inc. HR 1121 was a bill that aimed to rein in the powers of the CFPB.

In addition, it alleges that he co-sponsored HR 4986 on July 15 of last year, a day after getting a $5,000 donation for Cash America International. Similar contributions followed soon after he signed onto a letter to then Attorney General Eric Holder supporting the pay day industry. (Neither of the bills became law.)

Hensarling, a powerful foe of the CFPB, was also a co-sponsor of HR 1121 in March 2011, and the report says that he received $8,500 in campaign contributions form the industry in the previous month.

Neugebauer received $8,000 in donations in the weeks before and after his decision to co-sponsor the 2011 bill.

The complaint goes to the Office of Congressional Ethics. A complaint does not by itself trigger an inquiry. For a contribution to be illegal, it would have to be proved that the congressman’s actions were take because of the contribution or as a way to solicit the contribution. Parties who are subject to legislation routinely, and legally, donate to members of Congress who have the power to shape that legislation.

Here’s an explainer on the procedure for the complaints from the Office of Congressional Ethics, which is maintained by the U.S. House of Representatives.

As a public-facing office, the OCE accepts information from the public, however a submission of information doesn’t automatically trigger a review. The decision to launch an investigation lies solely with the Board.

When the OCE receives credible information about an alleged violation, the office staff will ask for authorization from the Board chair and co-chair to conduct a “reasonable initial investigation.” The findings of this initial review are submitted to the Board, who has the final say about whether to start an investigation.

For more information on the process, and details on how to make a submission, visit the Public Input tab on our website.