UPDATED! Waters tested ethics boundary to hire grandson as her chief of staff

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Photo - Rep. Maxine Waters, D-CA. (AP Photo)
Rep. Maxine Waters, D-CA. (AP Photo)
News,Watchdog,Richard Pollock

U.S. Rep. Maxine Waters may be relieved that the U.S. House Ethics Committee closed its long-running probe this week of her personal lobbying on behalf of a bank in which her husband owned $350,000 worth of stock.

But members of the panel and government reformers outside Congress are now focusing on the fact the California Democrat appears to have pushed past the spirit of a decade-old House anti-nepotism rule by hiring her grandson as her chief of staff.

Waters paid her grandson more than $132,000 last year for the position he's occupied since 2007, according to congressional data. 

Instead of disciplining Waters, however, the House committee issued an unusual "letter of reproval" sanctioning Mikael Moore, the grandson.

Both criminal statutes and House ethics rules bar members of Congress from putting immediate family members on their congressional payrolls. Grandchildren are not considered immediate family members.

Jock Friedly, president and founder of LegiStorm, a congressional ethics watchdog group, told The Washington Examiner that his organization has "tracked family connections of members of Congress very extensively, and it's very clear that Maxine Waters stood apart as somebody who pushed the limits of what was ethically allowable."

Melanie Sloan, executive director of another watchdog group, Citizens for Responsibility and Ethics in Washington, said Waters should never have hired her grandson in the first place.

In an interview with The Examiner, she called it "problematic, and we viewed (it) as unwise, and I think she shouldn't have done it."

Sloan says that relatives look after each other when trouble arrives. Moore protected his boss before ethics investigators.

An ethics charge could have jeopardized Waters' appointment as chairman of the Financial Services Committee if Democrats regain the majority in the House after the November elections.

"Would Mikael Moore have said anything that would have implicated his own grandmother in wrongdoing or that might have cost her the lead at the House Financial Services Committee? I think a question can be asked here," Sloan said.

Beginning in 2004, Moore worked for Waters when she was chief deputy whip for House Democrats. He briefly worked in 2006 on the House Financial Services Committee, where Waters enjoyed seniority. The powerful committee oversees commercial banks.

In 2007, she brought her grandson into her personal office as chief of staff. The position compensated Moore as much as $138,574, not including benefits, in 2010, according to LegiStorm. No explanation was available for the decrease in Moore's compensation in 2011.

Waters was alleged to use her powerful position as an African-American representative on the financial services panel to contact Treasury Secretary Henry Paulson and ask for a meeting to bail out minority-owned banks, especially OneUnited Bank. The bank was seeking $50 million in financial assistance from the Treasury Department.

Sidney Williams, Waters' husband, was formerly a OneUnited board director and faced the loss of $350,000 if the bank failed.

The ethics committee singled out Waters' hiring of a relative who aggressively represented his grandfather's bank when it faced trouble.

The committee said Moore had not been credible with investigators about his knowledge of his grandparent's stake in the bank when he was lobbying on behalf of OneUnited.

"One of the issues that complicated the resolution of this matter was the nature of the relationship between Rep. Waters and her chief of staff, who is also her grandson," the committee said.

House investigators said they "recognize that employer/employee relationships with grandchildren can be just as fraught with risk as other familial relationships." They unanimously urged a change in House rules.

Sloan says the House Administration Committee probably will take up a reform barring grandchildren from congressional payrolls.

Waters has not said whether she would continue to retain her grandson as chief of staff. Neither Waters nor Moore responded to requests from a reporter for comment.

UPDATE: Waters' husband left bank board before lobbying call was made

Sidney Williams, husband of Rep. Maxine Waters, was a OneUnited director from January 2004 until April 2008, and owned stock in the bank, according to The Los Angeles Times. Waters' call on behalf of the bank was placed in September 2008.

Richard Pollock is a member of The Washington Examiner's special reporting team. He can be reached at rpollock@washingtonexaminer.com.

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