H. Rept. 105-848 - 105th Congress (1997-1998)
January 02, 1999, As Reported by the Standards of Official Conduct Committee

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House Report 105-848 - SUMMARY OF ACTIVITIES ONE HUNDRED FIFTH CONGRESS




[House Report 105-848]
[From the U.S. Government Printing Office]




                                                 Union Calendar No. 489
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105th Congress                                                   Report
2d Session              HOUSE OF REPRESENTATIVES                105-848
_______________________________________________________________________



 
            SUMMARY OF ACTIVITIES ONE HUNDRED FIFTH CONGRESS           

                               __________

                                A REPORT

                                 of the

                              COMMITTEE ON

                     STANDARDS OF OFFICIAL CONDUCT

                        HOUSE OF REPRESENTATIVES


<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>


January 2, 1999.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                               --------

                    U.S. GOVERNMENT PRINTING OFFICE                    
69-006                     WASHINGTON : 1999




               COMMITTEE ON STANDARDS OF OFFICIAL CONDUCT

                    JAMES V. HANSEN, Utah, Chairman

LAMAR S. SMITH, Texas                HOWARD L. BERMAN, California,
JOEL HEFLEY, Colorado                  Ranking Minority Member
BOB GOODLATTE, Virginia              MARTIN OLAV SABO, Minnesota
JOE KNOLLENBERG, Michigan            ED PASTOR, Arizona
                                     CHAKA FATTAH, Pennsylvania
                                     ZOE LOFGREN, California

                Theodore J. Van Der Meid, Chief Counsel
         Bari Schwartz, Counsel to the Ranking Minority Member
                       Julian A. Haywood, Counsel
                      Virginia H. Johnson, Counsel
                       David H. Laufman, Counsel
                         Paul M. Lewis, Counsel
                         Reed D. Slack, Counsel
                         John E. Vargo, Counsel
                   Debbie Blockinger, Staff Assistant
               Christine Weinstein, Systems Administrator
                 Joanne White, Administrative Assistant



                         LETTER OF TRANSMITTAL

                              ----------                              

                          House of Representatives,
                Committee on Standards of Official Conduct,
                                   Washington, DC, January 2, 1999.
Hon. Jeff Trandahl,
Clerk, House of Representatives,
Washington, DC.
    Dear Mr. Trandahl: Pursuant to clause 1(d) of Rule XI of 
the Rules of the House of Representatives, we hereby submit to 
the House a report on the Activities of the Committee on 
Standards of Official Conduct for the 105th Congress.
            Sincerely,
                                   James V. Hansen,
                                           Chairman.
                                   Howard L. Berman,
                                           Ranking Minority Member.




                            C O N T E N T S

                              ----------                              
                                                                   Page
 I. Introduction......................................................1
II. Advice and Education..............................................5
        Publications.............................................     5
        Briefings................................................     6
        Advisory Opinion Letters.................................     7
III.Financial Disclosure..............................................7

IV. Select Committee on Ethics........................................7
 V. Ethics Task Force.................................................8
VI. Investigations....................................................9
        Complaints...............................................     9
            Representative Tom DeLay.............................     9
            Representative Bud Shuster...........................    10
            Representative Jay C. Kim............................    10
            Representative Newt Gingrich.........................    14
        Materials From the Inspector General.....................    16



                                                 Union Calendar No. 489

105th Congress                                                   Report
  2d Session            HOUSE OF REPRESENTATIVES                105-848

=======================================================================



           SUMMARY OF ACTIVITIES--ONE HUNDRED FIFTH CONGRESS

                                _______
                                

January 2, 1999.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

_______________________________________________________________________


   Mr. Hansen, from the Committee on Standards of Official Conduct, 
                        submitted the following

                              R E P O R T

                            I. Introduction

    House Rule XI, Clause 1(d), requires each committee to 
submit to the House, not later than January 2 of each odd-
numbered year, a report on the activities of that committee 
under that rule and House Rule X during the Congress ending on 
January 3 of that year.
    The jurisdiction of the Committee on Standards of Official 
Conduct (``Committee'') is defined in House Rule X, Clauses 
1(p) and 4(e), which state as follows:

               Committee on Standards of Official Conduct

                          Rule X, Clause 1(p)

    (1) Measures relating to the Code of Conduct. In addition 
to its legislative jurisdiction under the preceding provision 
of this paragraph (and its general oversight function under 
clause 2(b)(1)), the committee shall have the functions with 
respect to recommendations, studies, investigations, and 
reports which are provided for in clause 4(e), and the 
functions designated in titles I and V of the Ethics in 
Government Act of 1978 and sections 7342, 7351, and 7353 of 
title 5, United States Code.

                          Rule X, Clause 4(e)

    (1) The Committee on Standards of Official Conduct is 
authorized: (A) to recommend to the House from time to time 
such administrative actions as it may deem appropriate to 
establish or enforce standards of official conduct for Members, 
officers, and employees of the House, and any letter of 
reproval or other administrative action of the committee 
pursuant to an investigation under subdivision (B) shall be 
issued or implemented as a part of a report required by such 
subdivision; (B) to investigate, subject to subparagraph (2) of 
this paragraph, any alleged violation, by a Member, officer, or 
employee of the House, of the Code of Official Conduct or of 
any law, rule, regulation, or other standard of conduct 
applicable to the conduct of such Member, officer, or employee 
in the performance of his duties or the discharge of his 
responsibilities, and after notice and hearing (unless the 
right to a hearing is waived by the Member, officer, or 
employee), shall report to the House its findings of fact and 
recommendations, if any, upon the final disposition of any such 
investigation, and such action as the committee may deem 
appropriate in the circumstances; (C) to report to the 
appropriate Federal or State authorities, either with the 
approval of the House or by an affirmative vote of the two-
thirds of the members of the committee, any substantial 
evidence of a violation, by a Member, officer, or employee of 
the House, of any law applicable to the performance of his 
duties or the discharge of his responsibilities, which may have 
been disclosed in a committee investigation; (D) to give 
consideration to the request of any Member, officer, or 
employee of the House for an advisory opinion with respect to 
the general propriety of any current or proposed conduct of 
such Member, officer, or employee and, with appropriate 
deletions to assure the privacy of the individual concerned, to 
publish such opinion for the guidance of other Members, 
officers, and employees of the House; and (E) to give 
consideration to the request of any Member, officer, or 
employee of the House for a written waiver in exceptional 
circumstances with respect to clause 4 of rule XLIII.
    (2)(A)(i) No resolution, report, recommendation, or 
advisory opinion relating to the official conduct of a Member, 
officer, or employee of the House shall be made by the 
Committee on Standards of Official Conduct, and no 
investigation of such conduct shall be undertaken by such 
committee, unless approved by the affirmative vote of a 
majority of the members of the committee. -
    (ii)(I) Upon the receipt of information offered as a 
complaint that is in compliance with this rule and the 
committee rules, the chairman and ranking minority member may 
jointly appoint members to serve as an investigative 
subcommittee.
    (II) The chairman and ranking minority member of the 
committee may jointly gather additional information concerning 
alleged conduct which is the basis of a complaint or of 
information offered as a complaint until they have established 
an investigative subcommittee or the chairman and ranking 
minority member has placed on the committee agenda the issue of 
whether to establish an investigative subcommittee.
    (B) Except in the case of an investigation undertaken by 
the committee on its own initiative, the committee may 
undertake an investigation relating to the official conduct of 
an individual Member, officer, or employee of the House of 
Representatives only--
        (i) upon receipt of information offered as a complaint, 
        in writing and under oath, made by a Member of the 
        House and transmitted to the committee by such Member, 
        or
        (ii) upon receipt of information offered as a 
        complaint, in writing and under oath, from an 
        individual not a Member of the House provided that a 
        Member of the House certifies in writing to the 
        committee that he or she believes the information is 
        submitted in good faith and warrants the review and 
        consideration of the committee.
    If a complaint is not disposed of within the applicable 
time periods set forth in the rules of the Committee on 
Standards of Official Conduct, then the chairman and ranking 
minority member shall jointly establish an investigative 
subcommittee and forward the complaint, or any portion thereof, 
to that subcommittee for its consideration. However, if at any 
time during those periods, either the chairman or the ranking 
minority member places on the agenda the issue of whether to 
establish an investigative subcommittee, then an investigative 
subcommittee may be established only by an affirmative vote of 
a majority of the members of the committee.
    (C) No investigation shall be undertaken by the committee 
of any alleged violation of a law, rule, regulation, or 
standard of conduct not in effect at the time of the alleged 
violation; nor shall any investigation be undertaken by the 
committee of any alleged violation which occurred before the 
third previous Congress unless the committee determines that 
the alleged violation is directly related to any alleged 
violation which occurred in a more recent Congress.
    (D) A member of the committee shall be ineligible to 
participate, as a member of the committee, in any committee 
proceeding relating to his or her official conduct. In any case 
in which a member of the committee is ineligible to act as a 
member of the committee under the preceding sentence, the 
Speaker of the House shall designate a Member of the House from 
the same political party as the ineligible member of the 
committee to act as a member of the committee in any committee 
proceeding relating to the official conduct of such ineligible 
member.
    (E) A member of the committee may disqualify himself from 
participating in any investigation of the conduct of a Member, 
officer, or employee of the House upon the submission in 
writing and under oath of an affidavit of disqualification 
stating that he cannot render an impartial and unbiased 
decision in the case in which he seeks to disqualify himself. 
If the Committee approves and accepts such an affidavit of 
disqualification, the chairman shall so notify the Speaker and 
request the Speaker to designate a Member of the House from the 
same political party as the disqualifying member of the 
committee to act as a member of the committee in any committee 
proceeding relating to such investigation.
    (F) No information or testimony received, or the contents 
of a complaint or the fact of its filing, shall be publicly 
disclosed by any Committee or staff member unless specifically 
authorized in each instance by a vote of the full Committee.
    (3)(A) Notwithstanding clause 2(g)(1) of rule XI, each 
meeting of the committee on Standards of Official Conduct or 
any subcommittee thereof shall occur in executive session, 
unless the subcommittee or the committee, in open session by an 
affirmative vote of a majority of its members opens the meeting 
to the public.
    (B) Notwithstanding clause 2(g)(2) of rule XI, hearings of 
an adjudicatory subcommittee or sanction hearings held by the 
Committee on Standards of Official Conduct shall be held in 
open session unless the subcommittee or committee, in open 
session by an affirmative vote of a majority of its members, 
closes all or part of the remainder of the hearing on that day 
to the public.
    (4) Before any member, officer, or employee of the 
Committee on Standards of Official Conduct, including members 
of any subcommittee of the committee selected pursuant to 
clause 6(a)(3) and shared staff, may have access to information 
that is confidential under the rules of the committee, the 
following oath (or affirmation) shall be executed:

          I do solemnly swear (or affirm) that I will not 
        disclose, to any person or entity outside the Committee 
        on Standards of Official Conduct, any information 
        received in the course of my service with the 
        committee, except as authorized by the committee or in 
        accordance with its rules.

Copies of the executed oath shall be retained by the Clerk of 
the House as part of the records of the House. This 
subparagraph establishes a standard of conduct within the 
meaning of subparagraph (1)(B). Breaches of confidentiality 
shall be investigated by the Committee on Standards of Official 
Conduct and appropriate action shall be taken.
    (5)(A) If a complaint or information offered as a complaint 
is deemed frivolous by an affirmative vote of a majority of the 
members of the Committee on Standards of Official Conduct, the 
committee may take such action as it, by an affirmative vote of 
a majority of its members, deems appropriate in the 
circumstances.
    (B) Complaints filed before the One Hundred Fifth Congress 
may not be deemed frivolous by the Committee on Standards of 
Official Conduct.

                        II. Advice and Education

    The Committee offers educational programs and publications 
to inform House Members, officers, and employees of the 
requirements of the various laws, rules and standards that 
govern their conduct. Additionally, the Committee responds to 
specific requests for advice from Members, officers and 
employees--in person and over the telephone, as well as through 
the mail--on these matters. The Ethics Reform Act of 1989 
(``Act'') guarantees that no one may be investigated by the 
Committee on the basis of information provided to the Committee 
while seeking an opinion about proposed conduct, if the 
individual acts in accordance with the Committee's written 
advice. In this regard, the Act mandated that a separate Office 
of Advice and Education be established within the Committee in 
1990. The Committee maintains the confidentiality of both the 
inquiries that it receives from Members, officers and 
employees, and the advice provided to them. Additionally, 
courts will consider reliance on a Committee opinion a defense 
to prosecution by the Department of Justice.
    The Committee believes that these advice and education 
efforts are an extremely important means for attaining 
understanding of, and compliance with, the rules and standards 
of conduct. The increasingly technical and complex nature of 
the ethics rules makes such efforts all the more important.

Publications

    Since the House Ethics Manual was issued in 1992, the 
Committee has issued a number of advisory memoranda to Members, 
officers and employees that serve to update the materials in 
the manual. The following advisory memoranda were issued during 
the 105th Congress:
          
 1997 Salary Levels for Financial Disclosure 
        & Post Employment (March 6, 1997);
          
 Rules Governing Solicitation and Political 
        Fundraising (April 25, 1997);
          
 Gift Rule Provisions Applicable to Loans 
        (May 23, 1997);
          
 Gifts Presented to Members During Visits 
        (July 28, 1997);
          
 Financial Disclosure Requirements for Staff 
        (October 9, 1997);
          
 Travel Issues (December 17, 1997);
          
 1998 Salary Levels for Financial Disclosure 
        & Post Employment (Feb. 12, 1998);
          
 Outside Earned Income Restrictions on 
        Members and Senior Staff (Feb. 23, 1998);
          
 Answers to the ``Top 20 Questions'' (March 
        4, 1998);
          
 Rules & Standards of Conduct Relating to 
        Campaign Activity (Sep. 14, 1998);
          
 Employment Recommendations (October 1, 
        1998);
          
 Post-Employment and Related Restrictions for 
        Members (October 22, 1998); and
          
 Post-Employment and Related Restrictions for 
        Staff (October 22, 1998).
The advisory memorandum of February 23, 1998 announced a new, 
stricter policy regarding the outside earned income 
restrictions that apply to Members and senior staff. Among 
other things, those provisions prohibit covered individuals 
from receiving compensation for practicing any profession that 
involves a fiduciary relationship. The Committee action in this 
area was taken because in 1997 the Committee was asked, for the 
first time, to issue a formal ruling on whether those 
provisions applied to the practice of medicine by Members and 
senior staff. The Committee determined these provisions did 
apply to the practice of medicine, but under the policy 
announced in the memorandum, Members who are doctors may 
continue to practice medicine on a limited basis. The 
memorandum also announced that in implementing the fiduciary 
relationship provisions, the Committee will no longer use the 
``three prong'' test that is stated on page 103 of the House 
Ethics Manual.
    The matter of Member and staff travel under the gift rule 
is discussed extensively in the advisory memorandum of December 
17, 1997. That memorandum also provides a form for the Advance 
Authorization for Employee Travel that is required under the 
rule, and revised Member/Officer and Employee Travel Disclosure 
Forms. Other provisions of the gift rule are discussed in other 
advisory memoranda issued during the 105th Congress, including 
the ``Top 20 Questions'' memorandum.
    In addition, in April 1998 the Committee issued a revised 
version of its summary memorandum, Highlights of House Ethics 
Rules.

Briefings

    As part of its outreach and educational efforts, the 
Committee conducted numerous briefings during the 105th 
Congress regarding the House ethics rules and standards of 
conduct and the rules governing financial disclosure. Committee 
staff also participated in briefings sponsored by the 
Congressional Research Service and outside organizations.-
    The Committee made a presentation to the Members-elect of 
the 106th Congress as part of the New Member Orientation. 
Copies of the House Ethics Manual and Highlights of House 
Ethics Rules were provided to every new Member of Congress as 
part the orientation process, and each was offered an 
individual briefing for the Member and his or her staff.-
    In addition, during 1998 each Member of the House was 
invited to one of a series of Member-only ethics briefings held 
by Committee staff. A special briefing for Member office and 
committee chiefs of staff was held on January 21, 1998, and one 
for Member spouses was held on March 11, 1998 in conjunction 
with the House Members and Family Committee. Committee staff 
also provided numerous briefings to individual Member and 
committee offices. The Committee will continue this outreach 
effort in the 106th Congress.
    Staff also received numerous requests for briefings from 
visiting international dignitaries. Visitors from the emerging 
democracies of Eastern Europe and countries in Africa and Asia 
were particularly interested in our ethics regulations.

Advisory opinion letters

    The Committee's Office of Advice and Education, under the 
direction and supervision of the Committee's Chairman and 
Ranking Minority Member, prepared over 1,500 private advisory 
opinions during the 105th Congress. Opinions issued by the 
Committee in the 105th Congress addressed a wide range of 
subjects, including various provisions of the gift rule, travel 
funded by outside entities, Member or staff participation in 
fund-raising activities of charities and for other purposes, 
the outside earned income limitation and restrictions, campaign 
activity by staff, and the post-employment restrictions.

                       III. Financial Disclosure

    Title I of the Ethics in Government Act of 1978, as amended 
(5 U.S.C. app. 4, Sections 101-111), requires officials in all 
branches of the Federal Government to disclose to the public 
financial information regarding themselves and their families. 
In the House of Representatives, the Committee is responsible 
for administering the Act. The Committee establishes policy, 
issues instructions, and designs the Financial Disclosure 
Statements to be filed by Members, officers, legislative branch 
employees, and candidates for the House. After Statements are 
filed with the Legislative Resource Center of the Clerk of the 
House, they are forwarded to the Committee to be reviewed for 
compliance with the law. Accountants from the General 
Accounting Office assist the Committee in its review efforts.
    Prior to the May 15 due date for annual Financial 
Disclosure Statements, the Committee provided briefings for 
persons required to file, including briefings for Members only. 
The Committee encourages Members and staff to submit draft 
filings forreview by Committee staff, in order to reduce errors 
and the need for amendments. In calendar years 1997 and 1998, Committee 
staff reviewed approximately 4,719 Financial Disclosure Statements, 
including 1,011 Statements from candidates.
    Pursuant to its authority under 5 U.S.C. Sec. 7342, the 
Committee also continued its activities implementing the 
disclosure and reporting requirements of the Foreign Gifts and 
Decorations Act, and responded to requests from Members and 
employees for interpretations of the Act. Reports filed in 
accordance with this Act are available for public inspection at 
the Committee office.

                     IV. Select Committee on Ethics

    On January 7, 1997, the House passed H. Res. 5 which 
reconstituted the Committee from the 104th Congress as a Select 
Committee on Ethics for the sole purpose of completing their 
work In the Matter of Representative Newt Gingrich. H. Res. 5 
provided that the Select Committee ceased to exist upon the 
House's consideration of the report from the Committee or 
January 21, 1997.
    On December 21, 1996, the Investigative Subcommittee, 
chaired by Representative Goss, adopted a Statement of Alleged 
Violations against Representative Gingrich. (See Appendix A). 
The Statement of Alleged Violation charged Representative 
Gingrich with violating House Rule 43, clause 1. The 
Subcommittee found that Representative Gingrich ``failed to 
take appropriate steps to ensure that the activities [of 
certain tax exempt organizations] were in accordance with 
Section 501(c)(3) of the Internal Revenue Code. . . .'' The 
Subcommittee also found that ``information was transmitted to 
the Committee by and on behalf of Mr. Gingrich that was 
material to the matter under consideration by the Committee, 
which information, as Mr. Gingrich should have known, was 
inaccurate, incomplete, and unreliable.''
    Representative Gingrich admitted to the violation and 
waived his right to an adjudicatory hearing.
    Before the Sanction Hearing was held, Representatives 
Bunning and Hobson resigned from the Committee. Representative 
Lamar Smith was appointed to fill one vacancy. Representative 
McDermott recused himself from the Sanction Hearing.
    Chairwoman Johnson convened the Sanction Hearing on January 
17, 1997. James Cole, special counsel to the Subcommittee, 
presented his findings and the recommendations of the 
Subcommittee. Representative Gingrich's attorney, J. Randolph 
Evans, responded for the respondent.
    At the conclusion of the Sanction Hearing, the Committee 
voted 7-1 to recommend that Representative Gingrich be 
reprimanded and reimburse the House of Representatives the sum 
of $300,000. Representative Gingrich agreed with this 
recommendation. The Committee further recommended that 
documents obtained during the investigation be made available 
to the Internal Revenue Service.
    The Committee issued its report and sanction recommendation 
as H. Res. 31. The House considered H. Res. 31 on January 21, 
1997. Without amendment, the House adopted H. Res. 31 by a vote 
of 395-28, with five Members voting present.
    Following the expiration of the Select Committee, James V. 
Hansen was appointed Chairman and Howard L. Berman was 
appointed Ranking Minority Member. Following their appointment, 
the Chairman and Ranking Minority Member reached agreement with 
Representative Gingrich that he would make four installment 
payments prior to the conclusion of the 105th Congress to 
satisfy the $300,000 cost assessment. Representative Gingrich 
made three installment payments of $50,000 each and made a 
final payment of $150,000 on December 29, 1998.
    The Chairman and Ranking Minority Member also made 
available to the Internal Revenue Service documents obtained 
during the course of the investigation.

                          V. Ethics Task Force

    On January 12, 1997, the House named an Ethics Process Task 
Force. Also announced was a moratorium on the filing of new 
ethics complaints until April 11, 1997. This moratorium was 
subsequently extended by unanimous consents until September 10, 
1997. Representatives Livingston and Cardin were named co-
chairs of the Task Force. Representatives Solomon, Thomas, 
Goss, Castle, Moakley, Frost, Pelosi, and Stokes were also 
named to the Task Force. Chairman Hansen and Ranking Minority 
Member Berman were name ex-officio members.
    The Task Force met for several months and issued its 
recommendations in H. Res. 168. The House adopted two 
amendments to H. Res. 168. The Tauzin/Murtha amendment required 
that all non-members filing complaints must have a Member of 
the House sponsor the complaint. The Bunning/Abercrombie 
amendment required a majority vote of the full Committee and 
the investigative Subcommittee to expand the scope of an 
investigation. It also required that subpoenas be signed by the 
full Committee Chair and Ranking Minority Member unless 
otherwise provided by the Committee.
    Following the passage of H. Res. 168 (See Appendix B), the 
full Committee was named on September 29, 1997. Chairman Hansen 
and Ranking Minority Member Berman were joined by 
Representatives Lamar Smith, Martin Olav Sabo, Joel Hefley, 
EdPastor, Bob Goodlatte, Chaka Fattah, Joe Knollenberg, and Zoe 
Lofgren. The Committee organized on September 30, 1997, and voted to 
carry over the three pending complaints from the 104th Congress.

                           VI. Investigations

Complaints-

    The Committee had three complaints pending from the 104th 
Congress. At their organizational meeting in September 1997, 
the Committee voted to carryover the pending complaints. One 
complaint was filed by Representative David Bonior against 
Representative Gingrich. The other two complaints were filed by 
the Congressional Accountability Project at the end of the 
104th Congress. Additional complaints were received by the 
Committee during the 105th Congress. The Committee considered 
and took action on the following cases during the 105th 
Congress.
            Representative Tom DeLay-
    The first complaint filed by the Congressional 
Accountability Project was against Representative Tom DeLay. 
The complaint alleged Representative DeLay had improperly 
linked campaign contributions with official actions by more 
favorably treating in legislative matters those who had made 
campaign contributions to Republican candidates and had 
improperly performed political favors for his brother, a 
registered lobbyist, by assisting him in securing business.
    The Committee requested a response from Representative 
DeLay. After reviewing his response, the Committee voted to 
dismiss the complaint and sent a letter to Representative DeLay 
notifying him of the Committee's action. On November 7, 1997, 
the Committee issued the following press release:

          The Committee has dismissed the complaint filed by 
        the Congressional Accountability Project against 
        Representative DeLay.
          In dismissing the complaint, the Committee notes that 
        there is no prohibition precluding a family member from 
        being a lobbyist. The Committee found no basis for an 
        investigation based on his relationship with his 
        brother. Rep. DeLay demonstrated in his response that 
        in each issue involving his brother, Rep. DeLay's 
        involvement either predated his brother's hiring or was 
        consistent with his representation of his district.
          The Committee noted that the solicitation of campaign 
        contributions in House office buildings and the Capitol 
        is prohibited and that the subject of campaign 
        contributions should be avoided in those locations. 
        Rep. DeLay was advised that it is particularly 
        important that a Member not make statements that create 
        the impression that the Member would consider an 
        individual's requests for access or for official action 
        based on such campaign contributions.
            Representative Bud Shuster-
    The second complaint filed by the Congressional 
Accountability Project was against Representative Bud Shuster. 
After reviewing the response from Representative Shuster the 
Committee voted on November 14, 1997, to establish an 
investigative subcommittee. Representative Hefley was named 
chairman of the subcommittee and Representative Lofgren was 
named ranking minority member. Pursuant to Section 1 of H. Res. 
168, Representatives McCrery and Edwards were also named to the 
investigative subcommittee.-
    The Committee, in consultation with the Investigative 
Subcommittee and the Department of Justice, announced June 10, 
1998, that it would suspend interviews and depositions at the 
request of the Department of Justice. A further announcement 
was made by the Committee on December 4, 1998, that the 
Subcommittee would go forward with interviews and depositions. 
At the request of the Subcommittee, the full Committee voted to 
expand the scope of the Subcommittee's jurisdiction to include 
an examination of whether violations of House Rules and/or 
federal law were committed with respect to Representative 
Shuster's 1994, 1996, and 1998 campaigns for election to the 
U.S. House of Representatives.
            Representative Jay C. Kim
    In August 1997, Representative Kim pleaded guilty to three 
misdemeanor violations of Federal election campaign laws: (1) 
knowingly accepting an illegal $50,000 contribution to his 1992 
campaign from a Taiwanese national; (2) knowingly causing the 
contribution of more than $83,000 in illegal corporate 
contributions from JayKim Engineers, Inc. (``JKE'') to his 1992 
campaign; and (3) knowingly accepting an illegal $12,000 
corporate contribution to his 1992 campaign from Nikko 
Enterprises, Inc.-
    In December 1997, the Chairman and Ranking Minority Member 
exercised their authority under Committee Rule 17(c) to 
establish an investigative subcommittee to conduct an inquiry 
concerning Representative Kim, based on Representative Kim's 
guilty pleas to criminal violations of Federal election 
campaign laws and related guilty pleas by Representative Kim's 
campaign committee and his wife, June Kim.\1\
---------------------------------------------------------------------------
    \1\ A detailed discussion of the inquiry may be found in the 
Committee's final report, In the Matter of Representative Jay Kim, H. 
Rep. No. 105-797, 105th Cong., 2d Sess. (1998).
---------------------------------------------------------------------------
    The original scope of the inquiry included five issues: (1) 
matters related to the plea agreements that Representative Kim 
and June Kim entered into with the Department of Justice in 
July 1997; (2) alleged improprieties concerning Financial 
Disclosure Statements that Representative Kim filed pursuant to 
the Ethics in Government Act; (3)whether the facts relating to 
the publication of a book by June Kim entitled ``There Are 
Opportunities,'' and any royalties or other payments tendered in 
connection with that book, complied with House rules and applicable 
laws; (3) Representative Kim's failure to comply with an agreement with 
the Committee to return outside income from the publication of his 
book, ``I'm Conservative,'' which exceeded the statutory limit of 
$20,040; and (5) Representative Kim's knowledge, if any, regarding 
illegal contributions made to his 1992 congressional campaign by Korean 
Airlines, Co., Ltd. and other companies.
    Representative Lamar Smith served as Chairman of the 
Investigative Subcommittee, and Representative Ed Pastor served 
as Ranking Minority Member. Representative Ed Bryant and 
Representative Robert C. Scott also served on the Investigative 
Subcommittee pursuant to Clause 6(a)(3) of House Rule 10.
    The original scope of the inquiry was expanded four times 
pursuant to Committee Rule 20(c). On February 25, 1998, the 
full Committee, upon recommendation of the Subcommittee, voted 
to expand the Investigative Subcommittee's jurisdiction to 
include: (1) the possible misuse of official resources with 
respect to a contract between Representative Kim's 
congressional office and Image Media Services, Inc.; and (2) 
whether Representative Kim made false statements in a letter to 
the Investigative Subcommittee dated January 29, 1998.
    On April 22, 1998, the full Committee, upon the 
recommendation of the Subcommittee, voted to expand the 
Investigative Subcommittee's jurisdiction to include the issue 
of whether violations of Federal law were committed with 
respect to Representative Kim's 1994, 1996, and 1998 campaigns 
for election to the U.S. House of Representatives. -
    On May 22, 1998, the full Committee, upon the 
recommendation of the Subcommittee, voted to expand the 
Investigative Subcommittee's jurisdiction to include: (1) 
whether Representative Kim, or persons acting with his 
knowledge or approval, obstructed, or tried to obstruct, the 
discovery of information by investigative authorities; (2) 
whether Representative Kim, or persons acting with his 
knowledge or approval, reported false or misleading information 
to the House of Representatives or the Internal Revenue Service 
in connection with income relating to books written by Jay Kim 
and June Kim; (3) whether Representative Kim made false 
statements in a May 21, 1998, letter to the Honorable Lamar 
Smith and the Honorable Ed Pastor; and (4) whether 
Representative Kim received gifts in violation of House Rules 
during the period of 1993-1998.
    On June 19, 1998, the full Committee, upon the 
recommendation of the Subcommittee, voted to expand the 
Investigative Subcommittee's jurisdiction to include: (1) 
whether Representative Kim knowingly made false statements 
during his testimony before the Investigative Subcommittee; (2) 
whether JayKim Engineers, Inc., or its successor, reimbursed a 
company employee for a political contribution to a candidate 
for Federal election in or about March 1993 with the knowledge 
and approval of Representative Kim; and (3) whether 
Representative Kim failed to comply with the terms and 
conditions of a letter to him from the Committee on Standards 
of Official Conduct dated July 28, 1997, concerning the 
solicitation and acceptance of funds to pay for June Kim's 
legal expenses.
    At the conclusion of the inquiry, the Investigative 
Subcommittee found substantial reason to believe that 
Representative Kim committed violations of laws and House rules 
within the Committee's jurisdiction, and it unanimously adopted 
a Statement of Alleged Violation. The charges contained in the 
Statement of Alleged Violation concerned not only conduct to 
which Representative Kim previously had pleaded guilty in 1997, 
but also matters outside the scope of the criminal 
investigation by the Department of Justice.
    The Statement of Alleged Violation contained six counts of 
alleged violations of laws and House rules. Counts I through IV 
were based on statutory violations to which Representative Kim 
previously had pleaded guilty, although they also included 
additional alleged violations, including making false 
statements to the Investigative Subcommittee and making false 
statements on his Financial Disclosure Statements:
          
 Count I charged Representative Kim with 
        causing in-kind corporate contributions in 1992 and 
        1993 to his campaign committee by JayKim Engineers, 
        Inc. in violation of Clause 1 of House Rule 43, which 
        states that ``[a] Member, officer or employee of the 
        House of Representatives shall conduct himself at all 
        times in a manner which shall reflect creditably on the 
        House of Representatives.''--
          
 Count II charged Representative Kim with the 
        acceptance and receipt of a campaign contribution in 
        1992 by a Taiwanese national in violation of Clause 1 
        of House Rule 43. In addition, this count charged 
        Representative Kim with (1) making false statements on 
        his Financial Disclosure Statements regarding the 
        illegal foreign contribution in violation of the Ethics 
        in Government Act of 1978 and Clause 2 of House Rule 
        44; and (2) making false statements to the 
        Investigative Subcommittee regarding the illegal 
        foreign contribution, in violation of Clause 1 of House 
        Rule 43.--
          
 Count III charged Representative Kim with 
        the acceptance and receipt of a corporate and excessive 
        corporate contribution by Nikko Enterprises, Inc. 
        (``Nikko'') totaling $12,000 in October 1992, in 
        violation of Clause 1 of House Rule 43. This count also 
        charged Representative Kim with making false statements 
        to the Investigative Subcommittee regarding the illegal 
        contribution by Nikko.--
          
 Count IV charged Representative Kim with 
        making false statements on his Financial Disclosure 
        Statements regarding the illegal Nikko contribution in 
        violation of Clause 2 of House Rule 44.
    Counts V and VI of the Statement of Alleged Violation were 
based on conduct revealed by the Subcommittee's investigation. 
These counts included charges that Representative Kim received 
improper gifts totaling over $63,000, and that he attempted to 
influence statements by another person to investigators.
          
 Count V charged Representative Kim with 
        receiving a gift of $30,000 in January 1994 from Dobum 
        Kim, then an employee of Hanbo Steel and General 
        Construction, a company headquartered in South Korea, 
        in violation of Clause 4 of then-House Rule 43 and 
        Clause 1 of House Rule 43. This count also charged 
        Representative Kim with (1) attempting to influence 
        statements by Dobum Kim to investigators regarding the 
        $30,000 payment, in violation of Clause 1 of House Rule 
        43; (2) failing to report the $30,000 gift on his 
        Financial Disclosure Statement for calendar year 1994, 
        in violation of the Ethics in Government Act and Clause 
        2 of House Rule 44; (3) receiving gifts of travel 
        expenses and golf equipment from Hanbo Steel and 
        General Construction in 1994 totaling approximately 
        $3,640, in violation of Clause 4 of then-House Rule and 
        Clause 1 of House Rule 43; (4) failing to disclose the 
        gifts of travel expenses and golf equipment on his 
        Financial Disclosure Statement for 1994, in violation 
        of the Ethics in Government Act of 1978 and Clause 2 of 
        House Rule 44; and (5) making false statements to the 
        Investigative Subcommittee regarding Dobum Kim.
          
 Count VI charged Representative Kim with 
        violations of House Rule 51 and Clause 1 of House Rule 
        43 by receiving gifts in 1997 and 1998 consisting of 
        two cashier's checks totaling $30,000, which he used to 
        pay partial reimbursement to the U.S. Treasury for 
        excess outside earned income from his 1994 
        autobiography, ``I'm Conservative.''
    The Investigative Subcommittee also found evidence of other 
possible misconduct meriting public disclosure that did not 
result in charges against Representative Kim.
    On August 24, 1998, Representative Kim's attorney filed a 
Motion for a Bill of Particulars on behalf of Representative 
Kim pursuant to Committee Rule 23(b). Pursuant to the authority 
delegated to him by the Investigative Subcommittee, the 
Subcommittee Chairman denied Representative Kim's motion. On 
September 2, 1998, the Investigative Subcommittee ratified the 
Subcommittee Chairman's previous denial of the motion by 
separately voting to deny Representative Kim's motion.
    On September 9, 1998, Representative Kim's attorney filed a 
Motion to Dismiss the Statement of Alleged Violation pursuant 
to Committee Rule 23(c)(2). On September 10, 1998, the 
Subcommittee voted to deny the motion by an affirmative vote of 
a majority of its members.
    On September 25, 1998, Representative Kim filed an Answer 
to the Statement of Alleged Violation, in which he admitted the 
statutory violations of Federal election campaign laws to which 
he had pleaded guilty in 1997, but denied all charges by the 
Investigative Subcommittee, including alleged violations of 
House Rules based on those statutory violations. Thus, 
Representative Kim denied all of the charges contained in the 
Statement of Alleged Violation.\2\
---------------------------------------------------------------------------
    \2\ The Investigative Subcommittee charged Representative Kim only 
with violations of House Rules in connection with the statutory 
violations to which he had pleaded guilty--not with statutory 
violations of federal election campaign laws.
---------------------------------------------------------------------------
    On October 2, 1998, the Subcommittee voted to adopt a final 
report. On the same day, the Subcommittee Chairman, pursuant to 
Committee Rule 23(g), transmitted to the Chairman and Ranking 
Minority Member of the full Committee Statement of Alleged 
Violation, related motions, replies to those motions, and 
related pleadings. The Subcommittee Chairman also transmitted 
the Subcommittee's report to the Chairman and Ranking Minority 
Member of the full Committee.
    In transmitting the Statement of Alleged Violation and the 
other referenced materials, the Subcommittee recommended that 
no adjudicatory subcommittee be established, and that no 
further action be taken in this matter. The Subcommittee based 
its recommendation on the fact that Representative Kim had lost 
his primary election in June 1998, and that the Committee 
therefore would lose its jurisdiction over him in January 1999.
    With the scheduled date for the adjournment of the House 
fast approaching, the Committee could not complete the 
adjudication and sanction hearings after receiving the 
Subcommittee's report and the Statement of Alleged Violation. 
Given the limited time and the reasons cited by the 
Subcommittee, the full Committee unanimously voted on October 
6, 1998, to adopt the Subcommittee's report and to approve the 
Subcommittee's recommendation that no further action be taken 
in this matter.
            Representative Newt Gingrich
    On January 31, 1996, Representatives Bonior, DeLauro, 
Lewis, Miller, and Schroeder filed a complaint against 
Representative Gingrich. The complaint alleged that: (1) 
Representative Gingrich violated the laws governing tax-exempt 
organizations with respect to the sponsorship and operation of 
the American Opportunity Workshops, the Abraham Lincoln 
Opportunity Foundation, and American Citizens' Television; (2) 
he intervened improperly with the Environmental Protection 
Agency in 1991 on behalf of Mr. Miller Nichols, a non-
constituent, concerning federal asbestos regulations; (3) he 
intervened improperly with the International Trade Commission 
in 1989 on behalf of Southdown, Inc., a contributor to GOPAC; 
(4) he received improper personal benefits from GOPAC in 1990; 
(5) he personally violated Federal election campaign laws with 
respect to alleged contributions by GOPAC to his 1990 
congressional campaign; (6) he directed that contributions to 
GOPAC be forwarded to his 1990 election campaign; and (7) he 
separately violated House Rule 43, Clause 1, based on 
cumulative alleged conduct cited throughout the complaint.
    With respect to count number one of the complaint, 
involving allegations concerning tax-exempt organizations, the 
Committee, on August 1, 1996, referred it to the Investigative 
Subcommittee chaired by Representative Porter Goss. This count 
was included in the Subcommittee's Statement of Alleged 
Violation and was ultimately resolved by the Select Committee 
on Ethics in January 1997.
    With respect to counts two and three of the complaint, 
involving allegations of improperly intervening with federal 
agencies, the Committee on Standards of Official Conduct for 
the 104th Congress dismissed the allegations on the grounds 
that they did not merit further inquiry.
    With respect to counts four, five, six, and seven of the 
complaint, the Committee, on September 27, 1996, submitted a 
request to the Investigative Subcommittee chaired by 
Representative Goss asking whether the subcommittee had any 
information in its possession relating to the unresolved 
allegations that Representative Gingrich had received improper 
personal benefits from GOPAC and that he personally had 
violated Federal election campaign laws.
    On October 8, 1998, the Committee dismissed the remaining 
four counts of the complaint involving allegations 
Representative Gingrich had received improper personal benefits 
from GOPAC in 1990. On October 10, 1998, the Committee wrote a 
letter to Representative Gingrich notifying him of the actions 
taken and explaining the reasons for dismissing the remaining 
counts. The text of that letter, which the Committee voted to 
release to the public, is quoted in its entirety as follows:

          As you are aware, at its meeting on September 10, 
        1997, the Committee voted to carry over Counts IV, V, 
        and VI of the complaint filed against you on January 
        31, 1996. Pursuant to Rule 17(e) of the Committee 
        rules, the matters comprised by those counts were 
        placed on the agenda of the Committee in October, 1997. 
        Pursuant to Committee rule 18(f), the Committee hereby 
        provides notice of the committee resolution pertaining 
        to these matters adopted by unanimous vote of the 
        Committee.
          In reference to the allegation that you violated 
        House Rule 45's prohibition of unofficial office 
        accounts in 1990-1991, in your use of GOPAC-funded 
        consultants in the operation of the Minority Whip's 
        Office generally, and specifically in the development 
        of your legislative agenda, we conclude that the 
        evidence demonstrate that you committed repeated 
        violations of Rule 45. In particular, we have reviewed 
        substantial documentary evidence establishing that 
        while serving as a paid consultant to GOPAC, Mr. 
        Jeffrey Eisenach provided a wide array of services 
        pertaining to the development and implementation of 
        your legislative agenda, and that he did so at your 
        request.
          While the evidence establishes a prima facie case 
        that Rule 45 was violated, the violations occurred in 
        1990-91, prior to the instances that prompted previous 
        letters of admonition from the Committee concerning 
        Rule 45 violations, namely, the letter of December 
        1995, concerning Joe Gaylord and March and September 
        1996, letters concerning Donald Jones, all of which 
        concerned Rule 45 violations during your tenure as 
        Speaker. Because the pending Rule 45 violations 
        occurred so long ago and because we have before us no 
        evidence that Rule 45 problems persist in your office, 
        we will take no further action and have dismissed this 
        allegation. The Committee believes you have been 
        adequately informed and cautioned on Rule 45 issues and 
        anticipates full compliance in the future. We 
        appreciate your efforts to work with Committee staff 
        since the previous committee activity on this issue.
          In reference to the allegation that GOPAC improperly 
        subsidized your 1990 congressional campaign by paying 
        consultant salaries, directing large GOPAC donors to 
        contribute to your campaign, and identifying your 
        reelection as a top GOPAC priority, we note that all of 
        these matters were presented to the Federal District 
        Court for its consideration in FEC v. GOPAC (917 F. 
        Supp. 851, 1996). While the Committee is not bound by 
        the court's decision to dismiss the charges against 
        GOPAC (a decision which the FEC declined to appeal), we 
        are persuaded by the Court's analysis and defer to its 
        findings. We do so in full awareness that the subject 
        of the FEC proceeding was GOPAC and not you as an 
        individual, but it appears to us that to the extent 
        that GOPAC was exonerated by the court, you are by 
        implication exonerated as well. These portions of the 
        complaint are therefore dismissed.
          Finally, in reference to the allegation that you 
        personally benefited from the ``Newt Support'' 
        furnished by GOPAC and therefore should have reported 
        it as income on your Federal taxes, we find no evidence 
        establishing that the support in question constituted 
        income to you. We therefore dismiss this portion of the 
        complaint.
          This concludes the Committee's consideration of the 
        complaint filed against you on January 31, 1996. Please 
        be advised that the Committee will make this letter 
        public, but will issue no further report to the House 
        on this complaint.

Materials from the Inspector General

    On November 24, 1998, the Committee received a referral 
from the House Inspector General pertaining to the Clerk of the 
House. The Clerk announced her resignation from the House on 
December 21, 1998, effective January 1, 1999; therefore, the 
Committee took no action on the referral.
                               APPENDIX A

                              ----------                              


  Statement of the Investigative Subcommittee on Behalf of the House 
     Committee on Standards of Official Conduct, December 21, 1996

    The House Committee on Standards of Official Conduct is 
today releasing a Statement of Alleged Violation issued in the 
matter of Representative Newt Gingrich. In addition, the 
Committee is also releasing Mr. Gingrich's answer to the 
Statement of Alleged Violation, in which he admits to the 
violation of House Rules contained in the Statement of Alleged 
Violation.
    In light of Mr. Gingrich's answer, the Investigative 
Subcommittee is of the view that the Rules of the Committee 
will not require the holding of an adjudicatory hearing to 
determine whether the violation has been proven. Accordingly, 
with the concurrence of the Committee, the next proceeding will 
be a hearing before the full Committee to determine a 
recommendation to the House for an appropriate resolution. 
Since this remains a pending matter, there will be no further 
public comment.

   U.S. HOUSE OF REPRESENTATIVES COMMITTEE ON STANDARDS OF OFFICIAL 
         CONDUCT IN THE MATTER OF REPRESENTATIVE NEWT GINGRICH

         respondent's answer to statement of alleged violation

    I, Newt Gingrich, admit to the Statement of Alleged 
Violation dated December 21, 1996.
                                   Representative Newt Gingrich,
                                           Respondent.
                                   J. Randolph Evans, Esq.,
                                           Attorney for Representative 
                                               Newt Gingrich.
    I declare under penalty of perjury that the foregoing is 
true and correct. Executed on December 21, 1996.

                                      Representative Newt Gingrich.

house of representatives committee on standards of official conduct in 
     the matter of representative newt gingrich, December 21, 1996

                     STATEMENT OF ALLEGED VIOLATION

    1. At all times relevant to this Statement of Alleged 
Violation, Newt Gingrich was a Member of the United States 
House of Representatives representing the Sixth District of 
Georgia.
    2. At all times relevant to this Statement of Alleged 
Violation, GOPAC was a political action committee within the 
meaning of section 527 of the Internal Revenue Code dedicated 
to, among other things, achieving Republican control of the 
United States House of Representatives.
    3. GOPAC's methods for accomplishing the goal described in 
paragraph 2 included the development of a political message to 
appeal to voters and the dissemination of that message as 
widely as possible. As stated in a draft document dated 
November 1, 1989, entitled ``GOPAC IN THE 1990s'':

          [GOPAC's] role is to both create and disseminate the 
        doctrine of a majority Republican party.
          The creation of a new doctrine is essentially a 
        research function, involving the development of new 
        ideas at the strategic, operational and tactical level. 
        Strategic doctrine, in this context, consists of the 
        language, policies and programs that will define the 
        caring, humanitarian, reform Republican agenda of the 
        1990s. Operational doctrine consists of the political 
        message and image which will attract voters and elect 
        state and local candidates in support of this new 
        agenda. And, tactical doctrine consists of the specific 
        political techniques Republicans will use to win 
        elections and enact governing conservative policies. 
        (emphasis in the original).

    The document then states:

          As important as the creation of the new doctrine is 
        its dissemination. During the 1980s GOPAC and Newt 
        Gingrich have led the way in applying new technology, 
        from C-SPAN to video tapes, to disseminate information 
        to Republican candidates and political activists.

           *         *         *         *         *

          But the Mission Statement demands that we do much 
        more. To create the level of change needed to become a 
        majority, the new Republican doctrine must be 
        communicated to a broader audience, with greater 
        frequency, in a more usable form. GOPAC needs a bigger 
        ``microphone.'' (emphasis in the original).

    4. From in or about September 1986 through in or about May 
1995, Mr. Gingrich was General Chairman of GOPAC. In that 
capacity he determined the messages GOPAC used to accomplish 
its goals.
    5. In a document entitled ``Key Factors in a House GOP 
Majority,'' Mr. Gingrich wrote the following:

    1. The fact that 50% of all potential voters are currently 
outside politics (non-voters) creates the possibility that a 
new appeal might alter the current balance of political power 
by bringing in a vast number of new voters.

           *         *         *         *         *

    3. It is possible to articulate a vision of ``an America 
that can be'' which is appealing to most Americans, reflects 
the broad values of a governing conservatism (basic American 
values, entrepreneurial Free Enterprise and Technological 
progress), and is very difficult for the Democrats to co-opt 
because of their ideology and their interest groups.
    4. It is more powerful and more effective to develop a 
reform movement parallel to the official Republican Party 
because:
          a. the news media will find it more interesting and 
        cover it more often and more favorably;
          b. the non-voters who are non-political or anti-
        political will accept a movement more rapidly than they 
        will accept an established party;

           *         *         *         *         *

    6. The objective measurable goal is the maximum growth of 
news coverage of our vision and ideas, the maximum recruitment 
of new candidates, voters and resources, and the maximum 
electoral success in winning seats from the most local office 
to the White House and then using those victories to implement 
the values of a governing conservatism and to create the best 
America that can be.

    6. In early 1990 GOPAC developed and carried out a project 
called American Opportunities Workshop (``AOW''). It consisted 
of producing and broadcasting a television program centered on 
a citizens' movement to reform government. The movement was 
based on three tenets:
          1. Basic American Values;
          2. Entrepreneurial Free Enterprise; and
          3. Technological Progress.
    The project also involved the recruitment of activists to 
set up local workshops around the broadcast in order to recruit 
people to the movement. The project was Mr. Gingrich's idea and 
he had a high level of involvement in it.
    7. While AOW was described as being non-partisan, mailings 
sent by GOPAC to its supporters described AOW as having 
partisan, political goals. One letter sent over Mr. Gingrich's 
name stated the following:

          [W]e'll be reaching voters with our message, and 
        helping drive down to the state and local level our 
        politics of realignment.
          Through the use of satellite hook-ups, not only can 
        we reach new groups of voters not traditionally 
        associated with our Party, but we'll be able to give 
        them our message straight, without it being filtered 
        and misinterpreted by liberal elements in the media.

The letter ended with the following:

          I truly believe that our Party and our President 
        stand on the verge of a tremendous success this year, 
        and that this workshop can be a great election year 
        boost to us.

    8. AOW consumed a large portion of GOPAC's financial 
resources during 1990. After one program the funding and 
operation of the project was transferred, with Mr. Gingrich's 
knowledge and approval, to the Abraham Lincoln Opportunity 
Foundation (``ALOF''), a corporation with a tax-exempt status 
under section 501(c)(3) of the Internal Revenue Code. ALOF 
operated out of GOPAC's offices. Its officers consisted of 
Howard Callaway, the Chairman of GOPAC, and Kay Riddle, 
Executive Director of GOPAC. In addition, the people who were 
listed as working for ALOF were GOPAC employees or consultants. 
ALOF raised and expended tax-deductible charitable 
contributions to carry out the project.
    9. At ALOF the project was called American Citizens' 
Television (``ACTV'') and had the same goals as AOW. It was 
also based on the three tenants of Basic American Values, 
Entrepreneurial Free Enterprise, and Technological Progress and 
involved the recruiting of activists to set up local workshops 
around the broadcast to recruit people to the citizens' 
movement. In a letter sent by GOPAC over Mr. Gingrich's name, 
ACTV was described as follows:

          I am excited about progress of the ``American 
        Citizen's Television'' project, which will carry the 
        torch of citizen activism begun by our American 
        Opportunities Workshop on May 19th. We mobilized 
        thousands of people across the nation at the grass 
        roots level who as a result of AOW, are now dedicated 
        GOPAC activitst. We are making great strides in 
        continuing to recruit activists all across America to 
        become involved with the Republican party. Our efforts 
        are literally snowballing into the activist movement we 
        need to win in '92.

    10. ACTV broadcast three programs in 1990 and Mr. Gingrich 
continued his involvement in the project. The first two were 
produced by ALOF. They aired on July 21, 1990, and September 
29, 1990, and were hosted by Mr. Gingrich. The last program was 
produced by the Council for Citizens Against Government Waste, 
a 501(c)(4) organization, and did not include Mr. Gingrich. 
ALOF expended approximately $260,000 in regard to these 
programs.
    11. Under the Internal Revenue Code, an organization which 
is exempt from taxation under section 501(c)(3) must be 
operated exclusively for exempt purposes. The presence of a 
single non-exempt purpose, if more than insubstantial in 
nature, will destroy the exemption regardless of the number or 
importance of truly exempt purposes. Conferring a benefit on 
private interests is a non-exempt purpose. Under the Internal 
Revenue Code, an organization which is exempt from taxation 
under section 501(c)(3) is also prohibited from providing any 
support to a political action committee. These prohibitions 
reflect Congressional concerns that tax-payer funds not be used 
to subsidize political activity.
    12. Mr. Gingrich did not seek specific legal advice 
concerning the application of section 501(c)(3) of the Internal 
Revenue Code in regard to the facts described in paragraphs 2 
through 10 and did not take affirmative steps to ensure that 
such legal advice was obtained by others from an appropriate 
source.
    13. During the Preliminary Inquiry the Investigative 
Subcommittee (``Subcommittee'') consulted with an expert in the 
law of tax-exempt organizations. Mr. Gingrich's activities on 
behalf of ALOF and the activities of others on behalf of ALOF 
with Mr. Gingrich's knowledge and approval were reviewed by the 
expert. The expert concluded that those activities violated 
ALOF's status under section 501(c)(3) of the Internal Revenue 
Code in that, among other things, those activities:
          a. were intended to confer more than insubstantial 
        benefits on GOPAC and Republican entities and 
        candidates; and
          b. provided support to GOPAC.
    14. The Subcommittee also heard from tax counsel retained 
by Mr. Gingrich for the purposes of this Preliminary Inquiry. 
According to Mr. Gingrich's tax counsel, this type of activity 
would not violate ALOF's status under section 501(c)(3) of the 
Internal Revenue Code.
    15. Both the Subcommittee's expert and Mr. Gingrich's tax 
counsel agree that had they been consulted about this type of 
activity prior to its taking place, they would have advised 
that it not be conducted under the auspices of an organization 
exempt from taxation under section 501(c)(3) of the Internal 
Revenue Code.
    16. If the legal advice described in paragraph 15 had been 
sought and followed, most, if not all, of the tax-deductible 
charitable contributions would not have been used for the 
activities described in paragraphs 2 through 10. As a result, 
the public controversy involving the legality of a Member's 
involvement with an organization exempt from taxation under 
section 501(c)(3)of the Internal Revenue Code concerning 
activities described in paragraphs 2 through 10 would not have 
occurred.
    17. In December 1992, Mr. Gingrich began to develop a 
movement which became known as Renewing American Civilization. 
The goal of this movement was the replacement of the ``welfare 
state'' with an ``opportunity society.''
    18. A primary means of achieving this goal was the 
development of the movement's message and the dissemination of 
that message as widely as possible. The message was also known 
by the name of Renewing American Civilization. The heart of 
that message was that the welfare state had failed, that it 
could not be repaired but had to be replaced, and that it had 
to be replaced with an opportunity society that was based on 
what was called the ``five pillars of American Civilization.'' 
These were: (1) personal strength; (2) entrepreneurial free 
enterprise; (3) the spirit of invention; (4) quality as defined 
by Edwards Deming; and (5) the lessons of American history. The 
message also concentrated on three substantive areas: These 
were: (1) jobs and economic growth; (2) health; and (3) saving 
the inner city.
    19. It was intended that a Republican majority would be 
part of the movement.
    20. One aspect of the movement was to ``professionalize'' 
the House Republicans. One method for doing this was to use the 
movement's message to attract voters, resources, and 
candidates.
    21. GOPAC was one of the institutions that was instrumental 
in developing and disseminating the message of the movement. In 
early 1993 Mr. Gingrich, as GOPAC's General Chairman, was 
instrumental in determining that virtually the entire political 
program for GOPAC in 1993 and 1994 would be centered on 
developing, disseminating, and using the message of Renewing 
American Civilization.
    22. In late 1992 and through 1993, GOPAC's limited 
financial resources were not sufficient to enable it to carry 
out all of the political programs at its usual level.
    23. In or about late 1992 or early 1993, Mr. Gingrich 
decided to teach a course. It was also entitled Renewing 
American Civilization. The course lasted ten weeks and devoted 
a separate session to each of the ``five pillars'' and each of 
the three substantive areas.
    24. GOPAC had a number of roles in regard to the course. 
They included:
    a. Starting in or about February 1993, employees and 
consultants for GOPAC were involved in developing the course. 
As of June 1, 1993, Jeffrey Eisenach, GOPAC's Executive 
Director, and two of his assistants, resigned from their 
positions at GOPAC to manage the operations of the course. They 
did, however, maintain a consulting contract under which GOPAC 
paid one-half of their salaries through September 30, 1993.
    b. In a letter sent to all GOPAC Charter Members over Mr. 
Gingrich's name in June 1993, another aspect of GOPAC's 
involvement in the course was described as follows:

          During our meeting in January, a number of Charter 
        Members were kind enough to take part in a planning 
        session on ``Renewing American Civilization.'' That 
        session not only affected the substance of what the 
        message was to be, but also how best the new message of 
        positive solutions could be disseminated to this 
        nation's decision makers--elected officials, civic and 
        business leaders, the media and individual voters. In 
        addition to my present avenues of communications I 
        decided to add an avenue close to my heart, that being 
        teaching. I have agreed with Kennesaw State College, a 
        12,000 student graduate and undergraduate college 
        located in my district, to teach ``Renewing American 
        Civilization'' as a for-credit class four times during 
        the next four years.

    c. GOPAC's Charter Member Meeting in April 1993 was 
entitled ``Renewing American Civilization.'' At that meeting, 
Charter Members were asked to help develop the ideas contained 
in the course. A memorandum to the Charter Member attendees 
described that process as follows:

          As you are probably aware, Newt will be teaching a 
        for-credit class at Kennesaw State College this Fall on 
        the topic of ``Renewing American Civilization.'' The 
        class is organized around his ``Five Pillars of 
        American Civilization''. . .
          During the afternoon of Sunday, April 25, we are 
        asking our Charter Members to participate in a set of 
        breakout sessions, with one session focussing on each 
        of the five ``pillars.'' In particular, we will ask you 
        to critique a draft ``visions statement'' explaining 
        why we believe each pillar is essential to renewing 
        American Civilization. If past experience is any guide, 
        we expect these sessions to dramatically improve both 
        our understanding of the subject and our ability to 
        communicate it.

    d. GOPAC employees took part in fundraising for the course.
    e. GOPAC was involved in the promotion of the course. In 
one such instance, GOPAC prepared and sent a letter concerning 
the course over Mr. Gingrich's name to College Republicans. The 
letter included the following:

          [C]onservatives today face a challenge larger than 
        stopping President Clinton. We must ask ourselves what 
        the future would be like if we were allowed to define 
        it, and learn to explain that future to the American 
        people in a way that captures first their imagination 
        and then their votes.
          In that context, I am going to devote much of the 
        next four years, starting this Fall, to teaching a 
        course entitled ``Renewing American Civilization.'' I 
        am writing to you today to ask you to enroll for the 
        class, and to organize a seminar so that your friends 
        can enroll as well.

           *         *         *         *         *

          Let me be clear: This is not about politics as such. 
        But I believe the ground we will cover is essential for 
        anyone who hopes to be involved in politics over the 
        next several decades to understand. American 
        civilization is, after all, the cultural glue that hold 
        us all together. Unless we can understand it, renew it 
        and extend it into the next century, we will never 
        succeed in replacing the Welfare State with an 
        Opportunity Society.

           *         *         *         *         *

          I have devoted my life to teaching and acting out a 
        set of principles. As a fellow Republican, I know you 
        share those values. This class will help us all 
        remember what we're about and why it is so essential 
        that we prevail. Please join me this Fall for 
        ``Renewing American Civilization.''

    f. In letters sent to GOPAC, a partisan, political role for 
the course was described. Two letters sent over Mr. Gingrich's 
name included the following statements:

          i. As we discussed, it is time to lay down a 
        blueprint--which is why in part I am teaching the 
        course on Renewing American Civilization. Hopefully, it 
        will provide the structure to build an offense so that 
        Republicans can break through dramatically in 1996. We 
        have a good chance to make significant gains in 1994, 
        but only if we can reach the point where we are united 
        behind a positive message, as well as critique of the 
        Clinton program.
          ii. I am encouraged by your understanding that the 
        welfare state cannot merely be repaired, but must be 
        replaced and have made a goal of activating at least 
        200,000 citizen activists nationwide through my course, 
        Renewing American Civilization. We hope to educate 
        people with the fact that we are entering the 
        information society. In order to make sense of this 
        society, we must rebuild an opportunistic country. In 
        essence, if we can reach Americans through my course, 
        independent expenditures, GOPAC and other strategies, 
        we just might unseat the Democratic majority in the 
        House in 1994 and make government accountable again.

    Another letter sent over GOPAC's Finance Director's name 
included the following statement:

          iii. As the new finance director, I want to introduce 
        myself and to assure you of my commitment and 
        enthusiasm to the recruitment and training of 
        grassroots Republican candidates. In addition, with the 
        course Newt will be teaching in the fall--Renewing 
        American Civilization--I see a very real opportunity to 
        educate the American voting population to Republican 
        ideals, increasing our opportunity to win local, state 
        and Congressional seats.

    25. The course was taught at Kennesaw State College in the 
fall of 1993 and was taught at Reinhardt College in the winters 
of 1994 and 1995.
    26. Each year the course consisted of forty hours of 
lectures. Mr. Gingrich presented twenty hours of lecture and a 
co-professor from each of the respective colleges was 
responsible for the other twenty hours of the course.
    27. Each year the course was taught, it was also broadcast 
throughout the United States via satellite and local cable 
channels, and distributed via videotape and audiotape. The 
broadcasts and tapes only encompassed the twenty hours of 
lectures presented by Mr. Gingrich. Kennesaw State College 
Foundation and the Progress and Freedom Foundation were 
responsible for this dissemination of the course; Reinhardt 
College was not.
    28. The money raised and expended for the course was used 
primarily for the dissemination of the course as described in 
paragraph 27. In 1993 course expenditures amounted to 
approximately $300,000, in 1994 course expenditures amounted to 
approximately $450,000, and in 1995 course expenditures 
amounted to approximately $450,000.
    29. The main message of the course and the main message of 
the movement was renewing American civilization by replacing 
the welfare state with an opportunity society. ``Renewing 
American Civilization'' was also the main message of GOPAC and 
the main message of virtually every political and campaign 
speech made by Mr. Gingrich in 1993 and 1994. The course was, 
among other things, the primary means for developing and 
disseminating this message.
    30. Mr. Gingrich described the mission of the course and 
the movement as follows:

          We will develop a movement to renew American 
        Civilization using the 5 pillars of 21st Century 
        Freedom so people understand freedom and progress is 
        possible and their practical, daily lives can be far 
        better. Renewing American Civilization must be 
        communicated as an intellectual-cultural message with 
        governmental-political consequences. As people become 
        convinced American civilization must and can be renewed 
        and the 5 pillars will improve their lives we will 
        encourage them and help them to network together and 
        independently, autonomously initiate improvements 
        wherever they want. However, we will focus on economic 
        growth, health, and saving the inner city as the first 
        three key areas to improve. Our emphasis will be on 
        reshaping law and government to facilitate improvement 
        in all of american [sic] society. We will emphasize 
        elections, candidates and politics as vehicles for 
        change and the news media as a primary vehicle for 
        communications. To the degree Democrats agree with our 
        goals we will work with them but our emphasis is on the 
        Republican Party as the primary vehicle for renewing 
        American civilization.

    31. In a memorandum addressed to ``Various Gingrich 
Staffs,'' which included GOPAC employees and consultants as 
well as people involved in Mr. Gingrich's campaign, Mr. 
Gingrich described the broad application of the Renewing 
American Civilization message as follows:

          I believe the vision of renewing American 
        civilization will allow us to orient and focus our 
        activities for a long time to come.
          At every level from the national focus of the Whip 
        office to the 6th district of Georgia focus of the 
        Congressional office to the national political 
        education efforts of GOPAC and the re-election efforts 
        of FONG we should be able to use the ideas, language 
        and concepts of renewing American civilization.

    He then descried the role of the course in this process.

          The course is only one in a series of strategies 
        designed to implement a strategy of renewing American 
        civilization.

    Another of Mr. Gingrich's strategies involving the course 
was:

          Getting Republican activists committed to renewing 
        American civilization, to setting up workshops built 
        around the course, and to opening the party up to every 
        citizen who wants to renew American civilization.

    32. In writing about the goals of the movement, Mr. 
Gingrich wrote:

          Our overall goal is to develop a blueprint for 
        renewing America by replacing the welfare state, 
        recruit, discover, arouse and network together 200,000 
        activists including candidates for elected office at 
        all levels, and arouse enough volunteers and 
        contributors to win a sweeping victory in 1996 and then 
        actually implement our victory in the first three 
        months of 1997.

    The ``sweeping victory'' referred to in this document is by 
Republicans. Mr. Gingrich went on to describe the specific 
goals within the overall goal, all of which were to be 
accomplished through the course.

          1. By April 1996 have a thorough, practical blueprint 
        for replacing the welfare state that can be understood 
        and supported by voters and activists.
          We will teach a course on Renewing American 
        Civilization on ten Saturday mornings this fall and 
        make it available by satellite, by audio and video tape 
        and by computer to interested activists across the 
        country. A month will then be spent redesigning the 
        course based on feedback and better ideas. Then the 
        course will be retaught in Winter Quarter 1994. It will 
        then be rethought and redesigned for nine months of 
        critical re-evaluation based on active working groups 
        actually apply ideas across the country the course will 
        be taught for one final time in Winter Quarter 1996.
          2. Have created a movement and momentum which require 
        the national press corps to actually study the material 
        in order to report the phenomenon thus infecting them 
        with new ideas, new language and new perspectives.
          3. Have a cadre of at least 200,000 people committed 
        to the general ideas so they are creating an echo 
        effect on talk radio and in letters to the editor and 
        most of our candidates and campaigns reflect the 
        concepts of renewing America.
          Replacing the welfare state will require about 
        200,000 activists (willing to learn now [sic] to 
        replace the welfare state, to run for office and to 
        actually replace the welfare state once in office) and 
        about six million supporters (willing to write checks, 
        put up yard signs, or do a half day's volunteer work).

    33. In a speech at a GOPAC training seminar for candidates 
at the Virginia Republican Convention in June 1993, Mr. 
Gingrich described a partisan goal of the movement.

          We can't do much about the Democrats. They went too 
        far to the left; they're still too far to the left; 
        that's their problem. But we have a huge burden so that 
        everyone who wants to replace the welfare state and 
        everyone who wants to renew American civilization has a 
        home, and it's called being a Republican. We have to 
        really learn how to bring them all in.

    He then discussed the role of the course in the movement 
and described how the ``five pillars'' of the Renewing American 
Civilization course could be applied to political campaigns.

          Now, let me start just as a quick overview. First, as 
        I said earlier, American civilization is a 
        civilization. Very important. It is impossible for 
        anyone on the left to debate you on that topic.

           *         *         *         *         *

          But the reason I say that is if you go out and you 
        campaign on behalf of American civilization and you 
        want to renew American civilization, it is 
        linguistically impossible to oppose you. And how is 
        your opponent going to get up and say I'm against 
        American civilization?

    Near the end of the speech he stated:

          I believe, if you take the five pillars I've 
        described, if you find three areas that will really fit 
        you, and are really in a position to help you, that you 
        are then going to have a language to explain how to 
        replace the welfare state, and three topics that are 
        going to arouse volunteers and arouse contributions and 
        help people say, Yes, I want this done.

    34. In a number of other instances, Mr. Gingrich applied 
the ideas of the course to partisan, political purposes. 
Examples include:
    a. In a document entitled ``House Republican Focus for 
1994'' Mr. Gingrich wrote:

          The Republican party can offer a better life for 
        virtually everyone if it applies the principles of 
        American civilization to create a more flexible, 
        decentralized market oriented system that uses the 
        Third Wave of change and accepts the disciplines of the 
        world market.
          These ideas are outlined in a 20 hour intellectual 
        framework ``Renewing American Civilization'' available 
        on National Empowerment Television every Wednesday from 
        1 pm to 3 pm and available on audio tape and video tape 
        from 1-800-TO-RENEW.

    b. In a document Mr. Gingrich said was a briefing paper for 
House Republican Members, he described the movement to renew 
American civilization. Renewing American civilization required 
the replacement of the welfare state with an opportunity 
society. He wrote that doing this will require at least 200,000 
``partners for progress'' willing to study the principles of 
American civilization, work on campaigns, run for office, and 
engage in other activities to further the movement. Under the 
heading ``LEARNING THE PRINCIPLES OF AMERICAN CIVILIZATION'' 
Mr. Gingrich wrote, ``The course, `Renewing American 
Civilization', is designed as a 20 hours introduction to the 
principles necessary to replace the welfare state with an 
opportunity society.'' On the next page entitled ``Connecting 
the `Partners' to the `Principles,' '' Mr. Gingrich described 
where the course was being taught, including the fact that it 
was being broadcast for fifty weeks during 1994 on National 
Empowerment Television. He then wrote that, ``Our goal is to 
get every potential partner for progress to take the course and 
study the principles.''
    c. In a document entitled ``The 14 Steps Renewing American 
Civilization by replacing the welfare state with an opportunity 
society,'' Mr. Gingrich described a relationship between the 
course and the movement. He began with the proposition thatthe 
welfare state had failed and needed to be replaced. In describing the 
replacement, Mr. Gingrich wrote that it:

        must be an opportunity society based on the principles 
        of American civilization. . . .
          These principles each receive two hours of 
        introduction in ``Renewing American Civilization'', a 
        course taught at Reinhardt College. The course is 
        available on National Empowerment Television from 1-3 
        P.M. every Wednesday and by videotape or audiotape by 
        calling 1-800-TO-RENEW.

    Mr. Gingrich then wrote:

          The Democrats are the party of the welfare state. Too 
        many years in office have led to arrogance of power and 
        to continuing violations of the basic values of self-
        government.
          Only by voting Republican can the welfare state be 
        replaced and an opportunity society be created.

    35. From in or about June 1993 through in or about December 
1993, the course was funded and operated with tax-exempt funds 
under the auspices of the Kennesaw State College Foundation, an 
organization exempt from taxation under section 501(c)(3) of 
the Internal Revenue Code. From in or about December 1993 
through in or about July 1995, the course was funded and 
operated under the auspices of the Progress and Freedom 
Foundation, an organization exempt from taxation under section 
501(c)(3) of the Internal Revenue Code. In 1994 and 1995 the 
course was taught at Reinhardt College, an organization exempt 
from taxation under section 501(c)(3) of the Internal Revenue 
Code.
    36. Under the Internal Revenue Code, an organization which 
is exempt from taxation under section 501(c)(3) must be 
operated exclusively for exempt purposes. The presence of a 
single non-exempt purpose, if more than insubstantial in 
nature, will destroy the exemption regardless of the number or 
importance of truly exempt purposes. Conferring a benefit on 
private interests is a non-exempt purpose. Under the Internal 
Revenue Code, an organization which is exempt from taxation 
under section 501(c)(3) is also prohibited from any 
participation in a political campaign or from providing any 
support to a political action committee. These prohibitions 
reflect Congressional concerns that tax-payer funds not be used 
to subsidize political activity.
    37. Although Mr. Gingrich consulted with the House 
Committee on Standards of Official Conduct (``Committee'') 
prior to teaching the course, he did not seek specific legal 
advice concerning the application of section 501(c)(3) of the 
Internal Revenue Code in regard to the facts described in 
paragraphs 17 through 35 from an appropriate source and did not 
take affirmative steps to ensure that such legal advice was 
obtained by others from an appropriate source.
    38. During the Preliminary Inquiry the Subcommittee 
consulted with an expert in the law of tax-exempt 
organizations. Mr. Gingrich's activities on behalf of the 
Kennesaw State College Foundation, the Progress and Freedom 
Foundation, and Reinhardt College in regard to the course 
entitled ``Renewing American Civilization'' and the activities 
of others on behalf of those organizations with Mr. Gingrich's 
knowledge and approval were reviewed by the expert. The expert 
concluded that those activities violated Kennesaw State College 
Foundation's status under section 501(c)(3) of the Internal 
Revenue Code, the Progress and Freedom Foundation's status 
under section 501(c)(3) of the Internal Revenue Code, and 
Reinhardt College's status under section 501(c)(3) of the 
Internal Revenue Code in that, among other things, those 
activities were intended to confer more than insubstantial 
benefits on Mr. Gingrich, GOPAC, and other Republic entities 
and candidates.
    39. The Subcommittee also heard from tax counsel retained 
by Mr. Gingrich for the purposes of this Preliminary Inquiry. 
According to Mr. Gingrich's tax counsel, this type of activity 
would not violate the status of the Kennesaw State College 
Foundation, the Progress and Freedom Foundation, or Reinhardt 
College under section 501(c)(3) of the Internal Revenue Code.
    40. Both the Subcommittee's expert and Mr. Gingrich's tax 
counsel agree that had they been consulted about this type of 
activity prior to its taking place, they would have advised 
that it not be conducted under the auspices of an organization 
exempt from taxation under section 501(c)(3) of the Internal 
Revenue Code.
    41. If the legal advice described in paragraph 40 had been 
sought and followed, most, if not all, of the tax-deductible 
charitable contributions would not have been used for the 
activities described in paragraphs 17 through 35. As a result, 
the public controversy involving the legality of a Member's 
involvement with organizations exempt from taxation under 
section 501(c)(3) of the Internal Revenue Code concerning 
activities described in paragraphs 17 through 35 would not have 
occurred.
    42. On or about September 7, 1994, a complaint was filed 
against Mr. Gingrich with the Committee. The complaint centered 
on the course entitle ``Renewing American Civilization.'' Among 
other things, it alleged that Mr. Gingrich had used his 
congressional staff to work on the course and that he had 
misused organizations that were exempt from taxation under 
section 501(c)(3) of the Internal Revenue Code because the 
course was a partisan, political project, with significant 
involvement by GOPAC, and was not a permissible activity for a 
section 501(c)(3) organization.
    43. On or about October 4, 1994, Mr. Gingrich wrote the 
Committee in response to the complaint and primarily addressed 
the issues concerning the use of congressional staff for the 
course. In doing so he stated:

          I would like to make it abundantly clear that those 
        who were paid for course preparation were paid by 
        either the Kennesaw State Foundation, [sic] the 
        Progress and Freedom Foundation or GOPAC. . . . Those 
        persons paid by one of the aforementioned groups 
        include: Dr. Jeffrey Eisenach, Mike DuGally, Jana 
        Rogers, Patty Stechschultez [sic], Pamla Prochnow, Dr. 
        Steve Hanser, Joe Gaylord, and Nancy Desmond.

    44. On or about December 31, 1994, the Committee sent Mr. 
Gingrich a letter asking for additional information concerning 
allegations of misuse of tax-exempt organizations in regard to 
the course. The Committee also asked for information relating 
to the involvement of GOPAC in various aspects of the course.
    45. Whether any aspects of the course were political or 
partisan in their motivation, application, or design was 
material to the Committee's deliberations in regard to the 
complaint. Whether GOPAC had any involvement with the course 
was also material to the Committee's deliberations in regard to 
the complaint.
    46. In November 1994, Mr. Gingrich retained counsel to 
represent him in connection with the Committee's investigation. 
According to Mr. Gingrich, he then relied on counsel to respond 
to and otherwise address issues and concerns raised by the 
Committee. Mr. Gingrich, however, remained ultimately 
responsible for fully, fairly, and accurately responding to the 
Committee.
    47. Between on or about December 8, 1994, and on or about 
December 15, 1994, Mr. Gingrich delivered or caused to be 
delivered to the Committee a letter dated December 8, 1994, 
signed by Mr. Gingrich in response to the Committee's letter 
described in paragraph 44. According to testimony before the 
Subcommittee, the six-page December 8, 1994 letter was prepared 
by Mr. Gingrich's attorney and submitted to Mr. Gingrich for 
review during the transition following the 1994 election. In 
the December 8, 1994 letter Mr. Gingrich made the following 
statements:

          [The course] was, by design and application, 
        completely nonpartisan. It was and remains about ideas, 
        not politics. (Page 2.)
          The idea to teach ``Renewing American Civilization'' 
        arose wholly independent of GOPAC, because the course, 
        unlike the committee, is non-partisan and apolitical. 
        My motivation for teaching these ideas arose not as a 
        politician, but rather as a former educator and 
        concerned American citizen. . . . (Page 4.)
          The fact is, ``Renewing American Civilization'' and 
        GOPAC have never had any official relationship. (Page 
        4.)
          GOPAC . . . is a political organization whose 
        interests are not directly advanced by this non-
        partisan educational endeavor. (Page 5.)
          As a political committee, GOPAC never participated in 
        the administration of ``Renewing American 
        Civilization.'' (Page 4.)
          Where employees of GOPAC simultaneously assisted the 
        project, they did so as private, civic-minded 
        individuals contributing time and effort to a 501(c)(3) 
        organization. (Page 4.)
          Anticipating media or political attempts to line the 
        Course to [GOPAC], ``Renewing American Civilization'' 
        organizers went out of their way to avoid even the 
        appearances of improper association with GOPAC. Before 
        we had raised the first dollar or sent out the first 
        brochure, Course Project Director Jeff Eisenach 
        resigned has position at GOPAC. (Page 4.)

    48. On or about January 26, 1995, an amended complaint 
against Mr. Gingrich was filed with the Committee. The amended 
complaint encompassed the same allegations as the complaint 
described in paragraph 42, as well as additional allegations.
    49. On or about March 27, 1995, Mr. Gingrich's attorney 
prepared, signed, and caused a fifty-two page letter dated 
March 27, 1995, with 31 exhibits to be delivered to the 
Committee responding to the amended complaint. The March 27, 
1995 letter was submitted to Mr. Gingrich shortly before it was 
filed with the Committee.
    50. Prior to the letter from Mr. Gingrich's attorney being 
delivered to the Committee, Mr. Gingrich reviewed it and 
approved its submission to the Committee. The ultimate 
responsibility for the accuracy of information submitted to the 
Committee remained with Mr. Gingrich.
    51. The March 27, 1995 letter contains the full statements:

          As Ex. 13 demonstrates, the course solicitation . . . 
        materials are completely non-partisan. (Page 19, 
        footnote 1.)
          GOPAC did not become involved in the Speaker's 
        academic affairs because it is a political organization 
        whose interests are not advanced by this non-partisan 
        educational endeavor. (Page 35.)
          The Renewing American Civilization course and GOPAC 
        have never had any relationship, official or otherwise. 
        (Page 35.)
          As noted previously, GOPAC has had absolutely no role 
        in funding, promoting, or administering Renewing 
        American Civilization. (Page 34-35.)
          GOPAC has not been involved in course fundraising and 
        has never contributed any money or services to the 
        course. (Page 28.)
          Anticipating media or political attempts to link the 
        course to GOPAC, course organizers went out of their 
        way to avoid even the appearance of associating with 
        GOPAC. Prior to becoming Course Project Director, 
        Jeffrey Eisenach resigned his position at GOPAC and has 
        not returned. (Page 36.)

    52. Mr. Gingrich engaged in conduct that did not reflect 
creditably on the House of Representatives in that: regardless 
of the resolution of whether the activities described in 
paragraphs 2 through 41 constitute a violation of section 
501(c)(3) of the Internal Revenue Code, by failing to seek and 
follow the legal advice described in paragraphs 15 and 40, Mr. 
Gingrich failed to take appropriate steps to ensure that the 
activities described in paragraphs 2 through 41 were in 
accordance with section 501(c)(3) of the Internal Revenue Code; 
and on or about March 27, 1995, and on or about December 8, 
1994, information was transmitted to the Committee by and on 
behalf of Mr. Gingrich that was material to matters under 
consideration by the Committee, which information, as Mr. 
Gingrich should have known, was inaccurate, incomplete, and 
unreliable.
    53. The conduct described in this Statement of Alleged 
Violation constitutes a violation of Rule 43(1) of the Rules of 
the United States House of Representatives.

                               APPENDIX B

                              ----------                              


 H. Res. 168--In the House of Representatives, U.S., September 18, 1997

    Resolved,

SECTION 1. USE OF NON-COMMITTEE MEMBERS.

    (a) Rules Amendment.--Clause 6(a) of rule X of the Rules of 
the House of Representatives is amended by adding at the end 
the following new subparagraph:
          ``(3)(A) At the beginning of each Congress--
                  ``(i) the Speaker (or his designee) shall 
                designate a list of 10 Members from the 
                majority party; and
                  ``(ii) the minority leader (or his designee) 
                shall designate a list of 10 Members from the 
                minority party;
        who are not members of the Committee on Standards of 
        Official Conduct and who may be assigned to serve as a 
        member of an investigative subcommittee of that 
        committee during that Congress. Members so chosen shall 
        be announced to the House.
          ``(B) Whenever the chairman and ranking minority 
        member of the Committee on Standards of Official 
        Conduct jointly determine that Members designated under 
        subdivision (A) should be assigned to serve on an 
        investigative subcommittee of that committee, they 
        shall each select the same number of Members of his 
        respective party from the list to serve on that 
        subcommittee.''.
    (b) Conforming Rules Amendment.--Clause 6(b)(2)(A) of rule 
X of the Rules of the House of Representatives is amended by 
inserting after the first sentence the following new sentence: 
``Service on an investigative subcommittee of the Committee on 
Standards of Official Conduct pursuant to paragraph (a)(3) 
shall not be counted against the limitation on subcommittee 
service.''.

SEC. 2. DURATION OF SERVICE ON THE COMMITTEE ON STANDARDS OF OFFICIAL 
                    CONDUCT.

    The second sentence of clause 6(a)(2) of rule X of the 
Rules of the House of Representatives is amended to read as 
follows: ``No Member shall serve as a member of the Committee 
on Standards of Official Conduct for more than two Congresses 
in any period of three successive Congresses (disregarding for 
this purpose any service performed as a member of such 
committee for less than a full session in any Congress), except 
that a Member having served on the committee for two Congresses 
shall be eligible for election to the committee as chairman or 
ranking minority member for one additional Congress. Not less 
than two Members from each party shall rotate off the committee 
at the end of each Congress.''.

SEC. 3. COMMITTEE AGENDAS.

    The Committee on Standards of Official Conduct shall adopt 
rules providing that the chairman shall establish the agenda 
for meetings of the committee, but shall not preclude the 
ranking minority member from placing any item on the agenda.

SEC. 4. COMMITTEE STAFF.

    (a) Committee Rules.--The Committee on Standards of 
Official Conduct shall adopt rules providing that:
          (1)(A) The staff is to be assembled and retained as a 
        professional, nonpartisan staff.
          (B) Each member of the staff shall be professional 
        and demonstrably qualified for the position for which 
        he is hired.
          (C) The staff as a whole and each member of the staff 
        shall perform all official duties in a nonpartisan 
        manner.
          (D) No member of the staff shall engage in any 
        partisan political activity directly affecting any 
        congressional or presidential election.
          (E) No member of the staff or outside counsel may 
        accept public speaking engagements or write for 
        publication on any subject that is in any way related 
        to his or her employment or duties with the committee 
        without specific prior approval from the chairman and 
        ranking minority member.
          (F) No member of the staff or outside counsel may 
        make public, unless approved by an affirmative vote of 
        a majority of the members of the committee, any 
        information, document, or other material that is 
        confidential, derived from executive session, or 
        classified and that is obtained during the course of 
        employment with the committee.
          (2)(A) All staff members shall be appointed by an 
        affirmative vote of a majority of the members of the 
        committee. Such vote shall occur at the first meeting 
        of the membership of the committee during each Congress 
        and as necessary during the Congress.
          (B) Subject to the approval of Committee on House 
        Oversight, the committee may retain counsel not 
        employed by the House of Representatives whenever the 
        committee determines, by an affirmative vote of a 
        majority of the members of the committee, that the 
        retention of outside counsel is necessary and 
        appropriate.
          (C) If the committee determines that it is necessary 
        to retain staff members for the purpose of a particular 
        investigation or other proceeding, then such staff 
        shall be retained only for the duration of that 
        particular investigation or proceeding.
          (3) Outside counsel may be dismissed prior to the end 
        of a contract between the committee and such counsel 
        only by an affirmative vote of a majority of the 
        members of the committee.
          (4) Only subparagraphs (C), (E), and (F) of paragraph 
        (1) shall apply to shared staff.
    (b) Additional Committee Staff.--In addition to any other 
staff provided for by law, rule, or other authority, with 
respect to the Committee on Standards of Official Conduct, the 
chairman and ranking minority member each may appoint one 
individual as a shared staff member from his or her personal 
staff to perform service for the committee. Such shared staff 
may assist the chairman or ranking minority member on any 
subcommittee on which he serves.

SEC. 5. MEETINGS AND HEARINGS.

    (a) House Rules.--(1) Clause 4(e)(3) of rule X of the Rules 
of the House of Representatives is amended to read as follows:
    ``(3)(A) Notwithstanding clause 2(g)(1) of rule XI, each 
meeting of the Committee on Standards of Official Conduct or 
any subcommittee thereof shall occur in executive session, 
unless the committee or subcommittee by an affirmative vote of 
a majority of its members opens the meeting to the public.
    ``(B) Notwithstanding clause 2(g)(2) of rule XI, hearings 
of an adjudicatory subcommittee or sanction hearings held by 
the Committee on Standards of Official Conduct shall be held in 
open session unless the subcommittee or committee, in open 
session by an affirmative vote of a majority of its members, 
closes all or part of the remainder of the hearing on that day 
to the public.''.
    (2)(A) The first sentence of clause 2(g)(1) of rule XI of 
the Rules of the House of Representatives is amended by 
inserting ``(except the Committee on Standards of Official 
Conduct)'' after ``thereof''.
    (B) The first sentence of clause 2(g)(2) of rule XI of the 
Rules of the House of Representatives is amended by inserting 
``(except the Committee on Standards of Official Conduct)'' 
after ``thereof''.
    (b) Committee Rules.--The Committee on Standards of 
Official Conduct shall adopt rules providing that----
          (1) all meetings of the committee or any subcommittee 
        thereof shall occur in executive session unless the 
        committee or subcommittee by an affirmative vote of a 
        majority of its members opens the meeting or hearing to 
        the public; and
          (2) any hearing held by an adjudicatory subcommittee 
        or any sanction hearing held by the committee shall be 
        open to the public unless the committee or subcommittee 
        by an affirmative vote of a majority of its members 
        closes the hearing to the public.

SEC. 6. CONFIDENTIALITY OATHS.

    Clause 4(e) of rule X of the Rules of the House of 
Representatives is amended by adding at the end the following:
    ``(4) Before any member, officer, or employee of the 
Committee on Standards of Official Conduct, including members 
of any subcommittee of the committee selected pursuant to 
clause 6(a)(3) and shared staff, may have access to information 
that is confidential under the rules of the committee, the 
following oath (or affirmation) shall be executed:
          ``I do solemnly swear (or affirm) that I will not 
        disclose, to any person or entity outside the Committee 
        on Standards of Official Conduct, any information 
        received in the course of my service with the 
        committee, except as authorized by the committee or in 
        accordance with its rules.''
Copies of the executed oath shall be retained by the Clerk of 
the House as part of the records of the House. This 
subparagraph establishes a standard of conduct within the 
meaning of subparagraph (1)(B). Breaches of confidentiality 
shall be investigated by the Committee on Standards of Official 
Conduct and appropriate action shall be taken.'.

SEC. 7. PUBLIC DISCLOSURE.

    The Committee on Standards of Official Conduct shall adopt 
rules providing that, unless otherwise determined by a vote of 
the committee, only the chairman or ranking minority member, 
after consultation with each other, may make public statements 
regarding matters before the committee or any subcommittee 
thereof.

SEC. 8. CONFIDENTIALITY OF COMMITTEE VOTES.

    (a) Records.--The last sentence in clause 2(e)(1) of rule 
XI of the Rules of the House of Representatives is amended by 
adding before the period at the end the following: ``, except 
that in the case of rollcall votes in the Committee on 
Standards of Official Conduct taken in executive session, the 
result of any such vote shall not be made available for 
inspection by the public without an affirmative vote of a 
majority of the members of the committee''.
    (b) Reports.--Clause 2(l)(2)(B) of rule XI of the Rules of 
the House of Representatives is amended by adding at the end 
the following new sentence: ``The preceding sentence shall not 
apply to votes taken in executive session by the Committee on 
Standards of Official Conduct.''.

SEC. 9. FILINGS BY NON-MEMBERS OF INFORMATION OFFERED AS A COMPLAINT.

    (a) Filings Sponsored by Members.--Clause 4(e)(2)(B) of 
rule X of the Rules of the House of Representatives is amended 
by striking ``or submitted to'', by striking ``a complaint'' 
and inserting ``information offered as a complaint'', and by 
amending clause (ii) to read as follows:
          ``(ii) upon receipt of information offered as a 
        complaint, in writing and under oath, from an 
        individual not a Member of the House provided that a 
        Member of the House certifies in writing to the 
        committee that he or she believes the information is 
        submitted in good faith and warrants the review and 
        consideration of the committee.''

SEC. 10. REQUIREMENTS TO CONSTITUTE A COMPLAINT.

    The Committee on Standards of Official Conduct shall amend 
its rules regarding complaints to provide that whenever 
information offered as a complaint is submitted to the 
committee, the chairman and ranking minority member shall have 
14 calendar days or 5 legislative days, whichever occurs first, 
to determine whether the information meets the requirements of 
the committee's rules for what constitutes a complaint.

SEC. 11. DUTIES OF CHAIRMAN AND RANKING MINORITY MEMBER REGARDING 
                    PROPERLY FILED COMPLAINTS.

    (a) Committee Rules.--The Committee on Standards of 
Official Conduct shall adopt rules providing that whenever the 
chairman and ranking minority member jointly determine that 
information submitted to the committee meets the requirements 
of the committee's rules for what constitutes a complaint, they 
shall have 45 calendar days or 5 legislative days, whichever is 
later, after the date that the chairman and ranking minority 
members determine that information filed meets the requirements 
of the committee's rules for whatconstitutes a complaint, 
unless the committee by an affirmative vote of a majority of its 
members votes otherwise, to--
          (1) recommend to the committee that it dispose of the 
        complaint, or any portion thereof, in any manner that 
        does not require action by the House, which may include 
        dismissal of the complaint or resolution of the 
        complaint by a letter to the Member, officer, or 
        employee of the House against whom the complaint is 
        made;
          (2) establish an investigative subcommittee; or
          (3) request that the committee extend the applicable 
        45-calendar day or 5-legislative day period by one 
        additional 45-calendar day period when they determine 
        more time is necessary in order to make a 
        recommendation under paragraph (1).
    (b) House Rules.--Clause 4(e)(2)(A) of rule X of the Rules 
of the House of Representatives is amended by inserting ``(i)'' 
after ``(A)'', by striking ``and no'' and inserting ``and, 
except as provided by subdivision (ii), no'', and by adding at 
the end the following:
          ``(ii)(I) Upon the receipt of information offered as 
        a complaint that is in compliance with this rule and 
        the committee rules, the chairman and ranking minority 
        member may jointly appoint members to serve as an 
        investigative subcommittee.
          ``(II) The chairman and ranking minority member of 
        the committee may jointly gather additional information 
        concerning alleged conduct which is the basis of a 
        complaint or of information offered as a complaint 
        until they have established an investigative 
        subcommittee or the chairman or ranking minority member 
        has placed on the committee agenda the issue of whether 
        to establish an investigative subcommittee.''.
    (c) Disposition of Properly Filed Complaints by Chairman 
and Ranking Minority Member if No Action Taken by Them Within 
Prescribed Time Limit.--The Committee on Standards of Official 
Conduct shall adopt rules providing that if the chairman and 
ranking minority member jointly determine that information 
submitted to the committee meets the requirements of the 
committee rules for what constitutes a complaint, and the 
complaint is not disposed of within the applicable time periods 
under subsection (a), then they shall establish an 
investigative subcommittee and forward the complaint, or any 
portion thereof, to that subcommittee for its consideration. 
However, if, at any time during those periods, either the 
chairman or ranking minority member places on the agenda the 
issue of whether to establish an investigative subcommittee, 
then an investigative subcommittee may be established only by 
an affirmative vote of a majority of the members of the 
committee.
    (d) House Rules.--Clause 4(e)(2)(B) of rule X of the Rules 
of the House of Representatives is amended by adding at the end 
the following new sentences: ``If a complaint is not disposed 
of within the applicable time periods set forth in the rules of 
the Committee on Standards of Official Conduct, then the 
chairman and ranking minority member shall jointly establish an 
investigative subcommittee and forward the complaint, or any 
portion thereof, to that subcommittee for its consideration. 
However, if, at any time during those periods, either the 
chairman or ranking minority member places on the agenda the 
issue of whether to establish an investigative subcommittee, 
then an investigative subcommittee may be established only by 
an affirmative vote of a majority of the members of the 
committee.''.

SEC. 12. DUTIES OF CHAIRMAN AND RANKING MINORITY MEMBER REGARDING 
                    INFORMATION NOT CONSTITUTING A COMPLAINT.

    The Committee on Standards of Official Conduct shall adopt 
rules providing that whenever the chairman and ranking minority 
member jointly determine that information submitted to the 
committee does not meet the requirements for what constitutes a 
compliant set forth in the committee rules, they may--
          (1) return the information to the complainant with a 
        statment that it fails to meet the requirements forwhat 
constitutes a complaint set forth in the committee rules; or
          (2) recommend to the committee that it authorize the 
        establishment of an investigative subcommittee.

SEC. 13. INVESTIGATIVE AND ADJUDICATORY SUBCOMMITTEES.

    The Committee on Standards of Official Conduct shall adopt 
rules providing that--
          (1)(A) investigative subcommittees shall be comprised 
        of 4 Members (with equal representation from the 
        majority and minority parties) whenever such 
        subcommittee is established pursuant to the rules of 
        the committee; and
          (B) adjudicatory subcommittees shall be comprised of 
        the members of the committee who did not serve on the 
        investigative subcommittee (with equal representation 
        from the majority and minority parties) whenever such 
        subcommittee is established pursuant to the rules of 
        the committee;
          (2) at the time of appointment, the chairman shall 
        designate one member of the subcommittee to serve as 
        chairman and the ranking minority member shall 
        designate one member of the subcommittee to serve as 
        the ranking minority member of the investigative 
        subcommittee or adjudicatory subcommittee; and
          (3) the chairman and ranking minority member of the 
        committee may serve as members of an investigative 
        subcommittee, but may not serve as non-voting, ex 
        officio members.

SEC. 14. STANDARD OF PROOF FOR ADOPTION OF STATEMENT OF ALLEGED 
                    VIOLATION.

    The Committee on Standards of Official Conduct shall amend 
its rules to provide that an investigative subcommittee may 
adopt a statement of alleged violation only if it determines by 
an affirmative vote of a majority of the members of the 
committee that there is substantial reason to believe that a 
violation of the Code of Official Conduct, or of a law, rule, 
regulation, or other standard of conduct applicable to the 
performance of official duties or the discharge of official 
responsibilities by a Member, officer, or employee of the House 
of Representatives has occurred.

SEC. 15. SUBCOMMITTEE POWERS.

    (a) Subpoena Power--
          (1) House rules.--Clause 2(m)(2)(A) of rule XI of the 
        Rules of the House of Representatives is amended in the 
        first sentence by inserting before the period the 
        following: ``, except in the case of a subcommittee of 
        the Committee on Standards of Official Conduct, a 
        subpoena may be authorized and issued only when 
        authorized by an affirmative vote of a majority of its 
        members''.
          (2) Committee rules.--The Committee on Standards of 
        Official Conduct shall adopt rules providing that an 
        investigative subcommittee or an adjudicatory 
        subcommittee may authorize and issue subpoenas only 
        when authorized by an affirmative vote of a majority of 
        the members of the subcommittee.
    (b) Expansion of Scope of Investigations.--The Committee on 
Standards of Official Conduct shall adopt rules providing that 
an investigative subcommittee may, upon an affirmative vote of 
a majority of its members, expand the scope of its 
investigation when approved by an affirmative vote of a 
majority of the members of the committee.
    (c) Amendments of Statements of Alleged Violation.--The 
Committee on Standards of Official Conduct shall adopt rules to 
provide that----
          (1) an investigative subcommittee may, upon an 
        affirmative vote of a majority of its members, amend 
        its statement of alleged violation anytime before the 
        statement of alleged violation is transmitted to the 
        committee; and
          (2) if an investigative subcommittee amends its 
        statement of alleged violation, the respondent shall be 
        notified in writing and shall have 30 calendar days 
        from the date of that notification to file an answer to 
        the amended statement of alleged violation.

SEC. 16. DUE PROCESS RIGHTS OF RESPONDENTS.

    The Committee on Standards of Official Conduct shall amend 
its rules to provide that--
          (1) not less than 10 calendar days before a scheduled 
        vote by an investigative subcommittee on a statement of 
        alleged violation, the subcommittee shall provide the 
        respondent with a copy of the statement of alleged 
        violation it intends to adopt together with all 
        evidence it intends to use to prove those charges which 
        it intends to adopt, including documentary evidence, 
        witness testimony, memoranda of witness interviews, and 
        physical evidence, unless the subcommittee by an 
        affirmative vote of a majority of its members decides 
        to withhold certain evidence in order to protect a 
        witness, but if such evidence is withheld, the 
        subcommittee shall inform the respondent that evidence 
        is being withheld and of the count to which such 
        evidence relates;
          (2) neither the respondent nor his counsel shall, 
        directly or indirectly, contact the subcommittee or any 
        member thereof during the period of time set forth in 
        paragraph (1) except for the sole purpose of settlement 
        discussions where counsels for the respondent and the 
        subcommittee are present;
          (3) if, at any time after the issuance of a statement 
        of alleged violation, the committee or any subcommittee 
        thereof determines that it intends to use evidence not 
        provided to a respondent under paragraph (1) to prove 
        the charges contained in the statement of alleged 
        violation (or any amendment thereof), such evidence 
        shall be made immediately available to the respondent, 
        and it may be used in any further proceeding under the 
        committee's rules;
          (4) evidence provided pursuant to paragraph (1) or 
        (3) shall be made available to the respondent and his 
        or her counsel only after each agrees, in writing, that 
        no document, information, or other materials obtained 
        pursuant to that paragraph shall be made public until--
                  (A) such time as a statement of alleged 
                violation is made public by the committee if 
                the respondent has waived the adjudicatory 
                hearing; or
                  (B) the commencement of an adjudicatory 
                hearing if the respondent has not waived an 
                adjudicatory hearing;
        but the failure of respondent and his counsel to so 
        agree in writing, and therefore not receive the 
        evidence, shall not preclude the issuance of a 
        statement of alleged violation at the end of the period 
        referred to in paragraph (1);
          (5) a respondent shall receive written notice 
        whenever--
                  (A) the chairman and ranking minority member 
                determine that information the committee has 
                received constitutes a complaint;
                  (B) a complaint or allegation is transmitted 
                to an investigative subcommittee;
                  (C) that subcommittee votes to authorize its 
                first subpoena or to take testimony under oath, 
                whichever occurs first; and
                  (D) an investigative subcommittee votes to 
                expand the scope of its investigation;
          (6) whenever an investigative subcommittee adopts a 
        statement of alleged violation and a respondent enters 
        into an agreement with that subcommittee to settle a 
        complaint on which that statement is based, that 
        agreement, unless the respondent requests otherwise, 
        shall be in writing and signed by the respondent and 
        respondent's counsel, the chairman and ranking minority 
        member of the subcommittee, and the outside counsel, if 
        any;
          (7) statements or information derived solely from a 
        respondent or his counsel during any settlement 
        discussions between the committee or a subcommittee 
        thereof and the respondent shall not be included in any 
        report of the subcommittee or the committee or 
        otherwise publicly disclosed without the consent of the 
        respondent; and
          (8) whenever a motion to establish an investigative 
        subcommittee does not prevail, the committee shall 
        promptly send a letter to the respondent informing him 
        of such vote.

SEC. 17. COMMITTEE REPORTING REQUIREMENTS.

    The Committee on Standards of Official Conduct shall amend 
its rules to provide that--
          (1) whenever an investigative subcommittee does not 
        adopt a statement of alleged violation and transmits a 
        report to that effect to the committee, the committee 
        may by an affirmative vote of a majority of its members 
        transmit such report to the House of Representatives; 
        and
          (2) whenever an investigative subcommittee adopts a 
        statement of alleged violation, the respondent admits 
        to the violations set forth in such statement, the 
        respondent waives his or her right to an adjudicatory 
        hearing, and the respondent's waiver is approved by the 
        committee--
                  (A) the subcommittee shall prepare a report 
                for transmittal to the committee, a final draft 
                of which shall be provided to the respondent 
                not less than 15 calendar days before the 
                subcommittee votes on whether to adopt the 
                report;
                  (B) the respondent may submit views in 
                writing regarding the final draft to the 
                subcommittee within 7 calendar days of receipt 
                of that draft;
                  (C) the subcommittee shall transmit a report 
                to the committee regarding the statement of 
                alleged violation together with any views 
                submitted by the respondent pursuant to 
                subparagraph (B), and the committee shall make 
                the report together with the respondent's views 
                available to the public before the commencement 
                of any sanction hearing; and
                  (D) the committee shall by an affirmative 
                vote of a majority of its members issue a 
                report and transmit such report to the House of 
                Representatives, together with the respondent's 
                views previously submitted pursuant to 
                subparagraph (B) and any additional views 
                respondent may submit for attachment to the 
                final report; and
          (3) members of the committee shall have not less than 
        72 hours to review any report transmitted to the 
        committee by an investigative subcommittee before both 
        the commencement of a sanction hearing and the 
        committee vote on whether to adopt the report.

SEC. 18. REFERRALS TO FEDERAL OR STATE AUTHORITIES.

    Clause 4(e)(1)(C) of rule X of the Rules of the House of 
Representatives is amended by striking ``with the approval of 
the House'' and inserting ``either with the approval of the 
House or by an affirmative vote of two-thirds of the members of 
the committee''.

SEC. 19. FRIVOLOUS FILINGS.

    Clause 4(e) of rule X of the Rules of the House of 
Representatives is amended by adding at the end the following:
    ``(5)(A) If a complaint or information offered as a 
complaint is deemed frivolous by an affirmative vote of a 
majority of the members of the Committee on Standards of 
Official Conduct, the committee may take such action as it, by 
an affirmative vote of a majority of its members, deems 
appropriate in the circumstances.
    ``(B) Complaints filed before the One Hundred Fifth 
Congress may not be deemed frivolous by the Committee on 
Standards of Official Conduct.''.

SEC. 20. TECHNICAL AMENDMENTS.

    The Committee on Standards of Official Conduct shall--
          (1) clarify its rules to provide that whenever the 
        committee votes to authorize an investigation on its 
        own initiative, the chairman and ranking minority 
        member shall establish an investigative subcommittee to 
        undertake such investigation;
          (2) revise its rules to refer to hearings held by an 
        adjudicatory subcommittee as adjudicatory hearings; and
          (3) make such other amendments to its rules as 
        necessary to conform such rules to this resolution.

SEC. 21. EFFECTIVE DATE.

    This resolution and the amendments made by it apply with 
respect to any complaint or information offered as a complaint 
that is or has been filed during this Congress.

                               APPENDIX C

                              ----------                              


 Investigative Subcommittee of the Committee on Standards of Official 
           Conduct in the Matter of Representative Jay C. Kim

         statement of alleged violation, adopted august 7, 1998

               i. relevant standards of conduct and laws

    At all times relevant to the violations hereafter alleged 
(except as otherwise noted), the pertinent provisions of House 
Rules and laws stated or provided as follows:
Federal election campaign laws
    
 2 U.S.C. Sec. 441b: It is illegal for a 
corporation to make a contribution of any amount to a candidate 
for federal election.
    
 2 U.S.C. Sec. 441e: It is illegal for a foreign 
national to make a contribution of any amount to a candidate 
for federal election.
    
 2 U.S.C. Sec. 441f: It is illegal for any person 
to make a contribution to a federal candidate by using the name 
of another person.
    
 2 U.S.C. Sec. 437g(d)(1)(A): Any person who 
knowingly and willfully commits a violation of any provision of 
the Federal Election Campaign Act which involves the making, 
receiving, or reporting of any contribution or expenditure 
aggregating $2,000 or more during a calendar year shall be 
fined, or imprisoned for not more than one year, or both. The 
amount of this fine shall not exceed the greater of $25,000 or 
300 percent of any contribution or expenditure involved in such 
violation.
Law regarding financial disclosure by candidates and House Members
    
 Section 104(a) of the Ethics in Government Act: 
``The Attorney General may bring a civil action in any 
appropriate United States district court against any individual 
who knowingly and willfully falsifies or who knowingly and 
willfully fails to report any information that such individual 
is required to report pursuant to section 102 [of the Act]. The 
court in which such action is brought may assess against such 
individual a civil penalty in any amount, not to exceed 
$10,000.''
House Rules
    
 House Rule 43, Clause 1: ``A Member, officer or 
employee of the House of Representatives shall conduct himself 
at all times in a manner which shall reflect creditably on the 
House of Representatives.''
    
 Former House Rule 43, Clause 4: ``A Member . . . 
of the House of Representatives shall not accept gifts (other 
than personal hospitality of an individual or with a fair 
market value of $100 or less . . . in any calendar year 
aggregating more than . . . $250, . . . directly or indirectly, 
from any person (other than a relative) except to the extent 
permitted by written waiver granted in exceptional 
circumstances by the Committee on Standards of Official Conduct 
pursuant to clause 4(e)(E) of rule X.'' The term ``gift'' was 
defined to include ``[a] payment, subscription, advance, 
forbearance, rendering, or deposit of money, services, or 
anything of value, including food, lodging, transportation, or 
entertainment, and reimbursement for other than necessary 
expenses, unless consideration of equal or greater value is 
received by the donor.'' 1 A Member of the House of 
Representatives was permitted to accept a gift of travel 
expenses, including lodging, if the gift was in connection with 
``fact-finding'' or events in which the Member ``substantially 
participated.''
---------------------------------------------------------------------------
    \1\ This rule was in effect at the time Representative Kim became a 
Member of the House of Representatives in January 1993 and remained in 
effect until January 1996, when it was superseded by then-House Rule 
52.
---------------------------------------------------------------------------
    
 House Rule 44, Clause 2: ``For the purposes of 
this rule, the provisions of Title I of the Ethics in 
Government Act of 1978 shall be deemed to be a rule of the 
House as it pertains to Members, officers, and employees of the 
House of Representatives.''
    
 House Rule 51, Clause 1(a)-(b). ``No Member, 
officer, or employee of the House of Representatives shall 
knowingly accept a gift except as provided in this rule . . . 
For purposes of this rule, the term `gift' means any gratuity, 
favor, discount, entertainment, hospitality, loan, forbearance, 
or other item having monetary value.''

                         ii. alleged violations

Count I: Violation of House Rule 43, Clause 1 (Contributing and Causing 
        In-Kind Contributions from a Corporation)--
    In 1978, JayKim Engineers, Inc., was incorporated in the 
State of California. Representative Kim was the president and 
owner of JayKim Engineers, Inc. from 1978 to 1992. During much 
of this period, Representative Kim contributed to numerous 
candidates for federal office. On February 10, 1992, 
Representative Kim filed as a candidate for the U.S. House of 
Representatives. Between March 1992 and July 1993, the campaign 
headquarters was located inside the offices of JayKim 
Engineers, Inc. From March 1992 through July 1993, 
Representative Kim caused JayKim Engineers, Inc. to make in-
kind contributions to the JayKim for Congress Committee. The 
in-kind contributions included office space, printing expenses, 
photocopying expenses, postage, use of corporate telephones and 
computers, janitorial services, secretarial and other personnel 
services and supplies. In March 1992, Representative Kim 
initialed and caused to be distributed two memoranda for the 
employees of JayKim Engineers, Inc. telling them not to work on 
his campaign during business hours. Yet, numerous employees 
continued to work for the campaign on company time with 
Representative Kim's knowledge.
    During the time JayKim Engineers, Inc. made these in-kind 
contributions to the campaign, Representative Kim supervised 
the finances of both the corporation and of the campaign. Based 
on his own previous contributions to federal candidates and 
briefings by his campaign staff, Representative Kim knew that 
it was illegal for corporations, including JayKim Engineers, 
Inc. to make contributions, including in-kind contributions, to 
federal election campaigns.
    On or about July 28, 1997, Representative Kim signed a plea 
agreement with the United States Attorney's Office for the 
Central District of California regarding an investigation 
relating to the financing of his 1992, 1994, and 1996 campaigns 
for the House of Representatives. Representative Kim agreed to 
waive indictment by a grand jury and to plead guilty to an 
information charging him with accepting illegal corporate 
contributions in violation of 2 U.S.C. Sec. Sec. 441b and 437g. 
This plea agreement was filed with the United States District 
Court for the Central District of California on or about July 
31, 1997.
    Representative Kim stipulated to the following facts as the 
factual basis for his plea of guilty:

          9. Beginning in or about March, 1992, through in or 
        about July, 1993, defendant JAY KIM caused JayKim 
        Engineers, Inc., to contribute to defendant JAY KIM FOR 
        CONGRESS COMMITTEE approximately $83,248 in in-kind 
        contributions. The in-kind contributions included 
        office space, printing expenses, automobile expenses, 
        postage, Federal Express expenses, food and travel 
        expenses, janitorial services, and secretarial and 
        other personnel services. The in-kind contributions had 
        an aggregate value of more than $2,000 in 1992 and more 
        than $2,000 in 1993. Defendant JAY KIM knew that it was 
        illegal for corporations, including JayKim Engineers, 
        Inc., to make contributions, including in-kind 
        contributions, to federal election campaigns such as 
        his, but he caused JayKim Engineers, Inc., to make 
        those contributions anyway.

    On or about August 11, 1997, Representative Kim was 
convicted pursuant to a plea agreement in the United States 
District Court for the Central District of California of Count 
Six of the information in the case of United States v. Jay C. 
Kim, et al. (CR 97-726-RAP). The Assistant United States 
Attorney summarized the evidence as follows:

          The evidence would show beginning in March 1992 and 
        continuing through July 1993, defendant Jay Kim caused 
        JayKim Engineers, Inc. to contribute to defendant Jay 
        Kim for Congress Committee approximately $83,000 in in-
        kind corporate resources. The in-kind corporate 
        contributions included office space, printing expenses, 
        automobile expenses, postage, Federal Express expenses, 
        food and travel expenses, janitorial expenses, and 
        secretarial and other personnel services.
          Defendant Jay Kim knew that it was illegal for 
        corporations, including JayKim Engineers, Inc., to make 
        contributions, including the in-kind contributions, to 
        federal election campaigns such as his. But he caused 
        JayKim Engineers, Inc. to make those contributions 
        anyway.

Representative Kim and his attorney told the court that the 
above summary by the Assistant United States Attorney was 
accurate.
    On or about January 29, 1998, Representative Kim told the 
Investigative Subcommittee that he did not dispute any element 
of the plea agreement or statement of facts.
    On or about February 25, 1998, Representative Kim wrote a 
letter to the Honorable Richard A. Paez, United States District 
Judge, regarding his sentencing. Representative Kim again 
acknowledged his guilt regarding Count Six of the information. 
In addition, in a memorandum submitted to the district court on 
March 2, 1998, Representative Kim's attorney stated that ``in 
the end, the law was violated and Mr. Kim accepts 
responsibility for that violation. `At the sentencing 
proceeding on March 9, 1998, Representative Kim's attorney 
stated:

    Mr. Kim accepts responsibility. He knows what he did was 
wrong. He knows it violated the law. And he knew there was a 
law there at the time. And he knew there were things you could 
do and things you couldn't do.'' -

           *         *         *         *         *

    He knew there was a law there. But we were trying to 
explain--and we put it in our papers that same way--the laws 
are very complicated, but he had an obligation and a 
responsibility to know that when he took money or loans, or 
when he used his personal corporation to make contributions, 
in-kind to the campaign committee, that's wrong. And he accepts 
responsibility for it.

    Finally, Representative Kim told the court at his 
sentencing hearing that he accepted complete responsibility for 
his conduct.
    On June 8, 1998, when questioned by the Subcommittee, 
Representative Kim adopted the plea agreement, including the 
statement of facts regarding Count Six of the information.
    At all times during the events described above, it was 
illegal for a corporation to make a contribution of any amount, 
including an in-kind contribution, to a candidate for federal 
office. At all times during the events described above, House 
Rule 43, Clause 1, stated that ``[a] Member, officer, or 
employee of the House of Representatives shall conduct himself 
at all times in a manner which shall reflect creditably on the 
House of Representatives.''
    Based on the foregoing, the Investigative Subcommittee 
found that Representative Kim knowingly and willfully 
contributed and caused to be contributed $83,248 in illegal in-
kind corporate contributions to the Jay Kim for Congress 
Committee between March 1992 and July 1993 in violation of 2 
U.S.C. Sec. Sec. 441b and 437g. For that reason, the 
Investigative Subcommittee has substantial reason to believe 
that Representative Kim conducted himself in a manner that does 
not reflect creditably on the House of Representatives, in 
violation of Clause 1 of Rule 43 of the House of 
Representatives. The Investigative Subcommittee also has 
substantial reason to believe that RepresenativeKim conducted 
himself in a manner that does not reflect creditably on the House of 
Representatives on or about August 11, 1997, when he pleaded guilty to, 
and was convicted of, a violation of the above federal elections laws 
and admitted to contributing and causing to be contributed in-kind 
corporate contributions to his campaign, in violation of the Code of 
Official Conduct as set forth in Clause 1 of Rule 43 of the House of 
Representatives.

Count II: Violations of House Rule 43, Clause 1; House Rule 44, Clause 
        2; and Ethics in Government Act of 1978 (Acceptance and Receipt 
        of a Contribution from a Foreign National; False Statements on 
        Financial Disclosure Statements; and False Statements to 
        Investigative Subcommittee)

            A. Acceptance and receipt of a contribution from a foreign 
                    national-
    In approximately May 1992, Representative Kim asked Jerry 
Yeh, a young businessman in Diamond Bar, California, for a loan 
to meet the payroll for JayKim Engineers, Inc. Yeh, who did not 
have the funds himself, asked his father, Song Nien Yeh, for 
the money.
    Song Nien Yeh was a Taiwanese national. Song Nien Yeh 
agreed to the loan and wired $50,000 from Taiwan to the United 
States. On or about May 13, 1992, Representative Kim met with 
Jerry Yeh and signed a promissory note to Song Nien Yeh, 
agreeing to repay the $50,000 loan. According to the terms of 
the promissory note, Representative Kim was obligated to pay 
the loan back, without interest, by November 1992. 
Representative Kim knew the money would come from Jerry Yeh's 
father. As a result, Jerry Yeh gave Representative Kim a 
$50,000 cashier's check. On or about May 22, 1992, 
Representative Kim deposited a $50,000 cashier's check into his 
personal account at the Sunwest bank. On or about May 26, 1992, 
one week before the primary election on June 2, 1992, a $50,000 
check signed by Representative Kim and drawn from his personal 
account was written to the Jay Kim for Congress Committee and 
was deposited into the campaign account.
    In approximately late 1992, Representative Kim met Song 
Nien Yeh and Jerry Yeh together in California. He also met Song 
Nien Yeh in Taiwan in 1993. Representative Kim failed to pay 
the loan back as scheduled.
    Pursuant to the plea agreement, Representative Kim agreed 
to plead guilty to an information charging him with accepting 
an illegal foreign campaign contribution in violation of 2 
U.S.C. Sec. Sec. 441e and 437g.
    Representative Kim stipulated to the following facts as the 
factual basis for his plea of guilty:

          15. On or about May 22, 1992, defendant JAY KIM 
        accepted a $50,000 loan from Song Nien Yeh, whom 
        defendant JAY KIM knew was a Taiwanese national. 
        Defendant JAY KIM deposited the $50,000 payment into 
        his personal bank account. On May 26, 1992, defendant 
        JAY KIM wrote a $50,000 check on his personal bank 
        account and deposited the check into the bank account 
        of defendant JAY KIM FOR CONGRESS COMMITTEE.Defendant 
        JAY KIM knew that the payment from Song Nien Yeh was an 
        illegal excessive and foreign contribution.

    On or about August 11, 1997, Representative Kim was 
convicted pursuant to a plea agreement in the United States 
District Court for the Central District of California of Count 
Seven of the information. The Assistant United States Attorney 
summarized the evidence as follows:

          On May 22, 1992, defendant Jay Kim accepted a fifty-
        thousand dollar loan from Song Nien Yeh, whom Defendant 
        Jay Kim knew was a Taiwanese national.
          Defendant Jay Kim deposited the fifty-thousand-dollar 
        payment into his personal bank account.
          On May 26, 1992, defendant Jay Kim wrote a fifty-
        thousand-dollar check on his personal bank account and 
        deposited the check into the bank account of Defendant 
        Jay Kim for Congress Committee.
          Defendant Jay Kim knew that the payment from Song 
        Nien Yeh was an illegal, excessive and foreign 
        contribution.

Representative Kim and his attorney told the court that the 
above summary by the Assistant United States Attorney was 
accurate.
    On or about January 29, 1998, Representative Kim told the 
Investigative Subcommittee in writing that he did not dispute 
any element of the plea agreement or statement of facts.
    At his sentencing hearing on March 9, 1998, Representative 
Kim and his attorney accepted responsibility for violation of 
Count Seven of the information in the sentencing proceedings of 
his criminal case.
    On June 8, 1998, when questioned by the Investigative 
Subcommittee, Representative Kim testified that he stood by and 
adopted under oath the plea agreement, including the statement 
of facts, the proffer offered by the government during the plea 
hearing and any statements made during the sentencing hearing 
in federal district court regarding Count Seven of the 
information.
    At all times during the events described above, it was 
illegal for a foreign national to make a contribution of any 
amount to a candidate for federal office. Based on the 
foregoing, the Investigative Subcommittee found that on or 
about May 26, 1992, Representative Kim knowingly received and 
accepted an illegal $50,000 campaign contribution from a 
foreign national, in violation of 2 U.S.C. Sec. Sec. 441e and 
437g. For thatreason, the Investigative Subcommittee has 
substantial reason to believe that Representative Kim conducted himself 
in a manner that does not reflect credibly on the House of 
Representatives, in violation of Clause 1 of Rule 43 of the House of 
Representatives. The Investigative Subcommittee also has substantial 
reason to believe that Representative Kim conducted himself in a manner 
that does not reflect creditably on the House of Representatives on or 
about August 11, 1997, when he pleaded guilty to, and was convicted of, 
a violation of the above federal election laws and admitted to 
knowingly receiving and accepting a campaign contribution from a 
foreign national, in violation of the Code of Official Conduct as set 
forth in Clause 1 of Rule 43 of the House of Representatives.
            B. False statements on financial disclosure statements
    At all times during the events described in Count II, Title 
I of the Ethics in Government Act of 1978, as amended, required 
Members of the House of Representatives to file annual 
Financial Disclosure Statements with the Clerk of the House of 
Representatives (``Clerk''). At all times during the events 
described in Count II, House Rule 44, Clause 2, provided that 
Title I of the Ethics in Government Act shall be deemed to be a 
Rule of the House insofar as the law pertains to Members, 
officers, and employees.
    On or about May 17, 1993, Representative Kim filed his 
Financial Disclosure Statement for calendar year 1992 with the 
Clerk, and did not report a liability owed to Song Nien Yeh.
    On or about May 16, 1994, Representative Kim filed his 
Financial Disclosure Statement for calendar year 1993 with the 
Clerk and listed ``Jerry Yhee'' as a creditor for a joint 
liability in the form of a personal loan in the amount of 
$15,001-$50,000.
    On or about May 19, 1994, Representative Kim filed an 
amendment to his Financial Disclosure Statement for calendar 
year 1993 with the Clerk. Representative Kim did not amend any 
information regarding the ``Jerry Yhee'' loan.
    On or about February 24, 1995, Representative Kim filed an 
amendment to his Financial Disclosure Statement for calendar 
year 1993 with the Clerk. Representative Kim did not amend any 
information regarding the ``Jerry Yhee'' loan.
    On or about August 3, 1995, Representative Kim filed his 
Financial Disclosure Statement for calendar year 1994 with the 
Clerk. Representative Kim listed ``Jerry Yhee'' as a creditor 
for a joint liability in the form of a personal loan in the 
amount of $15,000-$50,000.
    On or about May 15, 1996, Representative Kim filed his 
Financial Disclosure Statement for calendar year 1995 with the 
Clerk. Representative Kim listed ``Jerry Yhee'' of Fullerton, 
California, as a creditor for a joint liability in the form of 
a personal loan in the amount of $15,001-$50,000.
    On or about May 15, 1997, Representative Kim filed his 
Financial Disclosure Statement for calendar year 1996 with the 
Clerk. Representative Kim listed ``Jerry Yhee'' of Fullerton, 
California, as a creditor for a joint liability in the form of 
a personal loan in the amount of $15,001-$50,000.
    On or about May 22, 1998, Representative Kim filed a 
partial Financial Disclosure Statement for calendar year 1997 
with the Clerk. Representative Kim listed ``Jerry Yhee'' of 
Fullerton, California, as a creditor for a joint liability in 
the form of a personal loan in the amount of $15,001-50,000.
    As stated above in Section A of Count II, the Investigative 
Subcommittee has substantial reason to believe that the $50,000 
payment relating to Song Nien Yeh was a political contribution 
in violation of 2 U.S.C. Sec. Sec. 441e and 437g. Based on the 
foregoing, the Committee has substantial reason to believe that 
on or about May 17, 1993, May 16, 1994, February 24, 1995, 
August 3, 1995, May 15, 1996, May 15, 1997 and May 22, 1998, 
Representative Kim made false statements on his Financial 
Disclosure Statements for calendar years 1993, 1994, 1995, 1996 
and 1997 (and amendments thereto), respectively, when he listed 
the political contribution from Song Nien Yeh as a personal 
loan from ``Jerry Yhee,'' in violation of Title I of the Ethics 
in Government Act of 1978, as amended, and Clause 2 of Rule 44 
of the House of Representatives.
            C. False statements to the investigative subcommittee
    In a December 17, 1997, letter to Representative Kim, the 
Chairman and Ranking Democratic Member of the Committee asked 
Representative Kim to explain the ``relationship, if any, 
between the $50,000 loan from Song Nien Yeh referenced in 
Paragraph 15 of the Statement of Facts and a loan by Jerry Yhee 
reported on your Financial Disclosure Statements for calendar 
years 1993, 1994, 1995, and 1996.''
    In a letter to the Investigative Subcommittee dated January 
29, 1998, Representative Kim responded in pertinent part as 
follows:

          In May 1992, I obtained a personal loan from Mr. 
        Jerry Yhee of Fullerton, California. (The discrepancy 
        between the spellings of ``Yeh'' and ``Yhee'' is due to 
        different English spelling of the translation of the 
        same Chinese family name.) Song Nien Yeh is his real 
        Chinese name. Here in the United States he goes by 
        Jerry.

    Jerry Yeh testified under oath that he has never used the 
name ``Song Nien Yeh'' and that it is the name of his father. 
He further testified that when he was introduced to 
Representative Kim, he was introduced as ``Jerry'' and not 
``Song Nien.'' Representative Kim did not remember Jerry Yeh 
using another name.
    At all times during the events described above, House Rule 
43, Clause 1, stated that ``[a] Member, officer, or employee of 
the House of Representatives shall conduct himself at all times 
in a manner which shall reflect creditably on the House of 
Representatives.''
    Based on the foregoing, the Investigative Subcommittee has 
substantial reason to believe that Representative Kim knowingly 
made a false statement to the Investigative Subcommittee on or 
about January 29, 1998, when he advised the Investigative 
Subcommittee in writing that Song Nien Yeh and Jerry Yeh are 
the same individual. For that reason, the Investigative 
Subcommittee has substantial reason to believe that 
Representative Kim conducted himself in a manner which does not 
reflect creditably on the House of Representatives, in 
violation of the Code of Official Conduct as set forth in 
Clause 1 of Rule 43 of the House of Representatives.

Count III: Violations of House Rule 43, Clause 1 (Acceptance and 
        Receipt of an Excessive Corporate Contribution from Nikko 
        Enterprises Inc., and False Statements to the Investigative 
        Subcommittee)

            A. Acceptance and receipt of an excessive corporate 
                    contribution
    On or about September 21, 1992, Representative Kim attended 
a fundraiser for President Bush at the Waldorf-Astoria in New 
York City. David Chang, the president of Nikko Enterprises, 
Inc. (``Nikko''), a New Jersey corporation, who had never met 
Representative Kim before, agreed to make a contribution to 
Representative Kim's campaign. On or about September 28, 1992, 
David Chang gave Yung Soo Yoo, a Republican fundraiser, a check 
for $12,000 to give to Representative Kim. The payee portion of 
the check was blank. The memorandum portion of the check 
indicated it was a political donation. After receiving the 
check, Yoo called Representative Kim, who directed him to give 
the check to an acquaintance, Benjamin Limb. Limb sent the 
check to Representative Kim. On or about October 13, 1993, the 
$12,000 check, now endorsed to June O. Kim, was deposited in 
the Kims' personal account by June Kim.
    On December 12, 1994, David Chang was interviewed by the 
Federal Bureau of Investigation regarding the $12,000 check 
from Nikko. After the interview, Chang told Yung Soo Yoo that 
he had been interviewed by the FBI. On or about December 15, 
1994, Yoo's secretary faxed David Chang's address to 
Representative Kim. At some point between December 13 and 
December 17, 1994, Representative Kim called David Chang and 
denied receiving a contribution from him.
    In approximately February 1995, Chang returned from a 
business trip and received a letter from June Kim dated 
December 17, 1994, along with a $2,000 check from June Kim 
payable to Chang personally. The letter, which was mistakenly 
addressed to Yung Soo Yoo, stated in pertinent part: ``Back in 
1992, which I borrow from you $10,000. It is inconvenience to 
you in delay. I will repay back to you as soon as possible. 
However, I send you a $2,000 initially.'' Chang called 
Representative Kim and refused the check because the $12,000 he 
gave to Representative Kim was not a loan.
    Pursuant to his plea agreement, Representative Kim agreed 
to plead guilty to an information charging him with accepting 
an illegal and excessive corporate campaign contribution in 
violation of 2 U.S.C. Sec. Sec. 441b and 437g.
    Representative Kim stipulated to the following facts as the 
factual basis for his plea of guilty:

          18. In September, 1992, defendant JAY KIM attended a 
        fundraising dinner in New York City where the president 
        of Nikko Enterprises, Inc. (``Nikko''), a corporation, 
        told defendant JAY KIM, that he would make a large 
        contribution to defendant JAY KIM's congressional 
        campaign. Shortly thereafter, the president of Nikko 
        caused a Nikko corporate check in the amount of $12,000 
        to be issued for the purpose of making a political 
        contribution. The $12,000 contribution check was 
        forwarded to a New York fundraiser for defendant JAY 
        KIM. The New York fundraiser telephoned defendant JAY 
        KIM and told him that he received the check. Defendant 
        JAY KIM and the New York fundraiser also discussed the 
        amount and corporate nature of the check. The New York 
        fundraiser mailed the $12,000 contribution check to 
        defendant JAY KIM in Diamond Bar, California. 
        Thereafter, in October, 1992, defendant JAY KIM 
        received and accepted the $12,000 contribution check, 
        which was then endorsed by defendant JUNE KIM and 
        deposited in defendants JAY KIM's and JUNE KIM's joint 
        personal bank account. Defendant JAY KIM knew that the 
        $12,000 Nikko contribution check was an illegal 
        corporate and excessive contribution.

    On or about August 11, 1997, Representative Kim was 
convicted of Count Eight of the information pursuant to a plea 
agreement in the United States District Court for the Central 
District of California. The Assistant United States Attorney 
summarized the evidence as follows:

          In September 1992, defendant Jay Kim attended a fund-
        raiser dinner at the Waldorf Astoria Hotel in New York 
        City. At the fund-raiser, the President of Nikko 
        Enterprises, Inc., a corporation, told defendant Jay 
        Kim that he would make a large contribution to 
        defendant Jay Kim's congressional campaign.
          Shortly, thereafter, the president of Nikko caused a 
        Nikko corporate check in the amount of $12,000 to be 
        issued for the purpose of making a political 
        contribution.
          The twelve-thousand-dollar contribution check was 
        forwarded to a New York fund-raiser for defendant Jay 
        Kim. The New York fund-raiser telephoned defendant Jay 
        Kim and told him that he had received the check. 
        Defendant Jay Kim and the New York fund-raiser also 
        discussed the amount and the corporate nature of the 
        check. The New York fund-raiser mailed the twelve-
        thousand-dollar contribution check to defendant Jay Kim 
        in Diamond Bar, California.
          Thereafter, in October 1992, defendant Jay Kim 
        received and accepted the twelve-thousand-dollar 
        contribution check, which was then endorsed by 
        defendant June Kim, and deposited in defendant Jay 
        Kim's personal bank account.
          Defendant Jay Kim knew that the twelve-thousand-
        dollar Nikko contribution check was an illegal 
        corporate and excessive contribution.

Representative Kim and his attorney told the court that the 
above summary by the Assistant United States Attorney was 
accurate.
    On or about January 29, 1998, Representative Kim advised 
the Investigative Subcommittee in writing that he did not 
dispute any element of the plea agreement or statement of 
facts.
    At his sentencing hearing on March 9, 1998, Representative 
Kim and his attorney accepted responsibility for violation of 
Count Eight of the information in the sentencing proceedings of 
his criminal case.
    On June 8, 1998, when questioned by the Investigative 
Subcommittee, Representative Kim testified that he stood by and 
adopted under oath the statement of facts relating to Count 
Eight of the information.
    At all times during the events described above, it was 
illegal for a corporation to make a contribution of any amount 
to a candidate for federal election. At all times during the 
events described above, House Rule 43, Clause 1, stated that 
``[a] Member, officer, or employee of the House of 
Representatives shall conduct himself at all times in a manner 
which shall reflect creditably on the House of 
Representatives.''
    Based on the foregoing, the Investigative Subcommittee 
found that Representative Kim knowingly received and accepted 
an illegal corporate campaign contribution in or about October 
1992, in violation of 2 U.S.C. Sec. Sec. 441b and 437g. For 
that reason, the Investigative Subcommittee has substantial 
reason to believe that Representative Kim conducted himself in 
a manner that does not reflect creditably on the House of 
Representatives. The Investigative Subcommittee also has 
substantial reason to believe that Representative Kim conducted 
himself in a manner that does not reflect creditably on the 
House of Representatives on or about August 11, 1997, when he 
pleaded guilty to, and was convicted of, the above federal 
election laws and admitted to knowingly receiving and accepting 
a corporate contribution to his campaign, in violation of the 
Code of Official Conduct as set forth in Clause 1 of Rule 43 of 
the House of Representatives.
            B. False statement to the investigative subcommittee
    In a December 17, 1997, letter to Representative Kim, the 
Chairman and Ranking Democratic Member of the Committee asked 
Representative Kim to explain ``[the] relationship, if any, 
between the $12,000 payment by Nikko referenced in Paragraph 18 
of the Statement of Facts and a loan by David Chang reported in 
a February 24, 1995, amendment to your Financial Disclosure 
Statement for calendar year 1993?''
    In a reply letter to the Investigative Subcommittee dated 
January 29, 1998, Representative Kim responded in pertinent 
part as follows:

           As stated in the answer to Question 5, at the time 
        the money was accepted, I was led to believe that Mr. 
        David Chang had agreed to provide me with a $12,000 
        personal loan. The loan came in the form of a check 
        from Nikko Enterprises, Inc. * * *. There was no 
        written loan agreement. I recall this was a gentleman's 
        agreement with a ``pay what you can when you can'' 
        arrangement.--

           *         *         *         *         *

          The $12,000 loan was reported in my February 23, 1995 
        [sic] amendment to my 1993 Financial Disclosure. As 
        noted in the February 1995 letter, its previous 
        omission was due to an accounting oversight. In 
        reviewing this matter recently, I realize that I should 
        have also amended my 1992 FD at the time I amended my 
        1993 FD. Quite frankly, I have no idea why at that time 
        I did not make a complete set of amendments. Insofar as 
        only $10,000 remained following December 17, 1994, and 
        that only obligations above the $10,000 threshold need 
        to be reported, I did not report this loan in my 1994 
        Financial Disclosure. However, in re-reading the 
        disclosure language, I realize I should have also 
        disclosed this in my 1994 FD insofar as I did owe David 
        Chang more than $10,000 for most of the calendar year 
        1994. I did report this $10,000 liability on my 1995 
        Financial Disclosure, though this was not required. I 
        did not report it in the subsequent 1996 filing because 
        my liability to Mr. Chang was not greater than $10,000.

    In its December 17, 1997, letter to Representative Kim, the 
Committee also asked Representative Kim, with respect to 
paragraph 18 of the statement of facts: ``[W]hat 
contemporaneous knowledge did you have that June Kim would, or 
did, deposit the $12,000 check from Nikko Enterprises, Inc. 
(``Nikko'') in the joint personal bank account that you shared 
at that time with June Kim?''
    In his reply letter to the Committee dated January 29, 
1998, Representative Kim responded in pertinent part as 
follows:

          I seem to recall that according to Mr. Yung Soo Yoo, 
        an intermediary at the New York fundraiser described in 
        Paragraph 18 of the Statement of Facts, Mr. David Chang 
        of Nikko Enterprises was willing to lend me, 
        personally, $12,000. Through Mr. Yoo, he sent a $12,000 
        check, drawn from Nikko Enterprises, Inc., which my 
        wife endorsed and deposited in our personal bank 
        account. As with the loan from Robert Yu, I was 
        personally liable for repaying the $12,000 and once it 
        was deposited in our account, it became commingled with 
        other personal funds therein.--

    Based on the foregoing, the Investigative Subcommittee has 
substantial reason to believe that Representative Kim knowingly 
made false statements in his letter to the Investigative 
Subcommittee dated January 29, 1998, when he stated in that 
letter that (1) he received a personal loan from David Chang, 
rather than a political contribution; (2) the Chang loan was a 
gentlemen's agreement with a ``pay what you can when you can'' 
arrangement; and (3) the Chang information on the amendment to 
Representative Kim's Financial Disclosure Statement for 
calendar year 1993 was an accounting oversight. For that 
reason, the Investigative Subcommittee has substantial reason 
to believe that Representative Kim conducted himself in a 
manner which does not reflect creditably on the House of 
Representatives, in violation of the Code of Official Conduct 
as set forth in Clause 1 of Rule 43 of the House of 
Representatives.

Count IV: Violations of House Rule 44, Clause 2 (False Statements on 
        Financial Disclosure Statements Related to the Contribution by 
        Nikko Enterprises, Inc.)

    At all times during the events described below, Title I of 
the Ethics in Government Act of 1978, as amended, required 
Members of the House of Representatives to file annual 
Financial Disclosure Statements with the Clerk of the House of 
Representatives. At all times during the events described 
below, House Rule 44, Clause 2, provided that Title I of the 
Ethics in Government Act shall be deemed to be a Rule of the 
House insofar as the law pertains to Members, officers, and 
employees.
    As stated in Count III above, on or about September 21, 
1992, Representative Kim attended a fundraiser for President 
Bush at the Waldorf-Astoria in New York City. David Chang, the 
president of Nikko Enterprises, Inc., a New Jersey corporation, 
who had never met Representative Kim before, agreed to give a 
contribution to Representative Kim's campaign. On or about 
September 28, 1992, Chang gave Yung Soo Yoo, a Republican 
fundraiser, a check for $12,000. The memorandum portion of the 
check indicated it was a political contribution. After 
receiving the check, Yoo called Representative Kim, who 
directed him to give the check to an acquaintance, Benjamin 
Limb. Limb sent the check to Representative Kim. On or about 
October 13, 1993, the $12,000 check, now endorsed to June O. 
Kim, was deposited in the Kim's personal account by June Kim.
    On December 12, 1994, David Chang was interviewed by the 
Federal Bureau of Investigation regarding the $12,000 check 
from Nikko. After the interview, Chang told Yung Soo Yoo that 
he had been interviewed by the FBI. On or about December 15, 
1994, Yoo's secretary faxed David Chang's address to 
Representative Kim. At some point between December 13 and 
December 17, 1994, Representative Kim called David Chang and 
denied receiving a contribution from him.
    In February 1995, Chang returned from a business trip and 
received a letter from June Kim dated December 17, 1994, along 
with a $2,000 check from June Kim payable to Chang personally. 
The letter, which was mistakenly addressed to Yung Soo Yoo, 
stated in pertinent part: ``Back in 1992, which I borrow from 
you $10,000. It is inconvenience to you in delay. I will repay 
back to you as soon as possible. However, I send you a $2,000 
initially.'' Chang called Representative Kim and refused the 
check because the $12,000 he gave to Representative Kim was a 
political contribution.
    Pursuant to his plea agreement, Representative Kim agreed 
to plead guilty to an information charging him with accepting 
an illegal and excessive corporate campaign contribution in 
violation of 2 U.S.C. Sec. Sec. 441b and 437g.
    As stated in Count III above, Representative Kim stipulated 
to paragraph 18 of the statement of facts as the factual basis 
for his plea of guilty.
    On or about August 11, 1997, Representative Kim was 
convicted pursuant to a plea agreement of Count Eight of the 
information and he and his attorney agreed with the summary of 
the evidence provided by the Assistant United States Attorney.
    On or about January 29, 1998, Representative Kim stated in 
writing that he did not dispute any element of the plea 
agreement or statement of facts.
    At his sentencing hearing on March 9, 1998, Representative 
Kim and his attorney accepted responsibility for violation of 
Count Eight of the information in the sentencing proceedings of 
his criminal case.
     On June 8, 1998, when questioned by the Investigative 
Subcommittee, Representative Kim testified that he stood by and 
adopted under oath the statement of facts relating to Count 
Eight of the information.
    -On or about May 17, 1993, Representative Kim filed his 
Financial Disclosure Statement for calendar year 1992 with the 
Clerk. On or about May 16, 1994, Representative Kim filed his 
Financial Disclosure Statement for calendar year 1993 with the 
Clerk and did not report a liability owed to David Chang.
    -On or about May 19, 1994, Representative Kim filed an 
amendment to his Financial Disclosure Statement for calendar 
year 1993 with the Clerk and did not report a liability owed to 
David Chang.
    -On December 12, 1994, David Chang was interviewed by the 
FBI regarding the $12,000 check from Nikko Enterprises, Inc.
     In February 1995, Chang returned from a business trip and 
received a letter from June Kim dated December 17, 1994, along 
with a $2,000 check from June Kim payable to Chang personally. 
The letter, which was mistakenly addressed to Yung Soo Yoo, 
stated in pertinent part: ``Back in 1992, which I borrow from 
you $10,000. It is inconvenience to you in delay. I will repay 
back to you as soon as possible. However, I send you a $2,000 
initially.'' Chang called Representative Kim and refused the 
check because the $12,000 he gave to Representative Kim was a 
political contribution.
    -On or about February 24, 1995, Representative Kim filed an 
amendment to his Financial Disclosure Statement for calendar 
year 1993 with the Clerk that stated in part:

          In Schedule V (Liabilities), due to an accounting 
        oversight, the final line item in this section is 
        missing. It should have been reported as: JT David 
        Chang (creditor), Personal Loan (Type of Liability), 
        Category B (Amount of Liability). This liability was 
        incurred for only part of 1993.

    -On or about August 3, 1995, Representative Kim filed his 
Financial Disclosure Statement for calendar year 1994 with the 
Clerk. Despite reporting a personal loan from David Chang as a 
liability in his amendment to the calendar year 1993 Financial 
Disclosure Statement filed with the Clerk on February 24, 1995, 
Representative Kim did not report a liability owed to David 
Chang on his Financial Disclosure Statement for calendar year 
1994.
    -On or about May 15, 1996, Representative Kim filed his 
Financial Disclosure Statement for calendar year 1995 with the 
Clerk and, on Schedule V (Liabilities), listed David Chang as a 
creditor for a personal loan in the amount of $10,001-$15,000.
    -On or about May 15, 1997, Representative Kim filed his 
Financial Disclosure Statement for calendar year 1996 with the 
Clerk and did not report a liability owed to David Chang.
    -On or about May 22, 1998, Representative Kim filed a 
partial Financial Disclosure Statement for calendar year 1997 
with the Clerk and on Schedule V (Liabilities) listed David 
Chang as a creditor for a personal loan in the amount of 
$10,001-$15,000.
     Based on the foregoing, the Committee has substantial 
reason to believe that on or about February 24, 1995, May 15, 
1996 and May 22, 1998, Representative Kim made false statements 
in his Financial Disclosure Statements for calendar years 1993, 
1995 and 1997, respectively (and amendments thereto), when he 
listed the political contribution from Nikko Enterprises, Inc. 
as a personal loan from David Chang, in violation of Title I of 
the Ethics in Government Act of 1978, as amended, and Clause 2 
of Rule 44 of the House of Representatives.

Count V: Violations of Then-House Rule 43, Clause 4; House Rule 43, 
        Clause 1; Ethics in Government Act of 1978; and House Rule 44, 
        Clause 2 (Improper Gifts from Hanbo Steel and General 
        Construction; Failure to Disclose Gifts on Financial Disclosure 
        Statement; Attempt to Influence Statements to Investigators; 
        and False Statements to Investigative Subcommittee)

            A. Gifts of travel expenses and golf equipment from Hanbo 
                    Steel
     In January 1994, Representative Kim traveled from the 
United States to Honolulu, Hawaii. On or about January 16, 
1994, he flew from Honolulu to Maui. Dobum Kim, who was in 
charge of the Los Angeles office of Hanbo Steel and General 
Construction (``Hanbo Steel''), a company headquartered in 
South Korea, met Representative Kim in Honolulu and escorted 
him by air to Maui. Dobum Kim purchased Representative Kim's 
round-trip airline ticket from Honolulu to Maui at a cost of 
$206, charging the ticket to a corporate American Express 
account of Hanbo Steel.
    -After arriving in Maui, Dobum Kim escorted Representative 
Kim to the Grand Wailea Resort, where Tae Soo Chung, the 
Chairman of Hanbo Steel, also was staying. According to hotel 
records, Representative Kim registered at the Grand Wailea 
Resort as a guest of Dobum Kim. Hotel records also indicate 
that In Kyu Mok, a secretary to Hanbo Steel Chairman Chung, 
signed the registration card at the hotel on behalf of 
Representative Kim, and wrote the address of Hanbo Steel's 
corporate headquarters in Seoul, South Korea on the card.-
     On or about January 16, 1994, Representative Kim played 
golf in Maui with Hanbo Steel Chairman Chung, Dobum Kim, and 
other persons. Prior to playing, DobumKim--with the 
contemporaneous knowledge of Representative Kim--purchased golf clubs 
and other golf equipment for Representative Kim (including a bag for 
the clubs) totaling approximately $2,369. Dobum Kim charged the golf 
purchases to his personal American Express card and later obtained 
reimbursement from Hanbo Steel.
    -Representative Kim confirmed under oath that he played 
golf in Hawaii with Hanbo Steel Chairman Chung. He initially 
testified that he ``rented'' golf clubs to play with Mr. Chung. 
When subsequently asked if golf clubs had been purchased for 
him, he initially testified that he could not remember. 
Subsequently, he testified that he received a gift of three 
golf clubs in a souvenir golf bag at the airport before he 
departed Maui. He denied that anyone purchased golf clubs and a 
golf bag for him at the pro shop.
     According to credible testimony by Dobum Kim, Hanbo Steel 
also paid for the cost of Representative Kim's lodging at the 
Grand Wailea Resort with the contemporaneous knowledge of 
Representative Kim. His testimony was corroborated by ``guest 
histories'' for Jay Kim, Dobum Kim, and Tae Soo Chung provided 
to the Investigative Subcommittee by the Grand Wailea Resort, 
which show that the same credit card number was used to 
guarantee the room charges for all three individuals.\2\ The 
conclusion that Hanbo Steel paid for Representative Kim's hotel 
bill also is corroborated by the signature on his registration 
record by In Kyu Mok, the secretary to Hanbo Steel Chairman 
Chung, and by the indication on that record that Representative 
Kim's stay at the resort was ``care of'' Dobum Kim. Finally, 
the Grand Wailea Resort determined--based on a review of its 
records by hotel officials--that the credit card actually used 
to pay the room charges for Jay Kim, Tae Soo Chung, and In Kyu 
Mok was a corporate VISA card apparently in the name of Hanbo 
Steel.\3\
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    \2\ According to American Express, the account number appearing on 
all three guest histories is an American Express account issued outside 
of the United States.
    \3\ According to the managing director of the Grand Wailea Resort, 
the VISA card bears the account number ``4599 5070 0137 8408,'' and the 
imprint of the card, while not fully legible, incdicates the account 
holder is ``Han. . . . Gen. Cons. Co. Ldt.''
---------------------------------------------------------------------------
     According to hotel records, the cost of Representative 
Kim's lodging at the Grand Wailea Resort totaled approximately 
$1,066.
     Based on the foregoing, the record indicates that Hanbo 
Steel paid for travel and lodging expenses and golf equipment 
for Representative Kim totaling approximately $3,640.
    At all times during the events described above, Clause 4 of 
House Rule 43 stated that ``[a] Member . . . of the House of 
Representatives shall not accept gifts (other than personal 
hospitality of an individual or with a fair market value of 
$100 or less . . . in any calendar year aggregating more than . 
. . $250, . . . directly or indirectly, from any person (other 
than a relative) except to the extent permitted by written 
waiver granted in exceptional circumstances by the Committee on 
Standards of Official Conduct pursuant to clause 4(e)(E) of 
rule X.'' The term ``gift'' was defined to include ``[a] 
payment, subscription, advance, forbearance, rendering, or 
deposit of money, services, or anything of value, including 
food, lodging, transportation, or entertainment, and 
reimbursement for other than necessary expenses, unless 
consideration of equal or greater value is received by the 
donor.'' House Rule 43, clause 4, permitted a Member of the 
House of Representatives to accept a gift of travel expenses, 
including lodging, if the gift was in connection with ``fact-
finding'' or events in which the Member ``substantially 
participated.''
    -At all times during the events described above, House Rule 
43, clause 1, stated that ``[a] Member, officer or employee of 
the House of Representatives shall conduct himself at all times 
in a manner which shall reflect creditably on the House of 
Representatives.''
    -Representative Kim indicated during his testimony that he 
traveled to Hawaii to give a speech to a private organization. 
The Investigative Subcommittee, however, found no credible 
evidence that Representative Kim's acceptance in 1994 of travel 
expenses and golf equipment from Hanbo Steel concerned a fact-
finding trip or substantial participation in an event as then 
permitted by House Rule 43, Clause 4. Moreover, as discussed 
more fully below in Section B of Count 5, Representative Kim 
did not report any privately funded travel to Hawaii on his 
Financial Disclosure Statement for calendar year 1994.
    -Based on the foregoing, the Investigative Subcommittee has 
substantial reason to reason to believe that Representative 
Kim's acceptance of round-trip travel from Honolulu to Maui, 
lodging at the Grand Wailea Resort, and golf clubs and 
equipment, as detailed above, constituted gifts to 
Representative Kim within the meaning of Clause 4 of then-Rule 
43 of the House of Representatives, and that his acceptance of 
those gifts was in violation of that rule. The Investigative 
Subcommittee also has substantial reason to believe that, by 
accepting those gifts, Representative Kim engaged in conduct 
that does not reflect creditably on the House of 
Representatives, in violation of the Code of Official Conduct 
as set forth in Clause 1 of Rule 43 of the House of 
Representatives.
            B. Failure to disclose gifts of travel expenses and golf 
                    equipment
    As stated above in Section A of Count 5, the Investigative 
Subcommittee has substantial reason to believe that 
Representative Kim received gifts of travel, lodging, and golf 
equipment from Hanbo Steel in 1994 totalling approximately 
$3,640.
    At all times during the events described below, Title I of 
the Ethics in Government Act of 1978, as amended, required 
Members of the House of Representatives to file annual 
Financial Disclosure Statements with the Clerk of the House of 
Representatives. At all times during the events described below 
in this section of Count 5, House Rule 44, Clause 2, provided 
that title I of the Ethics in Government Act of 1978 shall be 
deemed to be a Rule of the House insofar as the law pertains to 
Members, officers, and employees.
    With respect to the Financial Disclosure Statement for 
1994, section 102 of the Ethics in Government Act required 
House Members to ``disclose on your Financial Disclosure 
Statement all gifts totalling more than $250 from a single 
source other than a relative.'' The instructions issued to 
House Members for completing their Financial Disclosure 
Statements for 1994 stated that ``[t]he value of all gifts from 
the same source received during the calendar year must be 
totaled to determine if the reporting threshold of $250 has 
been met, except that any gift with a fair market value of $100 
or less need not be counted.'' The instructions also stated 
that ``[a]ll types of gifts, including travel-related expenses 
provided for your personal benefit, must be reported on 
Schedule VI [of the Financial Disclosure Statement].'' Members 
were required to report the receipt of travel expenses for 
``fact-finding'' trips or trips in which they ``substantially 
participated'' on Schedule VII of the Financial Disclosure 
Statement.
    Representative Kim did not report the above-specified gifts 
of travel, lodging, and golf equipment that he received from 
Hanbo Steel in January 1994 on his Financial Disclosure 
Statement for 1994, which was filed in August 1995. Based on 
the foregoing, the Investigative Subcommittee determined that 
Representative Kim had contemporaneous personal knowledge of 
each of the gifts in question. The Investigative Subcommittee 
also determined that Representative Kim knew, or should have 
known, that each of the gifts was reportable on his Financial 
Disclosure Statement for 1994. Finally, Representative Kim did 
not report the payment or reimbursement of any ``fact-finding'' 
or ``substantial participation'' travel expenses on his 
Financial Disclosure Statement for 1994 with respect to the 
trip to Hawaii in January 1994. Consequently, the Investigative 
Subcommittee has substantial reason to believe that 
Representative Kim violated the Ethics in Government Act of 
1978, as amended, and Clause 2 of Rule 44 of the House of 
Representatives, when he failed to report the above-specified 
gifts from Hanbo Steel on his Financial Disclosure Statement 
for calendar year 1994, filed in August 1995.
            C. Receipt of $30,000 check from Dobum Kim-
    In approximately 1992, Dobum Kim opened a money market 
account (``cash maximizer account'') at Bank of America at the 
direction of Tae Soo Chung, the Korean Chairman of Hanbo Steel. 
Subsequently, Mr. Chung told Dobum Kim to expect transfers to 
that account of $100,000 and $200,000, respectively, by Hanbo 
Steel officials in other countries. On or about October 18, 
1993, $100,000 was transferred by wire by an official of Hanbo 
Steel in another country to the above-mentioned Bank of America 
money market account in the United States in the name of Dobum 
Kim. On or about October 26, 1993, an additional $200,000 was 
transferred by wire into the same account by a Hanbo Steel 
official in another country.-
    While playing golf with Representative Kim and Dobum Kim in 
Maui on or about January 16, 1994, Hanbo Steel Chairman Tae Soo 
Chung told Dobum Kim to give $30,000 to Representative Kim 
after returning to the continental United States. According to 
credible testimony by Dobum Kim, Mr. Chung gave this 
instruction to Dobum Kim in the presence of Representative Kim.
    A few days after his return to the continental United 
States from Hawaii, Dobum Kim received a telephone call 
directly from Representative Kim. According to credible 
testimony by Dobum Kim, Representative Kim told him that he 
would like to meet personally with him at Representative Kim's 
home in Diamond Bar, California. Dobum Kim understood that 
Representative Kim wanted the $30,000 that Tae Soo Chung had 
told Dobum Kim in Hawaii to give to Representative Kim, 
although Representative Kim did not mention the money during 
his telephone call to Dobum Kim. The two men set a date and 
time for the meeting at Representative Kim's home.
    On or about January 29, 1994, Dobum Kim went alone to 
Representative Kim's home in Diamond Bar, California. 
Representative Kim and his wife, June Kim, both were present 
when Dobum Kim arrived.
    Dobum Kim told Representative Kim that he had come to pay 
him the $30,000 that Tae Soo Chung had directed him in Hawaii 
to give to Representative Kim. Dobum Kim told Representative 
Kim that he would write a check in the amount of $30,000. 
Representative Kim told Dobum Kim to make the check payable to 
June Kim.
    Dobum Kim expressed concern to Representative Kim about the 
legality of the payment. According to credible testimony by 
Dobum Kim, Representative Kim told him not to be concerned 
because he would be buying books. Dobum Kim asked 
Representative Kim what he meant. Representative Kim told him 
that he had written his autobiography, and that it would be 
published in Korea. Dobum Kim expressed concern about how he 
could buy books that did not yet exist. Representative Kim told 
him not to worry, and asked him to write the word ``books'' in 
the memorandum portion of the check. According to credible 
testimony by Dobum Kim, Representative Kim told him to pretend 
that he had purchased books in return for the check.
    Dobum Kim wrote the check pursuant to Representative Kim's 
instructions, and gave it directly to Representative Kim. The 
check was drawn on the money market account that he had 
established at the Bank of America utilizing funds from Hanbo 
Steel.\4\
---------------------------------------------------------------------------
    \4\ The account number of the money market account was 21751-33359, 
which appears at the bottom of the $30,000 check that Dobum Kim gave to 
Representative Kim. The Investigative Subcommittee obtained Union Bank 
records regarding Representative Kim and June Kim from the U.S. 
Attorney's Office for the Central District of California.
---------------------------------------------------------------------------
    The record indicates that June Kim endorsed the $30,000 
check from Dobum Kim and deposited it on March 2, 1994, into a 
joint personal savings account at Union Bank in California in 
the name of Jay C. Kim and June O. Kim. That conclusion is 
supported by the following evidence:
          
 The $30,000 check written by Dobum Kim, made 
        payable to June Kim, is check number 127.
          
 Representative Kim recognized the signature 
        of endorsement on the back of the check as June Kim's 
        signature.
          
 A deposit slip bears the handwritten name 
        ``June O. Kim,'' the date of March 2, 1994, the net 
        deposit amount of $30,000, and the account number 085-
        3027-365, which corresponds to the account number for a 
        joint savings account at Union Bank in the name of Jay 
        C. Kim and June O. Kim.
          
 A statement from Bank of America regarding 
        accounts in the name of Dobum Kim, dated March 22, 
        1994, shows that check number 127 in the amount of 
        $30,000, drawn on the ``cash maximizer'' (i.e., money 
        market) account, was paid on March 2, 1994--the same 
        date as the date on the deposit slip for $30,000 
        bearing the name ``June O. Kim.''
    According to bank records, three separate withdrawals from 
the Kims' joint savings account at Union Bank--each in the 
amount of $10,000--occurred on March 11, 1994, April 14, 1994, 
and May 9, 1994, respectively. Bank records also show that the 
$30,000 in funds withdrawn from the joint savings account was 
transferred to a joint checking account at Union Bank in the 
name of Jay C. Kim and June O. Kim, where the money was 
commingled with personal funds.
    Not until sometime in 1995--several months after the book 
was published in August 1994--were any books delivered in 
connection with the $30,000 check given to Representative Kim 
by Dobum Kim. At that time, June Kim personally gave a few 
copies of Representative Kim's book to Hae Eun Kim, Dobum Kim's 
wife. Dobum Kim was working for Hanbo Steel in Venezuela at the 
time.
    Representative Kim claimed that a large number of books was 
delivered to the offices of Hanbo Steel in Seoul, South Korea, 
but he provided no evidence to substantiate his claim, and the 
Subcommittee is unaware of any credible evidence to corroborate 
his claim that books were delivered to Hanbo Steel in 
connection with the $30,000 payment by Dobum Kim in January 
1994.
    At all times during the events described above, House Rule 
43, clause 4, stated that ``[a] Member . . . of the House of 
Representatives shall not accept gifts (other than personal 
hospitality of an individual or with a fair market value of 
$100 or less . . . in any calendar year aggregating more than . 
. . $250, . . . directly or indirectly, from any person (other 
than a relative) except to the extent permitted by written 
waiver granted in exceptional circumstances by the Committee on 
Standards of Official Conduct pursuant to clause 4(e)(E) of 
rule X.'' The term ``gift'' was defined to include ``[a] 
payment, subscription, advance, forbearance, rendering, or 
deposit of money, services, or anything of value, including 
food, lodging, transportation, or entertainment, and 
reimbursement for other than necessary expenses, unless 
consideration of equal or greater value is received by the 
donor.'' As stated in the House Ethics Manual, ``a gift to an 
official's spouse or dependent is considered an indirect gift 
to that official unless circumstances make it clear that the 
gift is truly independent of the spouse's or dependent's 
relationship to the Member or employee.''
    At all times during the events described above, House Rule 
43, clause 1, stated that ``[a] Member, officer or employee of 
the House of Representatives shall conduct himself at all times 
in a manner which shall reflect creditably on the House of 
Representatives.''
    Based on the foregoing, the Investigative Subcommittee has 
substantial reason to believe that the $30,000 check given by 
Dobum Kim to Representative Kim in January 1994 constituted a 
gift to Representative Kim within the meaning of Clause 4 of 
then-Rule 43 of the House of Representatives, and that his 
acceptance of the check constituted a violation that rule. The 
Investigative Subcommittee also has substantial reason to 
believe that, by accepting the $30,000 check from Dobum Kim in 
violation of House Rules, Representative Kim engaged in conduct 
that does not reflect creditably on theHouse of 
Representatives, in violation of the Code of Official Conduct as set 
forth in Clause 1 of Rule 43 of the House of Representatives.
            D. Failure to report gift of $30,000 on financial 
                    disclosure statement
    As stated above in Section C of Count 5, the Investigative 
Subcommittee has substantial reason to believe that the $30,000 
check given by Dobum Kim to Representative Kim in January 1994 
constituted a gift to Representative Kim under then-House Rule 
43, Clause 4. The Investigative Subcommittee also has 
substantial reason to believe that Representative Kim knew, or 
should have known, that the $30,000 check constituted a gift 
that was reportable on Schedule VI of his Financial Disclosure 
Statement for 1994. Representative Kim did not report the 
$30,000 received from Dobum Kim in January 1994 on his 
Financial Disclosure Report for 1994.
    At all times during the events described above, Title I of 
the Ethics in Government Act of 1978, as amended, required 
Members of the House of Representatives to file annual 
Financial Disclosure Statements with the Clerk of the House of 
Representatives. At all times during the events described above 
in this section of Count 5, Clause 2 of House Rule 44 provided 
that title I of the Ethics in Government Act of 1978 shall be 
deemed to be a Rule of the House insofar as the law pertains to 
Members, officers, and employees.
    With respect to the Financial Disclosure Statement for 
calendar year 1994, section 102 of the Ethics in Government Act 
required House Members to ``disclose on your Financial 
Disclosure Statement all gifts totalling more than $250 from a 
single source other than a relative.'' Members also were 
required to ``disclose gifts from third parties to your spouse 
or dependent children unless the gifts are totally independent 
of the relationship to you.'' The instructions issued to House 
Members for completing their Financial Disclosure Statements 
for 1994 stated that ``[t]he value of all gifts from the same 
source received during the calendar year must be totaled to 
determine if the reporting threshold of $250 has been met, 
except that any gift with a fair market value of $100 or less 
need not be counted.'' The instructions also stated that 
``[a]ll types of gifts, including travel-related expenses 
provided for your personal benefit, must be reported on 
Schedule VI [of the Financial Disclosure Statement].''
    Based on the foregoing, the Investigative Subcommittee has 
substantial reason to believe that Representative Kim violated 
the Ethics in Government Act of 1978, as amended, and Clause 2 
of Rule 44 of the House of Representatives, by failing to 
report the gift of $30,000 received from Dobum Kim in January 
1994 on his Financial Disclosure Statement for calendar year 
1994, which was filed in August 1995.
            E. Attempt to influence statements by Dobum Kim to 
                    investigators
    As stated above in Section C of Count 5, Dobum Kim 
personally tendered a check directly to Representative Kim on 
or about January 29, 1994. According to credible testimony by 
Dobum Kim, he expressed concern to Representative Kim about how 
he could buy books that did not yet exist. Representative Kim 
told Dobum Kim not to worry, asked him to write the word 
``books'' in the memorandum portion of the check, and told him 
the transaction was ``legal.''
     According to credible testimony by Dobum Kim, 
Representative Kim told Dobum Kim to pretend as though he had 
purchased books in return for the check. Further, 
Representative Kim told Dobum Kim that if he was questioned 
later by investigative authorities, he should say that he paid 
the $30,000 to purchase copies of Representative Kim's book.\5\ 
Dobum Kim understood that Representative Kim was asking him to 
make false statements to investigators if he was questioned 
later about this matter.
---------------------------------------------------------------------------
    \5\ According to credible testimony by Dobum Kim, June Kim was 
present for that conversation.
---------------------------------------------------------------------------
    In early 1995, June Kim attempted to contact Dobum Kim by 
telephone at his residence in California. At the time of June 
Kim's telephone call, Dobum Kim was unavailable because he was 
working for Hanbo Steel in Venezuela. June Kim spoke to Dobum 
Kim's wife, Hae Eun Kim, in lieu of speaking to Dobum Kim. June 
Kim asked Hae Eun Kim to meet her for lunch.
    Subsequently, June Kim and Hae Eun Kim had lunch together. 
After lunch, June Kim told Hae Eun Kim that if representatives 
of the Federal Bureau of Investigation (``FBI'') asked her if 
she received books, she should respond that she did, in fact, 
receive books. Hae Eun Kim understood June Kim to be telling 
her to convey this message to her husband, Dobum Kim, as she 
could not think of any reason for someone to ask her about 
books.
    In 1997, a Special Agent of the FBI interviewed Dobum Kim 
in connection with the $30,000 check he had given to 
Representative Kim in January 1994. Dobum Kim indicated to the 
Special Agent that he communicated only with June Kim, rather 
than Representative Kim, in connection with the purchase of 
copies of Representative Kim's book. Dobum Kim also told the 
Special Agent that June Kim had agreed to provide him with 
2,000 books, but that he had received only 1,000 books. Dobum 
Kim acknowledged under oath that the above statements he made 
to the FBI in 1997 were false, and that he made those false 
statements because Representative Kim had asked him to pretend 
that he had purchased books.
    At all times during the events described above, House Rule 
43, clause 1, stated that ``[a] Member, officer or employee of 
the House of Representatives shall conduct himself at all times 
in a manner which shall reflect creditably on the House of 
Representatives.''
    Based on the foregoing, the Investigative Subcommittee has 
substantial reason to believe that in approximately January 
1994 Representative Kim attempted to induce Dobum Kim to give 
false information to Federal investigative authorities if asked 
about the $30,000 check that he had given to Representative 
Kim. Therefore, the Investigative Subcommittee has substantial 
reason to believe that Representative Kim conducted himself in 
a manner that does not reflect creditably on the House of 
Representatives, in violation of the Code of Official Conduct 
as set forth in Clause 1 of Rule 43 of the House of 
Representatives.
            F. False statements to investigative subcommittee regarding 
                    Dobum Kim
    The Investigative Subcommittee received credible evidence 
that:
          
 Dobum Kim, a South Korean national in charge 
        of the Los Angeles office of Hanbo Steel and General 
        Construction, a Korean company, had dinner with 
        Representative Kim in California in June 1993.
          
 In late October 1993, Dobum Kim met 
        privately with Representative Kim for approximately 
        thirty minutes in his congressional office in 
        Washington, D.C. The two men discussed an upcoming 
        meeting in the Washington, D.C. area between 
        Representative Kim and Tae Soo Chung, the South Korean 
        Chairman of Hanbo Steel.\6\ Dobum Kim gave 
        Representative Kim a business card on which the name 
        ``Dobum Kim'' was printed.
---------------------------------------------------------------------------
    \6\ Hotel records obtained by the Investigative Subcommittee 
corroborated Dobum Kim's testimony that he visited the Washington, D.C. 
area in approximately October 1993.
---------------------------------------------------------------------------
          
 On or about October 28, 1993, Dobum Kim had 
        dinner with Representative Kim, Tae Soo Chung, one of 
        Tae Soo Chung's sons, and Jennifer Ahn, at the Palm 
        Restaurant in Washington, D.C.
          
 Following the dinner at the Palm Restaurant, 
        Dobum Kim and Representative Kim went to Tae Soo 
        Chung's suite at the Ritz Carlton Hotel in Arlington, 
        Virginia (Pentagon City).\7\ Dobum Kim escorted 
        Representative Kim and Jennifer Ahn downstairs when 
        they departed the hotel later that evening.
---------------------------------------------------------------------------
    \7\ Dobum Kim's testimony that Tae Soo Chung stayed at the Ritz 
Carlton in Pentagon City was corroborated by records obtained from that 
hotel.
---------------------------------------------------------------------------
          
 Dobum Kim met Representative Kim in Honolulu 
        on or about January 16, 1994, and accompanied him by 
        air to Maui, where he took Representative Kim to the 
        Grand Wailea Resort.
          
 While in Maui in January 1994, Dobum Kim had 
        dinner with Representative Kim and Tae Soo Chung.
          
 At a golf course near the Grand Wailea 
        Resort, Dobum Kim purchased golf clubs and other 
        equipment for Representative Kim in Representative 
        Kim's presence and with his knowledge. Dobum Kim then 
        played golf with Representative Kim and Tae Soo Chung.
          
 After returning to the United States, 
        Representative Kim personally telephoned Dobum Kim and 
        asked him to come to his home in Diamond Bar, 
        California.
          
 On or about January 29, 1994, Dobum Kim went 
        to Representative Kim's home in Diamond Bar, California 
        and gave him a $30,000 check.
    In a letter to Representative Kim dated April 2, 1998, the 
Investigative Subcommittee asked Representative Kim to respond 
in writing to the following question: ``Please describe the 
circumstances surrounding Mr. Dobum Kim's payment of $30,000 to 
buy copies of your book, `I'm Conservative.' Please describe 
your relationship, if any, with Mr. Dobum Kim.'' On or about 
May 21, 1998, Ralph L. Lotkin, counsel to Representative Kim, 
submitted a letter to the Chairman and Ranking Democratic 
Member of the Investigative Subcommittee. Representative Kim 
personally reviewed, approved, and signed the letter, and he 
acknowledged that the letter was prepared with the assistance 
of counsel. In reply to the above-specified question contained 
in the Subcommittee's letter to Representative Kim dated April 
2, 1998, Representative Kim responded as follows:``I do not 
know who Dobum Kim is or any of the circumstances subsumed in 
your question.'' (Emphasis added.)
    When questioned about that answer at his deposition on June 
18, 1998, Representative Kim stated that ``at that time [i.e., 
May 21, 1998] I didn't know who Dobum Kim was, until you 
mentioned today Hanbo. . . . At that time I had no idea who 
Dobum Kim is.'' Counsel for the Subcommittee then asked: ``Even 
though we asked you [in the May 21, 1998, letter] about a 
$30,000 check?'' Representative Kim responded: ``I didn't know 
anything about a $30,000 check.'' (Emphasis added.)
    At all times during the events described above, House Rule 
43, clause 1, stated that ``[a] Member, officer or employee of 
the House of Representatives shall conduct himself at all times 
in a manner which shall reflect creditably on the House of 
Representatives.''
    Based on the substantial credible evidence discussed above 
regarding direct personal contact between Dobum Kim and 
Representative Kim, the Investigative Subcommittee has 
substantial reason to believe that Representative Kim knowingly 
submitted false answers regarding Dobum Kim in his May 21, 
1998, letter to the Chairman and Ranking Democratic Member of 
the Investigative Subcommittee and in his testimony on June 18, 
1998, regarding his response about Dobum Kim in the May 21, 
1998, letter. Therefore, the Investigative Subcommittee has 
substantial reason to believe that Representative Kim conducted 
himself in a manner that does not reflect creditably on the 
House of Representatives, in violation of the Code of Official 
Conduct as set forth in Clause 1 of Rule 43 of the House of 
Representatives.
    As stated above, on June 18, 1998, Representative Kim 
testified under oath before the Investigative Subcommittee. 
During his deposition, Representative Kim testified that:
          
 He did not remember calling Dobum Kim and 
        asking him to come to Representative Kim's home in 
        Diamond Bar, California.
          
 He denied that he asked Dobum Kim to come to 
        his house to give him money promised by the Chairman of 
        Hanbo Steel.
          
 He did not remember that the man who 
        accompanied him by air from Honolulu to Maui, or anyone 
        else from Hanbo Steel, came to his home in Diamond Bar. 
        (Subsequently, he qualified his response by stating 
        that, ``to the best of my recollection,'' Dobum Kim did 
        not come to his home.)
          
 He did not remember Dobum Kim telling him at 
        his home in Diamond Bar that Dobum Kim would write a 
        $30,000 check. (Subsequently, Representative Kim called 
        this allegation ``a wild story.'')
          
 Dobum Kim has never given him a $30,000 
        check.
          
 Dobum Kim did not write out a $30,000 check 
        at Representative Kim's home in Diamond Bar.
          
 He did not remember telling Dobum Kim to 
        write the word ``books'' on the check for $30,000.
          
 He did not remember telling Dobum Kim to 
        write ``books'' on the check in order to create the 
        appearance that he had paid for books.
          
 He did not tell Dobum Kim what to say to 
        investigators if asked about the $30,000 check. 
        (Subsequently, Representative Kim stated that ``[t]o 
        the best of my recollection, I don't believe I did.'')
          
 He does not know what happened to the 
        proceeds from the $30,000 check given by Dobum Kim.
          
 He has no knowledge that a deposit slip in 
        the amount of $30,000, dated March 2, 1994, and 
        apparently filled out by June Kim, corresponds in any 
        way to the check written by Dobum Kim in the amount of 
        $30,000 in January 1994.
    Based on credible evidence in the record, as discussed 
above, the Investigative Subcommittee has substantial reason to 
believe that the above testimony by Representative Kim was 
knowingly false. Therefore, the Subcommittee has substantial 
reason to believe that Representative Kim's conduct does not 
reflect creditably on the House of Representatives, in 
violation of the Code of Official Conduct as set forth in 
Clause 1 of Rule 43 of the House of Representatives.

Count VI: Violations of House Rule 51 and House Rule 43, Clause 1 
        (Receipt of Improper Gifts To Pay Partial Reimbursement to 
        House of Representatives for Excess Outside Earned Income From 
        Book)

    In approximately February 1994, Representative Kim entered 
into a contract with Sungmoon Publishing Company, a South 
Korean company, to publish his autobiography. According to 
Representative Kim, the book was published in August 1994.
    On or about February 21, 1995, Representative Kim wrote a 
letter to the Committee requesting ``a ruling on the acceptance 
of proceeds from a book I wrote.'' Other correspondence and 
communications between Representative Kim and the Committee 
followed regarding his income from the book.
    On or about May 15, 1995, the Committee sent a letter to 
Representative Kim advising him of its determination that his 
income from the book, as represented to the Committee, ``does 
not qualify for the exception to the outside earned income 
limit for copyright royalties received from established 
publishers pursuant to usual and customary contractual terms.'' 
The Committee expressed particular concern about a purported 
agreement between Representative Kim and Hun Kim, a South 
Korean national, pursuant to which Representative Kim 
purportedly received royalties from Hun Kim consisting of forty 
percent of the gross proceeds of sales of his book in South 
Korea by Hun Kim. Representative Kim had first mentioned this 
royalty arrangement to the Committee in a letter to the 
Committee dated March 17, 1995. In that letter, he stated that 
``[f]rom the final price of the book the publisher takes 50% of 
the proceeds, the book-broker (marketing firm) [i.e., Hun Kim] 
receives 10% and the remaining 40% represents the royalty I am 
given. . . .''
    In its letter dated May 15, 1995, the Committee advised 
Representative Kim that ``your total book income for 1994 (from 
both the publisher and the marketing agent), added with any 
other outside income you may have earned in 1994, is subject to 
the $20,040 cap.'' Consistent with precedent regarding 
violations of the cap on outside earned income, the Committee 
told Representative Kim that ``you must either return the 
earned income you received in 1994 in excess of $20,040 or make 
donations to charity in an equivalent sum.''
    On or about August 3, 1995, Representative Kim filed his 
annual Financial Disclosure Statement (``FDS'') for calendar 
year 1994. He reported earned income from ``Book Publishing'' 
of $132,298, noting on the report that ``proceeds being 
refunded per 5/15/95 Standards Ctte. Communication.''
    The next day, Representative Kim sent a letter to the 
Committee acknowledging that the amount of excess earned income 
in question was $112,258, based on the income reported in his 
FDS for 1994.\8\ Based on the information provided by 
Representative Kim, the Committee reconfirmed that $112,258 
constituted the amount of the required reimbursement in an 
October 26, 1995, letter of agreement signed by Representative 
Kim.
---------------------------------------------------------------------------
    \8\ The amount of $112,258 represents the difference between 
$132,298--the amount of income reported by Representative Kim--and the 
$20,040 cap on outside income.
---------------------------------------------------------------------------
    On or about December 31, 1997, Representative Kim 
transmitted three checks to the Committee totaling $20,000 in 
partial satisfaction of his obligation to repay excess earned 
income from his book. The checks consisted of a $10,000 
cashier's check purchased on December 31, 1997 from First Union 
National Bank of Virginia, payable to the U.S. Treasury; a 
personal check in the amount $4,000 dated December 31, 1997, 
drawn on the joint account of Jay Changjoon Kim and June Kim at 
California Korea Bank in Rowland Heights, California; and a 
personal check in the amount of $6,000 dated December 31, 1997, 
drawn on the joint account of Jay Kim and June Kim at the 
Congressional Federal Credit Union in Washington, D.C.
    On or about January 23, 1998, Representative Kim submitted 
a second cashier's check to the Committee in the amount of 
$20,000, payable to the U.S. Treasury, in partial satisfaction 
of his obligation to repay excess earned income from his book. 
That cashier's check also was purchased from First Union 
National Bank of Virginia.
    By Representative Kim's own admission, Jennifer Ahn 
purchased and transmitted to him the two cashier's checks in 
the amounts of $10,000 and $20,000 that he submitted to the 
Committee on or about December 31, 1997, and January 23, 1998, 
respectively, in partial reimbursement for excess earned income 
from his book. Jennifer Ahn confirmed under oath that she 
purchased both cashier's checks on behalf of Representative 
Kim. Ms. Ahn, who resides in Northern Virginia, assisted 
Representative Kim with the marketing of his book in South 
Korea and the United States, and has helped to raise funds for 
his campaigns for election to the U.S. House of 
Representatives. Hun Kim, who purportedly served as a marketing 
agent for sales of Representative Kim's book in South Korea, is 
Ms. Ahn's brother-in-law.
    Both Jennifer Ahn and Representative Kim testified that the 
funds Ms. Ahn used to purchase the cashier's checks derived 
from proceeds from sales of Representative Kim's book to which 
he was entitled.
    Jennifer Ahn testified that in October or November 1997, 
Representative Kim contacted her and told her that he was 
required to repay money to the House of Representatives or the 
Committee on Standards of Official Conduct in connection with 
his book. According to Ms. Ahn, Representative Kim told her 
that he wanted Hun Kim to repay to him $30,000 that he had 
previously loaned to Hun Kim in order to pay part of the 
reimbursement owed for excess outside earned income. According 
to Ms. Ahn, the $30,000 represented proceeds from sales of 
Representative Kim's book by Hun Kim to which Representative 
Kim was entitled. Ms. Ahn testified that in approximately 1995 
Hun Kim had asked if he could ``borrow'' the $30,000 in sales 
proceeds because of financial difficulties at the time relating 
to medical problems.
    Jennifer Ahn testified that she conveyed Hun Kim's request 
to Representative Kim, and that Representative Kim agreed. 
According to both Jennifer Ahn and Representative Kim, the 
purported agreement between Hun Kim and Representative Kim 
regarding deferred payment of the $30,000 was solely a verbal 
agreement.
    In late 1997, according to Ms. Ahn, Representative Kim told 
her to ``get the money back'' that he purportedly had loaned to 
Hun Kim. According to Ms. Ahn, Hun Kim began to repay the 
$30,000 ``loan'' from Representative Kim in periodic 
installments beginning in 1996. She testified that sometimes 
Hun Kim personally paid her in cash in Korea, and sometimes he 
wired money to her in the United States. She kept no records of 
any of the payments by Hun Kim, according to her testimony.
    According to Ms. Ahn, she already had received repayment 
from Hun Kim of the entire $30,000 by the time that 
Representative Kim asked her to ``get the money back'' from Hun 
Kim. She testified that she did not inform Representative Kim 
she had previously received the money, however, because ``[h]e 
never asked for it.'' According to Ms. Ahn, she had been in 
possession of most of the $30,000 for a year or more before 
Representative Kim asked her for the money. Ms. Ahn further 
testified that she used some of the money that Hun Kim had 
repaid to pay her own expenses, deposited some of it in a 
personal financial account, and invested some of it in mutual 
funds. She testified that she liquidated personal investments 
to obtain funds with which to purchase the cashier's check in 
the amount of $10,000 in December 1997. She also testified that 
she used the proceeds from a loan by a close personal friend in 
South Korea to purchase the cashier's check in the amount of 
$20,000 in January 1998.
    Ms. Ahn testified that she gave Representative Kim a 
cashier's check for only $10,000 in December 1997--rather than 
funds totaling $30,000--``because that's all I could afford at 
the time.'' According to Ms. Ahn, Representative Kim asked her 
when she could pay the remaining $20,000, and she said she 
would make the payment as soon as possible.
    Representative Kim initially addressed the matter of the 
cashier's checks purchased by Ms. Ahn in a May 21, 1998, letter 
from his attorney--which Representative Kim personally 
reviewed, approved, and signed--to the Chairman and Ranking 
Democratic Member of the Investigative Subcommittee. In that 
letter, Representative Kim stated as follows:

          At approximately the time funds were being deposited 
        into my wife's personal checking account in South Korea 
        as a result of sales of my book,Ms. Ahn's brother-in-
law, Mr. Hong [sic] Kim, inquired if he could borrow approximately 
$30,000 because of medical and financial problems. I agreed to lending 
Mr. Kim the money. Accordingly, Mr. Kim retained $30,000 of my book 
proceeds instead of depositing such sums into my wife's bank account. 
This was an interest-free loan to be repaid when Mr. Kim was 
financially able to do so.
          Subsequently, Mr. Kim was able to repay me the 
        $30,000 and I recently learned that he did so by 
        transferring such sums to his sister-in-law, Ms. Ahn, 
        over a period of time. It is my further understanding 
        that the funds were on deposit in one of Ms. Ahn's 
        equity or other banking accounts. Ms. Ahn did not 
        immediately remit the repayment to me nor did I press 
        her for it. When I became responsible to repay what was 
        considered to be excessive outside earned income as a 
        result of sales of my book, it became necessary to 
        acquire the funds previously repaid by Mr. Hong [sic] 
        Kim. To this end, Ms. Ahn transferred to me the $30,000 
        . . . [in the form of] two [cashier's] checks of 
        $10,000 and $20,000.

    At his deposition, Representative Kim adopted under oath 
the statements quoted above from his letter of May 21, 1998.
    At all times during the events described above, House Rule 
51, clause 1(a), stated that ``[n]o Member, officer, or 
employee of the House of Representatives shall knowingly accept 
a gift except as provided in this rule.'' The term ``gift'' is 
defined in clause 1(b)(1) of Rule 51 as ``any gratuity, favor, 
discount, entertainment, hospitality, loan, forbearance, or 
other item having monetary value.''
     At all times during the events described above, House Rule 
43, clause 1, stated that ``[a] Member, officer or employee of 
the House of Representatives shall conduct himself at all times 
in a manner which shall reflect creditably on the House of 
Representatives.''
     It is undisputed that Jennifer Ahn purchased and 
transmitted two cashier's checks to Representative Kim 
totalling $30,000, and that Representative Kim used the 
cashier's checks to make a partial reimbursement to the U.S. 
Treasury for excess earned income from his book. There is no 
evidence in the record that the $30,000 received by 
Representative Kim represents payment for any services rendered 
by Representative Kim, or investment income earned by 
Representative Kim.
     The Investigative Subcommittee therefore would have to 
credit representations by Representative Kim and Jennifer Ahn 
that the cashier's checks represented deferred income from book 
sales by Hun Kim in order to find that the cashier's checks do 
not constitute improper gifts to Representative Kim.
     Based on a review of the record as a whole, the 
Investigative Subcommittee did not credit Representative Kim's 
or Jennifer Ahn's explanations regarding the origins of the 
funds that Ms. Ahn used to purchase the cashier's checks.
     First, the only evidence offered in support of the claim 
that the cashier's checks represented deferred repayment of a 
$30,000 loan by Representative Kim to Hun Kim is the testimony 
of Representative Kim and Jennifer Ahn, a close associate of 
Representative Kim. Representative Kim acknowledged that no 
written agreement existed between himself and Hun Kim, and Ms. 
Ahn provided no documentary evidence to substantiate her 
testimony that Hun Kim made periodic loan repayments to her in 
cash or by wire transfer in connection with Representative 
Kim's book.
     Second, the Investigative Subcommittee finds it 
implausible that Representative Kim would have agreed to defer 
repayment by Hun Kim of $30,000 during the period in question. 
According to disclosure reports filed by his campaign with the 
Federal Election Commission (``FEC''), his campaign owed him 
more than $200,000 during the period of November 28, 1994, to 
September 30, 1996, a period that overlaps with the period in 
which Hun Kim purportedly owed $30,000 to Representative Kim. 
In addition,Representative Kim was confronting legal fees at 
the time relating to the criminal investigation by the U.S. Attorney's 
Office for the Central District of California. In light of the 
substantial personal debt that he confronted during the relevant time 
period, the Investigative Subcommittee did not credit the notion that 
Representative Kim would have foregone repayment of $30,000.
     Third, Hun Kim's purported debt to Representative Kim is 
premised upon a purported marketing agreement between Hun Kim 
and Representative Kim whereby the publisher of Representative 
Kim's book was entitled to fifty percent of the revenue from 
Hun Kim's sales of the book. The publisher, however, advised 
counsel to the Investigative Subcommittee that he has no 
knowledge of such an agreement; that neither Hun Kim nor 
Sunkyong Bookstore (Hun Kim's business) was under any 
obligation to remit any percentage of subsequent sales of the 
book; and that neither Hun Kim nor Sunkyong Bookstore gave any 
money, either directly or indirectly, to the publishing company 
in connection with sales of the book by Hun Kim or Sunkyong 
Bookstore.
     Counsel to the Investigative Subcommittee also interviewed 
Hun Kim by telephone with the assistance of a translator. When 
asked if he had ``any agreements with Jay Kim regarding the 
sale or marketing of his book,'' Hun Kim responded, ``As far as 
I remember, I don't think there was one. . . . To the best of 
my recollection, there was no agreement with Jay Kim.'' 
Subsequently, he stated that he ``I don't remember exactly 
whether there was an agreement or not.''
     Hun Kim also told counsel to the Subcommittee that he 
could not remember if Representative Kim received any money 
from his involvement in the sale of Representative Kim's book 
in Korea. Nor did he have any recollection of retaining a 
percentage of the proceeds from his sales of Representative 
Kim's book, or remitting fifty percent of the sales proceeds to 
the publisher. Finally, Hun Kim told counsel to the 
Subcommittee that he did not remember whether Representative 
Kim received any money from his sale of Representative Kim's 
book.
     As stated above, Jennifer Ahn is Hun Kim's sister-in-law 
and worked with Hun Kim to market Representative Kim's book in 
South Korea. She testified that she has no knowledge of any 
agreement or understanding between Hun Kim and Representative 
Kim regarding how much money Representative Kim would receive 
from sales of his book in South Korea. She also testified that 
she has no knowledge of whether Hun Kim received a percentage 
of the proceeds from sales of Jay Kim's book in South Korea.
    -Based on the record as a whole, the Investigative 
Subcommittee therefore has substantial reason to believe that 
Representative Kim's acceptance of the cashier's checks 
purchased by Jennifer Ahn in approximately December 1993 and 
January 1994 constituted gifts within the meaning of House Rule 
51, and that Representative Kim's acceptance of the checks was 
in violation of House Rule 51. The record further supports the 
conclusion that Representative Kim used those improper gifts to 
make a partial reimbursement to the U.S. Treasury in connection 
with his violation of the limit on outside earned income. For 
that reason, the Investigative Subcommittee also has 
substantial reason to believe that, by accepting the cashier's 
checks, Representative Kim conducted himself in a manner that 
does not reflect creditably on the House of Representatives, in 
violation of the Code of Official Conduct as set forth in 
Clause 1 of Rule 43 of the House of Representatives.