By WALTER SHAUB
Under cover of the feverish reaction to the FBI memorandum released by U.S. Rep. Devin Nunes, the Office of Government Ethics quietly dumped documents revealing a new low point in the agencyâ€™s 40-year history. In a letter signed Jan. 29, but withheld from public view until the memo frenzy was peaking, the agencyâ€™s Trump-appointed acting director, David Apol, blessed a shockingly permissive arrangement for funneling cash to White House appointees and others linked to Trump.
The fund, which will reimburse legal fees stemming from the Russia investigations, represents a radical and dangerous departure from established practice for government-employee legal defense funds. Itâ€™s formulated under, of all things, an IRS designation for political organizations. Even its name, the Patriot Legal Expense Fund Trust, echoes the tribal politics of our time. The name may suggest something more sinister still, that the cash is for â€śpatriotsâ€ť loyal to the president.
When the plan to set up a fund was announced, White House lawyer Ty Cobb told NBC none of the money would go to â€śindictees or current targets.â€ť That might mean the president is throwing the likes of former national security adviser Michael Flynn and Trump campaign consultant George Papadopoulos into the outer darkness. They have pleaded guilty to lying to the FBI and are cooperating with special counsel Robert S. Mueller III. In fact, the fundâ€™s newly finalized charter does discourage payments to criminal defendants, but it also includes a convenient exception: The fundâ€™s manager has â€śsole and absolute discretionâ€ť to determine that the defendant acted â€śin good faith and without knowledgeâ€ť of any illegality.
Other legal defense funds for government workers â€” for example, those set up for President Bill Clintonâ€™s staffers when he was under investigation â€” have been structured as trusts for one employee at a time. In such trusts, the money collected can only be disbursed to that single beneficiary. It canâ€™t be used to favor or shun potential recipients based on what they may or may not reveal to investigators.
Not so with the Patriot Fund. Despite its name, it is set up not as a trust but as a limited liability company â€” an LLC â€” and its funds can go to any of the White House staffers, campaign workers or other Trump associates who get caught up in the Russia investigations. The fundâ€™s charter is largely silent as to the selection process except to grant absolute power to the fund manager, who alone passes judgment on who is worthy or unworthy of support.
An ingenious flourish on this unbounded control is language barring the manager from revealing publicly (or to individual recipients) how the decisions are made. That bit of omerta shields the manager from scrutiny. (One rule of the Patriot Fund, it seems, is you donâ€™t talk about the Patriot Fund.)
The 49-page charter is a lush garden of legal formalities that conceal the fundâ€™s minimal consideration of ethical safeguards. No firewall prevents the president from bending the managerâ€™s ear about who should or shouldnâ€™t receive the fundâ€™s largesse. Nor is the manager required to seek any guidance from ethics officials to determine if donations come from prohibited sources. The Patriot Fund doesnâ€™t specifically bar gifts from a donor who verbally admits the donation is based on the potential recipientâ€™s official position. Only if the donor puts such a prohibited motive in writing would the money be refused â€” and see below, perhaps not even then.
The manager isnâ€™t required to individually screen each donor to check for ethical conflicts. Instead, the Patriot Fund relies mainly on an honor system. Donors complete online forms to self-certify that their gifts comply with the rules.
Among the things donors are asked to attest to is that they donâ€™t do business with, and arenâ€™t regulated by, federal agencies that could be influenced by a potential beneficiary of the fund. The online form then helpfully lists 20 â€śindependentâ€ť agencies â€” for example, the Securities and Exchange Commission â€” that it defines as exempt from this rule. Unfortunately, White House staffers and other senior appointees do consult with and influence the SEC and all the other agencies on the list.
According to the charter, the Patriot Fund wonâ€™t strictly refuse money from prohibited sources. Instead, it allows the manager to track bad and good donations separately. Money from prohibited sources would count only toward distributions to recipients outside the government, who arenâ€™t subject to federal ethics rules. This is a shell game. For legal purposes, bad money taints the whole fund because money is fungible: Every dollar the fund accepts from a questionable source and pays to a nongovernmental beneficiary frees up a dollar for those who work for the government. All the book-cooking in the world canâ€™t remove the taint.
Finally, the charter includes a provision authorizing distributions from the Patriot Fund to Trumpâ€™s reelection campaign. This is unprecedented in my experience â€” legal defense funds are not also campaign fundraising tools. And depending on the tax status of the Patriot Fund LLC â€” whether it is a partnership or a corporation â€” distinct election law rules either prohibit or limit direct campaign contributions. How exactly the fund will reconcile itself with these laws is a mystery.
Government-employee legal defense funds are not required to seek approval from the Office of Government Ethics. They do, however, because the officeâ€™s blessing conveys legitimacy in the eyes of the public, and it may even give pause to investigators later on. Apolâ€™s decision to bless the bizarre charter of the Patriot Fund is a heartbreaking breach of applicable laws and the executive branchâ€™s ethical norms.
Shaub, senior director for ethics at the Campaign Legal Center in Washington, resigned as the director of the Office of Government Ethics in July 2017.
Distributed by Tribune Content Agency.