November 21, 2018 Emory A. Rounds, III Director U.S. Office of Government Ethics 1201 New York Avenue NW Washington, DC 20005 Re: Cynthia Shaw Director Departmental Ethics Office Justice Management Division U.S. Department of Justice 950 Pennsylvania Avenue NW Washington, DC 20530 Potential Commissions from Public Financial Disclosures by Acting Attorney General Matthew Whitaker Dear Mr. Rounds & Ms. Shaw: We write to follow up on our recent letter regarding the Department of Justice’s release of financial disclosure reports filed by Acting Attorney General Matthew Whitaker. Today DOJ provided recently revised copies of Mr. Whitaker’s new entrant and annual public financial disclosure reports. In the short time that they have been available, we have identified at least one potentially significant omission from the disclosures contained in these two reports. Federal Election Commission filings by Whitaker for Senate, Inc. — a campaign committee initially formed by Mr. Whitaker in connection with his 2014 candidacy in the Republican primary for the U.S. Senate in Iowa -- indicate that Mr. Whitaker made a personal loan to his campaign committee.1 The most recent FEC report filed by this campaign committee in October 2018 indicates that $49,187.37 of this debt remains outstanding, and there is no indication that it has been written off by the creditor (that is, Mr. Whitaker in his personal capacity). But there is also no disclosure of this significant asset in either of Mr. Whitaker’s filed public financial disclosure reports.2 OGE guidance is clear that a loan to another party is a reportable asset on the public financial disclosure reports, apart from certain loans to immediate family members.3 Transparency regarding Mr. Whitaker’s potential ability to recoup a large amount of money from individual contributions to his campaign committee is important because of the significant potential WHITAKER FOR SENATE INC, FEC FORM 3, Oct. 18, 2018, http://docquery.fec.gov/pdf/108/201810180300239108/201810180300239108.pdf (showing $49,187.37 owed to Matthew G. Whitaker from an original loan of $50,000 with no recent payments). 2 Forms available at https://www.americanoversight.org/document/acting-attorney-general-whitakersannual-form-278. 3 OFFICE OF GOVERNMENT ETHICS, Public Financial Disclosure Guide, Other Assets & Income, Loan Made to Another Party, https://www.oge.gov/web/278eguide.nsf/2f96d42716636dbf85257f490052263c/1e57fed98f4ab3c18 5257f45006b2bcf?OpenDocument. 1 1030 15th Street NW, Suite B255, Washington, DC 20005 AmericanOversight.org conflicts of interest that could flow from such contributions. Unlike individual contributions to an active campaign, which benefit the candidate only insofar as those contributions can be used to promote the campaign for an office, here Mr. Whitaker receives a direct and personal financial benefit from any contributions designated to retire the outstanding debts of his 2014 campaign. These potential concerns are underscored by recent activity in the campaign accounts. In late January and early February of 2018 -- that is, during Mr. Whitaker’s tenure as Chief of Staff and Senior Counselor to the Attorney General, but after multiple years of inactivity in the account -Mr. Whitaker’s campaign committee received four contributions totaling $8,800 according to its FEC filing.4 Notably, at least some of the contributors appear to be affiliated with Mr. Whitaker’s former lobbying clients. If these contributions were solicited to retire campaign debt, they directly benefited Mr. Whitaker as the campaign’s only reported creditor. If they were not solicited for that purpose, Mr. Whitaker nevertheless remains a creditor with a reportable asset. The prospect that Mr. Whitaker may receive a direct and personal financial benefit from these contributions creates a clear potential conflict of interest that should be disclosed and analyzed for potential recusal obligations. Transparency regarding potential conflicts of interest is a core tenet to the federal government ethics program. Especially given the tremendous responsibilities he has recently assumed as acting head of the Department of Justice, it is important that the public be informed of any possible sources of financial conflicts of interest for Mr. Whitaker, and that those potential conflicts of interest be carefully evaluated for potential recusal obligations. Moreover, the absence of any disclosure regarding this asset in Mr. Whitaker’s filed public financial disclosure reports raises troubling questions regarding the completeness of those disclosures. Indeed, given that filers of public financial disclosure reports are required to certify that the reports are “true, correct, and complete to the best of [their] knowledge,” a deliberate omission of a required disclosure could also constitute a federal crime.5 American Oversight is a non-partisan organization dedicated to accountability and ethics in government. No doubt we share that commitment with you. We urge the Departmental Ethics Office take steps to ensure that Mr. Whitaker’s public financial disclosure reports are revised to reflect all sources of potential conflicts of interest, and to carefully evaluate the potential recusal obligations that may result, including, in particular, any recusal obligations resulting from the individual contributions to Mr. Whitaker’s campaign committee. We likewise urge OGE to investigate why Mr. Whitaker failed to disclose the debt as required, whether the failure was deliberate, and whether there is anything else he failed to disclose. Mr. Whitaker’s financial disclosure forms reflect several revisions, including changes made as recently as November 20, 2018, which indicates they were under scrutiny, and yet this significant asset was apparently omitted. We also urge OGE to work with the Department of Justice to ensure that its ethics program yields timely and transparent disclosures regarding the potential conflicts of interest of WHITAKER FOR SENATE INC, FEC FORM 3, Oct. 18, 2018, http://docquery.fec.gov/pdf/108/201810180300239108/201810180300239108.pdf (showing individual contributions) 5 See, e.g., 18 U.S.C. § 1001. 4 2 Department employees, and urge OGE to take appropriate informal action under 5 U.S.C. § 2638.402 as necessary to ensure that DOJ’s ethics program meets this standard. Sincerely, Austin R. Evers Executive Director American Oversight 3