Outside lawyer hired to review investigators in Rep. Waters’ ethics case

Reporting from Washington —  With its case against Rep. Maxine Waters in turmoil, the House Ethics Committee on Wednesday hired a prominent outside lawyer to examine whether its own staff acted improperly while investigating the veteran Los Angeles congresswoman.

After Washington lawyer Billy Martin completes his review of the committee staff’s conduct, the ethics panel will decide whether to pursue the case against Waters, an outspoken Democrat who has held elective office in Sacramento or Washington for more than three decades.

Waters said the committee recognized that its investigation of her was “misguided, flawed and could go no further” and expressed confidence that the outside counsel would conclude that “further investigation of me is not warranted.”

Waters has been accused of intervening on behalf of a bank where her husband owned stock and served on the board. But the case against her, started two years ago, has been stalled by strife within the committee, which is evenly divided between Democrats and Republicans and operates largely in secret.

In announcing the unanimous decision to hire an outside counsel, the panel’s Republican chairman, Rep. Jo Bonner of Alabama, and top Democrat, Rep. Linda T. Sanchez of Lakewood, cited “serious allegations” made about the committee’s conduct.

Memos last year from the committee’s then-staff director and chief counsel Blake Chisam accused two staff members who worked on the Waters investigation of unauthorized communications with Republican committee members, Politico reported this week. One document said the contacts could pose a “serious risk of tainting the fact finder.”

Committee officials have declined to comment on the published report, although Bonner this year told the staff members, who have moved on to other jobs, that he had determined their actions to be “consistent with the highest ethical standards.”

One committee official who spoke on condition of anonymity because he was not authorized to comment publicly said the decision to hire an outside counsel had been in the works for weeks.

Earlier Wednesday, a coalition of watchdog groups including Common Cause and the League of Women Voters called for the hiring of an outside counsel to “ensure a publicly credible investigation.”

Martin plans to get to work immediately, the committee said. Up to $500,000 has been authorized for his work through the end of the year, when the committee hopes to reach a decision about Waters. Options include dropping the case or moving ahead with a trial.

Martin, 51, a trial lawyer with the law firm Dorsey & Whitney, has been involved in a number of high-profile cases. He defended NFL football player Michael Vick in a dog-fighting case, represented the parents of slain Washington intern Chandra Levy and, during the investigation of former President Clinton, served as counsel to both Monica Lewinsky and her parents, according to the law firm’s website.

Waters, a high-ranking member of the House committee that oversees banking, came under scrutiny for calling then-Treasury Secretary Henry M. Paulson to set up a September 2008 meeting during the financial crisis between his staff and representatives of minority-owned banks.

The Office of Congressional Ethics, an independent body that referred the case to the House Ethics Committee, said the discussion at the meeting “centered on a single bank, OneUnited.” Three months later, OneUnited received $12 million in federal bailout funds, which had yet to be repaid as of last week.

The ethics panel also accused Waters’ Chief of Staff Mikael Moore, who is her grandson, of working to help the institution, even as Rep. Barney Frank (D-Mass.), then chairman of the House Financial Services Committee, urged Waters to “stay out of it” because of her husband’s ties to the bank.

Waters, 72, has defended her actions, saying she didn’t benefit financially and was acting on behalf of minority banks in general, not just OneUnited. Waters’ husband, Sidney Williams, served on the OneUnited board from January 2004 to April 2008. Waters’ most recent financial disclosure report shows her husband’s investment in the bank valued at between $100,000 and $250,000 last year.

Delays in the case have drawn criticism from watchdog groups. Waters was scheduled to go on trial before fellow House members last fall, but the case was put off to allow for further investigation after a new piece of information was discovered during preparation of a witness for the hearing.

richard.simon@latimes.com