June 27, 2002

The Honorable Joel Hefley
Chairman
The Honorable Howard L. Berman
Ranking Minority Member
Committee on Standards of Official Conduct
HT-2, The Capitol
Washington, D.C. 20515

Re: In the Matter of Representative James A. Traficant, Jr.

Dear Chairman Hefley and Ranking Minority Member Berman:

Pursuant to Rule 23(g) of the Rules of the Committee on Standards of Official Conduct, we herewith transmit the attached Statement of Alleged Violations adopted unanimously by the Investigative Subcommittee in the above-captioned matter. Also attached is the Answer of the Respondent to the Statement of Alleged Violations, and the following pleadings of the Respondent and related responses of the Investigative Subcommittee: the Respondent’s Motion for a Bill of Particulars dated June 3, 2002; the Investigative Subcommittee’s response to the Motion for a Bill of Particulars dated June 4, 2002 (granting the motion in part and denying the motion in part); the Respondent’s Motion to Dismiss dated June 14, 2002; and the Investigative Subcommittee’s response to the Motion to Dismiss dated June 17, 2002 (denying the motion).

We also herewith transmit the evidence relied upon by the Investigative Subcommittee to prove the charges set forth in the Statement of Alleged Violations, which materials consist of the certified trial transcript in United States of America v. James A. Traficant, Jr., Criminal No. 4:01CR207 (N.D. Ohio) (Eastern Division), and certified copies of exhibits admitted into evidence in that trial.

In addition to memorializing the transmittal of the aforementioned documents, this letter also constitutes the Report of the Investigative Subcommittee to the full Committee regarding this inquiry.

This Investigative Subcommittee was established on April 17, 2002, and was given jurisdiction to determine whether Representative Traficant violated the Code of Official Conduct, or any law, rule, regulation, or other standard of conduct applicable to his conduct in the performance of his duties or the discharge of his responsibilities, with respect to any or all of the matters for which Representative Traficant stood trial in United States of America v. James A. Traficant, Jr., Criminal No. 4:01CR207 (N.D. Ohio) (Eastern Division).

During its inquiry, the Investigative Subcommittee obtained and reviewed a complete certified transcript of Representative Traficant’s trial, as well as certified copies of all exhibits admitted into evidence during that trial. The Investigative Subcommittee also obtained and reviewed materials from the U.S. Department of Justice that that department represented were furnished to the government by Representative Traficant in connection with his criminal prosecution. Those materials included audio tapes, apparent bank records, and other documents.

In accordance with Committee Rule 20(a)(3), the Investigative Subcommittee provided Representative Traficant with "an opportunity to present, orally or in writing, a statement, which must be under oath or affirmation, regarding the allegations and any other relevant questions arising out of the inquiry." By letter dated April 24, 2002, Representative Traficant was invited to appear before the Investigative Subcommittee at the offices of the Committee on Standards of Official Conduct on May 1, 2002 at 3:00 p.m. As an alternative, Representative Traficant was invited to submit a written statement to the Investigative Subcommittee by May 1, 2002. Representative Traficant did not provide any written notification to the Subcommittee as to whether he would decline his opportunity to submit a written statement or make an oral statement, and in fact he did not submit a written statement by May 1, 2002.¹ Absent any notification or response from Representative Traficant, and in the event that he would appear to make an oral statement at the time scheduled, the Investigative Subcommittee convened at 3:00 p.m. on May 1, 2002 for the purpose of hearing from Representative Traficant. As the record of that meeting reflects, Representative Traficant did not appear that day to make an oral statement, nor did he submit a written statement pursuant to Committee Rule 20(a)(3).

At a time after the adjournment of the aforementioned meeting of the Investigative Subcommittee, the Investigative Subcommittee received a letter from Representative Traficant requesting that the Investigative Subcommittee furnish him with a copy of the transcript of his criminal trial, and further that he be granted a "a 30-day extension from the time [he] receive[d] the transcripts to respond."²  After considering his letter and the circumstances presented, the Investigative Subcommittee determined to deny Representative Traficant’s request for a 30-day extension. The Investigative Subcommittee determined, however, that the particular interests of proceeding expeditiously in this matter would be well-served by granting his request for a copy of the trial transcript. Accordingly, on May 3, 2002, the Investigative Subcommittee transmitted to Representative Traficant a complete set of copies of the certified trial transcript in United States of America v. James A. Traficant, Jr., Criminal No. 4:01CR207 (N.D. Ohio) (Eastern Division), as well as a complete set of copies of certified copies of the exhibits admitted into evidence during that trial.³

On May 8, 2002, pursuant to Committee Rule 27(c), the Investigative Subcommittee provided Representative Traficant with a copy of a Statement of Alleged Violations ("SAV") it intended to adopt in this matter.⁴ On that date, the Investigative Subcommittee further advised Representative Traficant, inter alia, that the copies of certified transcripts and exhibits it had previously furnished to him constituted all the evidence it intended to use to prove the charges set forth in the SAV that the Investigative Subcommittee intended to adopt.⁵  In addition, although not obligated to do so under any Committee or House Rule, in the interest of full disclosure, the Investigative Subcommittee also determined to, and did, make the materials furnished by the U.S. Department of Justice in this matter available for inspection by Representative Traficant at the offices of the Committee on Standards of Official Conduct.⁶

On May 22, 2002, the Investigative Subcommittee voted to adopt the attached SAV. Subsequent to this event, Representative Traficant filed the aforementioned Motion for a Bill of Particulars and Motion to Dismiss, to each of which the Investigative Subcommittee responded. Representative Traficant filed an Answer to the SAV on June 27, 2002.

Dozens of witnesses gave sworn testimony during Representative Traficant’s criminal trial, and hundreds of pages of documentary evidence were admitted into evidence during that proceeding. Although the Investigative Subcommittee took notice of the fact that Representative Traficant was indicted and found guilty of ten felony offenses, the charges in the SAV are based on the certified transcript of and the certified copies of the exhibits from his trial. We note for your information that under Committee Rules, an investigative subcommittee may adopt a Statement of Alleged Violations only if it determines "that there is a 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." See Committee Rule 20(e) (emphasis added). It is the unanimous opinion of the Investigative Subcommittee, however, that the trial testimony and other evidence far exceeded this evidentiary standard.⁷

Each of the counts in the SAV alleges egregious conduct that reflects directly on Representative Traficant’s official and representative responsibilities. As charged in Count X of the SAV, and as shown by the trial testimony and evidence, during the time periods alleged in the SAV, Representative Traficant engaged in a continuing pattern and practice of official misconduct, through which he misused his office for personal gain. To illuminate the nature of Representative Traficant’s conduct in this matter, several specific examples of his conduct are summarized below.

First, as set forth in Count I of the SAV, Representative Traficant agreed to and did perform official acts on behalf of Anthony Bucci, Robert Bucci, and companies they controlled, for which Anthony Bucci, Robert Bucci, companies they controlled, and others acting at their request agreed to and did provide Representative Traficant with things of value, including free labor, materials, supplies, or equipment for use at Representative Traficant’s farm. Among other official acts, on behalf of the Buccis and companies they controlled, Representative Traficant intervened in matters pending before the Ohio Department of Transportation and the United States Department of Labor. David Dreger, a former deputy director within the Ohio Department of Transportation testified that at a meeting with Representative Traficant, Representative Traficant communicated to him that there would be trouble for that department if, in its enforcement of a contract with the Buccis, it "caused the Bucci brothers to lose their business." Indeed, Anthony Bucci testified that in exchange for the things of value provided by him and his brother to Representative Traficant (including forgiveness of a nearly $13,000 debt owed by Representative Traficant to the Buccis), "we were going to own him."

As set forth in Count II of the SAV, Representative Traficant agreed to and did perform official acts on behalf of Arthur David Sugar, Sugar’s son, and companies Sugar controlled, for which Arthur David Sugar, companies he controlled, and others acting at his request agreed to and did provide Representative Traficant with things of value, including free labor, materials, supplies, or equipment for use at Representative Traficant’s farm. Among other official acts performed by Representative Traficant for the Sugars, Representative Traficant took actions in connection with the incarceration of Arthur David Sugar’s son following a DUI conviction. For example, Representative Traficant wrote a letter for attachment to a bond motion to be filed with the Licking County Court of Common Pleas, and directed a staff member to contact the director of a Youngstown half-way house regarding Arthur David Sugar’s son. After learning he was under investigation, Representative Traficant gave Sugar an unsolicited check for $1,142 and took other steps to conceal his request for and acceptance of free labor and materials from the Sugars.

As described in Count III of the SAV, Representative Traficant agreed to and did perform official acts on behalf of John J. Cafaro, U.S. Aerospace Group, LLC ("USAG"), and/or other persons or entities affiliated with USAG, for which John J. Cafaro, companies he controlled, and others acting at his request, agreed to and did provide Representative Traficant with things of value. The aforementioned things of value included numerous meals (worth approximately $3,675), a welder and related supplies (worth approximately $3,050), a generator (worth approximately $2,700), the loan or provision of four automobiles, and/or the payment for repairs, slip fees, and related expenses for Representative Traficant’s boat (worth approximately $26,000). As part of the aforementioned course of conduct, Representative Traficant, John J. Cafaro, and others engaged in a scheme under which Mr. Cafaro would use his own, or company funds to purchase Representative Traficant’s boat, but make it falsely appear that an employee of USAG was purchasing the boat in his individual capacity. In connection with this scheme, Mr. Cafaro provided the funds necessary to reimburse the employee for thousands of dollars in funds expended for boat repairs and slip fees. Moreover, in addition to the other expenditures he made or authorized regarding Representative Traficant’s boat, Mr. Cafaro gave Representative Traficant an envelope containing $13,000 in cash, representing approximately one-half of the purchase price of the boat. In exchange for the aforementioned things of value, Representative Traficant took numerous official actions to promote the laser-guided technology marketed by USAG, including facilitating a meeting between USAG officials and the Chairman of the Federal Aviation Administration during which this technology was flight-tested. When John J. Cafaro was asked during the trial "[w]hat, if any, promises was the Congressman making with regard to Army – the potential for Army contracts for USAG?", he testified that Representative Traficant "said he had great relationships with the military and armed forces subcommittee, and that it was possible to get funding for this type of equipment through that particular subcommittee."

Counts IV and V of the SAV each relate to a course of conduct by Representative Traficant in which he employed attorney Raymond Allen Sinclair as a member of his congressional district staff, in exchange for Mr. Sinclair’s agreement to rent additional office space to Representative Traficant for use as a congressional district office, and to pay Representative Traficant $2,500 per month of his congressional salary. In his testimony, Mr. Sinclair described in detail how he placed $2,500 in an envelope each month which he deposited under the door of Representative Traficant’s private office, and how he continued to maintain his full-time private law practice while a salaried congressional employee of Representative Traficant. Also in connection with this conduct, Count VI of the SAV addresses Representative Traficant’s effort to persuade Mr. Sinclair to destroy evidence of salary kickbacks and to provide false testimony to a federal grand jury. Mr. Sinclair detailed in his testimony how at the direction of Representative Traficant and in Representative Traficant’s presence, envelopes used to transmit such funds to Representative Traficant were burned in a tub in the basement of Mr. Sinclair’s office building. The partially burned envelopes were admitted into evidence during Representative Traficant’s trial.

Count VII of the SAV relates to a course of conduct in which Representative Traficant defrauded the United States of money and property (1) by soliciting and accepting payments from the salaries of congressional employees (including Raymond Allen Sinclair, former administrative assistant Henry DiBlasio, and former district director Charles O’Nesti), which salaries were drawn from the funds of the United States Treasury; (2) by directing members of his congressional staff to perform personal labor and services to maintain and repair Representative Traficant’s boat; and (3) by having members of his congressional staff perform personal labor and services at Representative Traficant’s farm. The personal labor and services of Representative Traficant’s congressional staff were performed at his farm and/or boat for no compensation other than their congressional salaries. The labor and services on behalf of Representative Traficant at his farm included baling hay, running and repairing farm equipment, maintaining and repairing structures on the farm, building a horse corral, converting a corn crib to another use, among other labor and services. Among other witnesses that testified on this subject, one former member of Representative Traficant’s congressional district staff, George Bucella, testified that he termed going to the farm as "going south," and that he did so to perform work at Representative Traficant’s farm between 100 and 300 different days. Richard Rovnak, a part-time employee in Representative Traficant’s district office, testified that at Representative Traficant’s direction, he spent most of his time at Representative Traficant’s farm doing work that included plumbing, wiring, and other "handyman" work. Rovnak also spent time in Washington, D.C. as part of his part-time employment for Representative Traficant, but he performed no duties at Representative Traficant’s congressional office. Instead, he performed work on Representative Traficant’s boat that included painting, varnishing, and replacing brass fittings.

Counts VIII and IX relate to federal income tax returns for the calendar years 1998 and 1999, which were made and subscribed by Representative Traficant on behalf of himself and his wife, and which income tax returns were verified by written declarations by Representative Traficant that were verified under penalties of perjury, and were filed with the Internal Revenue Service. As set forth in these Counts, Representative Traficant did not believe the income tax returns to be true and accurate as to every material fact in that he knew he and his wife’s total income was substantially in excess of the amounts reported in those returns. In essence, Representative Traficant filed two false income tax returns with the Internal Revenue Service that failed to report the substantial income accrued to him in connection with the gratuities and/or bribes and salary kickbacks he received and accepted during the calendar years 1998 and 1999.

Finally, as noted, Count X of the SAV charges Representative Traficant with engaging in a continuing pattern and practice of official misconduct, through which he misused his office for personal gain, and which comprised the following instances of conduct, or any combination thereof: the instances of conduct alleged in each of Counts I, II, III, IV, V, and VII of the SAV, separately and inclusive; and/or the course of conduct in which Representative Traficant agreed to and did perform official acts on behalf of Bernard "Pete" Bucheit, for which Bucheit and companies he controlled agreed to and did provide Representative Traficant with things of value. On behalf of Bucheit, Representative Traficant intervened with United States government authorities with respect to a contract dispute between Bucheit’s company and Prince Mishaal of Saudi Arabia, and/or with respect to an investment in the Gaza Strip. Officials contacted by Representative Traficant on behalf of Bucheit included Vice President Al Gore, Secretary of State Madeline Albright, Secretary of State James Baker, United States Ambassador to Saudi Arabia Charles Friedman, and United States Ambassador to Kuwait Ryan Crocker, among other high ranking United States officials. In exchange for these official acts, Representative Traficant received free labor and materials for use at Representative Traficant’s farm. Among others who testified they performed work at Representative Traficant’s farm at the expense of Bucheit, David Manevich testified that he repaired a wooden deck at Representative Traficant’s farm, as well as constructed a privacy fence, enclosed a room on the deck, and built a gazebo, for which he was paid $26,994 by Bucheit.

Based on the conduct alleged in the SAV, Representative Traficant is charged in that document with violating multiple provisions of the Code of Official Conduct (current House Rule 23), as well as a provision of the Code of Ethics for Government Service. As charged in the SAV, with respect to the conduct alleged in each and every one of the ten Counts in the Statement of Alleged Violations, Representative Traficant violated Clause 1 of the Code of Official Conduct (current House Rule 23), which provides that "[a] Member of the House shall conduct himself at all times in a manner that shall reflect creditably on the House." In addition, with respect to the conduct alleged in each of Counts I, II, III, IV, V, VI, VII, and X of the SAV, Representative Traficant is charged with violating Clause 2 of the Code of Official Conduct (current House Rule 23), which provides that "[a] Member of the House shall adhere to the spirit and letter of the Rules of the House and to the rules of duly constituted committees thereof." With respect to the conduct alleged in each of Counts I, II, III, IV, V, VII, and X of the SAV, Representative Traficant is charged with violating Clause 3 of the Code of Official Conduct (current House Rule 23), which provides that "[a] Member . . . of the House may not receive compensation and may not permit compensation to accrue to his beneficial interest from any source, the receipt of which would occur by virtue of influence improperly exerted from his position in Congress." Finally, with respect to Counts VI, VIII, IX, and X of the SAV, Representative Traficant is charged with violating Clause 2 of the Code of Ethics for Government Service, which provides that "[a]ny person in Government service should . . . [u]phold the Constitution, laws, and legal regulations of the United States and of all governments therein and never be a party to their evasion."

In the view of the Investigative Subcommittee, Representative Traficant violated the letter and spirit of each of the aforementioned standards of conduct. Indeed, as noted previously, the examples of Representative Traficant’s misconduct set forth in this letter are only a partial list of the egregious misconduct for which Representative Traficant is charged in the Statement of Alleged Violations. The charges in the Statement of Alleged Violations are of the most serious nature and are abundantly supported by the evidence in the record, and which evidence demonstrates that Representative Traficant continually traded his office and the duties he swore to uphold for money and a wide range of other things of value.

As noted, the Investigative Subcommittee’s jurisdiction encompassed any and all of the matters for which Representative Traficant recently stood trial. To the extent possible, in the interests of clarity and in conducting its inquiry expeditiously, the Investigative Subcommittee focused its examination of the evidence to that relating to matters for which Representative Traficant was indicted by a grand jury and, subsequently, found guilty by a jury.

Specifically, the Investigative Subcommittee examined the record to determine whether the evidence adduced during the trial that resulted in Representative Traficant’s conviction of ten felony offenses also supported findings that Representative Traficant committed violations of the Code of Official Conduct, or any law, rule, regulation, or other standard of conduct applicable to his conduct in the performance of his duties or the discharge of his responsibilities. See Committee Rule 19(a). Although Representative Traficant was convicted of all ten felony offenses for which he was indicted, with respect to Count 10 of the indictment – the "racketeering" count – the jury found that Representative Traficant committed only eight of the 11 "racketeering acts" alleged.⁸  While the Investigative Subcommittee reviewed the evidence pertaining to the remaining three "racketeering acts," and considered whether the evidence regarding those acts supported independent findings that Representative Traficant violated the Code of Official Conduct (among other violations for which he could be sanctioned by the House), it ultimately determined not to charge those acts in the SAV. This determination was made not because the evidence would not support a finding of a violation, but to avoid any unnecessary controversy that may have arisen as a result of the Investigative Subcommittee charging a violation for the same acts that a jury did not conclude Representative Traficant committed based upon the same evidence. The Investigative Subcommittee made this determination notwithstanding the different standards, precedents, and burden of proof applicable to this ethics process. In brief, the Investigative Subcommittee was satisfied that the Statement of Alleged Violations it adopted more than amply describes and encompasses, even without additional charges, the wide range of ongoing official misconduct engaged in by Representative Traficant, through which he repeatedly misused his office for personal gain. The fact that additional charges were not adopted should not preclude consideration or charging of similar matters in future Committee inquiries.

Indeed, again in the interest of expediting proceedings where a Member has been found guilty of ten felony offenses, the Investigative Subcommittee did not pursue to conclusion other violations by Representative Traficant potentially supported by the evidence in the trial record. For example, clause 5(a)(1)(A) of current House Rule 25 (the "Gift Rule") provides that a Member may not knowingly accept a gift except as provided in clause 5 of House Rule 25. Clause 5(a)(2)(A) defines the term "gift" as "a gratuity, favor, discount, entertainment, hospitality, loan, forbearance, or other item having monetary value," as well as "gifts of services, training, transportation, lodging, and meals, whether provided in kind, by purchase of a ticket, payment in advance, or reimbursement after the expense has been incurred." In the view of the Investigative Subcommittee, the same evidence in the trial record that supported the charges in the SAV, in all likelihood, could have supported a finding that Representative Traficant received scores of gifts in violation of the Gift Rule in the form of money, meals, automobiles, farm equipment, free labor at his farm, and/or free labor to repair and maintain his boat, among other gifts.⁹ The record did not support a finding that Representative Traficant’s acceptance of these items fell within any exception contained in the Gift Rule. Compounding the mere receipt of these apparent gifts – potential violations in and of themselves – was the fact that the gifts were often solicited by Representative Traficant, and were in connection with official favors he performed for those who gave him the gifts.

In connection with his apparent receipt of gifts, and in apparent violation of Clause 2 of current House Rule 26, and of Title I of the Ethics in Government Act of 1978, and despite the instructions provided to him, Representative Traficant failed to disclose the source, a brief description, and the value of the aforementioned gifts on his annual financial disclosure statements. We note that Representative Traficant certified on each of his annual financial disclosure statements that his statements thereon and on all attached schedules were "true, complete and correct to the best of [his] knowledge and belief."¹⁰

Other possible violations of the Code of Official Conduct or other rules stem from testimony indicating that Representative Traficant may have lived in his congressional district office with the rent for that office being borne by taxpayers, and indicia in the trial record that a member of Representative Traficant’s congressional staff may have provided Representative Traficant with trial assistance, possibly in lieu of her official duties.¹¹  This list is not intended to be exhaustive.

As we noted, the Investigative Subcommittee determined not to pursue separate allegations based on the aforementioned apparent Gift Rule and other violations. The core conduct of Representative Traficant for which he stood trial and which the Investigative Subcommittee was established to investigate – that is, his misuse of his official office for personal gain – is fully encompassed in the Statement of Alleged Violations. To pursue other avenues further would have required the Investigative Subcommittee to undertake new and time-consuming avenues of inquiry, and possibly to seek expansion of its jurisdiction. It was the unanimous opinion of the Investigative Subcommittee that the interests of the House would be best served by proceeding as rapidly as possible to the adjudicatory stage of the ethics process with respect to the matters alleged in the Statement of Alleged Violations.

In light of the need to preserve public confidence in the legislative process when a Member of Congress has been convicted of ten felony offenses relating directly to his misuse of public office, the Investigative Subcommittee recommends that this matter proceed to an adjudicatory hearing as expeditiously as possible.

Sincerely,

/s Doc Hastings, Chairman Investigative Subcommittee           /s Zoe Lofgren, Ranking Minority Member, Investigative Subcommittee

/s Roger F. Wicker, Member, Investigative Subcommittee         /s  John Lewis, Member, Investigative Subcommittee

Attachments