Formal ethics investigation likely to dog Berkley for duration of Senate campaign

By Karoun Demirjian

Published Tuesday, July 10, 2012 | 2 a.m.

Updated Tuesday, July 10, 2012 | 9:04 a.m.

Nevada Rep. Shelley Berkley was always going to have to face some tough music on the Senate campaign trail over allegations she used her seat in Congress to push for policies and programs that benefited her family’s bottom line.

But the inquiry that stood at least a chance of being dismissed as a political witch hunt now ranks among the most serious investigations of alleged ethical offenses taking place this Congress.

The House Committee on Ethics voted unanimously Monday to appoint an investigative subcommittee, armed with full subpoena power, to determine whether Berkley violated the House’s Code of Official Conduct over matters “in which (her) husband had a financial interest.”

In 2008, Berkley joined with other members of the Nevada House delegation, including her current Senate opponent, Dean Heller, to press federal officials not to shutter the kidney center at University Medical Center in Las Vegas, which would have sent Southern Nevadans in need of transplants looking out of state for treatment. In that same year, Berkley sent a letter on her own to Rep. Pete Stark, who chaired the House subcommittee with jurisdiction over Medicare, urging him to oppose lowering Medicare reimbursement rates for dialysis.

Those are legitimate actions for the average, disinterested representative. But Berkley’s husband, Dr. Larry Lehrner, is a kidney doctor with a large practice, millions of assets in dialysis units and a contract — through his group medical practice — with UMC to provide the full range of kidney care.

Berkley has maintained, since her actions were first detailed in a New York Times investigation last year, that her advocacy for federal spending on kidney care — whether through the letters she wrote or the eight pieces of legislation she introduced on the subject — was done purely out of concern for her constituents.

“I couldn’t have lived with myself if I had stepped back and that program would have closed,” she said Monday in a Capitol hallway after the ethics committee released its decision. “I mean, there were 200 people waiting in line for a kidney transplant. What would you tell them? That you can’t, you won’t, you shouldn’t? That was my job.”

She’s confident the House investigators will come to the same conclusion.

“Once this is complete,” Berkley added, “there’s not going to be a question in anybody’s mind that my only concern was for the health and well-being of the people I represent.”

But ask her if she wants the committee to hurry up and finish their investigation before her election in November, and she’s not so sure.

“I don’t know,” she said. “I don’t know what’s going to happen.”

Given the usual pace of investigations, it’s extremely unlikely Berkley’s ethics probe will conclude before Nevada voters go to the polls in November. And that means the investigation will continue to be a sword wielded by her opponents in one of the country’s most closely watched Senate contests.

“Any such decision is going to follow the election, not come before,” said Craig Holman, government affairs lobbyist for the Project on Government Oversight, a nonpartisan watchdog organization in Washington, D.C.

“Yes, you can expect Berkley’s opponent to harp on the fact that the ethics committee is conducting an investigation, and it’s very likely that the issue’s going to be brought up repeatedly through the course of the election,” Holman continued. “[But] as a standard rule, the ethics committee does not announce or come out with any conclusions right before the election. ... They don’t want to allow the ethics process to be used for electioneering purposes.”

That harping began even before the committee reached its decision to pursue the investigation, with television ads aired by conservative groups supporting Heller.

The decision spurred renewed interest in the line of attack. Minutes after the ethics committee announced its decision, the National Republican Senatorial Committee leapt into the fray with the following statement:

“It speaks volumes that even Shelley Berkley’s Democrat colleagues unanimously voted to move forward investigating Berkley’s use of her office to enrich her and her husband,” Executive Director Rob Jesmer said. “Since Berkley entered the political arena, we’ve seen a long pattern of ethical questions surrounding her conduct. Nevadans deserve someone in the Senate who they can trust to work on their behalf and not someone — like Ms. Berkley — who puts her own financial and political interests first.”

So far, Berkley’s been locked into what has been the tightest Senate race in the country — a race that will help determine whether Democrats keep control of the Senate.

Even with her political opponents attacking Berkley on ethics allegations, she and Heller have been polling neck-and-neck in their race to be the first Nevadan elected to replace former Sen. John Ensign. Heller was appointed to fill the seat in 2011 after Ensign resigned amid an ongoing Senate ethics investigation into his efforts to cover up an extra-marital affair.

Few ethics experts — even those practiced at observing Nevada’s ethics imbroglios — expected to see the congresswoman dragged into a similarly serious level investigation as her predecessor.

“I am a bit surprised that they did the investigative subcommittee,” said Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, which put Berkley on a list of “dishonorable mentions” last year.

That move prompted the Nevada Republican Party to make a formal petition to the Office of Congressional Ethics to investigate Berkley’s actions.

“I think, in the scheme of things, members seem to have done far worse stuff,” Sloan said. “There just seems to be lots of stuff that they could go after — so why would this be the only thing?”

Only one other case processed by the Office of Congressional Ethics in the past three years has resulted in the formation of an investigative subcommittee. That case involves allegations that Rep. Maxine Waters used her influence on the House Financial Services committee to advocate for favorable treatment of a bank in which her husband had a $350,000 financial interest.

“They’re both women legislators accused of trying to help businesses owned by their husbands,” said Robert Stern, a visiting public policy professor at U.C. Berkeley. “In the past, male legislators did not have wives who were involved in businesses. ... It’ll be real interesting how these turn out.”

Others worry that the ethics committee’s decision establishes a new standard for ethical inquiries, potentially opening the door to broader scrutiny of congressional spouses.

“This potential expansion of what a conflict is could cause other members larger problems,” Sloan said. “It’s all precedential. If you find this is a conflict (with the Code of Conduct) it well could be that other members who have earmarks for universities where their spouses are employed are in conflict. I’m not really sure why that should be a big difference. And that is not unusual.”

But for Berkley, the greater ethical legacy of her case isn’t her immediate concern. More pressing is how the probe will affect her Senate campaign.

“It’s certainly not good news, and with a unanimous vote, it becomes even worse news,” said Eric Herzik, professor of political science at UNR. “Heller doesn’t even have to do anything ... so this is a pretty severe blow. She was going to have damage control to do anyway; now the damage is even worse.”

“Obviously, she wanted it dismissed, and that’s not going to happen,” said David Damore, political science professor at UNLV. “I think the worst would have been if there were any smoking gun in the paperwork and that got put out today. ... This allows her to spin her story.”

For now, that is just what Berkley is doing. She appeared calm and poised as she took questions from the press Monday and remarked that she hadn’t had any conversations with the ethics committee prior to them releasing their decision — meaning she had no influence over the committee’s decision to carry on with an investigation instead of dismissing the allegations or offering some intermediary form of censure.

But, in fact, questions may linger for quite a while — maybe forever.

Absent pursuit of truth, there is little incentive for the ethics committee to conclude its investigation before the election, and even less time. The investigative subcommittee is made up of members of Congress who, thanks to scheduled recesses and conventions, will only be in Washington for a handful of weeks between now and November.

After the election there is always the chance they could resume her case during the busy lame-duck session. But there are few compelling reasons to do that. Win or lose the Senate race, after Nov. 6, Berkley will be on her way out of the House.

If the committee allows the case to terminate with Berkley’s tenure in the House, the only paperwork that will be released to the public will be the Office of Congressional Ethics’ initial report from February. The committee declined to release it Monday; they are allowed under House rules to keep its contents a secret while they investigate for up to one year.

So while ethics investigators quietly go about their work, it’s now up to the normally outspoken Berkley to do her best to win over voter sympathy. And she’s already started to build the case.

“I introduced 114 pieces of health legislation, everything from osteoporosis to cancer. Eight of the 114 pieces of legislation that I introduced were kidney related,” she said. “It deserved eight pieces of legislation. ... I’m proud of that record.

“I didn’t think anybody didn’t know that my husband was a kidney specialist. If I had to do it over again, I would be shouting from the rafters that Dr. Larry is a kidney specialist.”