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Fortune 435: How wealthy is Congress?

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Jane Harman, who represents California’s 36th District, may be the wealthiest member of Congress. She may also be running second as the member of Congress who has seen the greatest accretion of net worth since attaining her House seat in 1994.

According to an analysis by the Sunlight Foundation called Fortune 435, Rep. Harman’s net worth in 2006 may have been $409,426,887, up from $241,334,326 in 2000. (Sunlight bills itself as “a catalyst to create greater political transparency and to foster more openness and accountability in government.”)

The site allows inspection of each member of Congress in terms of net worth. Tabs lead to “Wealthiest,” “Greatest Change,” “Started with $0 or less,” and “Ended 2006 with $0 or less.”

It’s great fun. But Fortune 435’s worth is not its revelation of congressional wealth; rather, it demonstrates the weaknesses in the Ethics in Government Act of 1978 that requires financial disclosures by members of Congress. That’s why “may” is the operative word regarding Rep. Harman’s wealth.

According to Fortune 435, members must:

… disclose information on their personal finances, including their assets, sources of income, transactions and debts. (However, lawmakers are not required to report everything they own, including the value of their personal residences, nor their related mortgages.) They report the value of their and their spouses’ assets, the amount of income – both earned and unearned – and the extent of indebtedness in broad ranges, making the forms a very inaccurate tool for measuring wealth. For example, House Speaker Nancy Pelosi reported in 2007 that she and her husband have a net worth somewhere between $86 million and negative $9 million. Whether the Speaker of the House is extremely wealthy or on the verge of declaring bankruptcy (or somewhere in between) cannot be determined from her financial disclosure form. [emphasis added]

That’s the problem — the “ranges” of disclosure. It allows members to discreetly hide their holdings. In an e-mail announcing Fortune 435’s launch, Sunlight’s Paul Blumenthal says this about presidential candidate John McCain:

John McCain jumped from an average net worth of $8.8 million in 1995 to $36.4 million in 2006.

Two things, rules applying to financial disclosures allow a member of Congress to omit the assets and liabilities held by a spouse if the spouse’s assets and liabilities are held separately and the member has no knowledge of what the spouse holds. It appears as though McCain listed more of Cindy’s assets in later filings than in earlier ones.

Most importantly, John McCain files deceptive personal financial disclosure forms. From 1995 to the present the highest value range that a member can check is $50,000,001+. Prior to 1995, the highest range was $1,000,0001+. McCain still to this day checks $1,000,0001+ for a number of his assets despite having the option of checking the more accurate ranges of $1 million-$5 million, $5 million-$25 million, or the $50 million+. McCain is the only member I have observed who still does this.

Sunlight staff, creating Fortune 435 with help from the Center for Responsive Politics, found some members’ disclosure forms illegible. No member has answered requests for legible forms. But the ethics act does not, it seems, cover the issue of legibility. Bad handwriting becomes a form of deceit.

So wander through Fortune 435. Have a gander at the net worth of your favorite rep. But keep in mind that this congressionally protected “range” game degrades any attempt to fully understand the financial condition of a member of Congress, let alone any meaningful analysis of what an increase (or decrease) in net worth might mean in terms of the public’s interest.

xpost: Scholars & Rogues

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Written by Dr. Denny Wilkins

May 13, 2008 at 2:02 pm

Posted in Uncategorized

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