Reed defends slow divestiture of personal businesses

WASHINGTON — Republican Rep. Tom Reed of Corning could avoid a fresh ethical dilemma by making public any guidance he received from the House Ethics Committee on divesting his interest in businesses he ran before entering Congress, a watchdog group says.

"Even if he doesn't have a letter, they should have been given him some pretty specific guidance in an email,'' Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington (CREW), said Monday.

Members of Congress have a responsibility to seek the Ethics Committee's guidance rather than waiting for the committee to contact them, Sloan said.

Reed told reporters Monday his office has been working with the Ethics Committee on divesting his interest in his law firm and medical debt collection business, and in commercial real estate holdings. He is not under investigation, he insisted, saying ethics rules allow him "a reasonable amount of time'' to get it completed.

"This has been something we have been attending to from the day I was elected to office,'' said Reed, who was elected in November 2010 and sworn in a few days later to fill the unexpired term of former Democratic Rep. Eric Massa.

Reed's congressional office referred questions about the communications from the House Ethics Committee to attorney Joe Rizzo, who was hired by Reed at the time of the 2010 election to handle the divestiture.

Rizzo did not immediately respond to a phone call Monday seeking copies of the communications.

A Buffalo News story on Saturday cited 194 legal documents filed in the Corning City Court in 2011 and another nine in 2012 that used the name of "the Law Office of Thomas W. Reed II PLLC.''

Martha Robertson, Reed's likely Democratic opponent in the November election, said Monday most of the legal actions "appear to be medical debt collection cases Reed's firm filed on behalf of Corning Hospital or the Guthrie Clinic."

The House Ethics Manual prohibits lawmakers from receiving compensation from any law firm "even for non-legal work,'' and firms cannot use a lawmaker's name "regardless of whether the organization compensates the member.'' The prohibition against use of a lawmaker's name includes "letterhead, advertising or signage,'' according to page 221.

An exception is made for firms that use a family name, such as a firm that bears the name of the new lawmaker's father. Reed, whose father was a career military officer, was the only partner at his law firm.

Reed told reporters the name of his law firm was not changed after he was sworn into office because "there was no name to change it to.'' And he said he didn't immediately dissolve his businesses because employees' jobs were at stake.

Reed said he doesn't remember exactly how many people worked for him at the time of his election, but the highest number on his payroll at one point was 30.

Last October, Reed released a letter from the Office of Congressional Ethics — which is separate from the House Ethics Committee — dismissing an allegation related to his use of a campaign committee check to pay property taxes on his vacation home. Reed corrected the mistake, which he termed "inadvertent,'' a month later. He noted the mistake on a campaign finance report, where it was first disclosed.

Reed told reporters Monday he has sold his medical debt collection business to one of his brothers.

Reed said he still owns commercial real estate that has his name on the deeds, but those properties are for sale.


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