House panel to investigate allegations against Berkley

WASHINGTON - In a move that shakes up the U.S. Senate race in Nevada, the House Ethics Committee announced Monday it will investigate allegations that Rep. Shelley Berkley used her office wrongfully to advance health policies that benefited her husband, a prominent Las Vegas doctor.

The committee's leaders said the panel voted unanimously to establish a four-member subcommittee armed with subpoena powers to conduct the probe, a process expected to stretch through the summer and fall and cloud the Las Vegas Democrat as she campaigns for the U.S. Senate.

Berkley, a seven-term U.S. House member, has been working on Capitol Hill and on the campaign trail since late last summer under the shadow of questions about possible ethical conflicts, which she has denied repeatedly.

The race between Berkley and U.S. Sen. Dean Heller, R-Nev., is one of the closest Senate contests in the nation and could determine whether Democrats and their leader, U.S. Sen. Harry Reid, D-Nev., maintain control after 2012.

Jennifer Duffy, an analyst with the Cook Political Report, said the ethics probe is a blow to Berkley, giving Republicans stronger ammunition against her and probably keeping the matter open all the way to Election Day.

"The issue stays alive through the campaign, and Republicans got a little bit more juice behind it with the unanimous vote" from five Democrats and five Republicans on the panel, Duffy said.

"And they get to keep talking about it. And I think she's more on the defensive now. In a race where everything counts, this is not something that Berkley needs hanging over her head. In a close race, everything matters."

In a front-page story Sept. 6, The New York Times reported on intersections between Berkley's advocacy on kidney care matters and the Las Vegas nephrology practice of her husband, Dr. Larry Lehrner.

The paper reported that in 2008, Berkley lobbied the federal Centers for Medicare and Medicaid Services to withdraw an order that would have revoked certification of the kidney transplant unit at University Medical Center, where her husband's practice, Kidney Specialists of Southern Nevada, directed kidney services.

It also reported that Berkley, a member of the House Ways and Means Committee, sponsored at least six bills to expand federal payments and other assistance to kidney doctors, wrote letters to block federal regulations and appeared at fundraisers sponsored by a professional group that had an association with her spouse.

The news story triggered a complaint to Congress from the Nevada Republican Party charging Berkley "used her office to enrich herself," in violation of House rules that forbid lawmakers from using their official positions for personal gain.

BERKLEY CAMPAIGN RESPONDS

Berkley's campaign said Monday it was "pleased with the committee's decision to conduct a full and fair investigation, which will ensure all the facts are reviewed."

"We are confident that ultimately it will be clear that Congresswoman Berkley's one and only concern was for the health and well-being of Nevada's patients," said campaign manager Jessica Mackler.

Democrats publicly rallied. Guy Cecil, executive director of the Democratic Senatorial Campaign Committee, said the organization's support for Berkley's Senate bid "remains as strong as ever."

Reid said Berkley will fight through the investigation.

"Nevadans want a senator who will fight for them and Shelley has made it clear that no one will fight harder than her," Reid said in a statement. "She is a strong advocate for Nevada's middle class and will work to put Nevadans back to work."

Heller, whom Berkley is trying to unseat in November, declined to comment.

Republican surrogates noted that the Ethics Committee's decision to launch a full investigation was unanimous among its five Democrats and five Republicans, suggesting there may be more than has been made public.

"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," said Rob Jesmer, executive director of the National Republican Senatorial Committee.

INITIAL REVIEW LEADS TO REFERRAL

In a preliminary review, the Office of Congressional Ethics found "substantial reason to believe" there were violations and recommended the full Ethics Committee take up the case.

The Berkley matter is the first referral the committee has accepted for a full investigation out of 13 preliminary recommendations in this Congress.

Berkley has defended her actions, saying they were motivated by her desire to help Nevada patients and not to line her husband's pockets. Her wedding to Lehrner in 1999 propelled her to the upper levels of wealth among House lawmakers, with assets in 2010 valued at between $9.7 million and $21.2 million, according to the Center for Responsive Politics.

Berkley told the Las Vegas Review-Journal in an interview last month that she did not believe her Senate race against Heller would pivot on ethics, but rather "what are we going to do to get people back to work."

Her advisers say they believe she can campaign effectively while under investigation. Berkley has portrayed herself as a friend of middle-class Nevadans, Latinos, women, veterans and other key voting blocs. She also is counting on the state's Reid-erected Democratic machine, along with whatever coattails President Barack Obama generates, to forge a victory.

While Heller will remain above the fray, "the Republican outside groups will keep this going," said David Damore, a political science professor at the University of Nevada, Las Vegas.

REPUBLICAN PAC PROMISES MORE ADS

The American Crossroads PAC spent $300,000 last month to run a television ad in Nevada reminding viewers of the allegations against Berkley. She aired a rebuttal the next day.

American Crossroads spokesman Nate Hodson suggested more to come.

"No ad up in Nevada at the moment, but as you know we raised the issue in ads first with a hefty buy," Hodson said in an email. "The unanimous decision by the House ethics committee points to the fact that Shelley Berkley was more interested in enriching her family than working to fix the broken economy."

Dan Hart, a Democratic operative not associated with Berkley's campaign, seemed surprised that the Democrats on the panel had joined in opening an investigation. In his view, "there was no convincing evidence to move forward."

The Berkley campaign was "going to have to deal with it no matter what happened today because the political ads were going to make an issue of it," Hart said. "It's not the best outcome, but it's not the worst outcome. They could have delivered some sort of reprimand. But when you're in a campaign, you want to leave this stuff behind you and get a result."

Robert Uithoven, a GOP operative not involved in the Heller campaign, said Congress rarely investigates its members, and so the news coming less than four months from Nov. 6 is particularly bad, with implications for Berkley's fundraising through the slow summer and her efforts to talk about issues that play to her strengths.

"I think everything becomes more complicated for her," Uithoven said. "It's tough to spin this in any positive way. It's not only a distraction of time, it's a distraction of resources.

"I don't think it affects the Democratic or Republicans voters, but it could affect the huge number of independent voters in this state," he added, explaining that independent voters "are probably more sick of Washington than any of the partisan voters are."

The committee's vote was taken June 29, the last day before the House members recessed for a weeklong holiday. The decision was announced Monday, their first day back, by the committee chairman, Rep. Jo Bonner, R-Ala., and the ranking Democrat, Rep Linda Sanchez of California.

In a four-paragraph statement, they said the investigative subcommittee would determine whether Berkley violated the House code of conduct or any other rules or laws "with respect to alleged communications and activities with or on behalf of entities in which Representative Berkley's husband had a financial interest."

The investigation will be led by Rep. Mike Conaway, a four-term Republican from Texas, and Rep. Donna Edwards, a three-term Democrat from Maryland. The other two members are Reps. Bob Latta, R-Ohio, and Adam Schiff, D-Calif.

HOUSE ETHICS MANUAL DEFINES RULE

The U.S. House code generally allows lawmakers to act on matters that affect a large class of people even if the individual "may stand to derive some incidental benefit along with others in the same class," according to its ethics manual. For instance, it is permissible for lawmakers who are farmers to act on agriculture matters.

"Only when members' actions would serve their own narrow, financial interests as distinct from those of their constituents should the Members refrain," the manual states.

Punishment could range from expulsion, the most serious, to censure or reprimand, and possibly suspension.

Melanie Sloan, a former federal prosecutor who heads an ethics watchdog group, said there often is some amount of negotiating between the ethics committee and lawmakers accused of wrongdoing, with the goal to avoid having to convene a full investigation.

"There is so much strategy involved," said Sloan, executive director of Citizens for Responsibility and Ethics in Washington. "They may have talked about resolving it with some kind of letter, but it may also be Berkley made a calculation of refusing to resolve it with a letter, thinking that would hurt her more."

Sloan, who emphasized that she did not have inside information, said the Berkley case could widen the definition of what constitutes a conflict of interest for House members.

BERKLEY MAKES HER CASE

In fighting accusations that she pulled strings to save the UMC kidney transplant program, Berkley has pointed out that Nevada's two other U.S. House members - Republican Reps. Jon Porter and then-Rep. Heller - joined in pressing federal officials to reconsider penalties against the hospital. Shutting down the kidney transplant unit would have cut off local care to more than 200 patients.

Berkley has said her sponsorship of bills that would have benefited kidney doctors were nothing out of the ordinary among more than 100 health-related pieces of legislation she has sponsored or co-sponsored.

"I wasn't thinking about the politics of it, and I wasn't worrying about the politics of it. It did not occur to me," she said last month in an interview on the "Face to Face" news program. "My only concern was to provide good health care in the state of Nevada for the people that live here."

Contact Stephens Washington Bureau Chief Steve Tetreault at stetreault@stephensmedia.com or 202-783-1760. Follow him on Twitter @STetreaultDC. Contact reporter Laura Myers at lmyers@reviewjournal.com or 702-387-2919. Follow her on Twitter @lmyerslvrj.