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Former Senator John Ensign in hot water

By Peter J. Henning

A report filed by the Special Counsel to the Senate Select Committee on Ethics accuses former Nevada Senator John Ensign of a number of violations related to the end of an affair he had with the wife of a top aide who was also a long-time friend of his family. The aide, Douglas Hampton, was indicted on charges of violating the federal conflict of interest rules this past March, and there is a good chance Mr. Ensign will also be targeted by federal prosecutors.

Much like his former Senate colleague John Edwards is a target of an investigation based on payments to a former mistress, as I discussed previously, Mr. Ensign’s problem was not so much the affair but how he tried to keep it quiet through a secret pay-off. After ending his intimate relationship with Cindy Hampton, who worked as treasurer of his campaign committee, Mr. Ensign terminated both Hamptons and arranged for them to receive $96,000 from a trust fund controlled by his parents. How that payment should be characterized will be crucial in determining whether the former senator will be indicted by prosecutors from the Public Integrity Section of the Department of Justice, who have been investigating him for over a year.

The Special Counsel’s report reads almost like a prosecution memorandum, setting out the facts of the relationship between Mr. Ensign and the Hamptons, and offering assessments of whether his conduct constituted a violation of federal criminal laws. The former senator does not appear to have set out to purposely violate federal law, but his efforts to keep the affair quiet by placating the Hamptons with money and work for Mr. Hampton may well have led to Mr. Ensign to commit criminal acts.

The charges against Mr. Hampton involve alleged violations of 18 U.S.C. § 207(e)(2), which makes it a crime when a highly-paid member of a senator’s staff within 1 year of leaving the position “knowingly makes, with the intent to influence, any communication to or appearance before any senator or any officer or employee of the Senate, on behalf of any other person” in which the former staffer seeks action by a senator or staff member. Mr. Hampton had numerous contacts with Mr. Ensign, who assisted him by contacting government officials on behalf of Mr. Hampton’s clients.

While Mr. Ensign might try to plead ignorance of what Mr. Hampton was doing, the Special Counsel’s Report goes into great detail about how the former senator pressured companies to hire his former aide, all part of an effort to keep Mr. Hampton from speaking out about the affair with his wife. There does not appear to be much “plausible deniability” here for Mr. Ensign, so proving his knowledge and intent to provide assistance to Mr. Hampton would not appear to be difficult. In addition, a charge of conspiracy is quite possible, based on the interactions of Mr. Ensign and Mr. Hampton.

A more difficult issue, and one with much greater potential ramifications, is characterizing the $96,000 payment to the Hamptons after being terminated from their jobs with the Senate office and campaign. The money came from an Ensign family trust controlled by the former senator’s father, and a press release issued a few weeks after the affair became public described it as “gifts” to the Hamptons and two of their children, made by the parents “out of concern for the well-being of long-time family friends during a difficult time.”

The payment immediately fell under suspicion, and a public interest group filed a complaint with the Federal Election Commission claiming it involved an improper campaign contribution. In response, Mr. Ensign and each of his parents filed an affidavit with the F.E.C. explaining the gifts was part of a long-standing pattern of generosity by the parents to the Hamptons, citing a Hawaiian vacation paid they paid for. The F.E.C. dismissed the complaint without pursuing it further, in large part based on this explanation.

An important issue is how the payment is characterized, because if it was not a gift then the statement to the F.E.C. may well be false, which could drag the parents into the investigation. Under 18 U.S.C. § 1001, a material false statement to a federal agency can be prosecuted, although I doubt federal prosecutors would target the parents because they appear to be more bystanders to the payment, acting as the source of the money but not the orchestrators of it. Mr. Ensign, though, was far more involved in the payment, and so a false statement charge against him is a distinct possibility if the payment was not a gift.

The Special Counsel’s report asserts that the money in fact constituted a severance payment to the Hamptons for the termination from their positions. There is evidence that Mr. Ensign viewed it in that light, describing the payment as “severance” in an initial draft of the press release disclosing it and in other documents outlining the reason for giving them the $96,000.

The determination of how the payment to Mrs. Hampton should be characterized is important because severance provided to an employee of a campaign would be considered a contribution, subject to various federal election laws. For example, under the Federal Election Campaign Act, an individual can only contribute $2,000 per year to an election committee and $5,000 per year for other political committees. The amount provided to Mrs. Hampton likely far exceeded those limits, which is a crime under 2 U.S.C. § 437g(d) punishable by up to 5 years in prison. If it actually was a severance payment, then telling the F.E.C. it was a gift would have misled that agency into viewing it as outside of its jurisdiction.

Whether the payment should be understood as severance or a gift is a close question. In most employment situations, a severance payment is governed by a contract or collective bargaining agreement, which sets for the conditions for receiving the payment. Companies downsizing their workforce may offer a severance payment in exchange for the departing employee waiving certain claims and agreeing not to sue, thus creating a binding agreement.

That was not the case with the Hamptons, who never agreed to remain silent about the affair in exchange for $96,000, although that may be what Mr. Ensign expected them to do. Indeed, the relationship came to light when Mr. Hampton sought additional payments from the former senator when the thought his access was diminishing. Mr. Hampton went to the media when he was unsatisfied with what was being offered.

The payment appears to be more like “hush money” than anything else, which means it may not be a gift but also might not qualify as severance. This is sure to be critical to the decision prosecutors have to make about whether to seek charges against Mr. Ensign related to the $96,000 payment and his statement to the F.E.C. about it.

Will federal prosecutors file charges against Mr. Ensign? The Special Counsel’s Report recounts at length the statements of John Lopez, Mr. Ensign’s former chief of staff who received immunity from prosecution in exchange for testifying. He has detailed knowledge of how Mr. Ensign’s Senate office operated, and could be a critical witness to the former senator’s knowledge and intent in helping Mr. Hampton, and perhaps the reason for the $96,000 payment. If Mr. Lopez is a credible witness, that would take the government a long way toward filing charges because he can provide a roadmap to Mr. Ensign’s thoughts.

Proving the payment to the Hamptons was severance and not a gift would be more difficult because it would be built on circumstantial evidence to figure out what was really intended at the time. The government is likely to be reluctant to call Mr. Ensign’s parents as witnesses, so it may decide to shy away from any charges directly related to the $96,000 payment and focus instead on possible conflict of interest violations, which would be easier to show with Mr. Lopez’s testimony.

Mr. Ensign has already lost his political career, having resigned from the Senate because of the fallout from his affair and the subsequent Ethics Committee investigation. If federal prosecutors pursue a criminal case, which is a good possibility, it will show once again that it’s the cover-up that causes the most damage.

Peter J. Henning is Professor of Law at Wayne State University Law School. His scholarship focuses primarily on white collar crime, constitutional criminal procedure, and attorney ethics. Before entering law teaching, he was a senior attorney in the Division of Enforcement at the U.S. Securities and Exchange Commission from 1987 to 1991, and a trial attorney in the Criminal Division of the U.S. Department of Justice from 1991 to 1994. Professor Henning is author with Lee Radek of The Prosecution and Defense of Public Corruption: The Law and Legal Strategies.

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