Waters Faces Allegations|of Ethics Violations

WASHINGTON (CN) - The House ethics committee announced Monday that it has "substantial reason to believe" that Rep. Maxine Waters, D-Calif., violated House ethics rules by working to direct special federal funds to a bank in which her husband owned stock.

Waters is the second Democratic representative in a week under scrutiny for possible ethics violations. Rep. Charles Rangle, D-N.Y., goes on trial this fall to face 13 counts of ethics violations, including accusations that he used his political position to solicit funds for a public policy center bearing his name, operating a campaign office out of a residential apartment and failing to disclose rental income.

A report released Monday by the Office of Congressional Ethics detailed allegations that Waters requested a meeting between Treasury Department officials and top executives at OneUnited, a bank in which Waters' husband, Sidney Williams, held stock and was a previous board member.

According to the OCE report, after OneUnited Vice President Robert Cooper asked Waters to set up the meeting, Waters told Cooper to write up his purpose for the meeting with then-Treasury Secretary Henry Paulson so she could "speak intelligently" about the matter.

OneUnited was allegedly seeking special federal funds to make up for losses from selling Fannie Mae and Freddie Mac securities. Waters claimed the meeting was for the benefit of minority-owned banks and did not mention OneUnited or her personal involvement, the report says.

According to the ethics office, Waters may have violated House rules for compensation and conflicts of interest.

The ethics committee, officially called the Committee on Standards of Official Conduct, said Monday that it is forming an adjudicatory subcommittee, to be chaired by ethics committee head Rep. Zoe Lofgren, D-Calif., and Rep. Jo Bonner, R-Ala., to determine if there is sufficient evidence to back up the allegations.

Unless Waters enters into a settlement, the subcommittee will hold a public trial to decide if she broke House rules.

Waters insists that she did nothing wrong.

"I have not violated any House rules," Waters said in a statement. "I simply will not be forced to admit to something I did not do and instead have chosen to respond to charges made by the House Committee on Standards of Official Conduct in a public hearing."

The ethics committee will announce any formal allegations against Waters in an organizational meeting that has not yet been scheduled.

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