Explainer: Navigating the Complex Web of Federal, State Disclosure Laws

Colleen O'Dea | April 21, 2015 | Explainer
Understanding the charges against U.S. Sen. Robert Menendez means understanding the finer points of the laws he allegedly broke

U.S. Sen. Robert Menendez (D-NJ)
U.S. Sen. Robert Menendez (D-NJ) is facing federal corruption charges due, in part, to his not following financial disclosure laws. Menendez allegedly took flights and vacations paid for at least in part by a doctor he calls his friend. Polls of the New Jersey public yielded different reactions to the charges, perhaps because the rules governing financial disclosure are numerous and politicians are often called out for failing to follow them.

Politicians and public officials face a number of financial disclosure requirements designed to give the public a way to see who is giving what to those in power. The information enables people to question whether individuals and groups that provide gifts to officials get anything in return: a public contract, a vote for or against legislation, or some other assistance. In the case against Menendez the alleged assistance included help in resolving federal Medicare overbilling charges against Melgen totalling $8.9 million and help getting visas for the doctor’s girlfriends. It offers a way to determine whether a benefactor may be trying to buy influence.

The rules differ based on whether the official is a state or federal official, elected or employed. And for some of those the voters put into office, there are additional rules for election years.

Here is a summary of these rules:

Congress members and candidates: Like Menendez, all members of Congress need to file an annual financial disclosure report, due each May 15. The form for a Senator is slightly different from the one for a member of the House of Representatives. They are also filed in their respective houses.

Senate forms

House forms

Both houses via the Center for Responsive Politics

The forms require a congressman , congresswoman, candidate (though only those who spend at least $5,000 on their candidacy), and senior staff (those earning more than $120,749 for 2014) to report for sources of income — investments, trusts, homes — the value of the asset, its type, and the amount of income. The dollar amounts are reported only in ranges, from $1-$200 to more than $5 million. They also must report financial transactions — purchases and sales of stocks, for instance. Earned income, as from employment, speaking fees, and other income must also be reported, as well as all liabilities, such as mortgages and other loans. Financial information for spouses and children has to be disclosed too.

However, not everything must be disclosed on these forms. For instance, travel funded by a campaign or paid by the government need not be reported. Trips paid for by a foreign government are reported on a different form.

Additionally, every time a member of Congress makes a stock or mutual fund transaction worth at least $1,000, he or she has to file a periodic transaction report with either the House or Senate no more than 45 days after the transaction.

What’s at dispute in the Menendez case are “gifts” the senator has received from a Florida doctor that he did not disclose, at least not initially. The indictment contends that Menendez used his office to help Dr. Salomon Melgen in exchange for the gifts and did not report the costs of flights, car service, and hotel stays. Menendez took trips to the Dominican Republic and Paris that were at least partly paid for by Melgen. According to reports, Menendez paid Melgen back for at least some of the costs in 2013 and dismissed his failure to disclose the trips as an oversight. The senator says the indictment is wrongheaded: He has been good friends with Melgen for more than 20 years and any actions he took that may have benefitted Melgen were done properly and not because of any gifts from Melgen.

New Jersey officials The state has a web of financial disclosure rules that differ based on whether a person is elected, appointed, or employed, and then further by job title and responsibilities. Different rules for officials at different levels have evolved at different times. The rules for state workers date back to the administration of Gov. Jim Florio, with each successive governor readopting or further amending them.

In general, all the forms require disclosure for the employee or officeholder and immediate family of sources of income, including gifts and honoraria, exceeding a minimal amount, as well as properties owned and business interests. The details required, however, differ depending on the job.

State employees and those who are members of state boards and commissions have to provide the greatest details, although using ranges of dollars for income and liability categories, rather than actual amounts. There is an additional form detailing personal and business relationships for those involved in the procurement process. And before employees can attend an event, they must complete a form detailing its purpose; who is paying for it; the cost for travel, meals, lodging; and the value of an honoraria.

Even the governor must file the same form and disclose the same payments.

Like Menendez, Gov. Chris Christie’s acceptance of travel has been called into question by some. Citizens for Responsibility and Ethics in Washington, which filed a complaint with the New Jersey Ethics Commission alleging that Christie violated state ethics laws by “accepting gifts of foreign travel and lavish lodgings and entertainment …” as part of a 2012 trade mission to Israel.

But like Menendez, Christie said through a spokeswoman that his flights on the private jet of a casino mogul and stay at a posh hotel courtesy of the King of Jordan were allowed because both men are friends, according to a New York Times report. The governor of New Jersey has a separate code of conduct, first put in place by former Gov. Jim McGreevey and renewed by Christie in 2010: The governor can accept gifts, meals, and travel expenses paid by family and friends with personal money.

Elected municipal and school officials and employees, including administrators and business managers, have a less detailed version of these forms, only two pages compared with 11 for state employees and appointees. On their forms, local officials have to report sources of income meeting various thresholds.

Legislators fill out a form that is somewhere between those required of these other groups. They have to provide the same kinds of information that state employees do, but the income categories are less detailed, with $50,000 or more the maximum range reported — for state employees, the maximum range is $500,000 or more.

In years in which they run for state office, officials and candidates must also complete a disclosure form with the state Election Law Enforcement Commission. This form requires similar kinds of information: sources, but not amounts, of incomes, honoraria, gifts and real estate.

While there are a wealth of state forms, finding them can be tricky, since they are spread throughout different state departments: State employees and appointees’ forms are found in the State Ethics Commission; legislators’ disclosures are held by the Legislature; election-related reports are available from the NJ Election Law Enforcement Commission; the Department of Education holds the forms of school officials; and the Department of Community Affairs keeps the forms of municipal and county officials.