Ethics Reform Act

IN THE LATE 1980s, U.S. Congressional ethics were under extensive public scrutiny, and the result was an environment that was ripe for reform. With the Ethics Reform Act of 1989, which became law in November 1989, Congress established restrictions[Page 298] on the ways that federal employees could earn money beyond their government salaries. The restrictions were applied to honoraria, gifts, and campaign contributions. Inevitably, Congressional attempts to ensure ethical behavior on the part of federal employees stirred up controversy in the media and the public.

In the midst of an economic recession, the House of Representatives added a provision to the Ethics Reform Act that increased annual salaries for all members by approximately 51 percent. Supporters of the bill argued that increasing salaries would offset the loss from honoraria and would protect members from being corrupted by special interests. The Senate initially bypassed the salary raise and retained the right to accept honoraria. However, in response to public outcry, at the beginning of the following term the Senate also banned honoraria for Senators and Senate staff, and the House of Representatives voted to eliminate the pay raise. Reactions to the raises at a time of economic crisis contributed to the resignation of Speaker of the House Jim Wright (D-TX) on June 30, 1989.

The Ethics Reform Act also attempted to deal with the ethics surrounding the huge war chests comprised of monies left over from political campaigns. Ten years before, Congress had prohibited members of Congress from converting these funds for personal use. The 1979 law had provided a “grandfather clause” that exempted members of Congress who took office before January 1980. The new act removed that exception, allowing members who left office before January 1993 to maintain control of their war chests. In 1989, 179 members of Congress remained who had been exempted from the 1979 act by the grandfather clause.