Read the report from CREW on Deal's crooked backroom manuvering with Casey Cagle:
Representative Nathan Deal (R-GA) is a nine-term member of Congress, representing Georgia’s 9th congressional district. His ethics issues stem from his abuse of his position for his personal financial benefit.
Recovery Services, Inc. a/k/a Gainesville Salvage & Disposal
Rep. Deal and Ken Cronan own and operate Recovery Services, Inc., a/k/a Gainesville Salvage & Disposal, which for nearly 20 years has provided a location and equipment for Georgia state inspectors to examine salvaged vehicles.
Since 1982, Georgia has required any vehicle wrecked and rebuilt to pass a safety inspection before the state will issue a title allowing the car to be sold or driven. Initially and inefficiently, inspectors traveled to where the vehicles were located, but in 1989, the state authorized a station in Athens, Georgia to serve as an inspection site. The program was expanded in 1990, the same year Rep. Deal and Mr. Cronan incorporated Recovery Services, Inc., which became one of the first of eight regional inspection stations, though there is no record explaining how the stations were chosen and Rep. Deal has been unable to provide an explanation.
The stations provide a garage bay with a hydraulic lift and an employee to help move cars while the state provides the inspectors.5 Station owners charge vehicle owners a fee to have their cars seen at the stations.6 While Rep. Deal and Mr. Cronan charge $100 per vehicle, most other stations charge only $60 or $75.7 In 2008, Rep. Deal’s and Mr. Cronan’s Gainesville station hosted over 2,800 vehicles out of the 17,000 vehicles inspected by the state. Recovery Services, Inc. has never had to compete for the contract, which between 2004-2008 alone, earned the company $1.4 million.
Rep. Deal personally earns $150,000 a year from the business.
When Georgia Revenue Commissioner Bart Graham became responsible for the system, he discovered it cost nearly as much to operate as it brings in and the locations of the inspection stations are relatively far from the largest metropolitan areas, making the stations into regional monopolies. As a result, by 2008, the commissioner began making efforts to reform the system by increasing the number of inspection stations and awarding the sites through a competitive bidding process.
Georgia Lieutenant Governor Casey Cagle ordered Comm. Graham to meet with him in his office to discuss the matter. On January 28, 2008, Comm. Graham arrived to discover he was meeting not only with Lt. Gov. Cagle and his then-chief of staff Brad Alexander, but also with Rep. Deal, Rep. Deal’s congressional chief of staff, Chris Riley, and Rep. Deal’s business partner, Mr. Cronan.14 Rep. Deal has admitted to requesting the meeting, during which Rep. Deal and Mr. Cronan questioned Comm. Graham about his intentions.
Lt. Gov. Cagle and Rep. Deal are both from Gainesville and represented the same district in the state Senate. Recovery Services, Inc. contributed $1,000 to Lt. Gov. Cagle’s 2005 campaign and Rep. Deal contributed an additional $5,000 to the campaign in 2006. In June 2008, Comm. Graham was called to another meeting with Rep. Deal, Mr. Cronan and others. After the meeting, Comm. Graham proposed privatizing the system and opening it up to more competition, at the same time eliminating the $1.7 million for the program from the state budget. The plan was adopted by the Georgia House and sent to the state Senate.
At that time, Rep. Deal’s chief of staff used his official House email account to contact Georgia state officials in an effort to keep the money in the state budget. The Atlanta Journal- Constitution obtained emails to and from Mr. Riley. On March 2 , 2009, Mr. Riley emailed Georgia Deputy Revenue Commissioner Mack Chandler advising him, “We would like to discuss with DOR your intentions regarding inspections, but the House version of the bill is pretty clear, never the less (sic), we would like to work with you. We have to be in Atlanta next Friday, does that work for you?”
On March 23, 2009, an aide to Lt. Gov. Cagle emailed Mr. Riley, “I just want to clarify that you are asking the DOR Salvage Inspection Program be fully funded at the previous continuation budget of $1.7M.”
On March 27, Comm. Graham again was forced to meet with Rep. Deal and Mr. Cronan and state Senate staff, but Comm. Graham, explained to reporters that he insisted the meeting be held on neutral ground: Gov. Perdue’s conference room. According to Comm. Graham, Rep. deal and Mr. Cronan made quite clear they did not want the inspection system changed.
Just three days later, on March 30, 2009, the Senate Appropriations Committee put the
money for the program back into the budget. In a transparent effort to conceal Rep. Deal’s interference, less than an hour after the vote -- after the program’s continuation was basically guaranteed -- Mr. Riley sent an email to Lt. Gov. Cagle’s office saying, “Following our meeting with Commissioner Graham, we would like to withdraw our request to fully fund the DOR Salvage Inspection Program and accept the House’s language.
Rep. Deal denies contacting anyone in the Senate to ask that the money for the program be left in the budget and both state Senate Appropriations Committee Chairman Jack Hill and Subcommittee Chairman Mitch Seabaugh claim to have no idea how the money was restored to the budget. Lt. Gov. Cagle’s current chief of staff, Bart Gobeil, refused to say whether Lt. Gov. Cagle asked that the money be restored.
Rep. Deal has defended Mr. Riley’s use of his House email account to pursue Rep.
Deal’s personal financial interests, claiming Mr. Riley “is on 24 hours,” and he is “ responsible for setting up meetings for me. . . that’s part of what he does.” Rep. Deal claims to have been acting on behalf of his constituents: his business partner and the “fellows who work in the office.
Honest Services Fraud
Federal law prohibits a member of Congress from depriving his constituents, the House of Representatives, and the United States of the right of honest service, including conscientious, loyal, faithful, disinterested, unbiased service, performed free of deceit, undue influence, conflict of of interest, self-enrichment, self-dealing, concealment, bribery, fraud and corruption.33 By using his position as a member of Congress as well as congressional resources, including House office staff time, to financially benefit himself and his business partner, Rep. Deal may have deprived his constituents, the House of Representatives, and the United States of his honest services in violation of 18 U.S.C. §§ 1341, 1346.
An employee shall not use or permit use of his Government position or title or any authority associated with his public office in a manner that is intended to coerce or induce another person . . . to provide any benefit, financial or otherwise,
to himself or to friends, relatives, or persons with whom the employee is affiliated in a nongovernmental capacity.
Rep. Deal, by using his position to influence Lt. Gov. Cagle to require Comm. Graham to attend meetings to discuss Rep. Deal’s personal financial interests, clearly violated 5 C.F.R. § 2635.702(a). Rep. Deal further violated this prohibition by using his position to influence the Georgia state legislature to void the action of Georgia’s Commissioner of Revenue and instead act in Rep. Deal’s personal financial interest
In addition, House conflict-of-interest rules provide that a member should never accept “benefits under circumstances which might be construed by reasonable persons as influencing the performance” of his official duties.37 To do so “would raise the appearance of undue influence or breach of the public trust.” By using his position as a member of Congress to influence Lt. Gov. Cagle and the Georgia state Senate to benefit his personal financial interest, Rep. Deal violated House conflict-of-interest rules.
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