Tuesday, October 19, 2010

There's More? Ex-Rep. Nathan Deal Paid $245,000 to Aide’s Wife

By Jennifer Yachnin of Roll Call Staff

Ex-Rep. Nathan Deal’s Congressional office paid hundreds of thousands of dollars to a Georgia company owned by his top staffer’s wife to fly to and from his Congressional district, but the staffer did not report the income on his financial disclosure forms because he claims the couple made no profit.

House rules prohibit Members from purchasing services from a staff member but appear to be silent on purchasing from a staff member’s spouse.According to House spending records, which detail the finances of each lawmaker’s office, Deal’s office paid Gainesville, Ga.-based Chattahoochee Logistics LLC at least $245,000 from 2002 to 2008.

Former House aide Chris Riley, who now serves as Deal’s campaign manager in the Georgia gubernatorial race, founded that company in 2003 and served as Deal’s pilot on Chattahoochee Logistics flights, as first reported last month by the Atlanta Journal-Constitution. The company is now in his wife’s control.In an interview Monday, Riley told Roll Call that he has not received any payment from Chattahoochee Logistics and received no additional compensation for serving as Deal’s pilot on those flights.“

I’ve never received income from Chattahoochee Logistics,” Riley said.A campaign spokesman referred questions about Chattahoochee Logistics to attorney Randy Evans at McKenna, Long & Aldridge.Evans confirmed that the LLC “had a single member” at the time it received payments from Deal’s office — Riley’s spouse, Bambi Riley — who would have received any income the company generated.Members and senior aides who must file annual financial disclosures are required to disclose the source of any non-Congressional income greater than $200, as well as the source of any income exceeding $1,000 earned by their spouse in the previous calendar year.Chris Riley’s publicly available financial disclosure forms, filed each year from 2004 to 2009, do not show Bambi Riley earning income from Chattahoochee Logistics.

Deal resigned in March to run for governor of Georgia; his campaign said Chattahoochee Logistics was “profit-neutral” when it received Congressional funds. Evans said: “It was virtually break-even.”In 2008, Chattahoochee Logistics also reimbursed the House for more than $80,000 in “overpayments” based on revised travel rules as determined by an internal audit, as the Atlanta newspaper reported.

The first two disclosure forms Chris Riley filed indicated that he was president of Chattahoochee Logistics, but the company dropped off his later forms.Riley said he subsequently removed himself as a member of the LLC, although he continues to manage the company in an uncompensated position. Records maintained by the Georgia secretary of state list the company’s principal office at Riley’s home address in Gainesville.

Riley added that he received advice from the Committee on Standards of Official Conduct.“The staff director of the Standards Committee said, ‘Do I get paid to drive a car?’” Riley recalled. “‘So why should you get paid to fly an airplane?’”Individuals familiar with the arrangement said Chattahoochee Logistics was paid based on the mileage reimbursement rates applied to an aircraft privately owned by a Member or staff for travel.“The goal is to pay what’s owed, and not a penny more and not a penny less,” Evans said.

The specific costs related to flight — such as hangar fees, fuel or maintenance — are unknown because the reimbursement rate covers only mileage.Evans could not say what Chattahoochee Logistics would have charged other customers because the company did not provide air travel services to anyone other than Deal. Evans said Bambi Riley uses Chattahoochee Logistics in connection with her real estate career, stating it is not a “single-use company.”According to the House Ethics Manual, lawmakers are prohibited from spending their official office budget, known as a Members’ Representational Allowance, on services provided by a Member’s spouse or staff.

Among the examples provided in the manual, the House ethics committee states that a lawmaker is prohibited from renting space in a building when that building is owned by a member of his or her staff.There is no explicit admonition against purchasing services from the spouse or family of a staff member.

Riley has run afoul of ethics rules before, returning more than $91,000 to Deal’s campaign in 2008 after a Roll Call survey found he had exceeded outside income limits for top Congressional staff from 2004 to 2007.Riley repaid that sum in June 2008, but the campaign subsequently returned the money to him in February 2009.

He then donated an identical amount to Gainesville-based Good News Clinics, which provides free medical services to low-income or homeless individuals.“This was the process that we were asked to follow by the Standards Committee,” Riley said. He said the ethics committee allowed him to choose between writing a check to the U.S. Treasury or a 501(c)(3) charity.

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