The House Ethics Committee has cleared Alaska Rep. Don Young on charges he took too much money for his legal expense fund from a donor with interests in offshore Arctic oil drilling. But now the panel is changing the rules because of the case.
At issue was $60,000 in checks given to Young during a January 2011 fundraiser in Texas. Alaska's lone congressman was handed an envelope by Gary Chouest, host of the fundraiser and president of Edison Chouest Offshore, a Louisiana company whose Alaska interests include an icebreaking ship it's building for Shell's planned drilling program in the Chukchi Sea.
Edison Chouest is among the top campaign contributors to all three members of Alaska's congressional delegation.
The Chouest donations to Young's legal fund were divided into a dozen checks of $5,000 apiece. Five thousand dollars is the maximum amount an individual or organization can give in a year to a congressman's legal fund.
Each of the checks came from a different company but all the companies are owned by the Chouest family. That raised the question of whether it was an attempt to sidestep the $5,000 limit in providing Young with a total of $60,000 in Chouest money.
The U.S. House Committee on Ethics, which launched an investigation after media coverage of the contributions, reported Tuesday that Young was acting within the rules in which "multiple entities owned by the same individual or individuals were permitted to make contributions up to $5,000 per entity if they were separate legal entities."
But the ethics panel said that doesn't mean it should be allowed and worried it "challenges the principles of the contribution limits."
"The Committee votes to dismiss the allegations, but is amending its (rules) to prohibit similar contributions in the future," said the report submitted on Tuesday by Rep. Joe Bonner, R-Alabama, the committee chairman.
Young put out a written statement after the ruling saying, "I am pleased that the Ethics Committee confirmed what I have maintained all along -- I did nothing to violate House rules. I am glad the inquiry has been completed."
Young set up the legal expense fund in 2008 to help cover costs associated with the long federal investigation into his campaign fundraising and other matters. Before the fund was set up, he reported spending more than $1 million in campaign funds on legal expenses. Young announced in August 2010 he had received a letter from the Justice Department saying he wouldn't be prosecuted. He continued to raise money for his legal fund, though.
Chouest offered to help Young with the legal fund during a telephone conversation the two men had in late December or early January 2011, according to the ethics committee's report.
"During the conversation, Mr. Chouest offered to raise funds for Rep. Young's legal expense trust. The funds would be contributions from the companies owned by the Chouest family," the ethics panel found.
Young's chief of staff, Pamela Day, then contacted the trustee of Young's legal fund to ask if it was allowed.
Day told investigators that trustee Gail Schubert, who is also president and CEO of the Bering Straits Native Corp., responded that contributions up to $5,000 are fine from each company that filed its own tax return and held separate insurance policies.
Young went to Chouest's fundraiser in Texas soon after that. The two men were already acquainted. Young was the top congressional recipient of campaign contributions by donors from the Louisiana-based Edison Chouest Offshore company in the 2008 election cycle, according to the Center for Responsive Politics, which listed him as receiving $33,100.
Donors associated with the company also made up Young's top single group of contributors for the 2010 election, the nonpartisan center's database shows, and are leading so far in the 2012 election cycle with $12,500 in donations.
The Edison Chouest money didn't just come to Young, a Republican in his 20th term. Contributors connected to Edison Chouest Offshore gave Alaska Republican Sen. Lisa Murkowski's campaign committee $41,050 since 2007, Murkowksi's second largest single donor group, according to the Center for Responsive Politics. Edison Chouest donors ranked as the third largest contributor to Alaska Democratic Sen. Mark Begich since he was elected in 2008, giving him $30,500, according to the center's database, which is based on Federal Elections Commission disclosure reports.
In Louisiana, Gary Chouest is viewed as both a larger-than-life player and a mystery. He's a major donor to political candidates, mainly Republicans, but also Democrats in and out of Louisiana who support oil development and maritime transportation.
His father, Edison Chouest, was a commercial shrimper who initially invested in a single offshore oil supply vessel. Gary Chouest, now head of the family-owned company, is credited as being a shrewd businessman and visionary who parlayed what his father started into one of the world's biggest maritime companies. Along with affiliated businesses, Edison Chouest builds, owns and operates a fleet of vessels that serves offshore oil field operations, conducts research for the National Science Foundation and engages in other marine activities, its executives say.
Young told ethics investigators in September that he is good friends with the Chouest family. Young said he's known the family for a decade and that Young, who once was a tug and barge operator, met Gary Chouest because "both have had maritime businesses," according to a memo describing the investigators' interview with Young.
"(Young) and Gary Chouest have attended social events together, including dinners and fishing events," the memo said.
GIVE THE MONEY BACK?
The ethics committee found Young had made efforts to find out if it was OK to take the Chouest money for his legal fund and that "it does not appear Rep. Young himself intended to violate the spirit" of the contribution limits.
The status of Young's legal expense fund is not clear. Young's chief of staff told the ethics investigators in September that a $25,000 payment by the fund to Young's lawyers on Jan. 4 represented the final payment of his legal bills.
But Young was in Texas raising the money from Chouest about a week later, around Jan. 14, according to investigators.
Fund trustee Schubert, in her own September interview with investigators, said she didn't know if the legal payments were over.
"(Schubert) explained that the remaining funds are for legal expenses; if there are no further legal expenses, the money should be retuned to the contributors. (Schubert) remarked that she 'guess(es) we should discuss that,'" the investigators said.
The rules require that leftover legal expense fund contributions be returned to contributors after the trust is terminated.
Young himself told investigators in September he doesn't think he owes any more legal bills and isn't raising money for the fund.
Young spokesman Luke Miller said Tuesday he could not comment on the legal fund or any return of contributions. Young's chief of staff and the fund's trustee did not return phone messages Tuesday asking about the fund.
Daily News reporter Lisa Demer contributed to this story.