The ethics committee, consisting of four Republicans and three Democrats, was called by Speaker of the House Lawerence Denney, R-Midvale, at the urging of House Minority Leader John Rusche, D-Lewiston. In its meeting Thursday at the Statehouse in Boise, committee members voted 4-3, along party lines, to dismiss the conflict-of-interest charge against Hart, and hold hearings on the legislative privilege allegation at later date. Republicans on the committee felt the allegations of Hart’s failure to disclose a conflict-of-interest were too vague to take action on, while Democrats said that Hart’s action created the appearance of impropriety that deserved a reprimand from the panel.

Hart told reporters gathered at a different room in the lower east wing of the Capitol that this experience would likely scare off potential electoral candidates in the future. He said that many people with whom he has had private conversations who have wanted to run for office were scared to do so because of mishaps or slip-ups in the past. “I hope that we don’t have future electoral candidates scared away from the electoral process,” said Hart. “I think if we shrink the pool of people who do run for office, then we are worse off, whether we are Republican, Democrat, or Independent.”

He also said that contrary to recent news reports, he has been paying his state and federal taxes. An aide for the Athol legislator passed out a letter from a certified public accountant saying that after a review of Hart’s finances, he found that he had paid more than $120,000 in state and federal taxes in the past five years. The more than $300,000 in liens placed against his assets, Hart said, is the result of the Internal Revenue Service revoking all his business-related tax deductions in the past eight years, which he said is pretty abnormal.
Here is Hart’s full address following the ethics hearing:

Here is Hart’s full address following the ethics hearing:
Part 1:

Part 2:

Hart did not speak at the hearing, but his attorney, Starr Kelso, spoke on his behalf, saying that that was no instance in which his client should have disclosed his private affairs but didn’t. “There was no basis, reason, or time, for a conflict of interest to be raised,” said Kelso.  At issue was House Rule 38, a provision that requires lawmakers who might have a conflict of interest in a particular piece of legislation to disclose the situation to colleagues.  For example, Rep. Brent Crane, R-Nampa, declared a conflict of interest earlier this year when a bill determining the pay rate for his father, state treasurer Ron Crane, came up for a vote on the House floor.

Circumstances around two bills were considered by panel members.  The two bills, House Bills 436 and 454, were considered in 2010, though only one piece of legislation received a final committee vote.  House Bill 454 was a personal bill of Hart’s, meaning that it never actually received a formal introductory hearing, thus there was no occasion on which Hart could have voted for the bill, or declared a conflict of interest with it either.  House Bill 436 dealt with the statue of limitations and how long citizens of Idaho could files taxes if they missed previous years before they were deemed ineligible.  Hart voted against the bill, which died in committee on a tie.  Kelso defended Hart’s vote on the measure, saying that if the bill had been pointed solely at Hart, it would be been a problem if the lawmaker didn’t disclose details.  Kelso explained that because the bill dealt with a large number of Idahoans, there was no conflict of interest because Hart was simply voting the wishes of his constituents.

Democrats on the panel, led by vice chair Rep. Wendy Jaquet, D-Ketchum, focused on public perception of Hart’s case.  Rep. Tom Loertscher, R-Iona, chair of the committee, pressed Democrats and Jaquet for specific instances in which Hart should have declared a conflict of interest.  Rep. George Sayler, D-Coeur d’Alene, said that according to media reports in the north Idaho area, there is a public perception of wrongdoing on Hart’s part.  ”Perception is reality,” said Sayler.  ”The perception up here is that Hart has behaved inappropriately.  Our credibility in the Legislature is involved, as well as Mr. Hart’s own credibility.” Jaquet agreed.  ”To dismiss this complaint at this time creates a perception that we don’t think there has been any misconduct and that we tolerate this kind of behavior,” said Jaquet.  ”The behavior does reflect badly on all of us.”  Jaquet moved that Hart be given a reprimand and be stripped of his assignment on the House Revenue and Taxation Committee.

Republicans wouldn’t have any of the perception argument.  Rep. Dell Raybould, R-Rexburg, attempted to kill all discussion based on perception.  ”I don’t believe this committee should be acting on perception, this committee should be acting on fact,” said Raybould.  ”I think we really need to look at the facts here before us today.”  Rep. Rich Wills, R-Glenns Ferry, called on all lawmakers to cast aside partisanship and vote for the facts of Hart’s case.  ”I respect everyone on this committee regardless of what’s behind their name,” said Wills.  ”I hope we can rise above it.”  Wills called for dismissal of one of the charges because he believed the allegations were too vague to merit any other move.

The four Republicans on the committee voted to dismiss one of the charges against Hart, while the three Democrats voted to give him the reprimand and strip him of his tax committee assignment.  The other charge in the case, that Hart used legislative privilege to receive special treatment by the state tax commission, will be taken up at a future and unknown time.  Loerstcher said that because Hart has ongoing proceedings in the case, any judgment by the panel on that allegation could cloud the findings of the commission.  Loertscher told committee members that when Hart’s legal proceedings are finished, the panel would finish its work.

At the rally Wednesday, Baumbach called on those who support the Athol Republican to show up at the ethics panel hearing, scheduled for 9 a.m. Thursday in the lower east wing of the Capitol.  ”We’re calling on citizens who love liberty to come to this hearing tomorrow at the Statehouse,” said Baumbach.  ”We encourage citizens to stand up for our conservative legislators.”

Baumbach also blamed Democrats for the investigation into Hart.  ”This ethics hearing … was called my Democrats who have become especially partisan and desperate because their party has failed leadership that has failed our country for the last two years,” he said.  House Minority Leader John Rusche, D-Lewiston, asked for the inquiry after several media reports were published about Hart’s alleged tax woes.

Here’s video of the full address by Baumbach:

Hart has come under fire recently after a Washington state newspaper revealed that he had more than $300,000 in tax liens placed against him by the IRS and $53,000 from the Idaho State Tax Commission and that he may have improperly used his status as a state lawmaker to keep from paying taxes multiple times. The Idaho Constitution prevents state legislators from being served or arrested while the Legislature is in session.

Baumbach also released a statement Tuesday in support of Hart. The letter slammed Democrats and said that Hart is the target of the inquiry due to his ideological beliefs. “They (Democrats) will say anything to further their socialist cause,” wrote Baumbach. “They will seek to destroy men, like Hart, who oppose big-government panacea at every turn.”

Brian Kane, a deputy assistant from the attorney general’s office who is advising the ethics panel, said at the first ethics panel meeting that lawmakers will need to decide if Hart used his legislative privilege too many times during his years in office.  Bambauch thinks legislative privilege is one of the perks of the lawmakers and that Hart isn’t the only legislator to use it.   “It is pointless to have legislative privilege to avoid the distraction of polemical civil filings, if the Legislature is going to convene an ethics hearing each time the privilege is invoked,” said Baumbach.  ”To punish Rep. Hart would be to open the entire Legislature up to frivolous lawsuits.  This ethics charge alone will have a chilling effect on the legislative process itself.”

Hart is expected to appear before the panel Thursday and is slated to testify.

An attorney from the Idaho attorney general’s office, Brian Kane, is advising the panel on the procedure for the investigation into Hart.  Another attorney from the attorney general’s office, Bill von Tagen, is representing the commission in Hart’s case, which has led some to contend that there may be a conflict in having two attorneys from the same agency involved in the Hart case.

Not so, says Denney, who appointed the seven-member ethics committee.  ”I believe that Kane is and will be impartial in his advice to the committee,” said Denney in an e-mail to IdahoReporter.com.  Rep. Wendy Jaquet, D-Ketchum, vice chair of the panel, said last week that Kane will serve in an advisory capacity for the committee.  ”I think that’s a policy issue that we resolved some time ago,” Jaquet told IdahoReporter.com. She explained that in the mid-1990s, state government decided to use legal counsel from the attorney general’s office to represent Idaho’s interests, instead of hiring independent lawyers, the idea being to save money.  ”We’ve asked him (Kane) to do some research,” said Jaquet, who added that committee members wanted to more in-depth reports on Hart than what is being offered in the news media.

Hart has come under fire recently after a Washington state newspaper revealed that he had more than $300,000 in tax liens placed against him by the IRS and $53,000 from the Idaho State Tax Commission and that he may have improperly used his status as a state lawmaker to keep from paying taxes multiple times. The Idaho Constitution prevents state legislators from being served or arrested while the Legislature is in session.  Kane, in the first meeting of the panel, said committee members must decide if Hart has used that privilege too many times during his tenure in the Idaho Statehouse.

Kriss Bivens-Cloyd, temporary spokesperson for the attorney general’s office, said that if there is a problem with the proceedings, her office should be deal with it.  House Rule 76, which sets forth the standards on how ethics panels are to be conducted for representatives, provides some clarity on the matter.  ”The committee may retain such counsel and may hire such investigators as it deems necessary for the performance of its duties,” says the rule.

Hart is contending that because he is in the midst of legal proceedings with the Idaho State Tax Commission, which also takes its legal advice from lawyers within the attorney general’s office, there is a conflict of interest between the executive and legislative branches of governments.  ”The legislative branch, consisting of the Idaho House and Senate, is bound to investigate its own matters,” said Hart in an e-mail to IdahoReporter.com.  ”To allow an attorney from the executive branch of government, and one from the very office that is prosecuting the same member of the legislature over at the Tax Commission creates both a separation of powers and a conflict of interest issue.  The Attorney General should know better,” Hart concluded.

Hart has come under fire recently after a Washington state newspaper revealed that he had more than $300,000 in tax liens placed against him by the IRS and $53,000 from the Idaho State Tax Commission and that he may have improperly used his status as a state lawmaker to keep from paying taxes multiple times. The Idaho Constitution prevents state legislators from being served or arrested while the Legislature is in session.  Kane, in the first meeting of the panel, said committee members must decide if Hart has used that privilege too many times during his tenure in the Idaho Statehouse.

Kriss Bivens-Cloyd, temporary spokesperson for the attorney general’s office, said that if Hart has a problem with the proceedings, he should approach her office about it.   The Idaho Tax Commission is not using Kane in litigation with Hart, but rather is using attorney Bill von Tagen.

House Rule 76, which sets forth the standards on how ethics panels are to be conducted for representatives, provides some clarity on the matter.  ”The committee may retain such counsel and may hire such investigators as it deems necessary for the performance of its duties,” says the rule.

The vice chair of the committee, Rep. Wendy Jaquet, D-Ketchum, said that she doesn’t agree with Hart’s claims.  ”I think that’s a policy issue that we resolved some time ago,” Jaquet told IdahoReporter.com. She explained that in the mid-1990s, state government decided to use legal counsel from the attorney general’s office to represent Idaho’s interests, instead of hiring independent lawyers, the idea being to save money.  When asked about the role Kane will play in the ethics committee’s proceedings, Jaquet said he will serve in an advisory role.  ”We’ve asked him to do some research,” said Jaquet, who added that committee members wanted to get more in-depth reports on Hart than what is being offered in the news media.

Republican Dell Raybould, R-Rexburg, said that he was unaware of Hart’s allegations and that he is not able to speak about the hearings outside of official proceedings.  Jaquet and Raybould both said that if Hart has a problem with the process, it can be addressed at the panel’s next meeting, which is July 29 in Boise.  Speaker of the House Lawerence Denney, R-Midvale, who appointed the committee, and Rep. Tom Loertscher, R-Iona, the chairman of the panel, could not be reached for comment on Hart’s claims.

The ethics panel, chaired by Rep. Tom Loertscher, R-Iona, met for the first time earlier this month, a meeting in which committee members were briefed on the procedures of an ethics investigation.   Loerstscher informed committee members they could choose four actions in the Hart case: dismiss the charges or recommend reprimand, censure, or expulsion for Hart.  If panel members decide to recommend reprimand, censure, or expulsion for Hart, the full House must approve whatever the committee decides.  Reprimand and censure recommendations would need a simple majority, or 36 representatives, to be approved, while expulsion would need a two-thirds majority, or 47 votes, to pass.  If Hart receives a reprimand or censure, he could also be stripped of his assignment to sit on the House Revenue and Taxation Committee.

The investigation centers on the constitutionality of his actions regarding the IRS and tax commission in recent years.  Reports have surfaced that Hart used a loophole in state law – a provision which prevents Idaho lawmakers from being arrested or served during legislation session – to avoid IRS inquiry into his finances many times, including his first year in the Idaho House in 2005.

In the letter to panel members, Hart said that he disagrees with Rep. John Rusche, D-Lewiston, the lawmaker who asked for the inquiry into the situation.  ”I disagree with the assertions of the charging letter. Nonetheless, I respect Rep. Rusche’s right as Minority Leader to raise any issue of concern. I have no hesitancy in accounting for, and defending, all of my actions as an elected representative of District 3,” wrote Hart.  He also took a jab at the whole process, challenging the legitimacy of Rusche’s claims.  ”I hope that when this proceeding is through the legislature gives due consideration to requiring that in the future all ethical complaints be clear and specific, and not based upon rumor, news accounts, and innuendo,” he concluded in the letter.  (Read Hart’s whole letter here: Ethics Committee Answer 7-14-10)

In the e-mail, Hart said that he is a state lawmaker for a myriad of good reasons, not to avoid paying taxes.  ”I sought this office because I wanted to be in a position to protect our constitutional rights and the liberties of the people. I am seeking re-election now because, with my six years of experience, I feel I can be more effective in attaining those lofty goals.”  He also said that his fight is right and morally correct.  ”American patriots fight for what is right in the country and reject is what is wrong with the country. This battle for me is no less than fighting for what is right and just in the legislative arena and in the state that I have grown to love.”

Hart’s case will be taken up by the ethic panel again on July 29.

Hart is being investigated after a writer from the Spokesman Review revealed that the Internal Revenue Service (IRS) has filed more than $300,000 in liens against the north Idaho lawmaker.  The panel, with its initial meet-up slated for Tuesday, will look into whether Hart has violated House ethics rules in the situation.  Reports have surfaced that Hart used a loophole in state law – a provision which prevents Idaho lawmakers from being arrested or served during legislation session – to avoid IRS inquiry into his finances many times, including his first year in the Idaho House in 2006.

Brian Kane, from the attorney general’s office, said that the duty of the committee is to examine Hart’s action to decide if Hart used a loophole in the Idaho Constitution, a provision preventing state legislators from being served or arrested during session, too many times.  Though it’s a provision in the Idaho Constitution, Kane said, panel members must determine if Hart used that loophole to give himself special privileges.  ”The job of the committee is to determine whether or not he has dipped into that well too many time, so to speak,” said Kane.  ”But you must balance that with that fact that it is constitutional privilege.”

The panel can take four actions after it finishes its work: it can dismiss the charges or recommend reprimand, censure, or expulsion for Hart.  If panel members decide to recommend reprimand, censure, or expulsion for Hart, the full House must approve whatever the committee decides.  Reprimand and censure recommendations would need a simple majority, or 36 representatives, to be approved, while expulsion would need a two-thirds majority, or 47 votes, to pass.  If Hart receives a reprimand or censure, he could also be stripped of his assignment to sit on the House Revenue and Taxation Committee.

Panel chairman Rep. Tom Loertscher, R-Iona, warned lawmakers to communicate in a safe and protected manner with Hart, if they choose to speak with him at all.  ”We need to be very careful,” Loertscher said. “We want to make sure we do this correctly so we don’t have to do this over again.”  He said that he and Hart ran into each other in late June at the Idaho Republican Party’s state convention in Idaho Falls when Loerstcher had yet to be notified that he was slated to serve on the committee to evaluate Hart’s behavior.  Judging by his actions at the convention, Loertscher said that Hart knew of his appointment before he did.  ”He avoided me like the plague,” Loertscher said.  He described Hart as someone who is “playing it safe.”

The committee was unable to do any deep investigative work because House procedure requires the subject of the inquiry, Hart, respond to a letter penned by Loertscher explaining the nature of the tasks before panel members.  Loertscher said that he has sent a letter to Hart, but has yet to receive a formal, written response.  Hart has until July 14 to respond, though he has the option to ignore the letter and not respond if he so chooses.

The panel will meet again on July 29 to begin its work.  Loertscher said that for the good of the panel and of the public, all committee members must be present at the Statehouse in Boise for the next meeting.  The majority of committee members phoned into Tuesday’s hour-long discussion.

Hart is being investigated after a writer from the Spokesman Review revealed that the Internal Revenue Service (IRS) has filed more than $300,000 in liens against the north Idaho lawmaker.  The panel, with its initial meet-up slated for Tuesday, will look into whether Hart has violated House ethics rules in the situation.  Reports have surfaced that Hart used a loophole in state law – a provision which prevents Idaho lawmakers from being arrested or served during legislation session – to avoid IRS inquiry into his finances many times, including his first year in the Idaho House in 2006.

Durst, on his blog, said that he isn’t completely satisfied with the members Denney picked for the panel, particularly the Republicans lawmakers.  “I do have serious concerns with the composition of the ethics panel convened by Denney. If truth is what we are searching for, then it seems to me that there are most certainly better alternatives than the legislators picked for this important task, specifically on the majority side,” wrote Durst Tuesday.

More specifically, Durst was critical of the age, professions, political statures, and geography represented on the panel. Each of the Republican lawmakers – Rep. Bert Stevenson, R-Rupert, Rep. Rich Wills, R-Glenns Ferry, Rep. Tom Loetscher, R-Iona, and Rep. Dell Raybould, R-Rexburg – serves as a committee chairman when the Idaho House is in session. That, Durst said, could lead to a decision based solely on politics.  “This is significant because it means that all of the majority members on the panel are fiercely loyal to the Speaker. I am not saying this is going to have an impact, but I do believe it is worth noting.”

The geographic representation on the panel, Durst argued on his blog, may be skewed against Hart, or at least people Hart represents in north Idaho.  “Not a single member of the majority on the ethics panel lives or represents the 1^st Congressional District. I can understand not having someone from the far north, given the local politics, but no one from the 1^st District at all? I have a feeling this is a lot more meaningful than meets the eye,” wrote Durst.  Rep. George Sayler, D-Coeur d’Alene, will represent the 1^st District on the panel.

Durst also ripped Denney for failing to use the legal resources of Republican lawmakers to construct the panel.  With the exception of Wills, who is a former law enforcement official, no other Republican on the panel has legal experience.  “While this certainly is a noble profession, I am not certain that it has the monopoly on ethics and law. These members are all good men who work hard, but are they the best fit, I don’t personally believe so.  Denney, in my view, missed a golden opportunity to take advantage of the legal acumen of Reps. Leon Smith, R-Twin Falls, and Lynn Luker, R-Boise, both trained attorneys and mediators,” Durst said.  Rep. Bill Killen, D-Boise, who will serve alongside Jaquet and Sayler, works as an attorney.

Ultimately, Durst wants the process to be fair and urged his fellow House members to proceed with caution during panel hearings.   “Ultimately, it is my hope that the process is thorough and fair. I hope that my colleagues on the panel do not rush to judgment, regardless of which side of judgment it may be. The process deserves their best efforts and so do the people of Idaho,” concluded Durst.

In a statement announcing the makeup of the panel, Denney offered no explanation as to why he picked certain legislators over others.

The investigation comes after a writer for the Spokesman Review revealed that Hart used his status as a representative, beginning in his first year in service, to keep tax collectors at bay.  A provision in the Idaho Constitution prevents lawmakers from being arrested or served during session, a loophole which Hart has used several times.  The writer found that Hart had more than $300,000 in liens placed against him by the IRS and that he has been delinquent in paying property taxes several times.

Denney called on state Rep. Tom Loerstcher, R-Iona, to chair the panel, while tapping Rep. Wendy Jaquet, D-Ketchum, to serve as the vice chairman.  Reps. Bert Stevenson, R-Rupert, Dell Raybould, R-Rexburg, and Rich Wills, R-Glenn Ferry, will also represent the majority party on the ethics committee.  Reps. George Sayler, D-Coeur d’Alene, and Bill Killen, D-Boise, will sit for the minority party.  Denney expressed faith in the panel to come to the right conclusion.  ”I have full confidence in the Idaho House process and in the capable and experienced members I have selected for this committee. It is important for both the House and for Rep. Hart to have this matter resolved quickly and in a fair, even-handed manner.”

Because the House is not in session, Denney explained, there will be no action regarding his seat on the House Revenue and Taxation Committee, the group of lawmakers tasked with setting tax policy in the state.

Hart said that he welcomes the investigation, which was called for by House Minority Leader John Rusche, D-Lewiston.

Rusche, attending his party’s state convention in Worley, said that though he wouldn’t call for Hart to resign from the committee, on which Rusche also sits, he isn’t entirely comfortable with it.  ”I see significant problems in someone with those kind of problems helping to craft tax policy for the state,” Rusche said.  He said the he feels that constituents in Hart’s district deserve proper representation and he is unsure if Hart can provide that.

Hart defended himself in the Spokesman article, saying that the experience is helping him to gain insight with the federal bureaucracy and red tape.  It is the second time in recent years that Hart has run into tax problems.  About five years ago, Hart and the IRS reached an agreement on how he would pay back more than $90,000 in unpaid taxes and penalties.