Did US Rep. Benny Thompson shake down the credit card companies?


House Homeland Security Committee faces ethics inquiry

At a hearing in late March, the nation's credit card companies faced the threat of expensive new rules from an unlikely regulator: the House Homeland Security Committee, chaired by Rep. Bennie Thompson (D-Miss.).

The committee had never before dealt with credit card issues, but Thompson warned Visa, MasterCard and others that Congress might need to impose tighter security standards costing millions of dollars to protect customers from identity theft.

Behind the scenes, some of Thompson's staff members sensed a different motive -- an attempt to pressure the companies into making political donations to the chairman, according to several former committee staff members.

Now the House ethics committee is investigating the propriety of the committee's operations, and whether its members' interactions with companies compromised its work. Within a few weeks of the hearing, Thompson collected $15,000 in donations from the credit card industry and its Washington-based lobbyists, a Washington Post analysis shows. No legislation on card security has been introduced.

Several former committee staff members, who requested anonymity in order to speak freely, have told The Post the hearing on credit cards was one of several committee actions that concerned the staff because of their consideration of potential donors and contractors friendly to Thompson. The current ethics inquiry was prompted this summer, according to an ethics document obtained by The Post, when a former committee aide alleged she was fired after complaining to her bosses that a lobbyist made improper requests to staff members.

Thompson -- who made headlines separately this week by calling a committee hearing to investigate Tareq and Michaele Salahi's ability to get past Secret Service and into a White House state dinner without invitation -- said he did not arrange a hearing to generate campaign donations.

"That's incorrect," he said of the suspicion. "We do hearings all the time -- sometimes we are able to generate legislation earlier, and sometimes we have to [build] a public record."

He said that he has never been told of staff complaints about his hearings, and that he was not aware a committee staff member said she was fired for raising objections about inappropriate lobbyist requests.

"I would assume if discomfort was there with the staff, they would have shared it, " he said. "I have not heard this."

Committee staff director Lanier Avant, who also serves as the congressman's chief of staff, said the credit card hearing was prompted by a data breach at a payment company, Heartland Payment Systems, that compromised the credit information of millions of customers.

Several congressional ethics experts said it could be an ethics violation if a lawmaker or senior staff member arranged a hearing for the purpose of collecting campaign contributions. Proving such a case would be difficult, they said, and investigators would need evidence that a lawmaker intended to use a hearing for fundraising leverage.

Sarah Dufendach, a vice president at Common Cause, said the House ethics committee should take the staff member's allegation seriously, especially because Thompson's office has had a number of staff departures. She questioned whether credit card security was a top committee priority.

"You have to wonder: Did this take precedence over everything else that was on your committee's plate?" she said. Joshua Levy, an attorney for the fired staff member, Veronique Pluviose-Fenton, declined to comment.

Numerous credit card lobbyists would not comment on the record. Officials at Visa and the industry-sponsored Payment Card Industry Security Standards Council, who were asked to testify at the hearing, said they did not have concerns about the hearing.

Visa spokeswoman Sandra Chu said her company did not contribute to Thompson and did not direct its lobbyists to contribute.

Thompson's committee has been roiled by turnover this year, with at least 10 staff members resigning or being fired, according to congressional payroll records.

Former and current staffers said many departures came after employees objected to committee operations. Many blame the staff turmoil on Avant, a Thompson confidant. Avant, 30, played a role in planning the March 31 credit card hearing, hosted by the subcommittee on cyber-threats.

Avant said his committee decisions have not been guided by politics. "I've never asked anything that they would be uncomfortable with," he said.

Thompson and his subcommittee chairman suggested the industry should use better data encryption and new technologies to prevent identity theft, such as microchips in credit cards. Avant said that the hearing helped inform lawmakers and the public about the issue, and that the committee might consider legislation at a later date.

In April and May, donations of $250 to $1,500 came in from lobbyists registered to represent Visa, American Express, MasterCard, Heartland and the National Installment Lenders Association, among others, as well as from the American Bankers Association's political action committee.

Thompson's committee also has faced criticism that it has been overly focused on helping and encouraging minority contractors -- especially in his poor Mississippi district -- to get federal government work. In March, both Republican and Democratic staff members raised concerns when Thompson moved to hold a committee oversight meeting at his alma mater in Mississippi, Tougaloo College, on how small contractors and minority-owned contractors could get Department of Homeland Security contracts. During part of the session, companies explained their value to the department, and staff members complained that it appeared to be an advertisement for companies and an inappropriate use of committee resources.

In July, Thompson held a hearing on Federal Emergency Management Agency housing alternatives in a disaster. Three invited witnesses were contractors who developed temporary shelters, and they testified about the value of their domes, trailers and assorted services. Two of those companies' executives, lobbyists and family members donated to Thompson within a few weeks of the event.

Avant said the March meeting was an official committee meeting to help companies learn how to tap into $787 billion in economic stimulus funds. He said the July hearing was intended to let lawmakers hear "outside the box" housing solutions from the private sector.

Thompson said the committee invites "companies all the time to come tell us what new ideas are." At the Mississippi meeting, he said, he had a log of participants and feedback that "it was an excellent conference."

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