U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1 

19–006 

" ! HOUSE OF REPRESENTATIVES 

112TH CONGRESS

2d Session 

REPORT

2012

112–588 

Union Calendar No. 145 

IN THE MATTER OF ALLEGATIONS 

RELATING TO REPRESENTATIVE 

VERNON G. BUCHANAN 

R E P O R T 

OF THE

COMMITTEE ON ETHICS 

JULY 10, 2012.—Referred to the House Calendar and ordered to be 

printed 


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(II) 

COMMITTEE ON ETHICS 

JO BONNER, Alabama, 

Chairman 

MICHAEL T. MCCAUL, Texas 

K. MICHAEL CONAWAY, Texas 

CHARLES W. DENT, Pennsylvania 

GREGG HARPER, Mississippi 

LINDA T. SA ́ NCHEZ, California, 

Ranking Member 

JOHN A. YARMUTH, Kentucky 

DONNA F. EDWARDS, Maryland 

PEDRO R. PIERLUISI, Puerto Rico 

JOE COURTNEY, Connecticut 

REPORT STAFF 

DAN SCHWAGER, Chief Counsel/Staff Director 

DEBORAH SUE MAYER, Director of Investigations 

KELLE A. STRICKLAND, Counsel to the Chairman 

DANIEL J. TAYLOR, Counsel to the Ranking Member 

CHRISTOPHER R. TATE, Counsel 

FRANK DAVIES, Investigator 

BRITTANY M. BOHREN, Investigative Clerk 


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(III)

LETTER OF SUBMITTAL 

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON ETHICS, 

Washington, DC, July 10, 2012. 

Hon. KAREN L. HAAS, 

Clerk, U.S. House of Representatives, 

Washington, DC. 

DEAR MS. HAAS: Pursuant to clauses 3(a)(2) and 3(b) of Rule XI 

of the Rules of the House of Representatives, we herewith transmit 

the attached Report, ‘‘In the Matter of Allegations Relating to Representative Vernon G. Buchanan.’’ 

Sincerely, 

JO BONNER, Chairman. 

LINDA T. SA ́ NCHEZ, 

Ranking Member. 


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C O N T E N T S 

Page 

I. INTRODUCTION ............................................................................................. 1 

II. HOUSE RULES, LAWS, REGULATIONS, AND OTHER STANDARDS 

OF CONDUCT .............................................................................................. 2 

III. BACKGROUND ................................................................................................ 3 

IV. ANALYSIS ........................................................................................................ 5 

V. CONCLUSION .................................................................................................. 6 

VI. STATEMENT UNDER RULE XIII, CLAUSE 3(c) OF THE RULES OF 

THE HOUSE OF REPRESENTATIVES .................................................... 7 


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1 Because the Committee has already published OCE’s Report and Findings, it has not done 

so again with its own Report. OCE’s Report and Findings are available on the Committee’s Web 

site, http://www.ethics.house.gov. 

Union Calendar No. 145 

112TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 112–588 

IN THE MATTER OF ALLEGATIONS RELATING TO 

REPRESENTATIVE VERNON G. BUCHANAN 

JULY 10, 2012.—Referred to the House Calendar and ordered to be printed 

Mr. BONNER, from the Committee on Ethics, 

submitted the following 

R E P O R T 

I. INTRODUCTION 

On November 8, 2011, the Office of Congressional Ethics (OCE) 

forwarded to the Committee on Ethics (Committee) a Report and 

Findings related to Representative Vernon G. Buchanan’s alleged 

failure to properly list on his Financial Disclosure Statements for 

2007 through 2010, certain positions with a number of entities, as 

well as certain income from those positions. Representative 

Buchanan amended his 2007 through 2010 Financial Disclosure 

Statements while OCE conducted its investigation. 

OCE found ‘‘substantial reason to believe that Representative 

Buchanan failed to disclose reportable positions and unearned income’’ on his Financial Disclosure Statements, and recommended 

further review in order for the Committee ‘‘to apply its Policy Regarding Amendments to Financial Disclosure Statements and determine whether the amendments were filed with a presumption of 

good faith.’’ 

The Committee published OCE’s Report and Findings on February 6, 2012.1 The Committee conducted its own review of those 

allegations pursuant to Committee Rule 18(a). 

This Report, adopted by the Committee on June 29, 2012, resolves the allegations forwarded by OCE on November 8, 2011. The 

Committee has unanimously determined that the evidence presently before the Committee supports a determination that Representative Buchanan did not report, in complete and accurate deVerDate Mar 15 2010 11:34 Jul 11, 2012 Jkt 019006 PO 00000 Frm 00007 Fmt 6659 Sfmt 6602 E:\HR\OC\HR588.XXX HR588

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2This Report addresses only the matter referred to the Committee on November 8, 2011, regarding financial disclosure errors and omissions. It does not address any other matter referred 

by OCE regarding Representative Buchanan. 

tail, all of the positions or ownership interests he held with several 

entities on his Financial Disclosure Statements for 2007, 2008, 

2009, and 2010, and that he did not accurately report certain income received from those same entities in the same years. 

However, the Committee also unanimously determined that 

these errors and omissions are not substantively different from the 

hundreds or thousands of errors and omissions corrected by amendment at the requirement of the Committee every year. Such errors 

and omissions occur frequently but rarely result in Committee action other than requests for amendments which will be publicly 

filed, and, in certain cases, late fees when the amendments are not 

timely filed after notification. Therefore, due only to the structure 

of House and Committee Rules requiring publication of material referred by OCE for further review, this Report is warranted to explain the Committee’s actions and findings in this matter, and to 

provide greater context to the OCE’s Report and Findings. 

On September 15, 2011, after being notified by OCE of their inquiry, Representative Buchanan amended his annual Financial 

Disclosure Statements for calendar years 2007, 2008, 2009, and 

2010, to reflect his positions with or ownership interests in certain 

entities, and income earned from these entities. As is done in many 

instances of incomplete or inaccurate Financial Disclosure Statements, Representative Buchanan has now remedied these errors 

and omissions by his subsequent amendments. Therefore, no further action by the Committee is warranted in this OCE matter.2

The Committee notes that Representative Buchanan’s amendments, like all amendments, are available for public review with 

the Clerk of the House and online. 

II. HOUSE RULES, LAWS, REGULATIONS, AND OTHER 

STANDARDS OF CONDUCT 

House Rule XXVI, clause 2 provides that Title I of the Ethics in 

Government Act (EIGA) of 1978 ‘‘shall be considered Rules of the 

House as they pertain to Members, Delegates, the Resident Commissioner, officers, and employees of the House.’’ The EIGA, codified at 5 U.S.C. app. 4 101 et. seq., provides that Members, officers, 

and certain staff of the House are required to file an annual Financial Disclosure Statement. The EIGA also requires candidates for 

federal office to file a Financial Disclosure Statement while they 

are a candidate. The EIGA, at Section 102(a), describes the information that must be included in the Financial Disclosure Statement. Section 102(a)(6)(A) requires a filer to include: ‘‘The identity 

of all positions held on or before the date of filing during the current calendar year (and, for the first report filed by an individual, 

during the two-year period preceding such calendar year) as an officer, director, trustee, partner, proprietor, representative, employee, or consultant of any corporation, company, firm, partnership, or other business enterprise, any nonprofit organization, any 

labor organization, or any educational or other institution other 

than the United States.’’ 


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III. BACKGROUND 

On November 8, 2011, OCE referred a matter involving Representative Buchanan to the Committee. In its referral, OCE recommended the Committee further review allegations that Representative Buchanan had failed to disclose reportable positions 

and unearned income on his Financial Disclosure Statements for 

the past four years. 

The Committee reviewed the allegations forwarded by OCE in its 

referral. Committee staff reviewed Representative Buchanan’s 

original Financial Disclosure Statements and the amendments he 

filed for public disclosure with the Clerk of the House in September 

2011, after he was notified of OCE’s inquiry. 

OCE’s Report and Findings describe a number of alleged errors 

in Representative Buchanan’s Financial Disclosure Statements 

from 2007 to 2010. In summary, OCE alleges that Representative 

Buchanan failed to report positions with six companies: Boca Creek 

Development Company, LLC; Bowling Green Dealership, LLC; 

Country Club Shores LLC and its companion entity Country Club 

Shores II, LLC; Regent Court Association, Inc.; and Vernon G. and 

Sandra J.C. Buchanan Family Foundation, Inc. OCE also alleged 

that Representative Buchanan failed to disclose up to $14,315 in 

interest income imputable to these six entities over the four-year 

time period it investigated. The total amount of interest income 

was the subject of some dispute between OCE and Representative 

Buchanan. For example, OCE noted that according to his federal 

income tax returns, Representative Buchanan had received interest 

income from Bowling Green Dealership, LLC of $2,373 in 2007 and 

$2,992 in 2008, but that he had listed the amount of interest income on his original Financial Disclosure Statements for those 

years as ‘‘zero.’’ In his amended Financial Disclosure Statements 

for those years, Representative Buchanan stated that he had received ‘‘zero’’ interest income from Bowling Green Dealership during those years, but noted that ‘‘Bowling Green, LLC produced interest income during the period, but when applied against net loss, 

the net total was still a loss.’’ OCE, in a footnote to its Report and 

Findings, alleged that this methodology for calculating income was 

at odds with the Committee’s instructions for completing Financial 

Disclosure Statements, in which the Committee states the general 

rule that income and assets must be reported on a gross basis, as 

opposed to a net basis. 

Representative Buchanan, in an interview with OCE, stated that 

the omission of these positions and income was inadvertent. He explained that he relies on his staff and several accountants to prepare his Financial Disclosure Statements and that, while he reviews the draft ‘‘a little bit,’’ he relies on others to ‘‘handle all of 

the details.’’ On September 15, 2011, after having been notified of 

OCE’s inquiry, Representative Buchanan filed amended Financial 

Disclosure Statements for the years in question. The amendments 

added the disclosure of all reportable positions discovered by OCE, 

as well as additional positions not initially disclosed and not identified by OCE. 

In his response to the Committee’s request for information, Representative Buchanan described his process for reviewing and 

amending his Financial Disclosure Statements. Once he learned of 


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OCE’s investigation, Representative Buchanan instructed his accountant to investigate. The accountant, Ms. Toni Poor, obtained 

all relevant records from the Florida Department of State, Division 

of Corporations regarding any and all entities in which Representative Buchanan was listed as an officer or manager. These files were 

cross-referenced against Representative Buchanan’s own files. With 

respect to errors and omissions in reporting unearned income, Ms. 

Poor reviewed historical tax returns for the entities OCE identified, 

and compared them with the ranges submitted on Representative 

Buchanan’s Financial Disclosure Statements. 

With respect to the controversy about his methodology for reporting income, Representative Buchanan responded that he reported 

the income based on the Committee’s instructions for reporting a 

partner’s share of business income as reported on his IRS Schedule 

K–1. That guidance instructs that such income should be calculated 

as the sum of the income reflected on specific lines of the IRS 

Schedule K–1 issued to partners. When Representative Buchanan 

performed that calculation with respect to Bowling Green Dealership, LLC, the result was a ‘‘significant loss for both 2007 and 

2008.’’ Representative Buchanan reported that he had contacted 

Committee staff in September 2011 while preparing the revisions 

to his Financial Disclosure Statement and received confirmation of 

his interpretation of the policy. 

Representative Buchanan also noted that many of the additional 

changes resulted from recharacterization of positions from officer to 

‘‘managing member’’ with the Division of Corporations; other 

changes resulted from inadvertent omission of previously sold or 

inactive businesses which had not been formally dissolved; and, in 

a few cases, the reportable positions had simply been omitted 

through oversight. Staff has reviewed these additional revisions 

and determined that the explanation is consistent with the nature 

of those revisions—most of the revisions simply change the title of 

a position previously disclosed (e.g., from ‘‘Partner’’ to ‘‘Managing 

Member’’ or from ‘‘President’’ to ‘‘President, Partner, Director’’) or 

provide additional information about the nature of the entity (e.g., 

to describe whether it is owned by a parent company also controlled by Representative Buchanan, or whether it is to be dissolved in the near future). 

On December 14, 2011, Representative Buchanan, through counsel, sent a letter to the Committee responding to OCE’s Report and 

Findings. In that letter, Representative Buchanan explained that 

the unreported income, totaling just under $15,000 over four Financial Disclosure Statements, amounts to somewhere between 

0.0000434% and 0.00000962% of the total assets he disclosed on 

those statements. Representative Buchanan stated that such a 

small error relative to the size of his Financial Disclosure Statements demonstrates that he attempted to comply with the EIGA 

requirements. Representative Buchanan also explained that the 

unreported positions were inadvertently omitted and not positions 

from which Representative Buchanan drew a large profit or in 

which he had been intimately involved. Finally, Representative 

Buchanan stated that the process he follows to complete and submit his Financial Disclosure Statements, which involves a number 

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mittee staff prior to filing, demonstrates his good faith efforts to 

comply with EIGA. 

IV. ANALYSIS 

It is clear from a review of Representative Buchanan’s Financial 

Disclosure Statements and amendments that when he filed his annual Financial Disclosure Statements for 2007, 2008, 2009, and 

2010, he did not report all of the positions he held with several entities in complete and accurate detail. He also failed to accurately 

report all income earned from those entities. On September 15, 

2011, shortly after being notified by OCE that they were reviewing 

his Financial Disclosure Statements, Representative Buchanan 

submitted letters to the Clerk of the House to amend his original 

filings in order to properly report the positions he held and income 

he earned. 

Members and other filers are, of course, required by law, and expected, to make full, complete, and accurate disclosures on their Financial Disclosure Statements. When the Committee, an outside 

group, the press, or some other entity discovers errors and omissions (as OCE did in this case), the inaccuracies may or may not 

be substantial or serious. Some examples of substantial or significant errors may include the failure to report significant amounts 

or whole categories of earned income, particularly when such income is also withheld from reporting on taxes, failing to disclose 

significant positions or transactions representing direct and obvious 

conflicts of interest, or a series of numerous errors and omissions 

over many years which reflect a substantial portion of all reportable items. 

However, less substantial errors and omissions on Financial Disclosure Statements are not uncommon. In fact, between 30% and 

50% of all Financial Disclosure Statements reviewed by the Committee each year contain errors or require a corrected statement. 

For over 95% of these inaccurate Financial Disclosure Statements, 

the filer appears to be unaware of the errors until they are notified 

by the Committee. Some filers also appear to become aware of errors after being notified by members of the media or outside groups 

who review the statements and other public records. Generally, unless there is some evidence that errors or omissions are knowing 

or willful, or appear to be significantly related to other potential 

violations, the Committee notifies the filer of the error and requires 

that he or she submit an amendment, which is then publicly filed. 

Once the amendment is properly submitted, the Committee takes 

no further action. Accordingly, errors and omissions in Financial 

Disclosure Statements are an ordinary part of the process for many 

filers, and in the normal course of review and amendment of Financial Disclosure Statements, the fact of errors and omissions are 

typically not the subject of an investigation or Report by the Committee, but rather are disclosed publicly by the filing of the amendment itself. 

In this matter, Representative Buchanan was notified by OCE 

that his Financial Disclosure Statements were either inaccurate or 

were missing information that should have been reported. Very 

shortly after receiving this notification, Representative Buchanan 

submitted information to the Clerk of the House to publicly amend 

his Financial Disclosure Statements with corrected information. 


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3To be clear, as noted above, while the Committee’s notices and consultations regarding 

amendments are generally not public, all amendments themselves are made public by the Clerk 

of the House. 

Representative Buchanan has consistently stated that if his Financial Disclosure Statements require further review or amendment to 

correct inadvertent errors or omissions, he will conduct such review 

or submit such amendment. 

There has been no evidence or allegation presented to the Committee that Representative Buchanan’s failure to file correct and 

complete information was either knowing or willful. Accordingly, 

Representative Buchanan, by filing Financial Disclosure Statements containing inadvertent errors and omissions, found himself 

in a posture not uncommon among filers of Financial Disclosure 

Statements, and while many others in that position are able to exit 

it in a manner which is not the subject of a public investigation by 

the Committee, House and Committee Rules forced the Committee 

to publish OCE’s Report and Findings in this matter and accordingly publicize Representative Buchanan’s errors and omissions.3

Nevertheless, because there is no evidence that these errors were 

knowing or willful, the Committee has determined that a full and 

complete amendment correcting these errors is the appropriate resolution of the matter, as it is in most other instances requiring an 

amendment. 

To be clear, however, Representative Buchanan, as well as other 

Members and employees of the House, should understand that accurate and complete reporting on Financial Disclosure Statements 

should be every filer’s goal and is necessary to be in compliance 

with House Rules and federal law. All filers are encouraged to 

promptly file amendments whenever they learn of errors or omissions. Failure to do so may constitute a knowing or willful violation. Subjecting the routine amendment process, in every instance, 

to public investigation may serve to discourage voluntary disclosure 

of errors and omissions, undermining the goal of accurate and complete public disclosure. 

Additionally, while filers are certainly welcome to seek professional assistance in preparing their Financial Disclosure Statements, they are reminded that each filer is responsible for compliance with EIGA requirements. As always, Committee staff is willing to assist all filers as they prepare their Financial Disclosure 

Statements. 

V. CONCLUSION 

Representative Buchanan’s annual Financial Disclosure Statements filed as a Member for 2007, 2008, 2009, and 2010, contained 

certain errors and omissions. The amendments he submitted for 

those four years reflected a number of errors or omissions, some of 

which were identified by OCE and some of which Representative 

Buchanan himself discovered. The Committee’s practice in such 

cases is to notify a Member or employee of errors on their Financial 

Disclosure Statements and require them to publicly amend their 

Statements. In this case, Representative Buchanan has already 

amended his Financial Disclosure Statements to provide corrected 

information with regard to all errors brought to his attention. 


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Therefore, the Committee concludes that no further action is necessary and considers the matter closed. 

VI. STATEMENT UNDER RULE XIII, CLAUSE 3(c) OF THE 

RULES OF THE HOUSE OF REPRESENTATIVES 

The Committee made no special oversight findings in this Report. 

No budget statement is submitted. No funding is authorized by any 

measure in this Report. 

Æ 


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