Rep. Maxine Waters (D-Los Angeles) is shown with her husband, Sidney Williams,… (J. Scott Applewhite / Associated…)
WASHINGTON — For three years, Rep. Maxine Waters (D-Los Angeles) steadfastly maintained that during a call with the Treasury secretary in the midst of the nation's financial crisis she was looking out for the interests of all minority-owned banks — not just one with ties to her husband.
She did nothing wrong, she said repeatedly.
On Friday, the House Ethics Committee investigator agreed. His recommendation, expected to be approved by the panel, would bring to an end a long and often tumultuous ethics case against Waters, who was accused of improperly helping a bank in which her husband owned stock.
"The evidence in the record does not support a knowing violation of ethics rules or any other standard of conduct with respect to Rep. Maxine Waters by a clear and convincing standard," said Billy Martin, the Washington attorney hired by the committee.
He presented his findings at a rare public session of the usually secretive panel, whose own behavior came under scrutiny during the Waters probe.
Rep. Robert W. Goodlatte (R-Va.), acting chairman of the committee in the Waters case, said that the panel, evenly divided between Democrats and Republicans, was prepared to accept Martin's recommendation. The committee met behind closed doors Friday before adjourning. Officials declined to comment.
An announcement, along with Martin's 150-page report, is expected early next week.
The recommendation is bittersweet for the veteran South Los Angeles congresswoman, one of Los Angeles' most enduring liberal politicians. She declined to comment after the meeting, but left smiling with her husband.
The expected exoneration of the outspoken 74-year-old lawmaker clears the way for her to become the top Democrat on the House Financial Services Committee in the next Congress, succeeding the retiring Rep. Barney Frank (D-Mass.).
But the ethics committee was considering its lightest form of punishment against Waters' chief of staff and grandson, Mikael Moore, for seeking to help OneUnited Bank. Waters' husband, Sidney Williams, served on the OneUnited board from January 2004 to April 2008 and owned stock in the institution.
Moore, appearing before the committee, denied any wrongdoing.
Waters did not speak during the meeting and said she would not talk about the investigation until after the committee announces its final decision.
Frank issued a statement saying that he was "pleased but not surprised that the House Ethics Committee found no reason to bring any charges against my colleague."
The case stemmed from a telephone call that Waters, a senior member of the congressional committee that oversees banking, made to then-Treasury Secretary Henry M. Paulson during the financial crisis to set up a September 2008 meeting between his staff and representatives of minority-owned banks.
The Office of Congressional Ethics, an independent body that referred the case to the House Ethics Committee, said the discussion at the meeting "centered on a single bank, OneUnited."
Three months later, OneUnited received $12 million in federal bailout funds, which had not yet been repaid as of Monday.
Waters, a prominent politician who has held elective office in Sacramento or Washington for more than three decades, insisted that her efforts were consistent with her longtime work to promote opportunity for minority-owned businesses and lending in underserved communities. She said that she also had fully disclosed her husband's ties to the bank.
Martin said that after reviewing more than 150,000 pages of documents and the transcripts of 41 witnesses and conducting his own interviews, he concluded that Waters, in seeking the Treasury meeting, "believed she was acting on behalf of all minority banks which she believed had been seriously affected by the conservatorship of Fannie Mae and Freddie Mac."
"Because the evidence supports that she was acting on behalf of a large group of banks, we found no evidence in the record to support that her phone call to arrange the meeting violated any House rule or any other standard of conduct," Martin said.
If Waters, accused of three ethics violations, had been found guilty of improper behavior, she could have faced a range of punishments, including reprimand, censure or even expulsion, all of which require votes of the House.
The committee was considering sending a letter of reproval to Moore for efforts to specifically aid OneUnited, including sending a September 2008 email to House Financial Services Committee staff that said "OU" — meaning OneUnited — "is in trouble."
Moore, appearing before the committee with Waters seated behind him, denied that he knew about the congresswoman's husband's investment in OneUnited.
"The work that I did in September of 2008 was not on behalf of any one bank," he told the committee.
But Martin said that he found Moore's assertions "incredible and doubted the credibility of his testimony generally."
Moore, though, expressed relief.