Perverse incentive: Pay your own sexual-harassment settlements

Consider this the congressional equivalent to BYOB. Several members of the House want to change the rules on Capitol Hill to force elected officials to pay for settlements for sexual harassment from their own pockets. The bill would answer the rising outrage over the use of taxpayer funds to keep allegations of bad behavior quiet, but such a rule change might have some unintended consequences:

Momentum is building fast in Congress to ban the use of taxpayer money to settle sexual harassment cases — particularly after news that a total of well over $100,000 has been paid in recent cases against lawmakers. …

On the first day the House was in session after the allegations against Conyers surfaced, Rep. Tom Marino (R-Pa.) unveiled a bill to ban taxpayer funds from being used to pay for settlements resulting from harassment by a lawmaker. Marino’s bill would also require the House and Senate Ethics Committees to consider the expulsion of lawmakers who engage in sexual harassment.

“It is unconscionable that Congressman and Senators have taxpayers foot the bill for their disgusting actions,” Marino said upon introducing his legislation.

Rep. Ron DeSantis (R-Fla.), meanwhile, introduced a bill this week to prohibit the future use of taxpayer money on settlements in cases where lawmakers or staff are accused of sexual harassment. Nondisclosure agreements could no longer be a condition of any settlements under the DeSantis bill, which would also require members and staff who have ever been named in a sexual harassment settlement in the past to reimburse the Treasury — with interest.

DeSantis might come up against some pushback on that idea. Technically, the House can set its own rules, but generally speaking, Americans look on ex post facto laws with considerable skepticism. The rules at the time allowed for the use of these funds for settlements, and in fact Congress set these funds up as a reform of its previous immunity to such claims. Two decades later, the reform clearly needs reform, but attempting to relitigate past settlements will needlessly complicate matters over what appears to be a relative pittance. Most of the $17 million in settlements over that period of time didn’t involve congressional offices at all, but other agencies that fall under Congress’ oversight.

As a forward-looking reform effort, forcing members to pay for their own transgressions certainly seems to be a good idea. Why should taxpayers be held responsible at all? However, that raises a couple of problems. What happens when an elected official can’t afford to pay for the settlement out of his or her own pocket? Rep. Jackie Speier (D-CA) dismisses the concern:

Speier said she’s gotten pushback on making lawmakers reimburse taxpayers because “some people can’t afford it.” She countered that lawmakers don’t have to worry about it if they “don’t engage in that kind of” behavior.

That prompts two counterpoints, however. First, not all settlements necessarily involve admissions of guilt; in fact, few probably do. It’s fair to say that the evidence seems pretty overwhelming in the cases that have come to light, but that might not be representative of the whole class of settlements dealing with the behavior of the elected officials themselves.

More problematic is the incentive structure this sets up for recruiting candidates. How many Mr. Smiths and Ms. Smiths would want To Go To Washington if their modest means could put them in danger of financial ruin with a single complaint? How would a middle-class soccer mom recruited in a suburban district raise $50,000 to fund a settlement that may or may not have been justified? That kind of risk will discourage the kind of people who truly represent the majority of Americans and recruitment for Congress even more in the direction of the independently wealthy who can afford the risk. It’s a dangerous distortion of the risk-reward ratio for candidate recruitment, which is already skewing too far in that direction with the current regime of campaign finance laws. And what will happen in Capitol Hill offices when we start electing people with even greater senses of personal entitlement?

Here’s a better idea. Set up a tax code mechanism to apply a surcharge for settlements that come directly out of the constituencies of each elected official — the entire state for senators, and the congressional district for House members. Make it a line item on the 1040 form that requires an initial each year with the assessment for funding settlements. In that system, Minnesotans can pay for Al Franken, Detroit can pay for John Conyers, and so on without forcing other taxpayers to foot the bill for officials they never elected nor can remove.  That will force the kind of transparency that will eventually push the bums out of office, and provide the necessary incentives to get more civic-minded candidates to run in their place.