Category: Kenneth H. Ryesky

More Questions on the Congressional Harassment Slush Fund


(I will note here for the record that Meehan and I were law school classmates.)

As reported in the Philadelphia Inquirer:

Meehan confirmed the outline of the [New York] Times story, which said the married 62-year-old expressed his romantic desires to his aide after she began a serious relationship with someone else, then grew hostile when she did not reciprocate.  After filing her complaint, she received a settlement and ultimately left the job, and reportedly felt traumatized by the entire experience.


But he denied harassing her, and said any hostility he may have exhibited stemmed from stress around high-pressure votes last year over the Affordable Care Act.  He said that he sought to remain loyal to his wife, and that he used his office funds to settle the harassment claim so he and the aide could move on and keep the issue private.


In the interview, Meehan answered nearly every question asked, but would not disclose the size of the payout, which he called “severance,” not a settlement.  Asked why he [had] chose[n] to confidentially settle the claim using taxpayer money, Meehan said House attorneys advised him it was a practice that had been used before.

Some questions and observations:

1. As matters currently stand, there seem to be two sources from the public fisc from which an allegedly harassing congressmember can draw funds to settle with the accuser – namely, the much touted slush fund effectively administered by the Office of Compliance and the congressional member’s office operating fund.  Patrick Meehan has admitted using the latter option (and has suggested that some of his colleagues have done likewise).  What is the operating relationship, if any, between those two piles of money?

2. Per 2 U.S.C. § 1415(a):

[O]nly funds which are appropriated to an account of the Office in the Treasury of the United States for the payment of awards and settlements may be used for the payment of awards and settlements under this chapter. There are appropriated for such account such sums as may be necessary to pay such awards and settlements.

Are funds from the congressmembers’ office operating account legally available to pay settlements of harassment claims?

3. Is it proper, as Patrick Meehan seems to have done, to recolor the settlement funds as salary adjustments?

4. There is currently legislation pending in Congress that, if enacted substantially in its current form, would, among other things, publicize the names of those congresscritters who benefit from hush fund payouts and require that they make reimbursement to the fund.

5. The Government Accountability Office typically investigates agencies of the Executive Branch at the behest of one or more members of Congress.  How effectively can the GAO investigate Congress itself and/or a government agency of the Legislative Branch?

6. How do Internal Revenue Service policy and practice characterize and enforce the settlement transactions currently used, and how will they characterize and enforce those that would take place if the aforementioned legislation is enacted?

7. What other fiscal issues will emerge regarding congressional harassment settlements as this “hush fund” saga continues to unfold?

Kenneth H. Ryesky is a freelance writer who has taught business law and taxation at Queens College CUNY.   He formerly served as an attorney for the IRS and as a senior adviser with Ernst & Young’s Tel Aviv affiliate office’s U.S. Tax Desk.

More than $15 million in public funds has reportedly been paid out to settle sexual harassment claims against members of Congress, with the approval of Congress’s Office of Compliance. 

The House Committee on Ethics’ announcement that it is now investigating Representative Patrick Meehan (R-Pa.), and has removed him from serving on that committee, now raises additional questions regarding the fiscal aspects of the settlement process.

(I will note here for the record that Meehan and I were law school classmates.)

As reported in the Philadelphia Inquirer:

Meehan confirmed the outline of the [New York] Times story, which said the married 62-year-old expressed his romantic desires to his aide after she began a serious relationship with someone else, then grew hostile when she did not reciprocate.  After filing her complaint, she received a settlement and ultimately left the job, and reportedly felt traumatized by the entire experience.


But he denied harassing her, and said any hostility he may have exhibited stemmed from stress around high-pressure votes last year over the Affordable Care Act.  He said that he sought to remain loyal to his wife, and that he used his office funds to settle the harassment claim so he and the aide could move on and keep the issue private.


In the interview, Meehan answered nearly every question asked, but would not disclose the size of the payout, which he called “severance,” not a settlement.  Asked why he [had] chose[n] to confidentially settle the claim using taxpayer money, Meehan said House attorneys advised him it was a practice that had been used before.

Some questions and observations:

1. As matters currently stand, there seem to be two sources from the public fisc from which an allegedly harassing congressmember can draw funds to settle with the accuser – namely, the much touted slush fund effectively administered by the Office of Compliance and the congressional member’s office operating fund.  Patrick Meehan has admitted using the latter option (and has suggested that some of his colleagues have done likewise).  What is the operating relationship, if any, between those two piles of money?

2. Per 2 U.S.C. § 1415(a):

[O]nly funds which are appropriated to an account of the Office in the Treasury of the United States for the payment of awards and settlements may be used for the payment of awards and settlements under this chapter. There are appropriated for such account such sums as may be necessary to pay such awards and settlements.

Are funds from the congressmembers’ office operating account legally available to pay settlements of harassment claims?

3. Is it proper, as Patrick Meehan seems to have done, to recolor the settlement funds as salary adjustments?

4. There is currently legislation pending in Congress that, if enacted substantially in its current form, would, among other things, publicize the names of those congresscritters who benefit from hush fund payouts and require that they make reimbursement to the fund.

5. The Government Accountability Office typically investigates agencies of the Executive Branch at the behest of one or more members of Congress.  How effectively can the GAO investigate Congress itself and/or a government agency of the Legislative Branch?

6. How do Internal Revenue Service policy and practice characterize and enforce the settlement transactions currently used, and how will they characterize and enforce those that would take place if the aforementioned legislation is enacted?

7. What other fiscal issues will emerge regarding congressional harassment settlements as this “hush fund” saga continues to unfold?

Kenneth H. Ryesky is a freelance writer who has taught business law and taxation at Queens College CUNY.   He formerly served as an attorney for the IRS and as a senior adviser with Ernst & Young’s Tel Aviv affiliate office’s U.S. Tax Desk.



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Seattle's Income Tax Brings Out the Crazy in People


By unanimous vote, the Seattle City Council has now enacted an Income Tax ordinance imposing a tax on “high income residents,” i.e,  those whose annual incomes exceed $250,000 ($500,000 for joint filers).

The new legislation is largely the work of Councilwoman Kshama Sawant, an unabashed leftist and redistributionist who was elected on the Socialist Alternative party ticket, and who was a moving force behind Seattle’s ill-advised $15 per hour minimum wage.

[Kshama immigrated from India to the United States, ostensibly to improve her economic situation.  She went on to further her education, submitting her PhD dissertation in 2009. It is certainly fair to ask how this venture was underwritten.]

Kshama is only accepting $40,000 of her $117,000 annual salary, declaring that figure as “roughly the full-time take-home pay of a Seattleite.”

After paying taxes, the remainder of my salary will go to a Solidarity Fund to help build social justice movements. Throughout the year I will be making donations from this Solidarity Fund to causes such as workers’ strike funds, and environmental, civil rights, and women’s rights campaigns.

Some flashing red lights here:

Firstly, just what is this “Solidarity Fund” and who administers it?  Is it commingled with Kshama’s regular bank accounts, and if so (and even if the excess funds are placed into a separate account over which she herself has signatory authority), are we to depend upon her self-control for assurances that she does in fact live on $40,000 per year?  Where is the transparency in the Fund’s administration?

Secondly, if indeed Kshama’s personal annual budget is indeed $40,000 from a gross salary of $117,000, she has much more wiggle room in her budget than the burgerflippers who continue to suffer wage cutbacks and/or joblessness on account of the Seattle minimum wage law she pushed so assiduously to enact.

Thirdly, inasmuch the ObamaCare individual requirement to purchase healthcare insurance is part of the Internal Revenue Code, are Kshama’s healthcare expenses part of the taxes in her “after paying taxes” qualification?  And speaking of healthcare, does the $40,000 “take home” figure include the job perquisites and benefits she, as a Council member, receives but which are largely unavailable to the average Seattleite (think meals, transportation, parking, cell phone, home office, laptop computers, et cetera)?

Fourthly, when purchasing her $345,000 home, was Kshama’s mortgage qualification based upon her gross monthly income, or on her purported $40,000 budget?

Kshama wrote an article posted on the leftist Jacobin website, in which she stated:

[W]e need to think deeply about where our strength lies and how to create disruption on an even greater scale. Working people have enormous potential power to shut down the profits of big business by taking action in their workplaces like slowdowns, sickouts, and strikes. (snip)


Let’s use the coming weeks to begin planning for workplace actions as well a mass peaceful civil disobedience that shuts down highways, airports, and other key infrastructure. Students can organize walkouts in their schools to send a powerful message that youth reject Trump’s racism and misogyny.

Though she later insisted that her purported calls in the article civil disobedience in connection with May Day demonstrations would be peaceful, they proved to be violent and disruptive.

The Washington State Republican Party (WSRP) has rationally enumerated why Seattle’s new tax is bound to fail to achieve its purported objectives, and bring some supposedly unintended economic and bureaucratic negative consequences.

But the WSRP’s opposition does not end there; in its vehement opposition, WSRP calls:

…for the overtaxed citizens of Seattle, on behalf of all citizens of the state, to forcefully resist a new income tax passed by the Seattle City Council.


This law is unconstitutional, illegal, and against the voters’ will expressed nine times at the ballot box and it deserves nothing less than civil disobedience — that is refusal to comply, file or pay.


Don’t be fooled! This is not a tax on the rich. This is a thinly veiled attempt to test the state constitutional limits of an income tax for all.

This pronunciamento from an official Republican organization, validly founded as it may be, sounds awfully like leftist Democratic rhetoric.

As noted by Emerson, “Of all debts men are least willing to pay the taxes.”

Mass taxation protests have proven to be sources of potential upheaval and violence; the British Raj in India, the French Revolution, the Boston Tea Party, and the Whiskey Rebellion come immediately to mind.

The consequences of the WSRP’s extreme stance are unpredictable.  If things do get out of hand, will the Washington State Republican Party be held accountable in ways that Kshama Sawant was not?

WSRP does not stand alone in its opposition to the Seattle income tax; the Freedom Foundation  and the Washington Policy Center have also come out against the tax. Given the überleftist entrenchment in Seattle, and the possible synergies of the tax’s opposition, how well this one plays out is anybody’s guess.

Kenneth H. Ryesky, now a senior advisor in the U.S. Desk of Ernst & Young’s International Tax Services in Tel Aviv, is a lawyer who has taught business law and taxation at Queens College CUNY.  He formerly served as an attorney for the IRS.

By unanimous vote, the Seattle City Council has now enacted an Income Tax ordinance imposing a tax on “high income residents,” i.e,  those whose annual incomes exceed $250,000 ($500,000 for joint filers).

The new legislation is largely the work of Councilwoman Kshama Sawant, an unabashed leftist and redistributionist who was elected on the Socialist Alternative party ticket, and who was a moving force behind Seattle’s ill-advised $15 per hour minimum wage.

[Kshama immigrated from India to the United States, ostensibly to improve her economic situation.  She went on to further her education, submitting her PhD dissertation in 2009. It is certainly fair to ask how this venture was underwritten.]

Kshama is only accepting $40,000 of her $117,000 annual salary, declaring that figure as “roughly the full-time take-home pay of a Seattleite.”

After paying taxes, the remainder of my salary will go to a Solidarity Fund to help build social justice movements. Throughout the year I will be making donations from this Solidarity Fund to causes such as workers’ strike funds, and environmental, civil rights, and women’s rights campaigns.

Some flashing red lights here:

Firstly, just what is this “Solidarity Fund” and who administers it?  Is it commingled with Kshama’s regular bank accounts, and if so (and even if the excess funds are placed into a separate account over which she herself has signatory authority), are we to depend upon her self-control for assurances that she does in fact live on $40,000 per year?  Where is the transparency in the Fund’s administration?

Secondly, if indeed Kshama’s personal annual budget is indeed $40,000 from a gross salary of $117,000, she has much more wiggle room in her budget than the burgerflippers who continue to suffer wage cutbacks and/or joblessness on account of the Seattle minimum wage law she pushed so assiduously to enact.

Thirdly, inasmuch the ObamaCare individual requirement to purchase healthcare insurance is part of the Internal Revenue Code, are Kshama’s healthcare expenses part of the taxes in her “after paying taxes” qualification?  And speaking of healthcare, does the $40,000 “take home” figure include the job perquisites and benefits she, as a Council member, receives but which are largely unavailable to the average Seattleite (think meals, transportation, parking, cell phone, home office, laptop computers, et cetera)?

Fourthly, when purchasing her $345,000 home, was Kshama’s mortgage qualification based upon her gross monthly income, or on her purported $40,000 budget?

Kshama wrote an article posted on the leftist Jacobin website, in which she stated:

[W]e need to think deeply about where our strength lies and how to create disruption on an even greater scale. Working people have enormous potential power to shut down the profits of big business by taking action in their workplaces like slowdowns, sickouts, and strikes. (snip)


Let’s use the coming weeks to begin planning for workplace actions as well a mass peaceful civil disobedience that shuts down highways, airports, and other key infrastructure. Students can organize walkouts in their schools to send a powerful message that youth reject Trump’s racism and misogyny.

Though she later insisted that her purported calls in the article civil disobedience in connection with May Day demonstrations would be peaceful, they proved to be violent and disruptive.

The Washington State Republican Party (WSRP) has rationally enumerated why Seattle’s new tax is bound to fail to achieve its purported objectives, and bring some supposedly unintended economic and bureaucratic negative consequences.

But the WSRP’s opposition does not end there; in its vehement opposition, WSRP calls:

…for the overtaxed citizens of Seattle, on behalf of all citizens of the state, to forcefully resist a new income tax passed by the Seattle City Council.


This law is unconstitutional, illegal, and against the voters’ will expressed nine times at the ballot box and it deserves nothing less than civil disobedience — that is refusal to comply, file or pay.


Don’t be fooled! This is not a tax on the rich. This is a thinly veiled attempt to test the state constitutional limits of an income tax for all.

This pronunciamento from an official Republican organization, validly founded as it may be, sounds awfully like leftist Democratic rhetoric.

As noted by Emerson, “Of all debts men are least willing to pay the taxes.”

Mass taxation protests have proven to be sources of potential upheaval and violence; the British Raj in India, the French Revolution, the Boston Tea Party, and the Whiskey Rebellion come immediately to mind.

The consequences of the WSRP’s extreme stance are unpredictable.  If things do get out of hand, will the Washington State Republican Party be held accountable in ways that Kshama Sawant was not?

WSRP does not stand alone in its opposition to the Seattle income tax; the Freedom Foundation  and the Washington Policy Center have also come out against the tax. Given the überleftist entrenchment in Seattle, and the possible synergies of the tax’s opposition, how well this one plays out is anybody’s guess.

Kenneth H. Ryesky, now a senior advisor in the U.S. Desk of Ernst & Young’s International Tax Services in Tel Aviv, is a lawyer who has taught business law and taxation at Queens College CUNY.  He formerly served as an attorney for the IRS.



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