Congressman-auto dealer accused of conflict of interest

Introduction

Nov. 19, 2015: This story has been updated to include comment from U.S. Rep. Roger Williams of Texas.

Buried deep within a massive transportation bill that passed the House of Representatives is a little-noticed provision that won’t have much effect on highway projects, but is of great interest to automobile dealers.

The provision, an amendment offered just before midnight on Nov. 11, would allow dealers to rent or loan out vehicles even if they are subject to safety recalls. Rental car companies, meanwhile, don’t get the same treatment under the proposed law.

>> UPDATE: House Ethics Committee scolds, doesn’t punish Roger Williams

In essence, the amendment would allow an auto dealer to loan you a vehicle under active recall while you are getting your own fixed for the same defect.

The man who offered the amendment is no stranger to car dealerships. In fact, that’s his business. Rep. Roger Williams, a Texas Republican, sponsored the amendment. In introducing it on the floor of the House, he noted, “I am a second-generation auto dealer. I have been in the industry most of my life. I know it well.”

The possibility that his action might be considered a conflict of interest was apparently not on his mind, though it certainly occurred to others.

“It seems to me that if it isn’t illegal, if it isn’t an ethics violation it ought to be,” said Rosemary Shahan, president of Consumers for Auto Reliability and Safety, a consumer group. “His amendment benefits nobody but car dealers. And he’s a car dealer.”

The rental car provision in the legislation, which is also in the Senate bill, was spurred by the deaths of Raechel and Jacqueline Houck, ages 24 and 20. The two sisters were killed in 2004 while driving a rented, recalled vehicle that caught fire and crashed head-on into a semi, according to consumer groups that have backed the rental car proposal.

Williams’ amendment would make the act apply only to companies whose “primary” business is renting cars, which would effectively exclude dealerships. No such provision exists in the Senate bill.

The amendment received little attention in the press, which may have been due to the late hour it was offered.

“It was the House floor, almost midnight, there was hardly anyone there,” said Shahan. It passed on a voice vote.

Speaking in favor of the amendment on the floor that night was another auto dealer, Rep. Mike Kelly, a Pennsylvania Republican who sells Chevrolets, Cadillacs, Hyundais and KIAs in Butler.

“There is not a single person in our business that would ever put one of our owners in a defective car or a car with a recall,” he said.

In an emailed statement, Kelly said as chairman of the House automotive caucus he is “always proud to advance a legislative agenda that encourages a competitive and innovative automotive sector that employs millions of Americans.This often means weighing in with my personal expertise on relevant bills, regulations, and, in this case, amendments.”

According to Williams’ congressional biography, he was drafted by the Atlanta Braves but after an injury ended his sports career he “decided to trade in his baseball uniform for a suit and tie” and become a car dealer. “More than forty years later, Williams still owns and operates his car dealership,” it reads.

Williams is chairman of Chrysler Dodge Jeep RAM SRT in Weatherford, Texas. In his remarks on the House floor, Williams said the bill was bad for small businesses.

“Vehicles would be grounded for weeks or months for such minor compliance matters as an airbag warning sticker that might peel off the sun visor or an incorrect phone number printed in the owner’s manual,” he said.

Democratic Rep. Lois Capps of California didn’t agree with that reasoning, however.

“This is ridiculous. NHTSA (National Highway and Traffic Safety Administration) does not issue frivolous recalls,” she said. “All safety recalls pose serious safety risks and should be fixed as soon as possible.”

Members use the House “Code of Conduct” in guiding their actions. One section appears to be relevant. A member can’t receive compensation where “the receipt of which would occur by virtue of influence improperly exerted from the position of such individual in Congress.”

The House ethics manual states that “whenever a Member is considering taking any such action on a matter that may affect his or her personal financial interests,” he or she should contact the House Ethics Committee for guidance.

A spokesman for the House Ethics Committee declined comment.

(Update, Nov. 19, 2015, 3:06 p.m.: Williams, in a statement released after publication of this story said: “Dealers should not be forced to ground vehicles for a misprint or a peeled sticker. To suggest my amendment allows me, or anyone in my industry, to intentionally loan a dangerous, defective car is a damning assertion.”

The congressman said members should be able to use their business knowledge in their jobs on Capitol Hill. “Are Members of Congress who are doctors engaged in conflicts of interest when they vote on Medicare, Medicaid or NIH [National Institutes of Health] funding?” he asked.)

The Senate and House have both passed six-year transportation bills and a conference committee is scheduled to meet Wednesday to iron out any differences. The auto dealer loophole will almost certainly be part of the discussion.

A final bill isn’t expected for some time. A new deadline for passage, initially Friday, was extended by the House to Dec. 4.

This story was co-published with the Texas Tribune.