Q: What is the False Statements Act?
Sandler: The False Statements Act is a law that makes it a federal criminal offense—a felony—to knowingly make any false statement to any U.S. Government agency. It is applied in a wide variety of situations, including making false statements to federal law enforcement agents; making false statements on any kind of government form (grant, loan or assistance application, etc.); putting false information on reports required to be filed with any U.S. Government agency, etc. Even when a document you submit to a US Government agency doesn't have to be notarized or under oath, this law still makes it a crime to put any false information on that document—as long as the person who filled out the form knew the information was false, the information was relevant to the agency's operation and within its jurisdiction.
Q: Romney is accused of making false statements on his Public Financial Disclosure Form. What’s the importance of this form, and what sorts of things was Romney required to disclose?
Sandler: The form Romney was required to fill out is the Executive Branch Personnel Public Financial Disclosure Report. The Ethics in Government Act of 1978—one of the reform laws passed after the Watergate scandal—requires this form to be filled out by candidates for President and Vice President; presidential nominees to Executive Branch positions requiring Senate confirmation; the incumbent President and Vice President; most of the White House staff; all federal employees appointed by the President; and most very senior federal officials in the Civil Service and special Government employees, and certain other federal officials. The purpose of the form is to disclose personal financial interests—income received, assets held, debts—so that the public (and for incumbent officials, federal ethics officers) can determine whether there may be a conflict of interest on the part of the federal official.
In the case of a candidate for President, the purpose of the form is to let the electorate know from what companies, firms and organizations the candidate has been receiving money (earned income, speaking fees, dividends, interest, etc); and in what companies the candidate owns stock and other interests. The form is very important because it's the only way voters can learn about a candidate's personal financial interests that may influence or shape his positions and policies.
A presidential candidate such as Gov. Romney is required to disclose, generally for the year of filing and the calendar year before, amounts and sources of earned income; all assets held (stocks, bonds, real estate, business interests, retirement funds, trusts, etc), the value of each asset and the amount of income earned from the asset during the reporting period.
Q: And what he didn’t disclose was his ongoing relationship with Bain Capital after his purported separation. Are prosecutions common for this type of offense?
The issue is whether Gov. Romney affirmatively misrepresented his role with Bain Capital after his purported separation. On the form, Gov Romney (and related reporting entities including his Blind Trust, his IRA his wife's blind trust etc) reported investments in dozens of funds, including many privately held Bain Capital funds, worth tens of millions of dollars. On his form, Gov Romney explains that these investments were made pursuant to his retirement agreement with Bain Capital and that all of the investments are "passive" in nature, implying Gov. Romney didn't do anything at Bain to earn any income from any of these investments. To support that assertion, and in an obvious effort to distance himself from Bain's business after his purported departure, Gov Romney makes the categorical statement that, "Since February 11, 1999, Mr. Romney has not had any active role with any Bain Capital entity and has not been involved in the operations of any Bain Capital entity in any way."
It is well-established that making a false statement on an Executive Branch Personal Financial Disclosure Form is a violation of the False Statements Act. The Department of Justice makes clear in section 902 of its Criminal Resource Manual that making a false statement on the form is a prosecutable offense. Members of Congress and Executive Branch officials have been prosecuted for making false statements on their financial disclosure forms.
Who are some of the people who have been prosecuted?
Sandler: Among those prosecuted have been former US Rep Mary Rose Oakar (but let off because the statute didn't apply to the legislative branch at that time—has since been amended); former chief of staff to US Secretary of Agriculture, Ron Blackley; and for lying on a related disclosure form during vetting for a cabinet post, former US Secretary of Housing & Urban Development Henry Cisneros.
So the complaint has been filed. What happens next?
Sandler: We expect that the Public Integrity Section of the Justice Department, which is a group of non-partisan career professionals, will look at the facts carefully and decide whether the questions raised warrant further investigation.