Household net worth (Member of Congress)

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Members of the United States Congress are required to file an annual Personal Financial Disclosure (PFD) on or before May 15 of every year.[1]

This requirement also extends to candidates for federal office,[2] senior congressional staff, nominees for executive branch positions, Cabinet members, the president and vice president and Supreme Court justices. The "Ethics in Government Act of 1978" set this requirement. Additionally, anyone who handles political campaign funds for a U.S. Senator must file.[3]

Enforcement of the disclosure requirements for Members of Congress is monitored by the Congressional Ethics Committee.

The PFDs filed every year have been described as "imperfect gauges of a filer's net worth".[4]

This is because:

  • Filers are not required to list the value of their principal residence
  • Filer are only required to disclose the value of their assets in broad ranges
  • The PFDs can list assets that a filer manages for a dependent child but which are not owned by the filer
  • Filers to not need to disclose the value of assets in certain trusts

What must be disclosed

Income

  • Outside, earned income that exceeds $200 must be reported. (Note that elected officials and senior staff may only earn outside income up to $26,100 a year. Some exceptions apply; for example, in the case of previously approved income and some book royalties and advances.)
  • The source of the income and the amount of the income must be disclosed.
  • The salary earned from an incumbent's elected office, which is a matter of public record, does not require disclosure on the PFD.
  • If there is a spouse, the spouse must disclose the source of any income over $1,000. However, the amount of the spouse's income need not be reported.

Honoraria

  • Elected officials and senior staff are prohibited from receiving honoraria for speeches, articles or appearances.
  • In lieu of an honoraria, they may designate an amount to be donated to charity.
  • Any such honoraria must be reported on the PFD by source and amount.
  • The charity that receives the honoraria is not reported to the public; instead, it is reported on a confidential basis to the Congressional Ethics Committee.

Assets

Assets held for investment or the production of income that were worth more than $1,000 at the end of the calendar year, must be reported. Specifically, assets to be reported include:

  • Securities
  • Real estate (excluding the filer's primary residence, unless it generates income, and federal retirement accounts)
  • Ownership stake in a business
  • Bank accounts
  • Loans owed to the filer.
  • Assets that produced more than $200 of income during the year must be listed regardless of their value at the close of the year.

Assets that are exempt from disclosure include:

  • The asset value of the filer's primary residence (unless this primary residence produces income)
  • The asset value of any retirement accounts related to federal employment

Assets held within a self-directed account or fund are to be listed individually on the PFD. Note that filers are not required to provide detail on the individual holdings of mutual funds.

The fact that members of the United States Congress are not required to disclose the value of their personal residence on their PFD means that care must be taken in comparing the net worth of an average citizen to the disclosed net worth of a Member of Congress; specifically, any net worth calculations done for average members of the public should delete the value of their personal residence in order to achieve an apples-to-apples comparison.

Transactions

  • Filers must disclose the purchase, sale or exchange of any assets that amount to more than $1,000 in the calendar year in question.
  • They must disclose the date of the transaction and the amount of the transaction.
  • The 2012 STOCK Act additionally requires that any securities transactions must be reported 30-45 days after the transaction took place.

Liabilities

Filers must disclose:

  • Any liability or loan where the filer, their spouse or their dependent children owed more than $10,000 at any time during the calendar year. Filers must disclose the creditor, the type of liability and the greatest amount owed during the reporting period.
  • Loans on a principal residence that produces no income must be reported. This provision went into effect with the STOCK Act of 2012.

Exceptions:

Filers are not required to disclose loans secured by personal property that does not produce income, such as automobile loans.

Positions

  • Filers must disclose positions they hold with non-governmental organizations, except for their membership in religious, social, fraternal or political organizations.
  • Positions of a purely honorary nature and those held by spouses and dependent children are excluded from disclosure.

Agreements

  • Filers must disclose agreements with former employers describing:
  • Conditions for re-employment
  • Severance payments
  • Buyout agreements
  • Profit-sharing plans

The House requires written approval from the ethics committee for book deals and prohibits royalty advances. The Senate does not have an analogous requirement. Royalties do not count against the outside income limits.

Travel

Filers must report:

  • Travel and travel-related reimbursements from a single source, valued at more than $305 in aggregate for the year and connected to official business
  • The source, dates, and purpose of the travel and itinerary.

Gifts

Gifts that are acceptable include:

  • Those from personal acquaintances
  • Contributions to legal defense funds
  • Commemorative items

The source, value and a description of gifts that exceed $305 from a single source, other than a relative, must be disclosed.

Gifts worth $122 or less are not counted toward the $305 threshold.

Exclusions in data

From OpenSecrets.org:

Note that the ethics law does not require filers to report property, including personal residences, that is not held for investment purposes and does not produce income. The STOCK Act requires that the terms of all mortgages, including those on non-income producing personal residences, be disclosed. Mortgages reported on properties that were not listed as assets were excluded from the wealth calculations, but are displayed on our profiles of the corresponding officials. Even though they weren't required to do so, some filers did list the value of their personal residences; when they did, we included the information in our totals and detailed listings. Filers are required to report detailed listings and values of holdings that underlie an account. They occasionally also report the combined value of the account, in which case the combined value is omitted from calculations.

[5]

Range in value

Congressional financial disclosure forms use value ranges, rather than precise amounts, when reporting assets and liabilities. OpenSecrets.org gathers this information to build a range of potential values. For instance, if three assets are listed at a value range of $1,001-$15,000, the total range of assets would be listed as a minimum of $3,003 (3 X $1,001) and a maximum value would be $45,000 (3 X $15,000). OpenSecrets combines all assets and liability to form a total potential range of values, and then provides an average value as the best guess of each individual's net worth.[7]

External links

References

  1. Members of Congress are permitted to ask for a three-month extension.
  2. This is how the study is able to have 2011 figures for freshman members of the 113th Congress who did not begin their terms until 2012
  3. Legistorm, "About LegiStorm's Financial Disclosures"
  4. Legistorm, "How can I determine the net worth of a member of Congress or staffer?"
  5. Note: This text is quoted verbatim from the original source. Any inconsistencies are attributed to the original source.
  6. http://www.opensecrets.org/pfds/methodology.php
  7. OpenSecrets, "About the Personal Finances Data & CRP's Methodology"