December 1995: The LNC Acts
The December National Committee Meeting resumed its consideration of conflict of interest issues. LNC Treasurer Hugh Butler proposed a resolution:
“Whereas, the LNC is aware that LP headquarters employees have accepted outside consulting work, and, in as much as the LNC deplores conflicts of interest within the Party,
Therefore be it resolved that consulting work carried on by headquarters staff members are authorized by the LNC so long as:
- Both the work and income amounts are disclosed to the Chair.
- Employees agree to terminate specific work when requested by the Chair.
- The National Director is not authorized by this motion to accept outside work.
- The Chair and the National Director shall report all such activities to the LNC.”
There was the pointed debate. Willis spoke against the motion. At first, Willis claimed that he could determine himself whether “…a specific request from Sharon Ayres for the Browne campaign would or would not violate his fiduciary responsibility to the party.” He then threatened to resign if he were not permitted to do outside work. He claimed to have “outside clients” who he would not abandon. LNC Region 6 Representative Joseph Brennan observed “there could be a perception of conflict among those members who are supporting candidates other than Harry Browne.” Willis then announced that he would ignore the Party’s current policy, saying that “…Sharon Ayres is his friend and (he) would give her advice if asked but that does not constitute conflict of interest.” That is, at the December 1995 LNC Meeting, Willis told the LNC that regardless of LNC Policy he would continue to support the Browne Campaign if the Campaign asked him to. It appears that LNC members did not recognize where Willis’s position might lead.
Dasbach repeated his claim that the present rules meant: “…the current policy is that staffers can not do work for internal campaigns for free but can do so if paid.” The validity of Dasbach’s interpretation of the Policy Manual was not challenged. We now know that Willis violated even Dasbach’s interpretation of LNC policy.
Butler was then allowed to amend his own motion, the conditions on an employee for accepting consulting work being changed to:
“1. Both the amount of work and the income from it shall be approved by the Chair,
- Employees agree to terminate improper work when requested by the Chair.
- The Chair will report the facts to the LNC.”
The amended motion passed.
The National Director was now allowed to take outside work, so long as the amount of work and the income from it were approved by the National Chair. Reporting ‘the facts’ to the LNC was specifically charged only to the Chair, no longer to the Chair and the National Director. The ‘facts’ to be reported were not identified.
This change in the consulting rules had significant implications for all members of the headquarters staff. Consulting arrangements by staffers were now indisputably facts which were material to the LNC’s conduct of its affairs. Every staffer now had a Federal legal obligation to disclose to the National Chair any such arrangements of which he became aware, particularly if there were good reasons for the staffer to suppose that the consultant had failed to disclose the arrangements himself.
There are certain anomalies in how Willis and others interpreted Butler’s original motion and in how Butler revised the motion. The original motion says that Willis is not authorized by this motion to do outside consulting. However, Dasbach had been saying for months that Willis already had authorization to do work for internal campaigns for pay. Dasbach was the Party’s CEO. His interpretation of the National Committee’s rules may have been unreasonable, but the National Committee as the Party’s governing board did not dispute it when the opportunity arose. Because Willis already had—in the absence of LNC correction of Dasbach’s interpretation—authorization from the CEO, Willis did not need further authorization to work for Browne. Perry Willis’s pre-December work for Browne thus did not violate Party rules as they were then understood.
Willis apparently interpreted Butler’s motion in its original form as withdrawing permission for him to consult. Butler’s words do not say this. In the context of the meeting, perhaps this is what the original motion was understood to mean. Butler was National Treasurer in early 1996 when LNC, Inc. gave Browne direct financial support. From the record Butler, as Chief Financial Officer, failed to advise the National Committee that it was supporting Browne financially. Did Butler know? An ardent Browne supporter might have kept silent about the support. An ardent Browne supporter making an apparent conflict of interest motion might also have phrased it so that it authorized Willis to continue, while leaving inattentive Committee members with the misapprehension that they had suspended Willis’s permission to consult.
In its revised form, Butler’s motion allowed Willis to work for Browne, so long as the specified disclosures were made and Dasbach approved. Curiously, Willis’s apology and other sources refer to the new rules as forbidding Willis to work for outsiders, even though Butler’s original motion had been modified at Willis’s request to make clear that Willis was permitted to do this work. How could Willis have overlooked the change in the content of the motion?
At this point, an interesting question arises. Which rule did Willis actually break with the Invoice? Contrary to his statement in his apology that under the new rules he was not allowed to take consulting work, under the rules Willis was allowed to take Browne’s money. He was simply required to disclose the work to the National Chair and receive the National Chair’s approval. If Willis did not tell Dasbach, Willis had violated a National Committee rule, but not the rule he said he had violated. Hypothetically, if Willis had informed Dasbach and received his approval, and Dasbach had neglected to inform the National Committee of ‘the facts’, Dasbach rather than Willis would have been in violation of the Policy Manual.
This is not to say that Willis did not break Party rules. The Conflict of Interest rule required a disclosure from Willis and Winter that was never made. There is eyewitness testimony (from Jesse Markowitz) and documentary evidence (Willis’s June calendar) that Willis used the National Headquarters facility for Browne’s campaign. It was not until 1996 that Browne’s supporters within the LNC and its staff diverted Party funds to the Browne campaign.
Ominously, the National Committee had failed to face up to Willis’s announcement that he would continue to advise Sharon Ayres without being paid. That advice, if more detailed than the advice Willis would give every other Presidential candidate if asked, constituted support by Willis for the Browne campaign. Even under the very narrow interpretation of the Party’s Policy Manual being advocated by National Chair Dasbach, Willis as National Director was forbidden to support the Browne campaign for free. Without minuted objection, the National Committee swallowed Willis’s announcement that he would break Party Rules. When the National Committee allowed Willis’s announcement to stand, the National Committee lost control of the Party.
Willis’s position that he could ignore rules he disliked would come back in five years to haunt the National Committee.
