Murphy admits knowledge of rule prohibiting book advance payments

PERFECT TIMING - U.S. Representative Patrick Murphy, 33, received a $100,000 advance for his life's story at the same time public records indicate he could be more than three-quarters of a million dollars in debt.

Forced to defend a hefty book advance following a report by the Majority Accountability Project (www.majorityap.com), U.S. Representative Patrick Murphy, D-PA, admitted he was aware of House rules prohibiting Members of Congress from receiving such payments, and worked to complete a deal just days before taking office.

Murphy, 33, was paid $100,000 for his life story. According a June 28 story in Roll Call newspaper, “Murphy received the payment in December 2006. New Members were sworn in on Jan. 4, 2007.”

MURPHY KNEW ABOUT BAN
On November 12, 2006, the Bucks County Times reported that Murphy was attending an orientation for new Members of Congress the following weekend. At that orientation, freshmen Congressmen were given a briefing on House rules by the Committee on Standards of Official Conduct, more commonly known as the ethics committee.

Had Murphy been unable to conclude a deal prior to being sworn into office, he would have been prohibited from accepting a book advance, a rule Murphy would have been apprised of during that orientation. In subsequent interviews with reporters, Murphy acknowledged he was aware of those rules.

Murphy claimed that he had a “conversation with House ethics and they were fine (with the $100,000 advance).” But during a June 30 news conference, Murphy seemed to indicate he could not support that claim.

Asked by a reporter if he could prove the House ethics committee signed off on his book deal, Murphy responded that he’s “not sure what their standard operating procedure is.”

HEAVILY IN DEBT
According to personal financial records filed with the U.S. House of Representatives, the $100,000 advance Murphy received comes at a remarkably good time. Those records state that Murphy and his wife amassed between $55,000 to $165,000 in credit card and student loan debt by the end of 2006.

While a candidate for Congress, Murphy reported that he had two mortgages on his primary residence at the end of 2005, owing between $300,000 to $600,000, and bringing his total debt to as high as $765,000.

Murphy’s 2006 finances do not report his household mortgage; however, Members of Congress need not report liabilities on their “personal residence.”

SHROUDED IN SECRECY
Recently quizzed about his book, Murphy bristled at criticism that completing a deal just days before he would have been prohibited from doing so might be viewed by some as unethical, even if it was all perfectly legal.

“We need ethical leaders in government and people who are going to stand and tell you where they stand and tell you out in the open and very clear,” Murphy said while at Yardley Boro Hall on Saturday. “That’s how I conduct my office, with transparency.”

Public records show that Murphy’s book deal was anything but transparent.

While Murphy now says he was negotiating a publishing deal last fall, and that he finalized an agreement in December, 2006, it wasn’t until May, 2007, that the agreement became public.

Publisher’s Weekly, the industry newsletter, announced the sale of Murphy’s book on May 28, 2007, five months into Murphy’s term. The first report of Murphy speaking about the book came on May 19, 2007, in an article in the Bucks County Times.

Murphy’s book will not be available to the public until after the November, 2008, Congressional elections, although the actual publication date has varied between several published reports.

SWEETHEART DEAL?
In “Advances and Royalties – How Authors Are Paid,” best-selling romance novelist Rebecca Brandewyne wrote that “an author signing a first contract can expect to receive an advance of anywhere from $1,000 to $10,000, on average, per book.”

“Naturally,” she noted, “there are exceptions to this rule.”

A recent article in the New York Times reported extensively on the publishing industry, and its volatile nature.

“Eric Simonoff, a literary agent at Janklow & Nesbit Associates, said that whenever he discusses the book industry with people in other industries, ‘they’re stunned because it’s so unpredictable, because the profit margins are so small, the cycles are so incredibly long, and because of the almost total lack of market research’,” the Times reported.

“Publishers do engage in limited numbers crunching. In estimating value, editors rely heavily on an author’s previous sales or on sales of similar titles. Based on those figures and some analysis — about the popularity of the genre, the likely audience, the possible newsworthiness of the topic of the economy — they work up profit and loss projections.

“The advance payment to the author is often an estimate of the first year’s royalties, usually 10 percent to 15 percent of expected sales. The advance is a liability for the publisher because it is a fixed cost. It doesn’t have to be repaid by the author if it turns out to be an overestimate, which it usually is,” it said.

On-line research indicates that most literary agents and publishing houses usuall require a completed manuscript from first-time authors, although exceptions are made for non-fiction works. Murphy is widely reported to be currently writing his book, which means he would not have had a manuscript prior to making his publishing deal.

Despite the fact Murphy was a first-time author with no manuscript, he was able to negotiate an advance royalty ten- to one-hundred times the industry average, within a matter of weeks rather than months, and just days before House of Representative’s rules would have prohibited him from doing so.

So how did he make it all happen?

Next up: Connecting the dots.