All five of the panel's Republicans and one Democrat recused themselves. Committee Chairman Jo Bonner, R-Ala., said the move was made "out of an abundance of caution and to avoid even an appearance of unfairness."
Attorney Billy Martin, who was hired to investigate whether the ethics panel's staff was guilty of misconduct, recommended the recusals, a letter read on the House floor by Bonner said.
Waters, 73, had no immediate comment, the Los Angeles Times reported.
In addition to Bonner, Rep. Linda Sanchez, D-Calif., and Republican Reps. Michael McCaul of Texas, Michael Conaway of Texas, Charlie Dent of Pennsylvania and Gregg Harper of Mississippi stepped aside.
House Speaker John Boehner, R-Ohio, then appointed Reps. Bob Goodlatte, R-Va., as acting chairman, John Yarmuth of Kentucky as the ranking Democrat and Mike Simpson, R-Idaho, Steven LaTourette, R-Ohio, Shelley Moore Capito, R-W.Va., Tim Griffin, R-Ark., and John Sarbanes, D-Md., to round out the panel, The Hill reported.