There's good news and there's bad news for Rick Renzi, the embattled Congressman from northern and eastern Arizona, one of the nation's largest Congressional districts. But really, mostly bad.
The good news (for him) is that he's been cleared of campaign finance violations going all the way back to his initial election to Congress in 2002, after a new district was created. But he's definitely paying a price. By retroactively classifying the questionable funds as a personal loan to his campaign, he's had to pony up $323,840 to the IRS & state of Arizona for back income taxes. Yikes! That's gotta sting.
Cross-posted at ePluribusMedia
From the headline in the Prescott Courier, Election commission drops charges against Renzi, you'd think he'd gotten off the hook. But, instead, it looks to me that he's found a way to weasel out of his troubles with this retroactive fix. Because if he'd done things right in the first place, he wouldn't have had so much cash to spend in his initial run, and might never have won the Republican nomination - and so never have been elected.
And, as it happens, Renzi also has to pay $25,000 in "unrelated" fines to the FEC. Those were related to the 2001-2 campaign, as well, for false reports of cash-on-hand (overstated) and receipts & expenditures (understated). At least that fine can be paid out of his campaign chest. That's a significant bite out of $80,561.08 cash-on-hand from his latest FEC report. On balance, things aren't looking great for the erstshile real estate wheeler-dealer and former football linebacker from the Grand Canyon State.
The congressman, who has been drawn into an FBI investigation of an Arizona land deal, completed a conciliation agreement with the FEC on Jan. 10, but it was only made public now. ... The FEC's investigation of Renzi's 2002 campaign came after an FEC audit questioned whether $369,090 in loans to the campaign came from two Renzi operated corporations, which would be prohibited by law.
An FEC general counsel's report, however, said an accountant retained by Renzi reconstructed the activity between Renzi and the corporations and found that Renzi had never listed a loan repayment to him from the corporations. In a document to the FEC last year, Renzi said he and his wife filed amended 2001 tax returns paying federal back taxes of $285,421 and state taxes of $38,409.
According to the [FEC's] audit division the underlying transactional data and the amended tax returns show that the source of the $369,090 that Renzi loaned to his campaign came from loan repayments to him, and hence were his personal funds, not prohibited corporate contributions, thee FEC counsel wrote.
Drawn into? Like he's some kind of innocent bystander? Gimme a break!!
Renzi says he's hired a new CPA. (Like the money shenanigans six years ago were the accountant's fault!) One can only assume it took a high-priced "creative" bean-counter to cook up a way out of this mess. (I'm guessing that rooting around in the right public records in Arizona, or in Burke, VA would turn up a new second mortgage filed recently.) And according to the Hill today, that's just what happened:
Rep. Rick Renzi (R-Ariz.) took out a $500,000 second mortgage on his Flagstaff home in January after paying more than $300,000 in tax arrears discovered by a Federal Election Commission (FEC) investigation.
The mortgage loan, revealed by Renzi in a document filed with Coconino County, Ariz., is worth the highest possible listed value of his house, and suggests the embattled lawmaker may have faced a substantial cash squeeze at the end of the last Congress.
The balance of the $500k, over $150k, is probably heading right out the door for those new accountants and for legal advice. According to THe Hill, the attorney of record is one Glenn Willard, of Paton Boggs: that kind of high-powered DC law firm doesn't take on ethically challenged Congressman on a pro bono basis!
All-in-all, it would appear the Prescott in-district newspaper is being remarkably kind by suggesting the fourth-term Congressman is out of the woods. The Tucson Citizen is not so kind:
New federal report on campaign funds adds to Renzi woes
Rep. Rick Renzi paid hundreds of thousands of dollars in back taxes to settle charges that his businesses improperly funded his first campaign for office, according to documents released by federal regulators Tuesday. ... In both the corruption probe and the FEC case, Renzi's political problems stem from questions about how his business investments have intersected with - or possibly interfered with - his conduct as a lawmaker.
I think their angle on the story is right.
An accountant who reviewed Renzi's original 2002 tax returns called them "abysmal," "confused" and "complex" in an e-mail to Renzi, which he turned over to the FEC.
In September, Renzi had called complaints stemming from the FEC audit "desperate and erroneous allegations" launched by "liberal operatives." By the time he put that statement out, though, he had already filed the new tax returns and paid the back taxes.
One is tempted to call Renzi a weasel or a worm. But why libel perfectly respectable members of the natural animal kingdom? Renzi's foibles are all too human, born out of the arrogance of wealth and power, and in no way attributable to wild animals minding their own business and not making trouble for anyone.
The Arizona Republic speculates about the larger picture:
Democrats say the corruption investigation into land deals in Arizona involving a former business partner of Renzi is also connected to the forced resignation of Arizona's former top federal prosecutor, Paul Charlton.
Renzi faces grave doubts about whether he will seek re-election or even serve out his term, which expires in January 2009. He has already temporarily left all his committees. On Friday, he issued a written statement denying widespread rumors he was planning to resign.
Potential candidates on both the Democratic and Republican sides are preparing in case he steps down. That would lead to a special election to replace him.
Melanie Sloan of CREW, who's earned her desigation as a "watchdog" had her own wry observation:
"Every single member of Congress who is in serious trouble is insisting on their innocence and that they are the target of political attacks, right up until the day they plead guilty," said Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, which has long accused Renzi of misconduct.
FWIW, it's not clear exactly who is representing Renzi. The Hill mentions Paton Boggs, but if we're to believe the Business Journal of Phoenix, they're not the only legal firm Renzi's been signing checks to:
Former Arizona attorney general Grant Woods no longer is representing Republican Congressman Rick Renzi in a federal investigation that is looking into the latter's involvement in a real estate deal involving swapping federal lands with parcel owned by a former business partner.
Renzi hired Woods last year to deal with the federal inquiry. "I'm just not representing Renzi right now. He was paying the D.C. law firm and I suggested he just call me when and if he needs me," Woods said.
Woods said he and Renzi are on good terms and he did not rule out doing legal work for the congressman again in the future.
But which DC firm? Rather than Paton Boggs, this article says Renzi's being represented by another DC firm. Or is that in addition to Paton Boggs?
The Washington D.C. law firm Nixon Peabody LLP is representing Renzi in the matter. Attorneys at that firm were also not available for comment.
Legal counsel for corruption probes seems to be about the only grown industry for Republicans in the nation's capitol these days. Perhaps Renzi's paying a publicist, too. At any rate, he's launched a bit of a PR offensive with a long TV interview back in the home district. But it's a pretty lame one, so maybe he cooked up his counteroffensive all by himself.
The associated article says Renzi claims that leaks regarding an investigation of a land deal were "electioneering". Grasping at straws, he is! Sorry I don't know how to link to it directly, but the story has links to his (lame) comment on his staff's involvement with the USA Charlton's firing, and a broadcast story assembled from the interview, where Renzi complains he's a victim of a DoJ smear campaign, like he can pull some jujitsu move based on the firings story. Poor poor pitiful Renzi! My heart is breaking for him. (NOT.) And, he complains, this is keeping him from helping get solar power brought "onto the reservation" - there are several big ones in the district.
One wonders if the Renzis have had to start holding off on new $200 sneakers for their 12 kids, or if they've had to start filling out college financial aid forms. He doesn't have to worry about medical bills at least, with excellent coverage. But his hubris was great enough to have introduced a bill denying pension coverage to Congressmen convicted of crimes. This is response to the Foley scandal last fall. That's only one of many of the Congressman's actions which may come back to haunt him.