Renzi Indictment Triggers Democrats’ Interest
Making him the second sitting Member of Congress to currently face federal charges, the Justice Department on Friday indicted Arizona Rep. Rick Renzi (R) on 35 counts of extortion, money laundering and conspiracy relating to the lawmaker’s efforts to get the federal government to buy land from his business partner.
Fearing a damaging reprisal of the “culture of corruption” mantra that helped throw his party from the majority in the 2006 elections, House Minority Leader John Boehner (R-Ohio) all but called last week for Renzi to immediately resign. Renzi already has said he will not seek re-election in November, and he vacated his committee slots after news of the FBI raid of a family business in April. He is scheduled to be arraigned on March 6.
“I have made it clear that I will hold our Members to the highest standards of ethical conduct,” Boehner said Friday. “The charges contained in this indictment are completely unacceptable for a Member of Congress, and I strongly urge Rep. Renzi to seriously consider whether he can continue to effectively represent his constituents under these circumstances.”
Boehner said he expected to meet with Renzi to “discuss this situation” as soon as possible, which is likely to be when Congress returns this week.
“I stand with Leader Boehner and believe that he has taken the appropriate course of action,” National Republican Congressional Committee Chairman Tom Cole (Okla.) added Friday.
Renzi’s indictment also could affect the presidential race, as the Arizona Republican is one of 24 campaign co-chairs for presumptive GOP nominee Sen. John McCain (Ariz.).
“I’m sorry. I feel for the family; as you know, he has 12 children,” McCain told reporters Friday, according to The Associated Press.
“But I don’t know enough of the details to make a judgment. These kinds of things are always very unfortunate. … I rely on our Department of Justice and system of justice to make the right outcome.”
Now, Renzi becomes the second sitting lawmaker to come under federal prosecution. Rep. William Jefferson (D-La.) was charged in June with 16 counts of bribery and extortion in relation to his business dealings in Africa. The judge in that case officially delayed the start of Jefferson’s trial last week after his attorneys appealed a ruling to dismiss the charges.
Several other Members — nine out of 11 of them Republicans — including Reps. John Doolittle (R-Calif.), Jerry Lewis (R-Calif.) and Alan Mollohan (D-W.Va.) are being examined by federal investigators.
Through attorneys Reid Weingarten and Kelly Kramer, Renzi staunchly denied any wrongdoing on Friday and questioned the timing of the indictment after the burial of Renzi’s father last Thursday, one day before the charges were lodged.
“We are disappointed that the Department of Justice would not allow a decent amount of time to pass to allow a son to mourn the passing of his father,” the attorneys stated.
“Congressman Renzi did nothing wrong. We will fight these charges until he is vindicated and his family’s name is restored.”
The attorneys also bashed the Justice Department for its handling of the probe, saying that they feared the department may have been “influenced by political considerations.”
Charges of foot-dragging in the probe, which began no later than June 2005 and has moved slowly, arose during the U.S. attorneys investigation in which Paul Charlton, the former U.S. attorney for Arizona who started the investigation, was asked to step aside in December 2006.
Charlton would not comment on the timing of the indictment Friday but said he had been in touch with Justice Department investigators.
“All of those issues are being looked at by the inspector general,” Charlton said. “Whether it’s timely or not is just something we have to wait and see.”
Democrats said on Friday that they hoped Renzi would resign immediately so that Democratic Gov. Janet Napolitano could call a special election in his politically competitive Northern Arizona 1st district.
“We hope that Congressman Renzi will put the interests of his district first and do what is best for his constituents,” Democratic Congressional Campaign Committee spokesman Doug Thornell said.
“We think he ought to resign today,” said Emily Bittner, a spokeswoman for the Arizona Democratic Party. “In general, Democrats are better prepared to pick up this seat in a special election,” Bittner explained.
Bittner said a special election could be called 110 to 150 days from when Renzi steps down, but it was unclear whether the secretary of state’s office would attempt to hold two elections in such a short time period. Arizona’s regular primary is Sept. 2, and any winner of a special election would have to run again for a full term in November.
Politically, Democrats said a special election would benefit their hopes of stealing the seat. As of Jan. 31, the DCCC held a $30 million cash-on-hand advantage over the National Republican Congressional Committee, and the Democratic committee could afford to spend heavily on the contest. NRCC money proved decisive in boosting the Republican candidate in the June 2006 special election to replace jailed ex-Rep. Duke Cunningham (R-Calif.).
Additionally, former state Rep. Ann Kirkpatrick, the leading Democrat in the race, held a nearly $150,000 cash lead over mining industry advocate Sydney Hay, the leading Republican candidate, as of Dec. 31.
Grand Canyon State Republicans remained mum on Friday. Sources said the Arizona Republican Party would not offer a public position on the matter until it was done consulting with the state’s House GOP delegation and the NRCC.
“It would be expensive, and that’s the honest answer,” one Republican operative based in Arizona said of a possible special election. “We hold the seat in November with our current and likely candidates. It’s a tough call if it’s a special election.”
The 26-page indictment centers on a 2005 mining deal in which Renzi allegedly required private mining companies to buy land from James Sandlin in exchange for Renzi’s support of legislation allowing the government to swap land with the companies for the purposes of establishing a copper mine. Sandlin reportedly made $4.5 million off the land deal.
In perhaps the most explosive allegation, Renzi is alleged to have told a company interested in the land swap, which had to be approved by Congress, that if they did not purchase Sandlin’s land, then the proposal would die.
“No Sandlin property, no bill,” the indictment quotes Renzi as telling company officials.
Sandlin was a business partner and campaign contributor who had bought out Renzi’s real estate business in 2005, and he still owed Renzi about $700,000, according to the indictment. After the sale of the land, Sandlin used the proceeds to pay Renzi $733,000, but the two men hid that transaction by funneling the payment through other companies, the indictment alleges.
The indictment explains how Renzi met with representatives of “Company A” in his Congressional office in February 2005 and “insisted” that they purchase Sandlin’s property if he was to shepherd the land swap through Congress. Renzi did not disclose his financial ties to Sandlin, according to prosecutors. That deal ultimately fell through.
In May 2005, the indictment charges that Renzi met with “Investment Group B” to pursue an unrelated land swap in which he encouraged the investors to buy Sandlin’s land.
On May 5, 2005, “Investment Group B” wired $1 million to Sandlin, who then passed on a total of $733,000 to Renzi through two companies — Renzi Vino and Patriot Insurance — in a move designed to conceal its source. The indictment charges that Renzi filed a false financial disclosure form for 2005 that did not reveal Sandlin’s debt or its repayment.
The indictment further contends that Renzi needed the money because he was “having financial difficulty throughout 2005 and needed a substantial infusion of funds to keep his insurance business solvent and to maintain his personal lifestyle.”
The indictment also charges Renzi with insurance fraud in embezzling more than $400,000 in insurance premiums in order to fund his Congressional campaign. It charges Renzi and Andrew Beardall, president and general counsel of Renzi’s insurance venture, with lying to insurance regulators about the missing money and claiming an “administrative error” was responsible for “fake” insurance certificates issued by a company called Jimcor.
The indictment alleges that Renzi endeavored to conceal the funds further by claiming a personal loan to his campaign in 2001 when that money really came from insurance premiums.
Paul Singer and Lauren W. Whittington contributed to this report.