Watchdog seeks probe of campaign spending by Mississippi Rep. Palazzo

Five-term Republican paid $3,000 a month to rent farm he owns

An ethics watchdog group filed a complaint against Rep. Steven Palazzo, R-Miss. (Bill Clark/CQ Roll Call file photo)
An ethics watchdog group filed a complaint against Rep. Steven Palazzo, R-Miss. (Bill Clark/CQ Roll Call file photo)
Posted March 30, 2020 at 6:17pm, Updated at 7:44pm

A watchdog group is asking the Office of Congressional Ethics to investigate Rep. Steven M. Palazzo over the Mississippi Republican’s spending of more than $180,000 in campaign funds to rent a farm he owns and to pay an accounting firm that he founded and is now run by his former wife.

From 2018 to 2019, Palazzo’s campaign account paid $60,000 in rent to his farm, Greene Acres LLC, according to complaint filed by the Campaign Legal Center. The farm is in Perkinston, Mississippi, a rural location more than 30 miles away from his campaign committee address in Gulfport, where Palazzo lives.

Under House Rules, members of Congress may lease property to their campaigns, but there must be a bona fide campaign need for the space, and the campaign must not pay more than fair market value.

“The public record establishes that Representative Palazzo did not use the property for the 2020 primary campaign even though FEC reports beginning in December 2018 described the rent as for ‘2020 primary’ use,” the Campaign Legal Center’s complaint states.

The complaint also says that at $3,000 a month, the 4th District congressman’s campaign “has paid more for rent over the same period than the three other members of the Mississippi House delegation combined.”

Republican Michael Guest of the 3rd District reported $13,100 in rent since 2017, Democrat Bennie Thompson of the 2nd paid $37,500 in rent over the last two election cycles, and Republican Trent Kelly of the 1st did not appear to have paid any rent this election cycle, the group says.

Palazzo’s campaign said it welcomed any questions from the ethics office, while slamming the “baseless allegations by a biased, George Soros-supported, Washington, D.C. based group.”

“These unsubstantiated allegations first came up in dirty attacks by desperate political opponents during Congressman Palazzo’s most recent campaign, which he won with 67% of the vote,” campaign treasurer Paul Breazeale said in a statement.

Breazeale said any rent expenses were “for legitimate and allowable political and campaign purposes.”

“At no time has Rep. Palazzo made payments for a ‘farm,’ he added.

Since 2011, Palazzo’s campaign account had simultaneously paid two firms for accounting services, according to the complaint.

Payments totaling $127,933 went to Palazzo & Company LLC, which he founded in 2001. When Palazzo joined Congress in 2011, he transferred ownership of the company to his wife, Lisa Palazzo, who is not a certified public accountant. She is currently the owner and CEO of the firm. The couple divorced in 2016, according to HuffPost.

The other firm, Breazeale, Saunders & O’Neil, Ltd., was co-founded in 1981 by Breazeale, Palazzo’s campaign committee treasurer. The Jackson-based firm has received $76,954 in accounting fees and services since 2010.

“Over a ten year period, Rep. Palazzo has used two accounting firms: one for day-to-day bookkeeping and campaign operations and the other to ensure FEC compliance.” Breazeale said.

According to ethics rules, if the family member wants to sell services to a lawmaker’s campaign, there has to be a bona fide campaign need, and the campaign cannot be charged more than fair market value.

Neither the OCE nor the House Ethics Committee responded to requests for comment. The OCE can investigate public complaints and make recommendations to the Ethics panel, which has the power to punish members, up to recommending expulsion to the full House, if it finds violations.

The author of the complaint for the Campaign Legal Center, a nonpartisan group that advocates more transparency in elections, was Kedric Payne, who previously served as deputy chief counsel for the OCE.

“It is more important now than ever that our public officials put the public over their personal interest,” Payne said. “This appears to be another example of a member of Congress misprioritizing the public interest.”

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