WASHINGTON – The House Ethics Committee on Thursday released four reports of separate ethics violations by four members of Congress, describing what investigators suggested as a wide range of improper financial conduct.
The allegations against three Republicans and a Democrat focus on stock trading and the misuse of campaign funds, according to the Congressional Ethics Office, which investigated the cases.
Rep. Mike Kelly, Republican of Pennsylvania, is under scrutiny for stock purchases by his wife who investigators say have been affected by his actions as a congressman. Representative Tom Malinowski, Democrat of New Jersey, is facing allegations he failed to properly disclose hundreds of thousands of dollars in stock transactions. Rep. Alex X. Mooney, Republican of West Virginia, is accused of misusing campaign funds for personal expenses, and Rep. Jim Hagedorn, Republican of Minnesota, of improperly awarding contracts to companies owned to the relatives of its employees.
The four cases will continue to be reviewed by the House Ethics Committee, a bipartisan panel of lawmakers tasked with enforcing internal chamber rules.
In a particularly scathing report on Mr Kelly and his wife, Victoria Kelly, investigators concluded that there was “substantial reason to believe” that she had purchased shares in a steel company with a plant in the District of her husband “on the basis of confidential information” which he had “learned from his official duties”.
Mr Kelly’s case involves a frantic effort to help the steel mill which employs 1,400 people in his district after it was acquired last year by Cleveland-Cliffs. The Cleveland-Cliffs chief executive has publicly stated that unless the federal government is able to provide his company with additional trade protections, it will shut down that plant, along with one in Ohio.
Investigators found that Mr Kelly was personally involved in Cleveland-Cliffs’ efforts to pressure the White House, pressing Commerce Department officials, as well as Mark Meadows, then President Donald J’s chief of staff. Trump, to adopt additional protections.
On April 28, 2020, investigators wrote, the Commerce Department informed the Cleveland-Cliffs chief that it intended to open an investigation that could benefit the company. Relieved, the leaders of Cleveland-Cliffs canceled the planned layoffs. The news was passed on to Mr Kelly’s office, investigators wrote, citing witness interviews and emails.
The next day, Kelly bought $ 15,000 to $ 50,000 of Cleveland-Cliffs stock, according to the congressman’s financial information. Investigators deemed this purchase “atypical” because she had not owned or bought individual shares for almost a year earlier.
When she sold the shares in January, she made a profit: While she had bought the shares at $ 4.70, she sold them for around $ 18, according to investigators.
Neither Mr. Kelly nor his wife co-operated with the investigation, as did his staff and Cleveland-Cliffs officials. Mr Kelly has since maintained that neither he nor his wife committed any wrongdoing, and a lawyer for Mr Kelly called the investigation “fatally flawed”.
A spokesperson for Mr Kelly told the Pittsburgh Post-Gazette in September 2020 that Ms Kelly had made “a small investment to show her support for the workers and leadership of this century-old plinth in their hometown.” He did not explain why Ms Kelly had not publicly disclosed the purchase at the time, if his intention was to show solidarity with the company.
In the report on Mr Hagedorn, investigators found there were serious reasons to believe his office had directed nearly half a million dollars in public funds to contract for services from owned or controlled companies. by relatives of his associates, and that he was using private office space at a cost well below the market price and attempted to mislead the public about this.
Investigators concluded that Mr Hagedorn’s office spent an unusually large amount of government money on official mail to his constituents, and much of it went to two separate printing houses owned by relatives of two of his associates, who charged Mr. Hagedorn “much more” than the fair market price for these services. While the average Congressional office spent less than 1 percent of its budget on this mail, Mr. Hagedorn’s office spent almost 20 percent.
Investigators were unable to verify whether any of the companies, owned by the brother of Mr Hagedorn’s former chief of staff, had clients other than the congressman’s office.
Because Mr Hagedorn did not cooperate with the investigation, investigators wrote, they were unable to determine with certainty whether he was aware of the practices. But they said they found evidence showing that he “knew or should have known” of irregularities in his mail operation.
Mr Hagedorn hired an outside lawyer last year to look into the matter and came to many of the same conclusions as investigators from the Congressional Ethics Office. However, this internal review concluded that he was unaware that the contracts benefited the relatives of his assistants.
In their investigation of Mr. Mooney, investigators accused him of using campaign funds for very likely personal ends. The report found that there were substantial reasons to believe that Mr. Mooney used campaign contributions during frequent visits to fast food restaurants such as Chick-fil-A, Panera Bread, Taco Bell and a variety pizza vendors near his home, when there was no clear campaign goal for spending.
Mr Mooney also twice used campaign money to pay for trips to West Virginia which he described as “site visits”, but investigators said they were “mostly of a personal nature” . He used $ 2,445 in campaign funds at the Canaan Valley Resort and spent $ 302 on a private fishing tour at the Smoke Hole Resort, investigators said.
“While Representative Mooney’s cooperation greatly facilitated this investigation, and he attempted to remedy the violations as they became apparent to him and his lawyer during this review, the nature and general pattern violations have raised concerns, ”the report said.
Mr Malinowski’s stock trading investigation found he failed to file the required trading reports in 2019 and 2020, and he admitted he did not do so during an interview with investigators. . The report is likely to throw a cloud over Mr Malinowski as he faces a tough re-election race next year.
In the interview, Mr Malinowski blamed “recklessness on my part” for the lack of disclosure and said he regrets and takes full responsibility for it.
“It is not a justification or an excuse,” he said.
“I have an extremely busy job, and that was one of the things I knew I had to do,” he added. “But I didn’t put enough pressure on myself to do it every 45 days, and it was just reckless.”