Last Saturday, we shared the Minnesota Reformer story: MN01's Hagedorn spent tax dollars on vendor owned by a member of his staff.
Since then, Hagedorn has struggled to control the narrative--and has hired help that might make the story appear to spin even more out of control. At the Minnesota Reformer, Daniel Newhauser reports in Hagedorn hires lawyer-to-the-GOP-stars, previewing possible ethics case:
Rep. Jim Hagedorn has retained a prominent ethics lawyer to represent him, following revelations his office mismanaged taxpayer money, including paying a company owned by a member of his own staff.
Hagedorn has enlisted Elliot Berke, who has represented everyone from then-House Republican Conference Chairwoman Cathy McMorris Rodgers to disgraced Republican Reps. Duncan Hunter of California and Aaron Schock of Illinois in their respective ethics, legal and campaign finance cases arising from allegations they violated spending rules.
On July 30, Berke delivered a letter signed by Hagedorn to the House Administration Committee, which oversees taxpayer money allotted to congressional offices. The letter noted that the congressman had hired Berke to perform an independent review of spending in his office, according to two sources with direct knowledge of the matter.
Hagedorn acknowledged the review in a statement last week after a story came out reporting that he had fired his chief of staff.
The personnel move is the clearest sign yet that Hagedorn is prepared for an inquiry by the House Ethics Committee — or worse, said ex-Rep. Donna Edwards, a former Democratic member of the ethics panel.
“By making that hire, to me that suggests that there is an ongoing ethics investigation or that he anticipates one is going to be opened up,” the former Maryland legislator said.
Elliot Berke is a well known Washington ethics lawyer.
An ethics inquiry would hardly come as a surprise, according to half a dozen ethics experts contacted for this report. House ethics rules prohibit a congressman from doing business with a member of his staff. In a recent case, the Ethics Committee found that it may actually be illegal for staff to own companies that do business with the federal government.. . .
Read the whole hot mess at the Reformer.
The tale has legs in Southern Minnesota. At the Rochester Post Bulletin, John Molseed reported in Watchdog: Hagedorn spending should be investigated:
A nonpartisan watchdog group says first-term Republican U.S. Rep. Jim Hagedorn should face ethics investigations following revelations of his office’s spending of its representational allowance funds.
Over the weekend, Hagedorn’s office confirmed that Chief of Staff Peter Su had departed.
A statement from Hagedorn's office doesn't elaborate on Su's departure, but says the campaign is "making senior-level personnel changes" as part of its investigation into office spending.
That followed an article published Friday revealing that Hagedorn’s office spent 40% of its annual budget in the first quarter of 2020. Part of that spending is $60,240 in printing costs with a Texas-based company, INVOCQ Technologies LLC.
Overall, Hagedorn’s office has spent $101,328 on services from INVOCQ dating back to September 2019, House spending records show.
A Hagedorn staffer, John Sample, is also listed as INVOCQ’s director, chief financial officer and chief technology officer. The link between Hagedorn's office and INVOCQ was first reported Saturday by the Minnesota Reformer.
In a statement issued over the weekend, Hagedorn said he “became aware of the matter approximately two months ago.”
“I took immediate action by hiring outside counsel to perform an independent review, making senior-level personnel changes, and reestablishing best practices for staff and the acquisition of services,” the statement reads.
The statement
The statement says Hagedorn advised the House Administration Committee, House Ethics Committee and House Jurisdiction Committee of his office’s review and will continue providing the committees with their findings.
Sample’s current status with Hagedorn’s staff is unclear.
“I imagine the (House) Ethics Committee will look into it, and it certainly sounds like they should,” said Donald Sherman, deputy director of the watchdog group Citizens for Responsibility and Ethics in Washington, or CREW. “There’s clear violations here, and they certainly deserve to be examined.”
The House Ethics Manual outlines how Members’ Reimbursement Allowance may be used. The manual includes an example of using MRA funds to pay for rent or services from a business or property owned by a staff member as not being allowed.
The $60,240 was part of more than $270,000 that Hagedorn’s office reported spending the first quarter of 2020 on printing and mailers. Most of that was spent on services to Abernathy West LLC.
DFL Chairman Ken Martin said in a statement the overall spending on mailers raises alarms, pointing to a lack of transparency about the ownership of Abernathy.
“For all we know, Hagedorn himself could own Abernathy West and could be pocketing hundreds of thousands of our tax dollars,” he said.
Hagedorn’s office spending on mailers to constituents was far more than other members of Congress and accounts for about 19% of Hagedorn’s entire MRA budget. On average, mailers and printing accounts for about 1% of other congressional members' MRA spending, according to Legistorm, a firm that tracks allowance spending.
Spending the allowance on mailers is commonly referred to as “franking.” Members of Congress are allowed to send direct mailers to constituents until 90 days before an election. The 90-day window is a clear line in the practice, Sherman said.
“As long as members steer clear of that clear, bright line, it’s par for the course,” he said.
In his statement, Hagedorn referred to the practice, saying, “I will continue providing the Committees with findings and offer recommendations to improve House franking operations.”
Two days later, the PB's Matt Stolle reported in Feehan calls Hagedorn mailing scandal 'disqualifying:
DFL challenger Dan Feehan accused GOP Rep. Jim Hagedorn of being "asleep at the wheel," describing news reports that the first-term congressman's office directed at least $100,000 of taxpayer money to a printing company owned by one of his staff members as "shocking" and "disgraceful."
Hagedorn fired his chief of staff, Peter Su, over concerns about "spending irregularities." A nonpartisan watchdog group has called for an investigation into Hagedorn's spending of his allowance fund.
"Rep. Hagedorn has failed his most basic responsibility to be a steward of taxpayer resources, and he has yet again attempted to pass the buck," Feehan said in his first statement since the mailing scandal broke.
News about the improper spending was first reported by the Minnesota Reformer, a nonprofit, independent news operation.
Feehan, who is making his second bid for the seat held by Hagedorn, said the revelations about Hagedorn's spending are at best "disqualifying" and at worst raise concerns of "criminal activity."
"It is clear that Congressman Hagedorn is asleep at the wheel, allowing over one hundred thousand dollars of hard-earned taxpayer dollars to be funneled into his own employee's pockets," he said. "There is far more to learn about the abuse of taxpayer dollars in Rep. Hagedorn's office and who it benefited." . . .
The paper picked up on the latest turn in Stolle's Hagedorn hires ethics lawyer amid allegations:
Rep. Jim Hagedorn has hired an ethics lawyer with a reputation for representing lawmakers ensnared in ethical and legal troubles arising from allegations of spending rules violations.
The move comes amid allegations that the first-term Republican congressman paid $100,000 to a company owned by a member of his own staff and mismanaged taxpayer money.
The attorney hired by Hagedorn is Elliot Berke, a well-known ethics lawyer who previously represented GOP Rep. Duncan Hunter of California and GOP Rep. Aaron Schock of Illinois. Both faced legal and campaign finance cases arising from allegations they violated spending rules.
Hunter is currently serving an 11-month prison term for misusing campaign funds. Schock resigned from Congress in 2015 amid a scandal involving misuse of public and campaign funds. Berke also represented GOP Rep. Cathy Rodgers, who was sanctioned by the House Ethics Committee last year for an improper use of campaign funds.
The hiring of Berke was first reported by the Minnesota Reformer, a nonprofit, independent news organization that first broke the story about the irregular spending coming from Hagedorn's office.
Berke's hiring is a strong sign that Hagedorn is gearing up for an investigation by the House Ethics Committee, experts say. Hagedorn has said he was unaware of the spending and fired his chief of staff, Peter Su, two months ago over the "irregular spending." But experts say that members of Congress are ultimately responsible for spending decisions by their staff members. . . .
The tale is gaining national attention in the political press.
Politico's The Huddle reported on Monday:
STRANGE SPENDING -- A GOP congressman is under fire for his questionable use of taxpayer money. The story from Dan Newhauser in the Minnesota Reformer: “U.S. Rep. Jim Hagedorn likes to boast on mail he sends to his constituents that his postcards are, ‘Proudly printed in Minnesota!’ What the Minnesota Republican fails to mention, though, is he paid a Texas-based company owned by one of his staff members more than $100,000 of taxpayer money to do some of that printing — a business relationship Congressional ethics experts say is a clear violation of government ethics rules.
“Hagedorn also paid hundreds of thousands of dollars for printing to a separate, mysterious company that has existed for less than a year and seems to have gone to great lengths to conceal its ownership, according to publicly available Congressional spending records and business registration filings. ... On Friday — just more than a week after the Minnesota Reformer asked the office about the transactions — Hagedorn fired his chief of staff, Peter Su, over concerns about 'irregular spending,' according to the Daily Caller.” More: https://bit.ly/3h5zuS2.
And on Thursday:
BETTER CALL BERKE -- An update to the spending controversy surrounding GOP Rep. Jim Hagedorn, from Dan Newhauser for the Minnesota Reformer: “Rep. Jim Hagedorn has retained a prominent ethics lawyer to represent him, following revelations his office mismanaged taxpayer money, including paying a company owned by a member of his own staff.
“Hagedorn has enlisted Elliot Berke, who has represented everyone from then-House Republican Conference Chairwoman Cathy McMorris Rodgers to disgraced Republican Reps. Duncan Hunter of California and Aaron Schock of Illinois in their respective ethics, legal and campaign finance cases arising from allegations they violated spending rules.
"On July 30, Berke delivered a letter signed by Hagedorn to the House Administration Committee, which oversees taxpayer money allotted to congressional offices. The letter noted that the congressman had hired Berke to perform an independent review of spending in his office, according to two sources with direct knowledge of the matter. Hagedorn acknowledged the review in a statement last week after a story came out reporting that he had fired his chief of staff.” More: https://bit.ly/324xmUu.
My, my.
Photo: A pensive Hagedorn, via CNN.
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