WASHINGTON — The Home Ethics Committee is investigating Consultant Steven M. Palazzo, Republican of Mississippi, for potential misuse of funds, aft
WASHINGTON — The Home Ethics Committee is investigating Consultant Steven M. Palazzo, Republican of Mississippi, for potential misuse of funds, after a preliminary inquiry discovered that he engaged in what investigators referred to as a “regarding sample” of spending greater than $80,000 in marketing campaign cash on a $1.2 million waterfront home that he was making an attempt to promote.
In a report revealed on Monday, the impartial board of the Workplace of Congressional Ethics mentioned it had voted unanimously to advocate that the Home panel broaden its investigation into the fifth-term congressman’s conduct — together with subpoenaing him, his brother and a dozen others — as a result of there was “substantial cause to imagine that Consultant Palazzo transformed funds to non-public use to pay bills that weren’t official.”
In a short assertion from the leaders of the secretive Ethics Committee, Consultant Ted Deutch, Democrat of Florida and the chairman, and Jackie Walorski of Indiana, the senior Republican, mentioned that the panel would proceed its inquiry to “collect extra info crucial to finish its assessment.”
At subject, amongst different allegations, the report mentioned, was a “regarding sample of marketing campaign expenditures on a big riverfront residence which Consultant Palazzo owned and rented to Palazzo for Congress as an ostensible marketing campaign headquarters.” Investigators additionally alleged that Mr. Palazzo might have improperly used marketing campaign funds to pay his brother and used his place in Congress to do a particular favor for his brother.
The four-bedroom residence, which Mr. Palazzo known as the “River Home,” was outfitted with a ship dock and a visitor cottage, and was primarily used as a weekend residence by the congressman’s household, which had owned it for about 20 years, in accordance with the findings.
The property, located on the Tchoutacabouffa River north of Biloxi, appraised in 2017 for $1.175 million, in accordance with the report, and Mr. Palazzo had been making an attempt unsuccessfully to promote it. He deliberate to make repairs after which “put it again in the marketplace and get it off his arms,” however potential patrons stored balking due to “the intensive repairs the home wanted,” the report mentioned.
“I simply wish to promote it or discover some contractors to repair it with out costing an arm and a leg and promote it for somewhat extra,” Mr. Palazzo wrote in an e-mail to an actual property agent in January 2018.
Weeks later, Mr. Palazzo’s marketing campaign committee entered right into a lease with the congressman to hire the home as a marketing campaign headquarters for $3,000 per 30 days. The lease was equal to the quantity the congressman owed every month on the property, the report mentioned.
Investigators discovered that the marketing campaign additionally spent greater than $11,000 on utilities on the home, $6,300 on landscaping, $1,500 on plumbing, $1,300 on heating and air con, $960 on a safety system, $690 on cleansing and $200 on pest management, for a complete of greater than $82,000 spent on the property.
They recognized different residence enchancment prices they mentioned might have been related to the home, however Mr. Palazzo’s marketing campaign committee both didn’t have or didn’t present information of the bills, they mentioned. Between April 2018 and July 2019, Mr. Palazzo’s marketing campaign committee reported about $1,500 spent at varied Lowe’s residence enchancment shops.
“The big range of campaign-funded enhancements to the house seem to have been immediately associated to the sale of the property somewhat than any true marketing campaign function,” investigators wrote.
Finally, Mr. Palazzo offered the property in September 2019 for $485,000, the report acknowledged.
Investigators additionally questioned the position of the congressman’s brother, Kyle Palazzo, within the marketing campaign, stating that his work “might not have justified the wage he obtained.” He was paid greater than $23,000 within the final marketing campaign cycle, in accordance with the report.
One employees member instructed congressional investigators that Kyle Palazzo “didn’t have a spot to reside” and “was staying on the River [H]ouse,” the report mentioned.
“The potential use of the River Home as a residence, mixed with an absence of proof that the River Home was an precise marketing campaign headquarters, is in direct distinction with claims that the River Home was a bona fide marketing campaign headquarters,” investigators wrote.
The investigators additionally mentioned that it appeared that the congressman had used official assets to attempt to get the secretary of the Navy to intervene personally to improve Kyle Palazzo’s army standing so he could be eligible to re-enlist.
In response to the findings, a lawyer for Mr. Palazzo mentioned the inquiry had begun due to “unfounded allegations” by a political opponent.
“Always, Consultant Palazzo acted in good religion to adjust to Federal Election Fee guidelines,” the lawyer, Gregg Harper, wrote in an October letter made public this week. “Any bills associated to the River Home property that had been paid by the marketing campaign had been, the truth is, allowable marketing campaign bills and had been in compliance with all guidelines and relevant legal guidelines.”
Mr. Harper additionally argued that the congressman “didn’t do something ‘particular’ for his brother.”
His congressional workplace didn’t reply to a request for remark.
The report on Mr. Palazzo was launched the identical day the ethics board mentioned it was recommending that the Home panel proceed to assessment the actions of Delegate Michael San Nicolas, Democrat of Guam.
The allegations in opposition to Mr. San Nicolas embody that he might have reported false info in his Federal Election Fee submitting, accepted money contributions that had been in extra of federal limits and transformed marketing campaign funds to non-public use.
The board advisable the investigation into the delegate proceed as a result of there may be “substantial cause to imagine” the allegations.
He didn’t reply to a request for remark.