Source: https://www.scribd.com/document/168986522/CREW-Most-Corrupt-Members-of-Congress-2013-Gregory-Meeks
Timestamp: 2018-04-23 19:56:30
Document Index: 268810381

Matched Legal Cases: ['§ 104', '§ 1001', '§ 1001', '§ 102', '§ 1001', '§ 1001', '§ 1001', '§ 201', '§ 201', '§ 7353', '§ 7353', '§ 7353', '§ 7353', '§ 2635', '§ 2635', '§ 2635', '§ 2635', 'art 2', '§ 102', '§ 102']

CREW Most Corrupt Members of Congress 2013: Gregory Meeks | United States House Of Representatives | Making False Statements
REPRESENTATIVE GREGORY MEEKS Representative Gregory Meeks (D-NY) is a nine-term member of Congress, representing New York’s 5th congressional
district. His ethics issues stem from: (1) accepting improper gifts and loans; (2) his involvement with charities under federal investigation; and (3) his actions on behalf of convicted banker and campaign donor R. Allen Stanford. He was included in CREW’s 2011 and 2012 reports on congressional corruption for related matters. 1 Improper Gifts and Loans In 2006, Rep. Meeks paid $830,000 for a two-story house in the St. Albans neighborhood of Queens, New York. 2 In January 2007, only a few months after the purchase, the city listed the market value of the house as $1,239,000. 3 The home was designed by Robert Gaskin, a campaign contributor to the congressman who has also worked on projects for which Rep. Meeks has obtained federal funds. 4 It was built on land owned by another Meeks contributor, real estate developer Richard Dennis. 5 Both Mr. Dennis and Rep. Meeks claimed Rep. Meeks had not received a sweetheart deal on the house, but an independent appraiser hired by the New York Times found the value of the house to be more than $1 million at the time Rep. Meeks bought it. 6 “At $830,000, anyway you slice it, it was substantially below market,” the appraiser said. 7 “He appears to have gotten a very, very good deal.” 8 In addition, on June 18, 2010, Rep. Meeks admitted that over three years he had obtained two loans totaling $55,000 but had failed to report them on his personal financial disclosure forms. 9 Rep. Meeks said he obtained a $40,000 loan in 2007, which he had since repaid, and
For more information, see CREW’s Most Corrupt 2011, available at http://www.crewsmostcorrupt.org/mostcorrupt/entry/most-corrupt-report-2011, and CREW’s Most Corrupt 2012, available at http://www.crewsmostcorrupt.org/mostcorrupt/entry/most-corrupt-members-of-congress-report-2012. 2 Complaint filed with the House Committee on Standards of Official Conduct by the National Legal and Policy Center, March 19, 2010 (National Legal and Policy Center Complaint); Eric Lipton and Raymond Hernandez, Congressman Cries Poor, But Lifestyle May Disagree, New York Times, March 20, 2010. The National Legal and Policy Center, a watchdog group, also raised questions about the sale of Rep. Meeks’ former home in Far Rockaway, Queens. The NLPC alleges that Rep. Meeks sold that home at an inflated price to unqualified buyers represented by Alexander Kaplan, a Brooklyn real estate attorney who was subsequently convicted of a multimillion-dollar mortgage fraud scheme. For more information, see http://nlpc.org/stories/2012/01/10/nlpc-asks-fedsinvestigate-meeks-house-sale. 3 National Legal and Policy Center Complaint. 4 Id. 5 Id. 6 Lipton and Hernandez, New York Times, Mar. 20, 2010. 7 Id. 8 Id. 9 Benjamin Lesser and Greg B. Smith, Congressman Meeks Failed to Disclose Hidden Loans; Queens Pol Borrowed More than $50 G, New York Daily News, June 20, 2010.
that he received a $15,000 loan in 2008, which he was still repaying. 10 Notably, Rep. Meeks failed to include information about any loans on his 2007 and 2008 personal financial disclosure reports, but called the lapses an “oversight.” 11 According to his 2009 personal financial disclosures, in 2008 Rep. Meeks took a loan for $15,000 from the Congressional Federal Credit Union. 12 On the same form, Rep. Meeks also revealed a debt of $50,000 to $100,000 owed to Queens businessman Edul Ahmad, evidently the first disclosure of the 2007 loan and accrued interest. 13 Rep. Meeks admitted he had not sought permission from the House Ethics Committee (then known as the Committee on Standards of Official Conduct) before accepting the loan from Mr. Ahmad. 14 Apparently, Rep. Meeks received a check for $40,000 from Mr. Ahmad in January 2007 to help with costs associated with his new $830,000 home. 15 Rep. Meeks received the money without any discussion of interest rates, due dates, or collateral requirements for the loan. 16 Further, Rep. Meeks made no payments on the loan until June 2010, after the FBI questioned Mr. Ahmad about the money. 17 At that point, Rep. Meeks apparently took out a home equity loan for $59,650. 18 He then sent Mr. Ahmad a check for $59,684, representing the $40,000 plus an annual interest rate of 12.5 percent. 19 In a July 2010 statement regarding the omission of the loans from his personal financial disclosure forms, Rep. Meeks said that when he borrowed the money from Mr. Ahmad in 2007, “interest rates were as high as they have been in nearly a decade. Today, interest rates are as low as they have been since the 1950s. When I saw this, there was no question that it made financial sense to pay back the loan from Ed Ahmad and replace it with a lower interest rate loan secured by my home, which is exactly what I did during the same week that I filed my current and amended financial disclosure statement.” 20 Rep. Meeks admitted he had no documents to back up the loan from Mr. Ahmad, but said it was due within 10 years. 21 He later told the House Ethics Committee the loan interest rate and
Id. Greg B. Smith, Queens Congressman Gregory Meeks: $55G in Undisclosed Loans An ‘Oversight’, New York Daily News, June 21, 2010. 12 Rep. Gregory Meeks, Calendar Year 2009 Financial Disclosure Statement, filed June 16, 2010; Rep. Gregory Meeks, Multi-Year Personal Financial Disclosure Amendment, filed November 17, 2010. 13 Id.; Rep. Gregory Meeks, Calendar Year 2009 Financial Disclosure Statement, filed June 16, 2010; Greg B. Smith, FBI Looks Into Secret $40,000 Personal Loan to Queens Pol Gregory Meeks, New York Daily News, July 8, 2010. 14 Smith, New York Daily News, July 8, 2010. 15 Id. 16 Id. 17 Id.; In July 2011, the FBI arrested Mr. Ahmad on apparently unrelated mortgage fraud charges and, in October 2012, Mr. Ahmad pled guilty to one count of conspiracy to commit bank and wire fraud. His sentencing has not yet been scheduled. See United States v. Edul Ahmad, 1:11-mj-00755-jo (E.D.N.Y. 2011). 18 Complaint filed with the Office of Congressional Ethics by Citizens for Responsibility and Ethics in Washington, July 13, 2010, Exhibit F, Short Form Subordinated Third Mortgage, dated June 18, 2010, filed with the Office of the City Register of the City of New York, June 22, 2010. 19 Smith, New York Daily News, July 8, 2010; Office of Congressional Ethics, 112th Congress, Report and Findings Related to Rep. Gregory Meeks, Review No. 11-1048, April 29, 2011 (OCE Report and Findings). 20 OCE Report and Findings, Exhibit 11, Press Release from Representative Gregory Meeks, July 9, 2010. 21 Smith, New York Daily News, July 8, 2010.
repayment schedule was put in writing, but he misplaced the documents. 22 Mr. Ahmad’s lawyer, however, told the House Ethics Committee that the loan had no fixed interest rate, and Rep. Meeks did not sign any loan documents. 23 Rep. Meeks described the loan as “for my family obligations, etc. I was in a new house. It’s taking care of things for my family needs in the house [sic].” 24 Rep. Meeks continued, “You need to make sure the house is furnished. You need things.” 25 The $59,650 home equity loan Rep. Meeks took out to repay the $40,000 was borrowed from Four Investments, an investment firm owned by Dennis Mehiel, another New York businessman and a longtime Democratic donor. 26 Although Mr. Mehiel has not commented on the loan, in February 2010 he said, “I’m a longtime personal friend or acquaintance of virtually every Democratic member of Congress from New York.” 27 Mr. Mehiel and his wife, Karen Mehiel, donated a combined $9,600 to Rep. Meeks during the 2010 election cycle, the maximum allowable. 28 During an interview with the Office of Congressional Ethics (OCE), Mr. Mehiel said Rep. Meeks had met with him in June 2010 and asked him for a loan in order to pay back an existing $40,000 loan from another individual, whom Rep. Meeks did not identify. 29 Rep. Meeks also requested money to pay interest on the earlier loan. 30 Mr. Mehiel spoke with Rep. Meeks’ lawyers regarding loan terms, and told OCE Rep. Meeks’ lawyers wanted to complete the loan immediately because a House financial disclosure form was due. 31 In addition, Mr. Mehiel reported Rep. Meeks’ lawyers “felt compelled to pay the [original lender] a high interest rate so the [sic] Rep. Meeks would not be seen as getting a benefit.” 32 Four Investments had never made any similar loans previously and Mr. Mehiel said the company would not make any in the future, but he made an exception for Rep. Meeks, whom he described as a friend. 33 Mr. Mehiel said he did not want to appear to be offering Rep. Meeks a special deal, so he required Rep. Meeks to provide collateral and set a 7.3 percent interest rate payable quarterly after seeing the rate listed in the newspaper as a standard rate for such loans. 34
House Committee on Ethics, 112th Congress, Report: In the Matter of Allegations Relating to Representative Gregory Meeks, December 20, 2012, at 4. 23 Id. at 5. 24 Smith, New York Daily News, July 8, 2010. 25 Id. 26 Benjamin Lesser and Robert Gearty, Queens Pol Gregory Meeks Taps Democratic Fundraiser to Help Pay Back $40,000 Owed to Businessman, New York Daily News, July 9, 2010. 27 Id.; Raymond Hernandez, Enviable Access Given Top 10 Donors to New York Lawmakers, New York Times, February 11, 2010. 28 Lesser and Gearty, New York Daily News, July 9, 2010; Center for Responsive Politics, Donor Lookup, Mehiel, 2009-2010. 29 OCE Report and Findings, Exhibit 3, Memorandum of Interview, Managing Member, 4M Investments, LLC, March 14, 2011. The OCE report did not identify Mr. Mehiel by name, instead referring to the “Chairman of U.S. Corrugated, Inc. and Managing Member of 4M Investments, LLC.” Mr. Mehiel, however, is the owner of 4M Investments, and is also the chairman of U.S. Corrugated, Inc. See http://www.uscorr.com/about-us/leadershipteam/dennis-mehiel/. 30 OCE Report and Findings, at 8. 31 Id., Exhibit 3. 32 Id. 33 Id. 34 OCE Report and Findings, at 8.
Discounted Office Rent From 2002 until 2004, Rep. Meeks maintained a district office in the Richmond Hill neighborhood of Queens. 35 His office was in a building owned by Albert Baldeo, a Queens immigration lawyer. 36 In January 2013, Mr. Baldeo told the New York Post he had offered the congressman discounted rent during this period because he wanted Rep. Meeks to establish an office in Richmond Hill. 37 House disbursement records show Rep. Meeks paid $1,450 per month in rent for the Richmond Hill office from January 1, 2002 until September 2003, when the rent rose to $2,220 per month. 38 In addition, Rep. Meeks’ office reported a one-time $6,000 rent payment to Mr. Baldeo on August 31, 2003. 39 Mr. Baldeo later said Rep. Meeks had increased the size of his office, requiring him to charge additional rent, and the $6,000 was a retroactive payment of the difference. 40 Federal Probe into Dealings with Nonprofit Groups Rep. Meeks and some of his closest political allies in New York, including Democratic state Sen. Malcolm Smith and former Rep. Floyd Flake (D-NY), his predecessor in Congress, are the subject of a federal probe into their dealings with several nonprofit groups. 41 According to press reports, investigators are looking into whether Rep. Meeks and the others used the groups to “benefit themselves, their families, and their friends.” 42 In April 2013, Sen. Smith was charged with wire fraud and bribery for attempting to bribe state Republican party officials in exchange for a spot on the party’s mayoral ballot. 43 Sen. Smith pled not guilty. 44
Isabel Vincent and Melissa Klein, Pol’s ‘Crooked’ Pals, New York Post, January 20, 2013. Id. In October 2012, Mr. Baldeo was arrested in connection with a straw donor scheme tied to his unsuccessful 2010 bid for New York City Council. The case is pending. See United States v. Albert Baldeo, 1:13-cr-00125-PAC (S.D.N.Y. 2012). 37 Vincent and Klein, New York Post, Jan. 20, 2013. 38 Committee on House Administration, 107th Congress, Statement of Disbursements of the House from January 1, 2002 to March 31, 2002, Document No. 107-201, Vol. 2, at 1822-23, April 18, 2002; Committee on House Administration, 108th Congress, Statement of Disbursements of the House from July 1, 2003 to September 30, 2003, Document No. 108-132, Vol. 2, at 1729-30, October 1, 2003. 39 Id. at 1730. 40 Vincent and Klein, New York Post, Jan. 20, 2013. 41 Isabel Vincent and Melissa Klein, Feds’ Probe of Meeks Taking Sidetrack to Jamaica Biz Group, New York Post, April 18, 2010; Isabel Vincent and Melissa Klein, Hide and Meeks – Shady Charities, Odd Financial Disclosures, Love of Junkets Dog Queens Congressman, New York Post, March 21, 2010; Isabel Vincent and Melissa Klein, Pols Pushed $$ Into Their Do-Nothing Qns. Charity, New York Post, February 2, 2010; http://www.nysenate.gov/senator/malcolm-smith; http://www.legistorm.com/person/bio/127679 /Floyd_Harold_Flake.html 42 Kenneth Lovett, Barbara Ross, and Greg B. Smith, Federal Grand Jury Probes Real Estate and Nonprofit Deals for Malcolm Smith, Other Queens Pols, New York Daily News, April 2, 2010. 43 United States v. Smith et al., 7:13-cr-00297-KMK (S.D.N.Y. 2013), Michael Wilson and William K. Rashbaum, Lawmakers in New York Tied to Bribery Plot in Mayor Race, New York Times, April 2, 2013; Colin Moynihan, Lawmakers Plead Not Guilty to Charges in Bribery Scheme, New York Times, April 23, 2013. 44 Id.
Hurricane Katrina Charity In 2001, Rep. Meeks and state Sen. Smith co-founded a New York nonprofit called New Direction Local Development Corp. 45 From 2002 to 2008, New Direction’s address was the office of Joan Flowers, a former campaign treasurer for both Rep. Meeks and Sen. Smith. 46 Ms. Flowers also worked as counsel to Sen. Smith, but was asked to resign in March 2010, as reports of the federal probe surfaced. 47 Sen. Smith helped direct state funding to the group, and Rep. Meeks helped it secure other contributions, including a $250,000 contribution from International Airport Centers, the developer of a cargo center near JFK Airport. 48 New Direction displayed a picture of Rep. Meeks on its website. 49 In 2005, in the wake of Hurricane Katrina, New Direction began collecting money for New Yorkers Organized to Assist Hurricane Families, a special fund for Hurricane Katrina victims. 50 The New Direction website said it planned to raise $270,000 for hurricane evacuees, and directed donations to the offices of Rep. Meeks, Sen. Smith, and Democratic New York Assemblywoman Barbara Clark. 51 Rep. Meeks said all money raised for the fund would go to victims, and none would be used for administrative costs. 52 Rep. Meeks’ congressional campaign contributed $10,000 to the fund in 2005, though $5,000 appears to have been refunded to the campaign in 2006. 53 Additionally, Assemblywoman Clark said she helped set up a gospel concert that raised $11,210, and that money was turned over to Rep. Meeks to benefit the fund. 54 Nonetheless, according to New Direction’s tax returns, the only money spent on Hurricane Katrina-related giving was $1,392 paid out in 2006 for hurricane victim expenses. 55 According to press reports, the charity has not accounted for the rest of the money. 56 Rep. Meeks initially issued a statement saying “the funds were utilized to help sustain displaced evacuees,” but did not provide details. 57 A few days later, in February 2010, amid press reports of an investigation into the charity by the U.S. Attorney’s office, Rep. Meeks said he was not responsible for day-to-day operations at the charity and did not know what had become of the money. 58
Ken Boehm, Rep. Gregory Meeks’ Charity Looks More Like Slush Fund, National Legal and Policy Center, January 31, 2010. 46 Id. 47 Lovett, Ross, and Smith, New York Daily News, Apr. 2, 2010. 48 Boehm, National Legal and Policy Center, Jan. 31, 2010; Editorial, Floyd Flake’s Friends, New York Post, February 2, 2010. 49 Melissa Klein and Isabel Vincent, Queens Pols Stiffed Katrina Victims, New York Post, February 7, 2010. 50 Id. 51 Id. 52 Boehm, National Legal and Policy Center, Jan. 31, 2010 53 Id. 54 Klein and Vincent, New York Post, Feb. 7, 2010. 55 Id. 56 Id. 57 Id. 58 Justin Elliott, U.S. Attorney Subpoenas NY Officials On Rep. Meeks’ Non-Profit, TPMMuckraker, February 12, 2010; Jennifer Fermino, Meeks Passes the Bucks on Scandal, New York Post, March 16, 2010.
Greater Jamaica Development Corp. According to the New York Post, federal investigators have subpoenaed Rep. Meeks’ records for information about the Greater Jamaica Development Corp., a Queens nonprofit. 59 Rep. Meeks has secured millions of dollars in public money for the charity, including $9.2 million from the Federal Transit Administration for rehabilitation of an underpass. 60 Former Rep. Flake is a member of Greater Jamaica’s board. 61 Ties to Convicted Financier Allen Stanford Rep. Meeks, a member of the Caribbean Caucus, took at least six trips to luxurious Caribbean resorts paid for by the Inter-American Economic Council, a nonprofit heavily backed by banker R. Allen Stanford, between 2003 and 2007. 62 In 2006, in response to questions from the New York Daily News about the trips, Rep. Meeks claimed the trips were for business, though his wife traveled with him. 63 “It helps my marriage,” he said. 64 Stanford Financial Group also hosted a fundraiser for Rep. Meeks on the island of St. Croix in the Virgin Islands on July 18, 2008. 65 Additionally, Stanford Financial Group’s political action committee and employees donated $15,100 to Rep. Meeks during the 2008 election cycle, making the firm the third largest contributor to Rep. Meeks’ campaign committee. 66 Rep. Meeks also reportedly tried to set up a meeting between Mr. Ahmad and Mr. Stanford after receiving the $40,000 loan from Mr. Ahmad. 67 In March 2006, after the president of Mr. Stanford’s bank in Venezuela, Gonzalo Tirado, filed a lawsuit and raised questions about whether Mr. Stanford was involved in fraud, Mr. Stanford called Rep. Meeks, a member of the House Committee on Foreign Affairs, and asked him to intervene by going directly to Venezuelan President Hugo Chavez and requesting a criminal investigation of Mr. Tirado. 68 Two former federal agents then working for Mr. Stanford were listening to the call and said Rep. Meeks agreed to pursue the matter with President Chavez. 69 Rep. Meeks traveled to Venezuela in 2006 on a trip described as a meeting to express gratitude for a program that provided heating oil to Americans. 70 In 2007, Mr. Tirado was
Vincent and Klein, New York Post, Apr. 18, 2010. Id. 61 Id. 62 Rob Barry, Michael Sallah, and Gerardo Reyes, Gregory Meeks’ Trip to Venezuela On Behalf of Stanford’s Bank Raises Ethics Questions, Miami Herald, December 27, 2009; Greg B. Smith, Meeks Not Shy About Gifts; Enjoyed 6 Caribbean Visits Thanks to an Accused Con Artist, New York Daily News, December 29, 2009. 63 Smith, New York Daily News, Dec. 29, 2009. 64 Id. 65 Complaint filed with the Federal Election Commission by the National Legal and Policy Center, October 28, 2011 available at http://nlpc.org/stories/2011/11/03/watchdog-files-fec-complaint-against-rep-meeks-stanford-fundraiser. 66 http://www.opensecrets.org/politicians/contrib.php?cycle=2008&type=I&cid=N00001171&newMem=N& recs=20. 67 Editorial, Greg Meeks’ Felonious Friends, New York Post, October 12, 2012. 68 Barry, Sallah, and Reyes, Miami Herald, Dec. 27, 2009. 69 Id. 70 Id.
indicted in Venezuela. 71 Rep. Meeks has declined to answer questions about the trip, about whether he intervened in the case of Mr. Tirado, and about his relationship with Mr. Stanford. 72 In 2009, Mr. Stanford was indicted for running a Ponzi scheme and federal investigators reportedly began examining his ties to lawmakers, including Rep. Meeks. 73 The current status of the investigation is unknown. Status of Investigations In April 2010, Rep. Meeks officially notified then-House Speaker Nancy Pelosi (D-CA) he had been served with a subpoena for documents issued by the U.S. District Court for the Southern District of New York; press reports said the subpoena was tied to the federal corruption probe into the nonprofits tied to Rep. Meeks and other Queens politicians. 74 In May 2013, federal authorities arrested former New York Senate Majority Leader John Sampson (D) on bribery charges related to the probe. 75 Mr. Ahmad reportedly helped prosecutors gather information used to bring those charges. 76 The current status of the federal investigation into Rep. Meeks is unknown, but recent news reports suggest it is ongoing. 77 For example, in June 2013, former state Sen. Shirley Huntley (D-NY), who cooperated with federal agents and taped other New York politicians suspected of corruption, said she agreed to a plan to invite suspects to her home so they could be taped, but when federal agents suggested inviting Rep. Meeks, she told them he only “meets in parks” and would be unlikely to come. 78 After conducting an investigation into Rep. Meeks’ loans, OCE referred his case to the House Ethics Committee on May 18, 2011. 79 OCE found substantial reason to believe Rep. Meeks “failed to properly disclose the $40,000 as a gift on his 2007, 2008, and 2009 Financial Disclosure Statements in violation of House rules, standards of conduct and federal law.” 80 OCE noted that both Rep. Meeks and Mr. Ahmad had declined to cooperate with OCE’s investigation of the loan, and it “appeared to lack the normal indicia, including a set interest rate or repayment terms, of a legitimate loan. Therefore, this $40,000 transferred to Representative Meeks in 2007
Id. Barry, Sallah, and Reyes, Miami Herald, Dec. 27, 2009. 73 Michael Sallah and Rob Barry, Feds Probe Banker Allen Stanford’s Ties to Congress, Miami Herald, December 29, 2009. On March 6, 2012, Mr. Stanford was found guilty on 13 of 14 counts of operating a Ponzi scheme, including charges of fraud, conspiracy and obstructing an investigation by the SEC. On June 14, 2012, he was sentenced to 110 years in prison. Press Release, Department of Justice, Allen Stanford Sentenced To 110 Years In Prison For Orchestrating $7 Billion Investment Fraud Scheme, June 14, 2012. 74 S.A. Miller and Murray Weiss, Subpoena Takes Meeks By Storm, New York Post, April 16, 2010. 75 Mitchel Maddux and Dan Mangan, State Sen. John Sampson Indicted on Embezzlement Charges, Faces 120 Years, New York Post, May 7, 2013. 76 Id. 77 Irving DeJohn and Kenneth Lovett, Smith Was ‘Willing To Sell His Soul To Be The Man Again’, New York Daily News, April 4, 2013; Maddux and Mangan, New York Post, May 7, 2013; John Marzulli, Water Gate Shirley’s Espionage Drama; Spy Pol Tells All About Her 007 Trickery, New York Daily News, June 10, 2013. 78 Id. 79 Press Release, House Committee on Ethics, 112th Congress, Statement of the Chairman and Ranking Member Regarding Mr. Michael Collins, Mr. Greg Hill, Representative Gregory Meeks, and Representative Jean Schmidt, July 1, 2011. 80 OCE Report and Findings, at 1.
appears to have been a gift.” 81 OCE recommended the House Ethics Committee further review the matter and issue subpoenas to Rep. Meeks and Mr. Ahmad. 82 In contrast, OCE found the 2010 loan from Four Investments contained an interest rate and repayment schedule, and was recorded in a written agreement that was executed and filed with the New York City Department of Finance. 83 As a result, OCE recommended dismissal of allegations concerning that loan. 84 On August 5, 2011, the House Ethics Committee said it would dismiss the allegation that Rep. Meeks received an improper loan in 2010, but would continue to review the 2007 payment. 85 On December 20, 2012, the House Ethics Committee found Rep. Meeks failed to disclose the loan on his personal financial disclosure forms, but concluded there was no evidence his failure was in bad faith or was knowing or willful and decided to take no further action against him. 86 The committee also said it could not conclude Mr. Ahmad’s loan to Rep. Meeks constituted an improper gift. 87 Rep. Meeks told the committee he had lost the loan agreement, and thus could not produce evidence of the terms of the loan. 88 The committee, however, was unable to interview Mr. Ahmad, whose lawyer said Mr. Ahmad would invoke the Fifth Amendment if the committee subpoenaed him, unless he was given immunity from prosecution. 89 Mr. Ahmad’s lawyer did tell committee staff that Rep. Meeks had not signed any loan documents and the loan carried no fixed interest rate, contradicting Rep. Meeks’ version of events. 90 The committee, however, said Mr. Ahmad’s “highly compromised credibility” meant it could not reasonably conclude Rep. Meeks had been untruthful without documentary evidence showing the money was not a loan. 91 Legal Fees Since 2010, Rep. Meeks' campaign committee and political action committee have reported paying more than $400,000 in legal fees to seven firms: $211,000 to Dorsey & Whitney, $146,627 to Perkins Coie, $31,832 to Arent Fox, $4,740 to Wiltshire & Grannis, $4,205 to Thomas V. Kenney, Jr., Esq., $10,031 to Baldassare & Mara, and $2,000 to Steptoe & Johnson.92
Id. Id. at 20. 83 Id. at 5. 84 Id. 85 Press Release, House Committee on Ethics, 112th Congress, Statement of the Chairman and Ranking Member Regarding Representative Gregory W. Meeks, August 5, 2011. 86 In the Matter of Allegations Relating to Representative Gregory Meeks, H. Rep. No. 112-709, 112th Cong., 2d Sess. 5-6 (Dec. 20, 2012). 87 Id. at 6. 88 Id. at 4. 89 Id. at 5. 90 In the Matter of Allegations Relating to Representative Gregory Meeks, H. Rep. No. 112-709, 112th Cong., 2d Sess. 6. 91 Id.; Press Release, House Committee on Ethics, 112th Congress, Statement of the Chairman and Ranking Member of the Committee on Ethics Regarding Representative Gregory W. Meeks, December 20, 2012. 92 Friends for Gregory Meeks, FEC Form 3, 2010-2013 Reports; Build America PAC, FEC Form 3X, 2010-2013 Reports.
Potential Violations False Statements on Personal Financial Disclosure Forms The Ethics in Government Act of 1978 requires all members of Congress to file financial disclosure reports. 93 Under the statute, the attorney general may seek a civil penalty of up to $50,000 against any individual who knowingly and willfully falsifies or fails to file or report any information required by the Act. 94 House Rule 26 incorporates the financial disclosure provisions of the Ethics in Government Act. 95 Federal law prohibits anyone from making “any materially false, fictitious, or fraudulent statement or representation” 96 on “a document required by law, rule, or regulation to be submitted to the Congress or any office or officer within the legislative branch.” 97 Further, personal obligations aggregating over $10,000 owed to one creditor at any time during the calendar year, regardless of repayment terms or interest rates, must be included on personal financial disclosure statements. 98 By deliberately leaving the $40,000 gift/loan from Mr. Ahmad off of his 2007 and 2008 financial disclosure forms, Rep. Meeks made at least two prohibited false statements. In addition, by mischaracterizing the $40,000 he received from Mr. Ahmad as a loan on his 2009 financial disclosure reports, when in fact the money was more likely a gift, Rep. Meeks appears to have made another false statement. In addition, given that Rep. Meeks appears to have received a discount of at least $170,000 on the price of his home, the $170,000 constitutes a gift that should have been reported on his personal financial disclosure form. The failure to include this gift is a false statement. False Statement to the House Ethics Committee Federal law also prohibits anyone from making “any materially false, fictitious, or fraudulent statement or representation” 99 to “any investigation or review, conducted pursuant to the authority of any committee, subcommittee, commission or office of the Congress, consistent with applicable rules of the House or Senate.” 100 If Rep. Meeks’ claims to the House Ethics Committee that the $40,000 he received from Mr. Ahmad was a loan, the loan had a repayment schedule and was to be repaid with interest, the terms were put in writing, and Rep. Meeks lost the loan agreement – all statements contradicted
Pub. L. No. 95-521, 92 Stat. 1824 (Oct. 26, 1978). 5 U.S.C. app. 4, § 104. 95 House Comm. on Standards of Official Conduct, House Ethics Manual, at 248 (110th Cong., 2d Sess., 2008 ed.). 96 18 U.S.C. § 1001(a)(2). 97 18 U.S.C. § 1001(c)(1). 98 House Ethics Manual, at 258 (citing 5 U.S.C. app. 4 § 102(a)(4)). 99 18 U.S.C. § 1001(a)(2). 100 18 U.S.C. § 1001(c)(2).
by Mr. Ahmad’s lawyer – were false, he may have made additional false statements in violation of 18 U.S.C. § 1001. Acceptance of a Bribe Federal law prohibits public officials from directly or indirectly demanding, seeking, receiving, accepting, or agreeing to receive or accept anything of value in return for being influenced in the performance of an official act. 101 It appears Rep. Meeks bought his house for at least $170,000 less than it was worth. If the congressman took any official action in exchange for receiving that discount, he may have accepted a bribe. Similarly, if Rep. Meeks exchanged any official action for the $40,000 he received from Mr. Ahmad, that payment also may constitute a bribe. If Rep. Meeks used his position to benefit Mr. Baldeo in exchange for discounted rent, he may have accepted bribes. Finally, if Rep. Meeks used his position in Congress for the benefit of Mr. Stanford in exchange for campaign contributions or luxury trips, he may have accepted bribes. Illegal Gratuity The illegal gratuity statute prohibits a public official from directly or indirectly demanding, seeking, receiving, accepting, or agreeing to accept anything of value personally for or because of any official act performed or to be performed by such official. 102 In considering this statute, the Supreme Court has held that a link must be established between the gratuity and a specific action taken by or to be taken by the government official. 103 If Rep. Meeks took any official action in exchange for receiving the at least $170,000 discount on his house, he may have violated the illegal gratuity statute. Similarly, if Rep. Meeks exchanged any official action for the $40,000 he received from Mr. Ahmad, that payment also may constitute an illegal gratuity. If Rep. Meeks used his position to benefit Mr. Baldeo in exchange for discounted rent, he may have violated the illegal gratuity statute. Finally, if Rep. Meeks used his position in Congress for the benefit of Mr. Stanford in exchange for campaign contributions or luxury trips, he may have violated the illegal gratuity statute. In addition, the House Ethics Committee has used the acceptance of bribes and gratuities under these statutes as a basis for disciplinary proceedings and punishment of members, including expulsion. 104
18 U.S.C. § 201(b)(2)(A). 18 U.S.C. § 201(c)(1)(B). 103 United States v. Sun-Diamond Growers of Cal., 526 U.S. 398 (1999). 104 In the Matter of Representative Mario Biaggi, H.R. Rep. No. 100-506, 100th Cong., 2d Sess. (1988) (recommending expulsion of the member from the House); In the Matter of Representative Daniel J. Flood, H.R. Rep. No. 96-856, 96th Cong., 2d Sess. (1980).
Receiving Compensation For Exerting Improper Influence A provision of the Ethics Reform Act of 1989, 5 U.S.C. § 7353, prohibits federal employees, including members of Congress and staff, from soliciting or accepting anything of value from anyone who seeks official action from the employee’s agency, does business with that agency, or has interests which may be substantially affected by the performance of the employee’s official duties. 105 House Rule 23, clause 3, similarly provides: A Member, Delegate, Resident Commissioner, or employee of the House may not receive compensation and may not permit compensation to accrue to his beneficial interest from any source, the receipt of which would occur by virtue of influence improperly exerted from his position in the Congress. If Rep. Meeks took any official action in exchange for receiving at least a $170,000 discount on his house, he may have violated 5 U.S.C. § 7353 and House Rule 23. Similarly, if Rep. Meeks exchanged any official action for the $40,000 he received from Mr. Ahmad, he may have violated 5 U.S.C. § 7353 and House Rule 23. If Rep. Meeks used his position to benefit Mr. Baldeo in exchange for discounted rent, he may have violated these provisions. Finally, if Rep. Meeks used his position in Congress for the benefit of Mr. Stanford in exchange for campaign contributions or luxury trips, he may have violated 5 U.S.C. § 7353 and House Rule 23. Official Action for Personal Gain Members of the House are prohibited from “taking any official actions for the prospect of personal gain for themselves or anyone else.” 106 House members are directed to adhere to 5 C.F.R. § 2635.702(a), issued by the U.S. Office of Government Ethics for the Executive Branch, which provides: An employee shall not use or permit use of his Government position or title or any authority associated with his public office in a manner that is intended to coerce or induce another person . . . to provide any benefit, financial or otherwise, to himself or to friends, relatives, or persons with whom the employee is affiliated in a nongovernmental capacity. If Rep. Meeks took any official action in exchange for receiving at least a $170,000 discount on his house, he may have violated 5 C.F.R. § 2635.702(a). Similarly, if Rep. Meeks exchanged any official action for the $40,000 he received from Mr. Ahmad, he may have
The House Ethics Committee interprets this provision to apply to accepting campaign contributions, but not soliciting them. House Comm. on Standards of Official Conduct, “Memorandum For All Members, Officers and Employees,” Rules Governing (1) Solicitation by Members, Officers and Employees in General, and (2) Political Fundraising Activity in House Offices, April 25, 1997; House Ethics Manual, at 143-44, 150. 106 House Comm. on Standards of Official Conduct, “Memorandum For All Members, Officers and Employees,” Prohibition Against Linking Official Actions to Partisan or Political Considerations, or Personal Gain, May 11, 1999.
violated 5 C.F.R. § 2635.702(a). If Rep. Meeks used his position to benefit Mr. Baldeo in exchange for discounted rent, he may have violated this provision. Finally, if Rep. Meeks used his position in Congress for the benefit of Mr. Stanford in exchange for campaign contributions or luxury trips, he may have violated 5 C.F.R. § 2635.702(a). Unfairly Discriminating By Dispensing Special Favors The Code of Ethics for Government Service provides that government officials should: Never discriminate unfairly by the dispensing of special favors or privileges to anyone, whether for remuneration or not; and never accept for himself or his family, favors or benefits under circumstances which might be construed by reasonable persons as influencing the performance of his official duties. 107 If Rep. Meeks took any official action in exchange for receiving at least a $170,000 discount on his house, he may have dispensed special favors in violation of the Code of Ethics for Government Service. Similarly, if Rep. Meeks exchanged any official action for the $40,000 he received from Mr. Ahmad, he may have dispensed special favors in violation of the Code of Ethics for Government Service. If Rep. Meeks used his position to benefit Mr. Baldeo in exchange for discounted rent, he may have violated this provision. Finally, if Rep. Meeks used his position in Congress for the benefit of Mr. Stanford in exchange for campaign contributions or luxury trips, he may have dispensed special favors in violation of the Code of Ethics for Government Service. Gift Rule Violations Rule 25, clause 5(a)(1)(A)(i) of the House rules states that “a Member, Delegate, Resident Commissioner, officer, or employee of the House may not knowingly accept a gift except as provided in this clause.” The rules define “gift” to mean “a gratuity, favor, discount, entertainment, hospitality, loan, forebearance, or other item having monetary value.” 108 While members and staff may accept gifts on the basis of personal friendship, no gifts valued at over $250 may be accepted on this basis absent a written determination by the House Ethics Committee. 109 Further, the donor, description and value of any gifts aggregating over $335 from a single source must be disclosed on a member’s personal financial disclosure statement. 110 Rule 25, clause 5(a)(3)(R)(v) allows members, officers, and employees to accept opportunities and benefits that are available to a wide group, specifically providing that they may accept “loans from banks and other financial institutions on terms generally available to the public.” The House Ethics Committee has interpreted this rule:
72 Stat., Part 2, B12, H. Con. Res. 175, 85th Cong. (adopted July 11, 1958); House Ethics Manual, at 20. Rule 25, cl. 5(a)(2)(A). 109 Rule 25, cl. 5(a)(5); House Ethics Manual, at 40. These determinations are not public. Id. 110 5 U.S.C. app. 4 § 102(a)(2); House Ethics Manual, at 84, 258-59. This amount has since been increased to $350.
to allow the acceptance of loans from persons other than financial institutions, provided that they are on terms which satisfy the requirements which the Committee had previously utilized in evaluating loans: that is, the terms are commercially reasonable, including requirements for repayment and a reasonable rate of interest. 111 The Committee cautioned, however, that to ensure a loan is on commercially reasonable terms, before entering into any loan arrangement with someone other than a financial institution, members and staff “should contact the Committee for a review of the proposed terms, and a determination by the Committee on whether the loan is acceptable under the gift rule. Those who accept such a loan without Committee consideration run a risk of being found in violation of the gift rule, and possible other provisions of law as well.” 112 Discounted House Price It appears Rep. Meeks was permitted to purchase his house for a price one appraiser estimated was at least $170,000 less than the home’s value. Because discounts constitute gifts, Rep. Meeks appears to have accepted an improper gift by paying less than the home’s true value. Gift of $40,000 Even though the House Ethics Committee said it could not conclude Mr. Ahmad’s $40,000 alleged loan was a gift, given that Rep. Meeks failed to seek the committee’s approval of it, and failed to repay any portion of the money until the FBI began investigating the matter, this so-called loan was more likely an impermissible gift. Loan of $40,000 Alternatively, although there is no indicia suggesting the $40,000 was a loan from Mr. Ahmad – no loan agreement, no loan term, no payment schedule, and no cancelled checks – if the money was a loan rather than a gift, Rep. Meeks still violated federal law and House rules. First, House rules require members and staff who wish to accept a personal loan from someone other than a financial institution to seek permission from the Committee before accepting the loan. Rep. Meeks has admitted he never put the matter to the Committee. As a result, Rep. Meeks violated House rules by accepting the $40,000 from Mr. Ahmad. Second, the terms for loans accepted from anyone other than a financial institution must be commercially reasonable. Here, the absence of a loan term, payment schedule, and defined interest rate demonstrate the loan was not made on commercially reasonable terms. As a result, Rep. Meeks violated House rules by accepting the loan.
House Comm. on Standards of Official Conduct, “Memorandum from Committee on Standards of Official Conduct,” Gift Rule Provisions Applicable to Loans to Members, Officers, and Employees, May 23, 1997 (found in House Ethics Manual, at 381-384). 112 Id.
Third, as explained above, personal obligations aggregating over $10,000 owed to one creditor at any time during the calendar year, regardless of repayment terms or interest rate, must be included on personal financial disclosure statements, and failing to report them is a federal crime. 113 Here, by deliberately failing to include the loan on his 2007 and 2008 financial disclosure forms, and by including it on his 2009 forms only after the FBI questioned the loan, Rep. Meeks appears to have violated federal law. Conduct Not Reflecting Creditably on the House House Rule 23 requires all members of the House to conduct themselves “at all times in a manner that reflects creditably on the House.” 114 This ethics standard is considered to be “the most comprehensive provision” of the code. 115 When this section was first adopted, the Select Committee on Standards of Official Conduct noted it was included within the Code to deal with “flagrant” violations of the law that reflect on “Congress as a whole,” which might otherwise go unpunished. 116 This rule has been relied on by the committee in numerous prior cases in which the committee found unethical conduct including: the failure to report campaign contributions, 117 making false statements to the committee, 118 criminal convictions for bribery, 119 accepting illegal gratuities, 120 and accepting gifts from persons with interest in legislation in violation of the gift rule. 121 By purchasing a house for at least $170,000 less than its value, Rep. Meeks acted in a manner that brings discredit to the House. Similarly, by taking $40,000 from a New York businessman without any kind of loan agreement or repayment schedule, and then – only after a newspaper discovered and questioned the transaction – describing the money as a loan and suddenly repaying it, Rep. Meeks acted in a manner that brings discredit to the House. Finally,
House Ethics Manual, at 258 (citing 5 U.S.C. App. 4 § 102(a)(4)). Rule 23, cl. 1. 115 House Ethics Manual, at 12. 116 House Comm. on Standards of Official Conduct, Report Under the Authority of H. Res. 418, H. Rep. No. 1176, 90th Cong., 2d Sess. 17 (1968). 117 House Comm. on Standards of Official Conduct, In the Matter of Representative John J. McFall, H. Rep. No. 951742, 95th Cong., 2d Sess. 2-3 (1978) (Count 1); In the Matter of Representative Edward R. Roybal, H. Rep. No. 95-1743, 95th Cong., 2d Sess. 2-3 (1978). 118 House Comm. on Standards of Official Conduct, In the Matter of Representative Charles H. Wilson (of California), H. Rep. No. 95-1741, 95th Cong., 2d Sess. 4-5 (1978); H. Rep. No. 95-1743 (Counts 3-4). 119 House Comm. on Standards of Official Conduct, In the Matter of Representative Michael J. Myers, H. Rep. No. 96-1387, 96th Cong., 2d Sess. 2, 5 (1980); see 126 Cong. Rec. 28953-78 (Oct. 2, 1980) (debate and vote of expulsion); In the Matter of Representative John W. Jenrette, Jr., H. Rep. No. 96-1537, 96th Cong., 2d Sess. 4 (1980) (Member resigned); In the Matter of Representative Raymond F. Lederer, H. Rep. No. 97-110, 97th Cong., 1st Sess. 4, 16-17 (1981) (Member resigned after Committee recommended expulsion). In another case, the Committee issued a Statement of Alleged Violation concerning bribery and perjury, but took no further action when the Member resigned (In the Matter of Representative Daniel J. Flood, H. Rep. No. 96-856, 96th Cong., 2d Sess. 416, 125-126 (1980)). 120 House Comm. on Standards of Official Conduct, In the Matter of Representative Mario Biaggi, H. Rep. No. 100506, 100th Cong., 2d Sess. 7, 9 (1988) (Member resigned while expulsion resolution was pending). 121 House Comm. on Standards of Official Conduct, In the Matter of Representative Charles H. Wilson (of California), H. Rep. No. 96-930, 96th Cong. 2d Sess. 4-5 (1980); see 126 Cong. Rec. 13801-20 (June 10, 1980) (debate and vote of censure).
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