Congressman Indicted in Ariz. Land Deal
By PAUL DAVENPORT
The Associated Press
Friday, February 22, 2008; 9:25 PM
PHOENIX -- Federal authorities announced corruption charges Friday accusing Rep. Rick Renzi of engineering a swap of federally owned mining land to benefit himself and a former business partner and stealing from his insurance company's clients.
A lengthy federal investigation that had put the three-term Republican congressman under a cloud for more than a year culminated in a 26-page indictment issued Thursday against him and two other men. Renzi announced Aug. 23 that he wouldn't run for re-election in Arizona's mostly rural 1st Congressional District.
"Congressman Renzi deprived the citizens of Arizona of his honest services as a United States elected representative," U.S. Attorney Diane J. Humetewa said.
The indictment's 35 counts include charges of conspiracy, wire fraud, money laundering, insurance fraud and extortion. Most of the charges allege Renzi, 49, used his office to promote a land swap to collect on a debt owed by former Renzi associate James W. Sandlin of Sherman, Texas.
Renzi, Sandlin and Andrew Beardall of Rockville, Md., another of the congressman's former business associates, were to be arraigned in Tucson on March 6. Convictions on the most serious charges carry maximum penalties of 20 years in prison.
Renzi has denied wrongdoing, and his attorney, Kelly Kramer, issued a brief statement saying Renzi would "fight these charges until he is vindicated and his family's name is restored."
GOP leadership, however, immediately pressured Renzi to step down.
House Minority Leader John Boehner of Ohio called the charges against Renzi "completely unacceptable for a member of Congress" and said Renzi should "seriously consider whether he can continue to effectively represent his constituents under these circumstances."
Renzi had been considered in political peril ever since FBI agents raided his wife's insurance business in the southern Arizona town of Sonoita in October 2006. He immediately stepped down from the House Intelligence Committee, and followed that by taking a leave of absence from the House Financial Services and Natural Services committees.
Authorities accuse Renzi of using his position as a member of the Natural Resources Committee to push land deals for Sandlin. Renzi wanted Sandlin to make money so the congressman could be paid for an earlier land deal they made together, according to the indictment.
Attorneys for Sandlin did not immediately return a call seeking comment.
In 2005, Renzi promised to support proposed land exchanges sought by an unidentified investment firm and an unidentified company that owned mineral rights to a copper deposit on federal property in his district, but only if they bought property owned by Sandlin, the indictment states.
The mining company didn't make the purchase, prompting Renzi to tell the business' leaders, "No Sandlin property, no bill," the indictment states.
The investment group agreed to purchase Sandlin's land, and Renzi received $733,000 from Sandlin for helping with the sale, the indictment said.
The identities of the company and the investment group were not specified in the indictment, but they were previously identified as Resolution Copper of Superior, Ariz., and Preserve Petrified Forest Land Investors of Las Vegas, Nev.
Resolution Copper on Friday issued a statement saying that it did not buy the Sandlin property after learning that Sandlin and Renzi "had a business relationship that made us uncomfortable."
Officials from the investment group could not immediately be reached Friday.
"Renzi was having financial difficulty throughout 2005 and needed a substantial infusion of funds to keep his insurance business solvent and to maintain his personal lifestyle," the indictment reads.
The 27 counts in that part of the indictment included conspiracy, wire fraud and money laundering.
Other charges including conspiracy, extortion and insurance fraud relate to allegations that Renzi funneled cash from his insurance firm in 2002 to fund his first campaign. Prosecutors allege Renzi and Beardall embezzled more than $400,000 in insurance premiums from Renzi's insurance business and misled customers and state insurance regulators.
Beardall's lawyer, Lucius T. Outlaw III [Ed. Note: Lucius T Outlaw III?!!], said his client is confident the facts will show he never tried to defraud the government or injure anyone.
Renzi is one of 24 co-chairmen for Sen. John McCain's presidential campaign in Arizona. McCain seemed surprised when asked about the indictment Friday at a campaign stop in Indianapolis, choosing his words carefully, shaking his head and speaking slowly.
"I'm sorry. I feel for the family; as you know, he has 12 children," McCain said. "But I don't know enough of the details to make a judgment. These kinds of things are always very unfortunate. ... I rely on our Department of Justice and system of justice to make the right outcome."
Government watchdog group Citizens for Responsibility and Ethics in Washington applauded the Justice Department for holding Renzi "accountable given that his House colleagues refused to do so." The group has had Renzi on its "Most Corrupt Members of Congress" list for the last three years.
"Bluster aside, this latest in a string of congressional indictments demonstrates that Congress simply will not police itself," said CREW executive director Melanie Sloan.
The Renzi investigation began during the tenure of then-U.S. Attorney Paul Charlton, a Bush administration appointee who was forced from office as part of a Justice Department purge of U.S. attorneys around the country.
There has been speculation that the Renzi case figured in Charlton's ouster, but Humetewa said her office "had tremendous support" from the Justice Department and other federal law enforcement agencies.
