Adopted by the Investigative Subcommittee on June 30, 2020
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ADOPTED BY THE INVESTIGATIVE SUBCOMMITTEE ON JUNE 30, 2020 116TH CONGRESS, 2ND SESSION U.S. HOUSE OF REPRESENTATIVES COMMITTEE ON ETHICS IN THE MATTER OF ALLEGATIONS RELATING TO REPRESENTATIVE DAVID SCHWEIKERT June 30, 2020 Mr. PHILLIPS, from the Investigative Subcommittee, submitted the following REPORT To the Committee on Ethics INVESTIGATIVE SUBCOMMITEE Dean Phillips, Minnesota Bill Flores, Texas Chairman Ranking Member Jamie Raskin, Maryland John Katko, New York REPORT STAFF Thomas A. Rust, Chief Counsel/Staff Director Brittney Pescatore, Director of Investigations Janet M. Foster, Counsel C. Ezekiel Ross, Counsel Danielle Appleman, Investigator Caroline Taylor, Investigative Clerk ii C O N T E N T S I. INTRODUCTION ..................................................................................................... 1 II. PROCEDURAL HISTORY...................................................................................... 3 III. FINDINGS .................................................................................................................. 6 A. FINDINGS RELATING TO CAMPAIGN FINANCE ........................................................... 8 1. Overview............................................................................................................... 8 2. Failure to Disclose Metro Phoenix Bank Loan .................................................. 11 3. Falsely Reported $100,000 Personal Loan and Falsely Reported $100,000 Disbursements ........................................................................................................... 20 4. Irregularities with August 2012 $130,000 Personal loan .................................. 30 5. Failure to Report Contributions and Receipts ................................................... 36 6. Campaign Contributions by Congressional Staff............................................... 40 7. Allegations that Representative Schweikert Accepted Gifts from Staff & Misused Campaign Funds for Personal Expenditures ............................................................ 53 B. FINDINGS RELATING TO MISUSE OF OFFICIAL RESOURCES ........................................ 60 1. Overview............................................................................................................. 60 2. Findings Relating to Misuse of Official Resources for Campaign Purposes ..... 61 3. Findings Relating to Pressuring Staff to Perform Campaign Work .................. 73 4. Findings Relating to Mixed-Purpose Trip ......................................................... 80 5. Findings Related to Allegations of MRA Misuse ............................................... 84 6. Allegations that Representative Schweikert May Have Authorized an Improper “Severance” Payment to Employee B ....................................................................... 87 C. FINDINGS RELATING TO FINANCIAL DISCLOSURE STATEMENTS ................................ 91 D. LACK OF CANDOR AND DILIGENCE DURING THE INVESTIGATION ............................. 94 IV. RECOMMENDATION FOR SANCTION OF REPRESENTATIVE SCHWEIKERT ............................................................................................................... 97 V. ADVISORY RECOMMENDATIONS ................................................................ 100 VI. CONCLUSION ...................................................................................................... 102 APPENDIX A: Statement of Alleged Violations, Adopted June 30, 2020 APPENDIX B: Reports and Findings of the Office of Congressional Ethics APPENDIX C: Stipulations APPENDIX D: Exhibits to the Report of the Investigative Subcommittee APPENDIX E: Views of Representative Schweikert iii 116TH CONGRESS, 2ND SESSION U.S. HOUSE OF REPRESENTATIVES COMMITTEE ON ETHICS IN THE MATTER OF ALLEGATIONS RELATING TO REPRESENTATIVE DAVID SCHWEIKERT June 30, 2020 REPORT OF THE INVESTIGATIVE SUBCOMMITTEE I. INTRODUCTION On June 14, 2018, the Committee on Ethics (Committee) impaneled this Investigative Subcommittee (ISC) to investigate allegations referred by the Office of Congressional Ethics (OCE) that Representative David Schweikert may have authorized the misuse of his Members’ Representational Allowance (MRA) for improper purposes and that he may have accepted improper campaign contributions from his then-Chief of Staff, Richard Oliver Schwab. On December 20, 2018, the Committee unanimously voted to expand the ISC’s jurisdiction to include allegations raised in a second referral from OCE that Representative Schweikert may have used official resources to benefit his campaigns, pressured official staff to perform campaign activities, authorized compensation to an employee who did not perform duties commensurate with the compensation the employee received, received loans or gifts from a congressional employee, and omitted required information from his House financial disclosure statements and Federal Election Commission (FEC) candidate committee reports. The ISC conducted a detailed investigation into these numerous and wide-ranging allegations. Through its investigation, the ISC determined that Representative Schweikert’s campaign committees made a series of reporting errors, ranging from technical errors to more substantive falsehoods, and his campaign accepted hundreds of thousands of dollars in impermissible advances from Mr. Schwab. The ISC also found that Representative Schweikert’s campaign funds were used to reimburse staff for expenditures made for his personal use, including babysitting services, meals, dry-cleaning, and travel. While those campaign finance violations were ongoing, Representative Schweikert presided over a congressional office in which official resources were misused to support his campaign. This misuse primarily centered around Mr. Schwab, who Representative Schweikert frequently pressured to perform campaign work, and who expected other congressional staff to assist in campaign-related tasks. As discussed further in this Report, the ISC found some allegations raised by OCE’s referrals could not be substantiated. Representative Schweikert has attempted to cast himself as an unknowing participant or victim in response to many of these allegations and sought to lay much of the blame at the feet of Mr. Schwab and the compliance professionals he trusted to oversee his campaign committees. 1 The ISC is well-aware that Members have demanding schedules that do not afford them the time to tend to the minutiae of every campaign transaction or congressional office task to ensure their campaigns and congressional offices operate in full compliance with relevant rules and laws. Members often delegate such oversight and compliance responsibilities to others, as Representative Schweikert did with Mr. Schwab in this matter and with individuals employed by his campaign compliance firm. But Members must be held to account when they: know or should know of ethical violations that occur within the organizations they oversee; abdicate their duty to supervise the staff to whom they delegate substantial responsibilities; disregard concerns as they are brought to their attention; and hamstring compliance professionals by not supplying necessary information or providing false information. Representative Schweikert not only engaged in such conduct, in some instances (particularly with respect to campaign reporting requirements), he was a direct participant in conduct that resulted in violations. When the time came for him to address allegations of his wrongdoing, Representative Schweikert made repeated assurances that he intended to cooperate. Representative Schweikert did provide a substantial document production and made several meaningful efforts towards cooperation, and the ISC has considered those actions in assessing the matter. Nonetheless, Representative Schweikert did not follow-through on many of his assurances and delayed in providing any meaningful response to key issues under investigation. The ISC was troubled that he waited over a year to address allegations of serious reporting violations detailed in OCE’s Second Referral, after repeatedly attempting to waive off the matter as the product of inadvertent errors. Moreover, his testimony before the ISC, which was interspersed with incoherent or misleading statements that were contradicted by the record, fell well short of the duty of candor Members are expected to provide. Based on the totality of misconduct, the ISC unanimously concluded that there is substantial reason to believe that Representative Schweikert violated House Rules and other laws, rules, and standards of conduct, and that a House-level sanction is warranted. On June 30, 2020, after negotiating a resolution of this matter with Representative Schweikert, the ISC adopted a Statement of Alleged Violations (SAV) against Representative Schweikert finding that he engaged in a series of misconduct that did not reflect creditably on the House in violation of House Rule XXIII, clause 1, and failed to uphold the laws and regulations of the United States in violation of paragraph 2 of the Code of Ethics for Government Service. As part of the negotiated resolution, Representative Schweikert agreed to admit to all the violations in the SAV and waive further procedural steps. The ISC, by this Report, unanimously recommends that the full Committee submit a public report to the House with a resolution that Representative Schweikert be reprimanded for his conduct and fined in the amount of $50,000. Representative Schweikert has agreed to accept