New report points to “clear violation” of ethics rules; House Ethics Manual shows Rep. Hagedorn himself is responsible for spending
After news broke this summer that Congressman Jim Hagedorn has spent more taxpayer dollars than any other member of Congress this year, a new bombshell report from the Minnesota Reformer today found that Hagedorn’s office has been funneling over a hundred thousand dollars to one of his own employees. While Rep. Hagedorn is already trying to throw his chief-of-staff under the bus for the scandal, the House Ethics Manual clearly states, “The misuse of the funds and other resources that the House of Representatives entrusts to Members for the conduct of official House business is a very serious matter…while any House employee who makes improper use of House resources is subject to disciplinary action by the Standards Committee, each Member should be aware that he or she may be held responsible for any improper use of resources that occurs in the Member‘s office.”
As ethics experts told the Reformer, Hagedorn’s misuse of taxpayer dollars to line the pockets of his own employees is “a clear violation of government ethics rules” that presents “neon signs flashing red signals all over the place.” As Meredith McGehee, the executive director of a bipartisan democracy reform group put it, “…that’s a problem… Anyone who is in your employ in any shape or form, you shouldn’t be doing business with.”
Minnesota Reformer: Congressman spent tax dollars on vendor owned by a member of his staff
By Daniel Newhauser, August 15, 2020
WASHINGTON — 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.
…Hagedorn, a self-described fiscal conservative who represents the state’s 1st District, has the distinction of being the highest-spending Congressman so far this year, blowing through more than half a million dollars in the first three months of 2020 — nearly 40% of his yearly taxpayer-funded office budget. He’s spent almost twice as much as the average House of Representatives office, according to Legistorm, a company that tracks congressional budgets.
Hagedorn spent roughly $280,000, or about 19% of his entire annual budget, just on printing and sending mail to constituents between Jan. 1 and March 31, according to Congressional spending records. That’s close to what the average Congressional office spent on payroll and expenses combined during that time frame, Legistorm found.
Of that amount, Hagedorn spent $60,240 on printing with a company called Invocq Technologies LLC. He also previously spent $41,088 with that company in September 2019, according to congressional spending records. Those records only reflect spending through the end of March, as records for the second quarter of the year are not yet publicly available.
Texas business registration documents show that Invocq Technologies was formed in 2011 and is owned by John Brevard Sample, of Houston. Sample is listed as the chief financial officer, chief technology officer and director of the company as well as its registered agent.
…since January 2019, Sample has drawn a $45,000 annual salary from Hagedorn’s office as a part-time employee handling digital media, according to public listings of congressional staff.
“Well that’s a problem,” said Meredith McGehee, executive director of Issue One, a bipartisan democracy reform nonprofit. “Anyone who is in your employ in any shape or form, you shouldn’t be doing business with.”
Although Congressional conflict of interest rules are notoriously opaque, McGehee pointed to the House Ethics Manual, produced by the House Ethics Committee, which lays out specific rules about how congressmen can or can’t spend their office budgets. The manual includes an example that McGehee said applies cleanly to this case.
…When contacted by the Reformer last week, Hagedorn’s office, maintained this spending was not against the rules.
…In the nearly 10 years since Invocq Technologies was founded, it seems to have done no significant business. The company’s simple website states the “small firm prides itself in building connections between worlds, fostering cultural appreciation and new markets.” It lists no past work and makes no mention of the owners.
…Then, on Nov. 5, 2018, one day before the elections that brought Hagedorn into office, Sample reinstated the company without his former business partner, after paying all the fees and taxes.
…Sample joined the payroll a week later.
…Hagedorn’s office also did not respond when asked who owns Abernathy West, a company that was formed in August 2019.
Hagedorn paid Abernathy West nearly $340,000 for printing services between October and March, according to his office’s spending records, with more than a dozen payments ranging from about $7,000 to more than $62,000.
…The business was incorporated as a limited liability company in Delaware on Aug. 20, 2019, using LegalZoom, an online platform that allows people to create businesses, according to records kept by the Delaware Division of Corporations. As an LLC, Abernathy West doesn’t have to file annual reports, and since the company was created through a third-party registered agent, the records don’t reflect who owns or manages the company. A spokesman for the Delaware Division of Corporations said the state doesn’t even have that information.
…“This is like neon signs flashing red signals all over the place,” said Norm Ornstein, a government ethics expert and resident scholar at the conservative American Enterprise Institute. “This is a real test of the Ethics process. If you don’t crack down on something like this, you’ve really lost your way as an Ethics Committee.”
Bryson Morgan, a former investigator with the House Ethics Committee who now works for a private law firm, cautioned that while the rules seem clear-cut in print, they’re often enforced loosely because “member offices are treated like these little fiefdoms that they control” by the overseeing committees.
….Morgan said that, if nothing else, these revelations raise questions about whether the congressman is overseeing his pool of government money wisely and getting services at a fair market rate, especially given Invocq Technologies and Abernathy West have no known history of doing the work Hagedorn contracted them to do.
…Also in stark contrast to Hagedorn, most offices who do spend big money on franking use established direct mail firms that have long histories of working with congressmen and are transparent, sometimes even self-promotional, about who owns them.
Neither Abernathy West nor Invocq Technologies appear to have done business with any congressional offices in at least the last 10 years, since congressional spending records have been available online.
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