Arizona congressman Renzi indicted in fraud - East Valley Tribune: News

Arizona congressman Renzi indicted in fraud

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Posted: Friday, February 22, 2008 8:41 am | Updated: 6:08 pm, Thu Oct 9, 2014.

Rep. Rick Renzi was charged with 35 counts of conspiracy, fraud, money laundering and extortion in an indictment announced Friday.

Read the statement from lawyers representing Rep. Rick Renzi (pdf)

Read indictment against Republican Rep. Rick Renzi

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Florence residents react to Renzi's indictment

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The third-term Republican from Arizona is charged with using the power of his office, and in particular his spot on the House Natural Resources Committee, to push through a land sale that he personally benefited from in 2005. Renzi also is accused of funneling more than $100,000 from a longtime business associate into his 2002 campaign for Congress. Renzi was elected to Arizona's 1st Congressional District, a largely rural district that takes in sweeping portions of the northern, central and eastern portions of the state, including as parts of eastern Pinal County.

Other charges in the indictment allege Renzi conspired to embezzle money from a Virginia insurance company he owed by misappropriating more than $400,000 in premiums. He used most of that money to help finance his 2002 campaign, according to the charges.

"Congressman Renzi misused his public office by forcing a land sale that would financially benefit himself and a business associate," U.S. Attorney Diane Humetewa said at a news conference in Phoenix on Friday. "In doing so, he betrayed the trust of the citizens of Arizona."

Renzi's lawyers issued a statement Friday noting his father, a retired Army general, recently died and on Thursday was buried at Arlington National Cemetery. Hours after the funeral, Renzi was informed of the indictment when he was contacted by the media, according to the statement from attorneys Reid Weingarten and Kelly Kramer, both based in Washington, D.C.

The attorneys said Renzi did nothing wrong and that he will fight the charges until he is vindicated and his family's name is restored.

The reaction in Washington was swift. House Minority Leader John Boehner issued a statement pressing Renzi to resign.

"I have made it clear that I will hold our members to the highest standards of ethical conduct," said Boehner, R-Ohio. "The charges contained in this indictment are completely unacceptable for a member of Congress, and I strongly urge Rep. Renzi to seriously consider whether he can continue to effectively represent his constituents under these circumstances."

Renzi and his wife Roberta have 12 children and maintain large homes in Flagstaff and in a suburb in Virginia outside of Washington, D.C.

Among the allegations in the indictment, is the claim that Renzi used his position to force an investment group looking to do a land trade with the federal government to buy property in Cochise County owned by a business associate, James Sandlin.

Sandlin, 56, of Sherman, Texas, also charged in the indictment, was a business partner with Renzi in a Kingman development company. In 2003, Sandlin bought out Renzi, paying him $200,000 up front and signing a note promising to pay an additional $800,000 to the congressman, according to the indictment.

In early 2005, a mining company and investment group were competing to put together a land swap that would allow them to trade privately owned land for federal property near Superior.

Renzi insisted to both groups that he would not push the land swap unless a piece of land owned by Sandlin was included in their proposals, according to the indictment. He did not disclose Sandlin owed him money from the sale of their company.

"No Sandlin property, no bill," the indictment quotes Renzi as saying.

The mining company, Resolution Copper Co., was unable to reach an agreement with Sandlin. The investment group did agree to buy the Sandlin property for $4.6 million.

As a result of that land sale, Sandlin paid Renzi $733,000 in 2005, a payment that Renzi failed to disclose as required by law, according to the indictment.

Resolution sought to trade 5,000 acres of private land for 3,000 acres of federally owned property near Superior for a copper mine that could become the largest in North America.

The investment group that did buy Sandlin's alfalfa fields near Sierra Vista was identified in a Wall Street Journal article last year as Petrified Forest. Among the principals was former Arizona Gov. Bruce Babbitt, who served as U.S. Interior secretary under President Bill Clinton.

The Federal Election Commission concluded in 2004 that Renzi had received $360,000 in illegal corporate funds from the company he and Sandlin were involved in, according to the Journal.

After Resolution officials complained that Petrified Forest was getting favored treatment, Renzi dropped his support for the land swap, according to the Journal.

The indictment also alleges that in 2002, Sandlin issued $121,000 in corporate checks to Renzi, who then transferred $111,000 to his congressional campaign account.

Resolution issued a statement Friday by legal counsel Larry Stevens indicating that the company cooperated with investigators since the early days of the investigation.

The statement also summarized the company's position concerning the proposed transaction.

"In early 2005, Rep. Renzi asked the company to look at the Sandlin property and include it in our land exchange. In the course of our due diligence we learned that Rep. Renzi and James Sandlin had a business relationship that made us uncomfortable. We did not buy the property," Stevens said in the statement.

The second conspiracy outlined in the indictment involves an insurance agency called Renzi and Co. Inc., which the congressman owned.

The company acted as an insurance agent, collecting premiums from customers and forwarding them to the companies that actually provided the coverage. However, Renzi conspired with company president Andrew Beardall, 36, a Maryland attorney, to embezzle money from the agency, according to the indictment. About $400,000 in premiums was misappropriated, according to the charges.

Renzi diverted more than $300,000 from the scheme into his campaign accounts for the 2002 election, the indictment states. Renzi also concealed the source of those funds in his campaign disclosure statements, according to the indictment.

The federal investigation began in June 2005, said FBI agent Amy Hess. She declined say what information led to the probe. FBI agents spent 2,500 man-hours on the investigation and analyzed hundreds of thousands of documents, she said.

Tribune writers Gary Grado and Nick Martin contributed to this report.

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