[House Report 116-465]
[From the U.S. Government Publishing Office]
House Calendar No. 87
116th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 116-465
======================================================================
IN THE MATTER OF ALLEGATIONS
RELATING TO REPRESENTATIVE
DAVID SCHWEIKERT
----------
R E P O R T
OF THE
COMMITTEE ON ETHICS
BOOK 1 OF 2
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
July 30, 2020.--Referred to the House Calendar and ordered to be
printed
-----------------------------------------------------------------------
House Calendar No. 87
116th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 116-465
======================================================================
IN THE MATTER OF ALLEGATIONS
RELATING TO REPRESENTATIVE
DAVID SCHWEIKERT
__________
R E P O R T
OF THE
COMMITTEE ON ETHICS
BOOK 1 OF 2
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
July 30, 2020.--Referred to the House Calendar and ordered to be
printed
__________
U.S. GOVERNMENT PUBLISHING OFFICE
40-948 WASHINGTON : 2020
------------------------------------------------------------------------
COMMITTEE ON ETHICS
THEODORE E. DEUTCH, Florida, KENNY MARCHANT, Texas,
Chairman Ranking Member
GRACE MENG, New York GEORGE HOLDING, North Carolina
SUSAN WILD, Pennsylvania JACKIE WALORSKI, Indiana
DEAN PHILLIPS, Minnesota MICHAEL GUEST, Mississippi
ANTHONY BROWN, Maryland
REPORT STAFF
Thomas A. Rust, Chief Counsel/Staff Director
Brittney L. Pescatore, Director of Investigations
David Arrojo, Counsel to the Chairman
Chris Donesa, Counsel to the Ranking Member
Janet M. Foster, Counsel
C. Ezekiel Ross, Counsel
Danielle Appleman, Investigator
Caroline Taylor, Investigative Clerk
LETTER OF TRANSMITTAL
----------
House of Representatives,
Committee on Ethics,
Washington, DC, July 30, 2020.
Hon. Cheryl L. Johnson,
Clerk, House of Representatives,
Washington, DC.
Dear Ms. Johnson: Pursuant to clauses 3(a)(2) and 3(b) of
Rule XI and clause 5(a)(5) of Rule XIII of the Rules of the
House of Representatives, we herewith transmit the attached
report, ``In the Matter of Allegations Relating to
Representative David Schweikert.''
Sincerely,
Theodore E. Deutch,
Chairman.
Kenny Marchant,
Ranking Member.
C O N T E N T S
----------
Page
I. INTRODUCTION.....................................................1
II. PROCEDURAL HISTORY...............................................2
III. FINDINGS.........................................................3
IV. RESPONSE TO REPRESENTATIVE SCHWEIKERT'S VIEWS....................5
V. REASONS FOR RECOMMENDED SANCTION.................................7
VI. STATEMENT UNDER HOUSE RULE XIII, CLAUSE 3(C).....................8
ATTACHMENT: Report of the Investigative Subcommittee and Appendices
Calendar No. 87
116th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 116-465
======================================================================
.
IN THE MATTER OF ALLEGATIONS RELATING TO
REPRESENTATIVE DAVID SCHWEIKERT
_______
July 30, 2020.--Referred to the House Calendar and ordered to be
printed
_______
Mr. Deutch, from the Committee on Ethics,
submitted the following
R E P O R T
I. INTRODUCTION
The Committee on Ethics (Committee) hereby submits this
privileged report pursuant to House Rule XI, clause 3(a)(2) and
House Rule XIII, clause 5(a)(5), which authorize the Committee
to investigate any alleged violation by a Member, officer, or
employee of the House of Representatives, of the Code of
Official Conduct or any law, rule, regulation, or other
standard of conduct applicable to the conduct of such Member,
officer, or employee and to submit to the House a privileged
report recommending action by the House as a result of such
investigation.
This report: (1) summarizes the Committee's investigation
of Representative David Schweikert relating to violations of
House Rules, the Code of Ethics for Government Service, federal
laws and other applicable standards related to campaign finance
violations and reporting errors by his authorized campaign
committees, the misuse of his Members' Representational
Allowance for unofficial purposes, pressuring official staff to
perform campaign work, and his lack of candor during the
investigation; (2) adopts the attached report of the
Investigative Subcommittee (ISC) in the Matter of
Representative Schweikert; \1\ (3) addresses Representative
Schweikert's views on the ISC Report; and (4) recommends to the
House of Representatives that, pursuant to Article I, Section
5, Clause 2 of the United States Constitution and Committee
Rule 24(e), the House of Representatives adopt this report and,
by such action, Representative Schweikert be reprimanded and
fined $50,000.
---------------------------------------------------------------------------
\1\ The Committee thanks the Members of the ISC for their efforts
and attention to this matter.
---------------------------------------------------------------------------
II. PROCEDURAL HISTORY
On April 16, 2018, the Office of Congressional Ethics (OCE)
sent referrals (OCE's First Referrals) to the Committee
recommending that the Committee further review allegations
that: Representative Schweikert and his then-Chief of Staff,
Richard Oliver Schwab, may have misused or authorized the
misuse of House resources; Representative Schweikert may have
failed to ensure that his campaign committees complied with
applicable rules regarding contributions from congressional
employees; Mr. Schwab may have improperly made personal outlays
on behalf of Representative Schweikert's principal campaign
committees; and Mr. Schwab may have received income beyond the
outside earned income limit for senior staff. On June 14, 2018,
the Committee unanimously voted to establish an ISC to review
the allegations in OCE's First Referrals.\2\
---------------------------------------------------------------------------
\2\ On July 9, 2018, Mr. Schwab left House employment after
resigning from his position as Representative Schweikert's Chief of
Staff. On the date of Mr. Schwab's resignation, the ISC's and the
Committee's jurisdiction over Mr. Schwab ended.
---------------------------------------------------------------------------
On September 5, 2018, OCE sent a second referral (OCE's
Second Referral) to the Committee recommending the Committee
further review allegations that: (1) Representative Schweikert
may have used official resources to benefit his campaign or
pressured congressional staff to perform political activity;
(2) Representative Schweikert may have authorized compensation
to an employee who did not perform duties commensurate with his
House employment; (3) Representative Schweikert or his campaign
committee may have received loans or gifts from a congressional
employee; and (4) Representative Schweikert may have omitted
required information from his annual House financial disclosure
statements (FD Statements) and Federal Election Commission
(FEC) candidate committee reports.\3\ On December 20, 2018, the
Committee unanimously voted to expand the ISC's jurisdiction to
include the allegations contained in OCE's Second Referral.
---------------------------------------------------------------------------
\3\ OCE also reviewed an allegation that Representative Schweikert
tied official activities to campaign or political support. OCE did not
find substantial reason to believe the fifth allegation and recommended
that the allegation be dismissed.
---------------------------------------------------------------------------
The ISC met four times during the 115th Congress and 22
times during the 116th Congress. The ISC interviewed 18
individuals, including former and current staff of
Representative Schweikert's congressional office and campaign.
The ISC issued four subpoenas and 15 requests for information,
and in response received over 200,000 pages of documents.
Representative Schweikert voluntarily appeared before the ISC
and answered questions under oath.
Following its investigation, the ISC unanimously concluded
there was substantial reason to believe that Representative
Schweikert failed to uphold the laws and regulations of the
United States, in violation of paragraph 2 of the Code of
Ethics for Government Service and that he did not act in a
manner that reflected creditably on the House, in violation of
House Rule XXIII, clause 1 in connection with: his failure to
take reasonable steps to ensure his campaign committees
operated in compliance with applicable laws and standards of
conduct; the misuse of his MRA for non-official purposes;
pressuring official staff to perform campaign work; and his
lack of candor and due diligence in the course of the
investigation.
On June 30, 2020, following negotiations with
Representative Schweikert's counsel, the ISC unanimously voted
to adopt a Statement of Alleged Violations (SAV) detailing 11
violations and the facts giving rise to those violations. As
part of the settlement, Representative Schweikert agreed to
admit to all 11 violations in the SAV and waive all further
procedural rights he was afforded under House and Committee
rules. The ISC also agreed to recommend, and Representative
Schweikert agreed to accept, a sanction of reprimand by the
House of Representatives and a $50,000 fine regarding the
conduct set forth in the SAV.
On July 1, 2020, the ISC submitted a Report to the full
Committee detailing the evidence in support of its findings and
the rationale for its recommendation. Representative Schweikert
also submitted a response to the ISC's report stating that he
continues to take responsibility for his actions, noting that
he has implemented a number of corrective actions, but
challenging some of what Representative Schweikert
characterized as ``assertions'' in the ISC's Report.
Representative Schweikert, however, continues to admit to the
violations contained in the SAV.
In light of the above, on July 29, 2020, the Committee
unanimously voted to adopt this Report and to approve
Representative Schweikert's waiver agreement.
III. FINDINGS
The Committee adopts as its findings in this matter the
Report of the Investigative Subcommittee, as attached.
In summary, the ISC Report details the substantial evidence
in support of the violations of laws, rules and regulations
contained in the SAV. First, Representative Schweikert failed
to take reasonable steps to ensure his campaign committees
operated in compliance with applicable laws and standards of
conduct, including Federal Election Commission Act (FECA)
reporting requirements. Specifically, between July 2010 and
December 2017, Representative Schweikert's campaign committees
erroneously disclosed or failed to disclose at least $305,000
in loans or repayment of loans made or obtained for the benefit
of his congressional campaigns; failed to report at least
$25,000 in disbursements made by his campaigns; failed to
report more than $140,000 in contributions received by his
campaigns; and falsely reported making disbursements totaling
$100,000.\4\ The errors violated FECA's reporting requirements,
House Rule XXIII, clause 1, which requires Members to act in a
manner that reflects creditably upon the House, and paragraph 2
of the Code of Ethics for Government Services, which requires
Members to uphold the laws of the United States. These errors
also form the basis for Counts I through VI of the SAV.\5\
---------------------------------------------------------------------------
\4\ SAV at 3.
\5\ See id. at 22-27.
---------------------------------------------------------------------------
Second, between January 2011 and July 2018, Representative
Schweikert's former Chief of Staff made over $270,000 worth of
impermissible outlays on behalf of Representative Schweikert's
campaign \6\ and at least three other members of Representative
Schweikert's congressional staff made impermissible outlays,
totaling less than $500.\7\ Representative Schweikert knew or
should have known that Mr. Schwab made substantial purchases on
behalf of his campaign, but did not prevent the practice.
Congressional employees are prohibited under federal law from
making contributions to the campaign of their employing Member;
certain outlays, even if reimbursed, are considered
contributions and are thus impermissible. Accordingly,
Representative Schweikert did not act in a manner that
reflected creditably on the House, in violation 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. This violation forms the basis
for Count VII of the SAV.\8\
---------------------------------------------------------------------------
\6\ Id. at 14.
\7\ Id. at 17.
\8\ Id. at 27-28.
---------------------------------------------------------------------------
Third, Representative Schweikert misused campaign funds for
personal purposes by accepting personal items from staff that
were reimbursed by campaign funds. Between 2011 and 2018, at
least four members of Representative Schweikert's congressional
staff paid for personal items for Representative Schweikert,
including food and babysitting services, and were then
reimbursed for those items by Representative Schweikert's
campaign.\9\ The conversion of campaign funds to personal use
violated FECA and the FEC's implementing regulations, violated
House Rule XXIII, clause 6, which states campaign funds must be
kept separate and cannot be converted to personal use, and
violated paragraph 2 of the Code of Ethics for Government
Service.\10\ The conversion of campaign funds to personal use
also forms the basis for Count VIII of the SAV.\11\
---------------------------------------------------------------------------
\9\ Id. at 17-18.
\10\ Id. at 29.
\11\ Id.
---------------------------------------------------------------------------
Fourth, Representative Schweikert's Members'
Representational Allowance (MRA) was used for non-official
purposes. Between January 2011 and November 2017,
Representative Schweikert's official resources--including
official funds, staff time, and congressional office space--
were improperly used for unofficial and campaign purposes.\12\
Members are responsible for ensuring proper management of their
MRA and Representative Schweikert failed to provide the
oversight necessary to prevent misuse of his MRA. The misuse of
Representative Schweikert's MRA violated 31 U.S.C. Sec. 1301,
House Rule XXIII, clause 1 and paragraph 2 of the Code of
Ethics for Government Service and formed the basis for Count IX
of the SAV.\13\
---------------------------------------------------------------------------
\12\ Id. at 18-21.
\13\ Id. at 29-31.
---------------------------------------------------------------------------
Fifth, members of Representative Schweikert's congressional
staff were pressured to perform campaign work. Representative
Schweikert's former Chief of Staff testified that he was
pressured to perform campaign work, specifically to fundraise,
and in return, he had an expectation that congressional staff
fundraise on behalf of the campaign.\14\ Pressuring official
staff to perform campaign work violated House Rule XXIII,
clause 1 and formed the basis for Count X of the SAV.\15\
---------------------------------------------------------------------------
\14\ Id. at 21-22.
\15\ Id. at 31-32.
---------------------------------------------------------------------------
Finally, Representative Schweikert violated House Rule
XXIII, clause 1 by failing to exercise the proper diligence
necessary in responding to the allegations and the ISC
determined that his testimony lacked credibility.\16\
Representative Schweikert's lack of candor and due diligence
formed the basis for Count XI of the SAV.\17\
---------------------------------------------------------------------------
\16\ Id. at 32-33.
\17\ Id.
---------------------------------------------------------------------------
The ISC also investigated additional allegations for which
it did not find a violation. The ISC unanimously concluded
allegations that Representative Schweikert may have authorized
compensation to an employee who did not perform duties
commensurate with his House employment and that he or his
campaign committee may have received loans or gifts from a
congressional employee could not be substantiated.\18\ The ISC
further determined that no additional actions were necessary to
address omissions in Representative Schweikert's FD Statements
in consideration of the amendments filed to address those
omissions.\19\
---------------------------------------------------------------------------
\18\ See ISC Report at 90.
\19\ Id. at 93.
---------------------------------------------------------------------------
IV. RESPONSE TO REPRESENTATIVE SCHWEIKERT'S VIEWS
On June 27, 2020, Representative Schweikert submitted views
in response to the draft report of the Investigative
Subcommittee stating, ``[c]ritically, I agree with the ISC's
statement that I bear ultimate responsibility for ensuring that
my congressional office and my campaign adhere to both the
letter and spirit of the wide array of laws, rules, and
regulations that govern our important work.'' \20\
Representative Schweikert also accepted the ISC's conclusion
that he fell short of his duty to adequately supervise his
staff and others working on his behalf, deferred to the ISC's
discretionary authority regarding his cooperation with its
investigation, and requested that the Committee approve the
settlement agreement negotiated with the ISC.\21\
Representative Schweikert, however, also challenges some of the
``assertions'' in the ISC report.
---------------------------------------------------------------------------
\20\ Appendix E at 2.
\21\ Id. at 2, 6.
---------------------------------------------------------------------------
Representative Schweikert suggests that Mr. Schwab's
testimony should not be credited because he admitted to ``acts
of dishonesty.'' The ISC, however, made clear throughout its
report that it did not rely exclusively on Mr. Schwab's
testimony to find violations. Furthermore, as the ISC
explained, had it credited uncorroborated portions of Mr.
Schwab's testimony, Representative Schweikert would likely be
facing harsher penalties.\22\ Many aspects of Mr. Schwab's
testimony were corroborated by other witnesses or documents
obtained by the ISC and there is substantial evidence to
support the violations contained in the SAV to which
Representative Schweikert admits.
---------------------------------------------------------------------------
\22\ ISC Report at 7.
---------------------------------------------------------------------------
Representative Schweikert also expresses confusion at the
ISC's finding that his cooperation fell short of the standards
it expected, but his bewilderment ignores the ISC's central
concern that he did not identify or address errors in his FEC
reports identified by OCE for over a year. Representative
Schweikert had reason to know of many FEC reporting errors but
did not promptly advise the ISC of them, despite having
numerous opportunities to do so and despite the ISC's specific
requests that he identify the errors.
In addition, the Committee defers to the ISC's findings
that Representative Schweikert's testimony lacked candor at
times. In taking issue with the ISC's questioning strategy,
Representative Schweikert attempts to shift his responsibility
to provide truthful and candid testimony into an affirmative
duty of the ISC to inform him whenever he gave untruthful
testimony. However, the ISC findings with respect to his lack
of candor were not over minor memory lapses or slight
deviations from others' testimony but were due to its serious
concerns regarding Representative Schweikert's own affirmative
and self-serving statements, some which were not responsive to
any question posed, and which were squarely inconsistent with
the record the ISC obtained.\23\
---------------------------------------------------------------------------
\23\ Id. at 97.
---------------------------------------------------------------------------
The Committee appreciates that Representative Schweikert
made substantial efforts to cooperate with the investigation
by, among other things, producing thousands of pages of
documents in response to the ISC's requests for information and
by submitting a sua sponte report detailing his campaign's
acceptance of outlays; however, as the ISC explained, ``there
is no number of pages produced or dollars spent on lawyers that
can substitute for actually acknowledging and providing candid
responses to specific allegations of unethical conduct.'' \24\
---------------------------------------------------------------------------
\24\ Id.
---------------------------------------------------------------------------
Throughout the course of this investigation, Representative
Schweikert made vague or misleading statements to the ISC and
OCE that allowed him to evade the statute of limitations for
the most egregious violations of campaign finance laws, his
document productions were slow or non-responsive to several of
the ISC's requests for information regarding FEC errors, and he
gave self-serving testimony that lacked candor. Efforts like
the ones Representative Schweikert undertook to delay and
impede the ISC's investigation were not only highly detrimental
to the Committee's work and reputation of the House, they were
themselves sanctionable misconduct.
This matter should serve as an important reminder to all
individuals within the House community that when confronted
with allegations of unethical conduct, they should take
immediate steps to investigate and correct the issues and
ensure that they do not occur again in the future. Allowing
unethical conduct to continue in a Member's campaign and/or
congressional office makes that Member complicit in the
violation and the offending Member will be held accountable.
Moreover, when an individual delays acknowledging violations
under review by the Committee that they know to be true, not
only can the work of the Committee be impeded, but such
stalling is inconsistent with the duty of candor owed to the
Committee, may be viewed as an aggravating factor depending on
the circumstances, or, as was the case in this matter, lead to
a finding of a separate violation.
V. REASONS FOR RECOMMENDED SANCTION
The cumulative violations in this matter are serious and
occurred on a continuous and prolonged basis.\25\ While all of
the violations detailed above were concerning, the Committee
was disturbed by the events described in counts three and four
of the SAV in particular. Those counts detailed how
Representative Schweikert's campaign committee falsely reported
that he had loaned the campaign $100,000, when no such loan had
been made, and then falsely reported making $100,000 in
disbursements, which served to adjust the campaign's reported
cash on hand that was propped up by the fictious loan.\26\
These errors were not only flagrant and egregious violations of
campaign finance law, the falsely reported loan improperly
inflated his campaign's finances, thus making Representative
Schweikert's campaign appear to meet its financial goals while
depriving the public of accurate and transparent accounting of
the true state of his campaign.\27\ The falsely reported loan
was subsequently included in the Schweikerts' overall assets
listed in personal financial statements they submitted to a
bank in connection with a line of credit the bank provided in
support of Representative Schweikert's campaign.\28\ However,
as detailed in Count II of the SAV, the line of credit was
never disclosed to the FEC.\29\ In addition to these
interconnected reporting violations, Representative
Schweikert's campaign further benefited from a scheme in which
his former Chief of Staff made significant, yet impermissible,
campaign expenditures.\30\ As detailed in Count VII of the SAV,
Mr. Schwab waited weeks, and sometimes months, to seek
reimbursements from the campaign for his purchases, thereby
providing the campaign with enough liquidity to meet its other
obligations, or in other instances, allowing the campaign to
post higher cash on hand totals.\31\
---------------------------------------------------------------------------
\25\ Compare Comm. on Standards of Official Conduct, In the Matter
of Representative Charles B. Rangel, H. Rept. 111-661, 111th Cong. 2d
Sess. 2 (2010) (seeking censure of Member based on cumulate nature of
serious violations on a ``continuous and prolonged bases,'' where
Member did not enter settlement agreement) (hereinafter Rangel).
\26\ SAV at 25-26.
\27\ ISC Report at 28-30.
\28\ Id. at 21 n. 95.
\29\ SAV at 23-25.
\30\ ISC Report at 40-53.
\31\ SAV at 27-28.
---------------------------------------------------------------------------
The ISC considered whether a House-level sanction of
censure was appropriate given that the violations in this
matter were serious, cumulative, and occurred on a continuous
and prolonged basis.\32\ The ISC ultimately agreed to recommend
a lesser sanction than censure, ``due in large part to the
congressman's willingness to accept responsibility and
agreement to pay a substantial monetary fine.'' \33\ The
Committee defers to the ISC's sanction recommendation, which is
that Representative Schweikert be reprimanded and fined
$50,000, and recognizes that by admitting to the violations and
waiving his additional procedural rights, Representative
Schweikert has saved the House the further use of significant
resources and allowed this matter to be closed
expeditiously.\34\
---------------------------------------------------------------------------
\32\ See Rangel at 2 (censuring Member, who did not enter into a
settlement agreement, for serious violations that occurred on a
continuous and prolonged basis).
\33\ ISC Report at 99.
\34\ See Comm. on Ethics, In the Matter of Allegations Relating to
Representative Laura Richardson, H. Rept. 112-642, 112th Cong. 2d Sess.
15 (2012) (seeking reprimand of Member for serious violations following
negotiated settlement agreement in which a Member admitted to
violations).
---------------------------------------------------------------------------
Therefore, the Committee recommends Representative
Schweikert be reprimanded for the violations discussed above.
In addition to public reprimand, the Committee recommends that
the House, by adoption of this Report, impose a $50,000 fine on
Representative Schweikert for his misconduct and that the fine
be payable to the U.S. Treasury no later than October 30, 2020.
The Committee further recommends that the House of
Representative adopt a resolution in the following form and
that the adoption of this Report will serve as a reprimand of
Representative Schweikert and the imposition of a $50,000 fine
under the conditions outlined herein:
HOUSE RESOLUTION
Resolved, (1) That the House adopt the Report of the
Committee on Ethics dated July 30, 2020, In the Matter of
Allegations Relating to Representative David Schweikert.
VI. STATEMENT UNDER HOUSE RULE XIII, CLAUSE 3(c)
The Committee made no special oversight findings in this
Report. No budget statement is submitted. No funding is
authorized by any measure in this Report.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]