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Arizona's Rep. Renzi Is Indicted In Land Deal

By Ben Pershing
washingtonpost.com Staff Writer
Saturday, February 23, 2008

Rep. Rick Renzi (R-Ariz.) used his position in Congress to influence a federal land-exchange deal, collecting hundreds of thousands of dollars in payoffs, according to an indictment released yesterday.

The 35-count indictment handed up by a federal grand jury in Tucson also accuses Renzi of separately embezzling corporate funds to bankroll his first House campaign.

The indictment makes Renzi the fourth sitting lawmaker to face federal charges since 2005 in the Justice Department's continuing crackdown on public corruption, and it represents a fresh blow to congressional Republicans struggling with numerous allegations of ethical wrongdoing in their ranks.

Renzi joins as targets of Justice Department prosecution convicted GOP Reps. Randy "Duke" Cunningham (Calif.) and Robert W. Ney (Ohio), as well as Democratic Rep. William J. Jefferson (La.), who is awaiting trial on bribery charges.

Renzi, who was indicted along with two alleged co-conspirators after a federal investigation that took at least 16 months, is accused of conspiracy, money laundering and other crimes.

"These charges represent allegations that Congressman Renzi defrauded the public of his unbiased, honest services as an elected official," said Alice Fisher, the assistant attorney general in charge of the Justice Department's criminal division.

Renzi's attorneys, Reid H. Weingarten and Kelly B. Kramer, released a statement yesterday proclaiming their client's innocence. "Congressman Renzi did nothing wrong. We will fight these charges until he is vindicated and his family's name is restored," they said.

The two lawyers also complained that the Justice Department charged Renzi while he was mourning his father, retired Army Maj. Gen. Eugene C. Renzi, who died Feb. 9 and was buried Thursday.

"We are disappointed that the Department of Justice would not allow a decent amount of time to pass to allow a son to mourn the passing of his father," Weingarten and Kramer said.

Renzi is one of more than two dozen Arizona "co-chairs" of Sen. John McCain's presidential campaign. At a campaign stop yesterday in Indianapolis, McCain told the Associated Press: "I feel for the family. . . . But I don't know enough of the details to make a judgment."

Renzi's indictment centers primarily on allegations that the three-term House member pressured two parties interested in acquiring federal land, which required congressional approval, to purchase property from a former Renzi business partner who owed the lawmaker $700,000. He allegedly succeeded with one of them, allowing his former partner, James W. Sandlin, to pay off the debt. Sandlin also was indicted yesterday on similar charges.

Renzi also is charged with embezzling $400,000 from his own insurance company to fund his 2002 House campaign. Andrew Beardall, a Rockville lawyer who served as president and general counsel of the company, was accused of aiding that effort.

In a statement yesterday, House Minority Leader John A. Boehner (R-Ohio) said, "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 announced in August that he will not seek reelection in 2008.

The indictment unveiled yesterday alleges that Renzi offered to sponsor a bill to help "Company A" swap land with the federal government if it purchased property owned by Sandlin. Renzi, who served on a House panel -- the Natural Resources Committee -- that approved such deals, told the company that he would not support its request if it did not buy the land, according to the indictment. No deal was made.

"No Sandlin property, no bill," Renzi told the company, according to the indictment.

Later, Renzi pressured "Investment Group B," which also was seeking approval of a land exchange, to purchase the property, according to federal prosecutors. Renzi allegedly told the group that its exchange would receive a "free pass" through the Natural Resources Committee if the group bought Sandlin's land.

The group agreed to buy 480 acres from Sandlin for $4.6 million in 2005, the government said. That year, Renzi introduced the San Pedro River Land Exchange Act, which included the Sandlin land, but the bill was never enacted.

At the time, according to court papers, Sandlin owed Renzi $700,000. Renzi was having financial difficulties, the government said, "and needed a substantial infusion of funds to keep his insurance business solvent and to maintain his personal lifestyle."

After the purchase, Sandlin allegedly paid Renzi a total of $733,000 through two companies owned by the lawmaker and his wife. Renzi did not report those transactions on the personal financial disclosure forms he is required to file annually as a member of Congress.

"Company A" refers to Resolution Copper Mining, according to a source connected to the company. "Investment Group B" has been identified in previous news reports, including in The Washington Post, as a partnership that included land developer Guy Inzalaco and former Arizona governor Bruce Babbitt (D).

Sandlin's attorney, Bert Garcia, declined to comment on the charges yesterday.

The indictment alleges that Beardall helped Renzi "embezzle and misappropriate client premiums to fund his congressional campaign" and lie to state insurance regulators about the transactions.

Beardall's attorney, Lucius Outlaw III, said: "Mr. Beardall looks forward to addressing the government's allegations. He is confident that when the facts come to light, the facts will show that he committed no action with the intent to defraud the government or injure any party."

Renzi, 49, a burly former college football player and father of 12, was elected to Congress in 2002 in his first bid for office and narrowly won reelection in 2006, just days after news of the federal investigation broke. After a family business was raided by the FBI in April 2007, Renzi quit the three House committees on which he served. The race to replace him is underway.

Last year, Renzi also became involved in the controversy surrounding the Bush administration's firing of nine U.S. attorneys when his office acknowledged that his chief of staff called one of the federal prosecutors to ask about the status of the Renzi investigation.

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