Despite promising the “most ethical Congress ever,” Nancy Pelosi and Democratic leaders have done little to address the growing scandal surrounding Rep. Robert Wexler (D., Fla.).
Wexler, the Obama campaign’s Florida co-chairman, was the subject of a major scandal in July, when Republican opponent Edward Lynch revealed to Fox News that the congressman didn’t actually live in the district he represents. Lynch has also raised concerns about Wexler’s campaign financing.
Until recently, Wexler’s residence in Florida was listed as his mother-in-law’s house in Boca Raton, which is located in an over-55-only retirement community. The 47-year-old Wexler is married with three children and owns a house in Maryland, so it seems highly unlikely that he’s shared a residency in a Florida retirement community for years.
Article I, Section 2 of the U.S. Constitution demands that a representative, “when elected, be an inhabitant of that state in which he shall be chosen.” Representatives are elected every two years, and the South Florida Sun-Sentinel has reported that for four years Wexler received tax breaks in Maryland for claiming his home there as his primary residence. Wexler eventually admitted he hadn’t had a home in his district in eleven years, and announced he would begin renting a place in the district.
But that’s not Wexler’s only problem. According to a website set up by Lynch’s campaign, Wexler is in engaged in campaign-finance schemes that might amount to money laundering. Lynch even claims that the FBI is investigating. A spokesman for the FBI’s Miami field office told National Review Online they had “no comment,” and Ben Graber, an independent Democrat running a serious candidacy against Wexler and Lynch, has filed his own criminal complaint seeking an investigation.
Lynch’s accusations are as follows. Beginning July 23 — the day after Fox broke the news about the Democratic candidate’s questionable residency — and ending July 30, the Wexler campaign amended 25 Federal Election Commission reports going back to 2001. The amendments removed references to “Newbridge Securities” as a corporation from which the campaign had received funds, replacing Newbridge with a variety of different companies.
Several of the new companies, such as Capital Gains Consultants, Inc., were not in business at the time Wexler’s amended FEC report claims the funds were paid, according to documents Lynch provides. On July 25, in the midst of the Wexler campaign’s revisions to its old filings, Newbridge Securities and its owners were brought up on charges by the Securities and Exchange Comission for securities violations.
Here’s the other side: According to a document Wexler’s campaign provided to NRO, the changes to FEC filings are “technical,” and the campaign insists it had no advance knowledge of the SEC’s charges. Eric Johnson, Wexler’s chief of staff, who is also consulting on the campaign, told the Palm Beach Post that the filings were amended because an investment broker who manages some of the campaign’s funds had left Newbridge and joined other firms. That broker is a man named Roy Amico.
Coincidentally, there’s another Lynch charge that relates to Amico. Even though Wexler hasn’t owned a house in Florida for over ten years, Lynch notes that Wexler’s campaign did hold a mortgage on a Florida home. In 2004, a Palm Beach house was purchased by brothers Roy and Armand Amico for $975,000. Two months after the purchase, a second mortgage in the amount of $150,000 was taken out, with the Robert Wexler Congressional Committee as the mortgagee. That mortgage was paid off in 2006. Another $150,000 mortgage was given to Roy and Armand Amico’s Capital Gains Real Estate Consultants. According to the campaign, the mortgages were investments in the Amicos’ company. According to Lynch’s campaign, the second mortgage was satisfied days after the residency scandal broke. Lynch alleges that the mortgage should not have been satisfied, as the house had been in foreclosure for months, and the primary mortgage should have been taken care of first.
The Palm Beach Post offers a slightly different version of events. The Post reports that the Wexler campaign says it released the mortgage, meaning their investment in the Amico’s Capital Gains Real Estate Consultants is no longer secured by the mortgage.
While it’s pretty unusual for campaigns to make investments secured by mortgages, it’s hardly illegal. So why are the mortgages of interest? For one thing, Roy Amico was employed by Newbridge Securities until 2002. Roy’s brother Guy remains the president of Newbridge. The company released a letter responding to Lynch’s charges, insisting that the two brothers have no business relationship, and that the SEC investigation “relates, for the most part, to the activities of one employee” from late 2003 to mid 2004 — after Roy Amico left.
However, that doesn’t explain why campaign income would be attributed to firms — in place of Newbridge — that weren’t operating at the time the income was said to have been received. As for the mortgage, the Wexler campaign told the Post that the campaign, which currently has $1.5 million on hand, had made only a $261,307 profit on its investments over the last twelve years. And yet, the campaign just walked away from a $150,000 investment, no small amount. According to Wexler’s campaign, it released their mortgage because “the Campaign did not want to be involved in foreclosure proceedings, nor incur fees in connection with the proceedings when it had no realistic expectation of recovery.”
Wexler’s campaign told the South Florida Sun-Sentinel that accusations the campaign may be connected to securities fraud are “completely silly and downright libelous.”
There’s no proof of wrongdoing. But in the space of a week in July, Wexler was exposed as fudging details on his residency status; his campaign amended F.E.C. filings to remove references to Newbridge; two days after beginning to amend the reports, the SEC announced it was investigating Newbridge; and shortly thereafter the campaign backed out of a relatively sizable investment overseen by the brother of Newbridge’s president.
Further, this is not the first time Wexler has been brought up in connection with securities-fraud allegations. In 2003, Anthony D’Amato, CEO of Eagle Building Technologies of Boca Raton, pled guilty to federal securities-fraud charges. D’Amato had given $20,000 during the previous election cycle to Wexler’s political-action committee, and it doesn’t appear that Wexler was immediately truthful about his association with D’Amato.
“Wexler claimed he barely knew D’Amato, but company and federal records show the legislator had dealings not only with D’Amato, but also with Eagle Building Technologies, including being a shareholder of the company,” the Palm Beach Post reported at the time. “Later on, Wexler amended his assertion that he hardly knew D’Amato. ‘It upsets me to no end that I trusted the wrong people,’ he said at the time.”
The story has yet to gain much traction or prompt further investigation. Lynch has a theory on why the major press organ in Wexler’s district, the Palm Beach Post, hasn’t aggressively pursued the story. When Lynch delivered the story about Wexler’s suspect residency to Fox News, Bill O’Reilly went after the Post and its editor, Randy Schultz, accusing them of pro-Wexler bias.
“We didn’t expect to get the Post’s endorsement, but out of respect we’ve gone to the different editorial-board meetings,” Lynch told National Review Online. “The meeting with the Post was an hour long, and the first 45 minutes Randy figured he was going to exact his pound of flesh on me for the O’Reilly report saying he was in the tank for Wexler. It was great combative fun — let’s put it that way.”
The Wexler campaign has fired back by attacking Lynch’s credibility, accusing him of his own FEC irregularities and noting that there are substantial tax liens against Lynch and his wife.
Another reason the charges aren’t making more headlines is that, despite punching above his weight when it comes to opposition research, Lynch has had little help from the state Republican party; he is running his campaign on a shoestring. Wexler was considered a safe bet for reelection from the outset and remains the favorite, though Graber’s third-party candidacy has been surprisingly strong, and it’s likely to siphon a substantial amount of Democratic votes.
As for Democratic leaders, they’re already about to lose one seat in Florida for ignoring a brewing scandal: It was revealed that Congressman Tim Mahoney was having an affair with a member of his staff. He later fired her and paid out $121,000 in hush money. Mahoney had been elected by claiming Republican Mark Foley — who was embroiled in a scandal with underage congressional pages — didn’t reflect the “values and morals” of his district. Reports later emerged that that Democratic congressional leaders Rahm Emmanuel and Chris Van Hollen knew about Mahoney’s affair months ago.
Even putting aside allegations of money laundering, the residency issues are a serious matter that has yet to be resolved. It’s likely that law enforcement will not investigate the matter in earnest until November 5, to avoid the appearance of interfering with the election. So the question is, will Democratic leaders of the “most ethical congress ever” take proactive measures to address the gathering clouds of scandal around Wexler before it’s too late?
Don’t bet on it.
– Mark Hemingway is an NRO staff reporter.