GOP Rep. Renzi charged with extortion, embezzlement

WASHINGTON -- Republican Rep. Rick Renzi was charged Friday with extortion, wire fraud, money laundering and other crimes in an Arizona land swap that authorities say helped him collect hundreds of thousands of dollars in payoffs.

A 26-page federal indictment unsealed in Tucson accuses Renzi and a former business partner of extortion and conspiring to promote the sale of land that buyers could swap for property owned by the federal government.

Renzi, a three-term member of the House, announced in August that he would not seek re-election. His lawyer said Friday he was not guilty.

"Congressman Renzi did nothing wrong. We will fight these charges until he is vindicated and his family's name is restored," Renzi attorney Kelly Kramer said in an e-mail message.

The grand jury accused Renzi of using his position as a member of the House Natural Resources Committee to push the land swaps for business partner James W. Sandlin, a real estate investor from Sherman, Texas. The indictment comes after a lengthy federal investigation into the land development and insurance businesses owned by Renzi's family.

Authorities allege Renzi and Sandlin concealed at least $733,000 that the congressman took for helping seal the land deals. They are each charged with 27 counts of wire fraud, extortion and money laundering, and conspiracy connected to a transaction in Cochise County, Ariz.

"Renzi was having financial difficulty throughout 2005 and needed a substantial infusion of funds to keep his insurance business solvent and to maintain his personal lifestyle," the indictment says.

Additionally, Renzi and his second business partner, Andrew Beardall of Rockville, Md., are accused of embezzling more than $400,000 in insurance premiums in 2001 and 2002 to fund his first congressional campaign.

All three men are to appear in court in Tucson on March 6.

"Public corruption creates a cynicism for government and unfairly stains legions of honest public servants," Assistant Attorney General Alice S. Fisher said in a news release. "These charges represent allegations that Congressman Renzi defrauded the public of his unbiased, honest services as an elected official."

Renzi is a co-chairman in Arizona for GOP presidential front-runner Sen. John McCain's campaign. McCain seemed surprised when asked in Indianapolis for his reaction to the indictment, choosing his words carefully, shaking his head and speaking slowly.

"I'm sorry. I feel for the family; as you know, he has 12 children," McCain told reporters on the presidential campaign trail. "But I don't know enough of the details to make a judgment. These kinds of things are always very unfortunate. ... I rely on our Department of Justice and system of justice to make the right outcome."

The land swap deal has dogged Renzi more than a year.

The indictment says Renzi refused in 2005 and 2006 to secure congressional approval for land swaps by two unnamed businesses if they did not agree to buy Sandlin's property as a part of the deal.

One of the businesses, seeking congressional approval for surface rights for a copper mining project in Renzi's district, failed to buy the land in early 2005. As a result, Renzi told the business, "No Sandlin property, no bill," the indictment states.

Renzi had previously owned some of Sandlin's property, and concealed his relationship with the real estate investor from the mining company even when expressly asked. At the time, Sandlin owed $700,000 of the $800,000 price tag on property Renzi sold him in Kingman, Ariz.

Meanwhile, authorities contend, Renzi pushed the land on a second firm, an unnamed investment group, that was trying to secure a federal land swap. If the firm accepted Sandlin's property as part of the transaction, Renzi said investors would receive a "free pass" through the House Natural Resources Committee, according to the indictment.

In April 2005, the investors reluctantly agreed to the deal.

"Please be sensitive to the fact that we are going way out on a limb at the request of Congressman Renzi," one of the investors wrote in an April 17, 2005 e-mail to a Renzi aide. "I am putting my complete faith in Congressman Renzi and you that this is the correct decision."

The investment group agreed to pay $4.6 million for Sandlin's land, the indictment says. Sandlin then paid Renzi $733,000 for his help in securing the land swap from the second business.

Renzi failed to report the income on financial disclosure reports to Congress, as is required.

Government watchdog group Citizens for Responsibility and Ethics in Washington applauded the Justice Department for holding Renzi "accountable given that his House colleagues refused to do so." The group has had Renzi on its "Most Corrupt Members of Congress" list for the last three years.

"Bluster aside, this latest in a string of congressional indictments demonstrates that Congress simply will not police itself," CREW executive director Melanie Sloan said.