You know Jefferson. He’s the guy discovered to have $90,000 in cash stored in his freezer — wrapped in aluminum foil no less. In June 2007, he was indicted on 16 charges of bribery and influence peddling, although he has yet to be tried. In the meantime, it’s been much tougher for Democrats to condemn scandal-ridden Republicans like Rep. Rick Renzi and Sen. Ted Stevens, knowing that Jefferson is in a similar boat.

Democrats lost that baggage over the weekend, when Republican Anh Cao shocked New Orleans by defeating the nine-term Jefferson, thus becoming the first Vietnamese American to hold a seat in Congress.

That left Democrats generally free of any high-profile embarrassments in their ranks — for three whole days.

Now they have Blagojevich instead. Go figure.

(Flickr: Esther17)

SIERRA VISTA, Ariz.–Did Sen. John McCain, the GOP presidential nominee dodge a bullet when Rep. Rick Renzi, (R-Ariz.) was indicted in February on charges of wire fraud, money laundering, extortion and conspiracy in connection with the misuse of campaign funds and the sale of a business associate’s land?

The 35-count indictment against the three-term congressman did not include charges during a crucial time period in 2003, when Renzi was working with McCain to move a controversial amendment through Congress. They were trying to keep Fort Huachuca, a large Army base in southeast Arizona, from closing.

If prosecutors had focused on Renzi’s submission of what might be false congressional financial disclosure statements, then McCain might have been drawn deeper into the Renzi case. The FBI has already interviewed at least one member of McCain’s Senate staff and requested that his Senate office turn over documents possibly related to the case.

Illustration by: Matt Mahurin

Public records show that Renzi might have filed false congressional financial disclosure statements from 2001 through 2003, because he did not disclose his 50-percent ownership in Fountain Realty & Development, Inc. While submitting false congressional financial disclosure statements in this time period is not one of the counts against Renzi, the indictment states that Fountain Realty had more than $1 million in transactions with Renzi’s former business partner, and co-defendant, James W. Sandlin.

In contrast, the Justice Dept.’s seven-count felony indictment against Sen. Ted Stevens accuses the Alaska Republican senator of submitting false financial disclosure statements to Congress by concealing $250,000 in gifts from an oil industry supply company.

Did prosecutors avoid filing similar charges against Renzi to shield McCain from questions about his ties to the congressman? Or did they decide to focus on the more serious charges of wire and insurance fraud, money laundering, conspiracy and extortion?

Rep. Rick Renzi (R-Ariz.) (U.S. Congress)

What’s clear is that the absence of the charges has spared McCain having to answer questions about his relationship with the then first-term congressman in 2003, when they were working together to pass the controversial Fort Huachuca Preservation amendment. As a result, we may never know if McCain was aware that Renzi and Sandlin were business partners, and that Sandlin stood to gain financially from keeping Fort Huachuca open because he owned property in an area near the base that was rapidly growing. That property, a 480-acre alfalfa field, later played a central role in the criminal charges filed against Sandlin and Renzi.

When asked why prosecutors didn’t include charges against Renzi for possibly filing false congressional disclosure forms, several former federal prosecutors told me that the government typically files its strongest charges in a case. Weaker charges can always be added later, or offered in a plea bargain. Renzi’s possibly false congressional financial statements, while potential felonies, are relatively minor compared to the indictment’s more serious charges.

“Most federal prosecutors will spend considerable time thinking about–and then charging–their ‘best’ counts,” said David Schindler, a former federal prosecutor who won a fraud conviction against former Arizona Gov. J. Fife Symington III in 1997. “Even if a prosecutor has evidence of other crimes, [he or she] may choose to proceed on a narrower universe because the evidence is strongest as to those counts.”

Map of Arizona

The Renzi indictment is the first high-profile case for former McCain aide and newly appointed U.S. attorney in Arizona, Diane Humetewa. A member of the Hopi Tribe, Humetewa, who was sworn in in December, is the nation’s first Native American woman to serve in the job. She was McCain’s legal counsel on the Senate Indian Affairs Committee from 1993 to 1996.

McCain called her in early 2007 and asked if she wanted to be a U.S. attorney. “Frankly, I was pretty taken aback and surprised and flattered,” Humetewa was quoted as saying in a June 2008 story in Indian Country Today. “I felt I certainly couldn’t say no.”

Renzi’s trial in Tucson is set to begin March 24. He announced in August 2007 that he would not seek a fourth term.

Fort Huachuca Amendment

The Renzi-sponsored amendment was attached to a 2003 defense appropriations bill and aimed to protect the fort from being downsized or shuttered in the scheduled 2005 round of military base closures. Congressional watchdog groups sharply criticized Renzi for pushing the amendment because the fort wasn’t in his congressional district and because his father, the late Maj. Gen. Eugene Renzi, was an executive at ManTech International, a defense intelligence contractor, which had more than $1.5 billion in contracts at the military base.

As the ranking Republican, McCain shepherded the measure through a House-Senate Armed Services conference committee in November 2003. He backed it despite the criticism that Renzi’s sponsorship of it created a potential conflict of interest and despite his own 2001 admonition to fellow senators that they should refrain from injecting local politics into decisions regarding military bases.

McCain’s embrace of Renzi’s amendment, which was supported by the Army, was noticeable because he had done nothing publicly a year earlier when a similar measure, introduced by 12-term Rep. Jim Kolbe (R-Ariz.), whose district included Fort Huachuca, passed the House but was never introduced in the Senate.

In May 2002, Sandlin entered into negotiations to sell the 480-acre, water-intensive alfalfa field he purchased in early 2000 for $960,000 to Fort Huachuca, as part of a water conservation program to save the nearby San Pedro River, threatened by extensive groundwater pumping. The talks ended in 2004, when Sandlin rejected the Army’s offer as too low.

Protecting the San Pedro River was important to McCain and to the Army. The river’s deteriorating ecology had made Fort Huachuca vulnerable to downsizing or closing because the Army base was fueling rapid growth in the ground-water-dependent area. Both were trying to find ways to reduce depletion of the river, and the sale of Sandlin’s alfalfa field, less than a half-mile west of the river, would have helped. Sandlin’s parcel was the largest agricultural groundwater pumping use in the San Pedro River watershed, and acquiring it was a top priority for the Army, according to base officials.

While the Army was negotiating to buy Sandlin’s land, in the summer and fall of 2003, it was also lobbying McCain to back Renzi’s amendment. It is not known if McCain knew about the Army’s interest in the property. But linking Sandlin to Renzi could have been as easy as doing a Google search on Sandlin. He was among the first contributors to Renzi’s 2002 campaign.

Investigation of Renzi

The Renzi case, according to watchdog groups, has been impeded by political interference. Former Arizona U.S. Atty. Paul Charlton was pressing for the Renzi investigation in the fall of 2006. He was fired Dec. 7, 2006, a month after Renzi won reelection to his third term. Charlton was one of eight U.S. attorneys fired by former U.S. Atty. Gen. Alberto Gonzales. The dismissals led to congressional investigations that eventually forced Gonzales’ resignation. Charlton declined to comment about the Renzi case and his firing.

Justice Dept. officials in Washington, a source familiar with the case said, delayed the criminal investigation into Renzi’s activities for more than a year after investigators sought permission to go forward in 2005. “They did not want to indict this guy,” the source, who requested anonymity, said. “They didn’t want to put a wire on him, and they didn’t want to do a search warrant.”

The criminal investigation got back on track in April 2007, when the FBI raided Renzi’s wife’s insurance business in Sonoita, Ariz. Ten months later, a federal grand jury in Tucson returned the indictment against the congressman.

Prosecutors allege that Renzi used his congressional seat in 2005 to demand that a private investment group purchase Sandlin’s land in exchange for Renzi assisting the group with passage of federal land exchange bill. The investment group, which included former Interior Sec. Bruce Babbitt, ultimately bought Sandlin’s land for $4.5 million, yielding Sandlin a $3.5 million profit. Sandlin, according to the indictment, then funneled $770,000 to Renzi, which Renzi never reported on his 2005 congressional financial disclosure report.

Less Than Full Disclosure

In between allegedly embezzling funds from a family insurance company and pressuring investors to buy Sandlin’s land, Renzi filed three congressional financial disclosure reports where he never disclosed his partnership with Sandlin in Fountain Realty & Development.

Sandlin and Renzi’s business relationship began in August 2001, when Sandlin became a partner in Renzi Investments Inc., according to Arizona Corporation Commission records. The two men changed the company name to Fountain Realty & Development Inc. Renzi did not disclose any of this on his 2001 congressional financial disclosure statement. Instead, he reported receiving a dividend from Renzi Investments worth between $1 million and $5 million.

Nor did Renzi reveal his partnership with Sandlin in Fountain Realty & Development in his 2002 congressional disclosure forms. Renzi filed the statement on July 11, 2003– while he was seeking McCain’s support for his amendment.

Renzi also did not mention the company in his 2003 financial disclosure report. Nor did not he report the June 2003 sale of the balance of Fountain Realty to Sandlin for $200,000 cash and a $800,000 promissory note. Instead, Renzi reported a $1 million to $5 million gain from a company with a similar name, Fountain Hills Realty and Development Inc. That company, however, had ceased to exist in January 2002, when Renzi changed its name to Renzi Vino, Inc., according to Arizona Corporation Commission records.

McCain appeared unfazed by news of Renzi’s indictment and the 16-month criminal investigation that led up to it. When the indictment was unsealed Feb.22, Renzi was listed as one of 24 co-campaign chairmen for McCain’s Arizona presidential campaign, though the FBI’s criminal probe had been known since October 2006.

When asked by reporters four days after the indictment was made public whether Renzi was still on his campaign team, McCain said, “I don’t think so. It doesn’t matter.” Two months after Renzi’s indictment, McCain told a reporter that Renzi was a “good friend” and that the two “have a good relationship.”

An entrance to Fort Huachuca (Flickr: GoBot)

Sierra Vista, Ariz.–In February, when a 35-count federal indictment was filed against three-term Rep. Rick Renzi (R-Ariz.) on charges of wire fraud, money laundering, extortion and conspiracy in connection with his misuse of 2002 campaign funds and the sale of a business associate’s land, he was co-chairman of Sen. John McCain’s presidential campaign in Arizona. The indictment generated a flurry of negative press nationwide for the Republican presidential nominee because of Renzi’s close ties to the McCain campaign. The congressman’s trial is set to begin in March in Tucson.

Renzi is accused of demanding that an investment group seeking his help on a congressional land exchange buy property near an Army based in Southeastern Arizona owned by his business partner, James W. Sandlin. The investment group bought Sandlin’s land in 2005, generating a $3.5 million windfall, and Sandlin allegedly funneled more than $770,000 back to Renzi. The congressman, 50, and his defense team have declined to comment on the charges.

Rep. Rick Renzi (R-Ariz.) (U.S. Congress)

McCain said in February he didn’t know enough about the indictment to comment, and he has continued to express fondness for Renzi. McCain, however, was drawn into the periphery of the case in May, when it was learned that the FBI had interviewed at least one member of his staff and requested his Senate office turn over documents related to federal land exchanges.

McCain’s connections with Renzi at the time the congressman was accused of committing the crimes are deep and complex.

McCain played a pivotal role in passing Renzi’s most important legislation — the 2003 Fort Huachuca Preservation amendment. The amendment, attached by Renzi to a House defense appropriations bill, angered environmental groups because it exempted Fort Huachuca, a military installation, from the Endangered Species Act and and groups say it threatens the ecology of the nearby San Pedro River. McCain backed Renzi’s rider despite criticism from congressional watchdog groups and others that Renzi had a conflict of interest because the amendment would benefit his father’s company, which had significant business at the Army base.

The rider, which was supported by the Army, eliminated the threat that Fort Huachuca would be downsized or closed — which could have hurt the the Southeast Arizona economy and local real estate values, including Sandlin’s property.

Map of Arizona

After first saying he was opposed to Renzi’s rider because of the exemption from the Endangered Species Act, McCain ultimately backed the amendment with minor revisions, despite Renzi’s appearance of a conflict of interest. The decision has come back to haunt McCain because it seems to undercut his self-professed goal of steering clear of legislation designed to benefit special interests, as well as his credentials as an environmentalist. “I have carefully avoided situations that might even tangentially be construed as a less than proper use of my office,” McCain wrote in his memoir, “Worth the Fighting For.”

There is no evidence to suggest that McCain was aware of Renzi’s alleged criminal conspiracy with Sandlin. But the former Vietnam POW brushed aside editorials in Arizona’s major daily newspapers opposed to Renzi’s rider and ignored protests by environmental groups in front of his Tucson office when he decided to support Renzi’s amendment.

Renzi’s Motives Questioned

Chief among the questions raised was why the then-freshman congressman was pushing so hard to prevent the fort’s closure when the Army base was not in his congressional district. At the time, critics suggested that Renzi’s real motive was to benefit his family’s financial interests. Renzi’s father, the late Maj. Gen. Eugene Renzi, who died in February , was a senior executive with ManTech International, a military intelligence contractor. The company had more than $1.5 billion in current and future contracts at Fort Huachuca, and ManTech’s employees were Renzi’s single largest contributor in his 2002 congressional race — which Renzi won by only 3 percentage points.

Gary Ruskin of the Congressional Accountability Project, a Ralph Nader organization, told Phoenix New Times in September 2003 that Renzi was jeopardizing his credibility in Congress by supporting legislation that could benefit his father’s company. “Doing such things can cause huge political black eyes,” Ruskin said, “even if they are not explicitly a violation of House ethics rules,”

Despite the mounting criticism nationally throughout the fall of 2003, McCain backed Renzi’s legislation, something of a reversal for the senator. In 2002, he did little publicly to support a nearly identical measure introduced by 12-term congressman Rep. Jim Kolbe (R-Ariz), whose district includes Fort Huachuca. McCain’s support was key to passage of Renzi’s amendment because the senator was the ranking Republican on the Senate-House Armed Services conference committee dealing with the legislation.

In so doing, McCain ignored his own admonition to the Senate in 2001, when he urged colleagues to refrain from injecting local politics into federal legislation by seeking to protect military bases in their home states from the coming round of base realignments and closings.

McCain apparently ignored other background aspects of Renzi’s amendment. For example, a routine search of congressional and Arizona public records would have revealed the extent of Renzi’s and Sandlin’s relationship. The two had become business partners in August 2001, when Sandlin bought a stake in Renzi’s real-estate development company, Renzi Investments, Inc., which owned land near Kingman, Ariz.

The Indictment

According to the indictment, Sandlin wrote $220,000 in corporate checks to Renzi in 2002. Renzi used most of the money to finance his 2002 congressional campaign, the indictment alleges, to which Sandlin and his wife were among the first contributors, each giving $2,000 in March 2002. While McCain or his staff would not have known about Sandlin’s checks to Renzi, Sandlin’s and his wife’s campaign contributions were public record. (McCain’s presidential and senatorial staffs did not respond to written questions submitted by The Washington Independent on whether McCain was aware in 2003 of the two men’s business relationship.)

Sandlin had been a major real-estate investor near Fort Huachuca and along the nearby San Pedro River, since the mid-1990s. In early 2000, Sandlin paid $960,000 for 460 acres, the site of an alfalfa farm, less than a half-mile from the river. The land became part of a larger environmental controversy over whether groundwater pumping was draining the San Pedro River.

Pro-growth activists worried that Fort Huachuca might be downsized, or closed, because it was fueling rapid population growth in an area entirely dependent on groundwater. The increase in groundwater pumping was threatening to destroy the nation’s only riparian conservation area along the San Pedro River. But downsizing, or closing, the fort might also throw the southeast Arizona economy into recession.

In early 2002, Fort Huachuca began discussions with Sandlin to buy his 460 acres (alfalfa is a water-intensive crop) as part of the Army’s effort to reduce groundwater pumping. But Sandlin rejected the Army’s offer as too low, and negotiations broke off in 2004. The Army and McCain’s Senate staff did not comment on whether the Army alerted McCain in 2003 that it was seeking to purchase Sandlin’s land at the same time the military was lobbying McCain to back Renzi’s rider.

After the Army negotiations broke off, in 2005 Renzi pressured a private investment group to buy the parcel from Sandlin, which it did for $4.5 million. Renzi promised the investors, who included former Interior Sec. Bruce Babbitt, that he would include the property in a bill to swap the alfalfa field for federal land elsewhere in Arizona.Renzi dropped the exchange bill after word spread in Washington that Renzi was giving favorable treatment to a business associate.

In backing Renzi’s amendment, McCain asserted that the fort and the San Pedro River could coexist. But environmental critics didn’t agree, saying that the amendment would doom the river and give the green light to Fort Huachuca to expand. “We thought what Renzi did was outrageous, and that he did indeed have some serious conflicts,” said Sandy Bahr, director of the Grand Canyon Chapter of the Sierra Club. “The legislation smelled bad; it was bad; and McCain coming in and helping make it happen was inappropriate.”

McCain’s support of Renzi’s amendment angered major environmental groups also because the exemption from the Endangered Species Act removed the fort’s responsibility to reduce ground water consumption by the surrounding civilian community. The exemption removed an important protection for the San Pedro River, home to the second most diverse array of mammals in the world after the Costa Rican cloud forests. McCain has called the San Pedro River a “national treasure,” and Congress, in 1986, protected the river’s upper 40 miles by including it in the nation’s first National Riparian Conservation Area under the management of the U.S. Bureau of Land Management.

In hailing congressional passage of Renzi’s amendment in 2003, McCain, ignoring harsh criticisms from environmental groups, said the measure would protect both Fort Huachuca and the river. “I hope this compromise will be a model proving that military, environmental and economic objectives can productively coexist,” McCain stated in a press release.

But a month later, without mentioning his support for the Renzi rider, McCain admitted that the San Pedro River was in serious peril saying in the Sierra Vista Herald that, “It’s not a matter of whether it will dry up, it is when it will dry up.”

Friends in High Places

Why did McCain defy his own his admonitions to avoid injecting local politics into federal legislation? Renzi’s connections with the White House may offer one answer. A source familiar with the federal criminal investigation of Renzi, who asked to remain anonymous, said that Renzi’s father was a “very close friend” of Vice President Dick Cheney through his work in the military intelligence community.

That friendship seems to have paid political dividends to Renzi. Both Cheney and President George W. Bush campaigned for Renzi during his 2002 campaign, with Bush making two appearances in Arizona. The White House’s support prompted the Republican National Campaign Committee to spend $2 million on attack ads against Renzi’s Democratic opponent, George Cordova. Renzi later condemned the ads that portrayed Cordova as a liar, cheat and a thief — telling the Arizona Daily Sun that he would seek to replace the GOP leaders who had authorized the ad campaign.

After Renzi’s amendment passed, the congressman took a direct swipe at critics who claimed that the Fort Huachuca Preservation amendment was intended to benefit his father’s business by aiding the base’s growth. “Opponents of this language overreached with a smear campaign that was baseless and malicious,” Renzi said in a Nov. 7, 2003, press release. “These slanderous attacks discredited their campaign and gave concerned parties pause over the true motivations behind their intended goals.”

A little more than four years later, a federal grand jury indictment lays out what Renzi’s motives allegedly were.

As for McCain’s embrace of a piece of legislation that had, at the least, an appearance of a conflict of interest for Renzi, it is a prime example of Congress failing to police itself, according to Massie Ritsch, communications director for the Center for Responsive Politics.

“When members of Congress evaluate any policy or official action,” Ritsch said, “they should be open to the possibility that there might be conflict of interest inherent in it. They shouldn’t be green-lighting anything that is obviously a conflict of interest for the member who bought it to them.”