In deal, Rep. David Schweikert admits 11 ethics violations, to pay $50,000 fine

Rep. David Schweikert reached a deal announced Thursday to end a longstanding House Ethics Committee investigation by admitting to 11 rules violations, accepting a reprimand and agreeing to pay a $50,000 fine.

The committee found "substantial evidence" of violations by the five-term Arizona Republican stretching from 2010 into 2018 and faulted him for evasive, stalling tactics that helped him skirt more serious violations.

As it was, the violations the committee did find include undisclosed loans and campaign contributions; misuse of campaign funds for personal purposes; improper spending by his office; and an environment where office staffers were pressured to do political work.

The proposed deal caps an investigation that has cast a shadow over Schweikert’s political career since late 2017, when allegations of misspending first surfaced. The House of Representatives must adopt a resolution on the matter to make it final.

In a statement, Grace White, a spokeswoman for Schweikert, said he wanted to move ahead and didn't address the substantive issues in the probe.

"We are pleased the Committee has issued their report and we can move forward from this chapter. As noted in the review, all issues have been resolved and Congressman Schweikert will continue working hard for Arizona’s 6th District," she said.

In his response to the Ethics Committee, Schweikert acknowledged there were problems.

"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," he told the committee.

But the committee found that Schweikert was less than forthcoming and cooperative. His stonewalling tactics could be sanctioned by themselves, but the delays may have helped avert more serious problems for Schweikert, the committee wrote.

"Throughout the course of this investigation, Representative Schweikert made vague or misleading statements to the (investigative subcommittee) and (the Office of Congressional Ethics) 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 (Federal Election Commission) errors, and he gave self-serving testimony that lacked candor," the report said.

"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."

The committee’s report said Schweikert’s violations were a troubling example to avoid for other members of the House.

"While all of the violations detailed above were concerning, the Committee was disturbed by the events described in counts three and four … 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 fictitious loan," the report said.

"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."

For nearly two years, Schweikert publicly maintained the matter under investigation was little more than a bookkeeping dispute.

After the separate Office of Congressional Ethics, which helps screen potential cases for the Ethics Committee, revealed its investigative findings against Schweikert's longtime former chief of staff, Oliver Schwab, in June 2019, Schweikert political adviser Chris Baker shifted tone. He acknowledged serious problems had existed and said Schweikert’s trust in Schwab "was grossly misplaced."

Schweikert struggled before report

The report deals another blow to Schweikert, whose Scottsdale-based congressional district is historically safe ground for the GOP. But the Republican-leaning district is the kind of suburban, relatively well-educated location that has drifted toward Democrats, especially in the Trump era.

For Schweikert, a member of the tax-writing House Ways and Means Committee, the findings of misspending hit directly at the heart of his political persona as a budget and finance expert.

It also comes as Schweikert has struggled to mount a financially viable reelection campaign while Democrats have four candidates vying to challenge him in November.

One of them, Hiral Tipirneni, has $1 million more than Schweikert’s cash-strapped campaign.

Entering July, only one House incumbent, Rep. Chip Roy, R-Texas, had a larger cash deficit than Schweikert would if Tipirneni wins Tuesday’s Democratic primary.

His Democratic challengers seized on the report to argue his tenure should end.

Anita Malik, who lost to Schweikert in 2018 and is again seeking the party's nomination, emphasized the 11 violations in a tweet.

"Finally admitting guilt is not enough. (Schweikert) has brought shame on #AZ06. His self interest and self preservation is the worst of politics," she wrote.

Tipirneni said Schweikert "has violated his oath, abused his power, lied and misled, and betrayed the public trust."

"In using his taxpayer-funded congressional office in service of himself instead of our district, he has put his own interests above those of his constituents time and time again," Tipirneni said in a written statement.

Karl Gentles said in a tweet the district has long known Schweikert's "integrity and credibility was questionable at best. Now his colleagues have formally reprimanded him for his bad behavior. Voters must choose their next rep carefully, someone that will put #principlesoverpolitics and work for us not against us."

Ethics case snowballed

The Office of Congressional Ethics, which investigates potential cases and refers them to the Ethics Committee, began scrutinizing Schweikert after the Washington Examiner published a story in November 2017 outlining spending problems involving Schwab.

The OCE investigation amassed a troubling paper trail, and passed that on to the Ethics Committee. The Ethics Committee has subpoena power and burrowed in even deeper.

In its 107-page report, the special subcommittee that examined Schweikert's case found that his "campaign funds were used to reimburse staff for expenditures made for his personal use, including babysitting services, meals, dry-cleaning, and travel."

As the committee proceeded, Schweikert "delayed responding to its requests and his testimony was punctuated by dissembling and incoherent statements."

The probe pored over Schweikert's personal, congressional and campaign finances, unspooling a trail of confusing transactions that effectively masked a candidate relying on his chief of staff to keep his campaign afloat.

Schweikert's campaign committee disclosed a loan from him that wasn't made, and didn't disclose a loan or loan payments worth $205,000 that were made, the committee wrote.

In 2010, when Schweikert made his third run for Congress, he and his wife obtained a $75,000 line of credit using rental properties they owned to secure the deal. For several years, Schweikert used the credit to help fund his campaigns but didn't disclose the true nature of the money in his reports to the FEC.

He repaid the credit debt in full by 2015. While Schweikert created new campaign committees and turned to treasurers other than his wife, he didn't report the original line of credit, the committee found.

Early in the 2012 campaign cycle, when Schweikert defeated then-Rep. Ben Quayle, R-Ariz., in a hotly contested GOP primary, Schweikert's campaign reported a $100,000 loan from the candidate.

But he never made the loan. Schweikert told the committee he had been seeking another line of credit at the time.

"I had started the paperwork to do a credit line on the house, and in the chaos, maybe it just never got completed, and it [had] already been put down on the FECs. It should not have been done, it was a mistake," Schweikert told the committee.

Even so, the loan wasn't taken off the books, the committee found.

Instead, $100,000 was listed as paid out in four scattered amounts after the primary to a firm controlled by Schweikert's campaign consultant, Chris Baker. The payments were supposed to cover the costs of mailings, but those mailings were never made, the committee wrote.

The reports said Baker notified Schweikert in 2012 that his company had not received those payments.

Schweikert told the committee the $100,000 payments were "misreported," but the committee "received no further explanation why the fictional disbursements were reported in the first place."

A compliance firm that took over the campaign's books after the 2012 elections never learned about the nonexistent loan or the transactions that effectively erased it from the campaign's books, the report said.

In October 2013, Schweikert filed papers with the FEC saying the $100,000 he had loaned his campaign had been forgiven.

"If I was a better lawyer, but not having gone to law school, we probably should have done it a different way," he told the committee. "But it still accomplishes the same thing, it cleaned it up."

Schweikert didn't clear up the issue in more than a dozen FEC reports before closing the loan, and he didn't mention it to investigators for more than a year, the committee noted.

The committee said the fake loan suggested a more robust fundraising operation than actually existed.

The financial problems that dogged his early runs for Congress have continued to this day.

In three of the four quarters during the past year, Schweikert’s campaign spent more than it took in, a telltale sign of distress. Schweikert's campaign has spent heavily on legal fees throughout the investigation, cutting into his ability to run for reelection.

Losing, winning, surviving

Schweikert’s up-and-down congressional history includes debt-larded losses in 1994 and 2008 before he toppled former U.S. Rep. Harry Mitchell, D-Ariz., in the tea party-fueled wave election of 2010. 

Schweikert could not rest on his laurels with that victory because the state’s political lines were redrawn beginning with the 2012 elections.

To remain in office under the redrawn district lines, Schweikert had to defeat fellow GOP freshman U.S. Rep. Ben Quayle, the son of former Vice President Dan Quayle, in a 2012 primary. 

He won, but the victory came at a high price.

Campaign mailers raised questions of Quayle’s sexuality and a story in Politico citing unnamed sources said Quayle was among dozens of members of Congress who frolicked in the Sea of Galilee during a 2011 trip to Israel.  

Schweikert maintained he had not impugned Quayle the way many interpreted it, but to many Republicans, he had crossed a line. 

At the same time, Schweikert had also weakened the political hand of then-House Speaker John Boehner, R-Ohio, by voting against certain budget measures, among other acts of rebellion. After the 2012 elections, GOP leaders booted Schweikert and three other House Republicans from their committees.

Schweikert, who lost a seat on the House Financial Services Committee, said at the time that the purge targeted “the more outspoken conservatives” and “there is retribution for voting your conscience now.”

Whatever the reason, Schweikert was back on that committee after the 2014 elections and promoted to the Ways and Means Committee after the 2016 elections. 

By then, Schweikert was a member of the House Freedom Caucus, a group of activist conservatives who helped drive Boehner into retirement in 2015. Even so, Schweikert rarely bucked his party's leaders and was seen as a bridge to the party’s often-unruly right flank.

A tougher road ahead

At the beginning of the Trump administration, Schweikert reliably stuck with his party’s two signature legislative efforts: the failed attempts to repeal the Affordable Care Act and the successful passage of sweeping tax cuts that largely benefited corporations. 

Even with the cloud of the ethics investigation newly underway, Schweikert won a fifth term in 2018 by defeating Democrat Anita Malik by 10 percentage points. In three prior runs in the same district, Schweikert won by an average of 27 points.

Reach the reporter Ronald J. Hansen at ronald.hansen@arizonarepublic.com or 602-444-4493. Follow him on Twitter @ronaldjhansen.

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