The Arizona Republican already
faces a federal corruption probe - as well as a growing
political crisis - over allegations that he tried to use
legislation for land swaps in Arizona to help a former business
partner.
Tuesday's disclosure by the Federal Election Commission
threatens to revive an older scandal over whether Renzi broke
campaign finance laws when he was first elected in 2002, adding
to doubts about his political future.
The new documents show Renzi's
campaign agreed to pay the FEC $25,000 in January because he
misreported campaign contributions and expenses in 2002. They
also show that Renzi failed to disclose hundreds of thousands of
dollars in personal income in 2002, when he filed his taxes for
that year, and only recently paid more than $320,000 in federal
and state back taxes on the income.
In September, Renzi said complaints stemming from the FEC audit
were "desperate and erroneous allegations" launched by "liberal
operatives." By the time he put that statement out, though, he
had already filed the new tax returns and paid the back taxes.
In response to questions about the FEC release, Renzi's office
issued a written statement Tuesday.
"I take responsibility for the inaccuracy of our first FEC
report," Renzi said. "In an effort to clear it up, we hired a
new CPA, and all our reports are now correct and complete. I am
pleased this matter has finally been resolved."
House Republican leaders, who have not offered Renzi much public
support, did not respond to calls for comment.
Democrats said Renzi broke the law.
"Arizonans in the 1st Congressional District deserve a
representative who obeys the law and is accountable," said
Fernando Cuevas, a spokesman for the Democratic Congressional
Campaign Committee.
In the corruption probe and the FEC case, Renzi's political
problems stem from questions about how his business investments
have intersected - or possibly interfered - with his conduct as
a lawmaker.
Pursuing evidence in the corruption investigation, FBI agents
raided Renzi's businesses on April 19. That same day, House
records show that an aide to Rep. Doc Hastings of Washington,
the top Republican on the House Ethics Committee, pulled copies
of Renzi's financial disclosure statements for 2003, 2004, 2005
and 2006. That could indicate the panel has opened an
investigation into the matter.
Ethics committee rules prohibit aides or members from commenting
on whether the panel is conducting an investigation.
The FEC case began when an audit three years ago found Renzi had
loaned his 2002 campaign $369,000 from his businesses, violating
a federal ban on corporate political contributions. Renzi
disputed that, saying the money was from his personal funds.
The documents released Tuesday show he settled those charges by
filing amended tax documents for 2002. Those new returns
indicated that his businesses paid him and his wife, Roberta,
$598,444 that year that he had never before disclosed, the FEC
said. He paid back taxes on that income of $285,421 to the IRS
and $38,409 to the Arizona Department of Revenue when he filed
the new returns.
The Renzis own several businesses based in Sonoita, including an
insurance company and a vineyard company, which also owns some
real estate.
An accountant who reviewed Renzi's original 2002 tax returns
called them "abysmal," ""confused" and "complex" in an e-mail to
Renzi, which he turned over to the FEC.
Democrats say the corruption investigation, which is looking at
land deals in Arizona involving James Sandlin, a former business
partner of Renzi's, is also connected to a controversy over the
forced resignation of Arizona's former top federal prosecutor,
Paul Charlton.
Charlton had opened the investigation into Renzi well before
Justice Department officials forced him to leave his post last
December. Renzi's chief of staff, Brian Murray, called
Charlton's office about the investigation last October.
The department has not yet turned over documents related to the
investigation to House and Senate staffers looking into the
ouster of Charlton and seven other former U.S. attorneys.
Renzi faces grave doubts about whether he will seek re-election
or even serve out his current term, which expires in January
2009. He has already temporarily left all of his committees.
On Friday, he issued a written statement denying widespread
rumors he was planning to resign from Congress. Potential
candidates on both the Democratic and Republican side are
preparing in case he does step down, which would lead to a
special election to replace him.
The DCCC has opened a fundraising account to collect cash that
would be turned over to the party's candidate if there is a
special election.




