{"id":1477,"date":"2015-05-13T14:30:51","date_gmt":"2015-05-13T14:30:51","guid":{"rendered":"https:\/\/covcasbulletin.info\/?p=1477"},"modified":"2015-05-14T10:51:06","modified_gmt":"2015-05-14T10:51:06","slug":"10-members-of-congress-took-trip-secretly-funded-by-foreign-government","status":"publish","type":"post","link":"https:\/\/covcasbulletin.info\/?p=1477","title":{"rendered":"10 members of Congress took trip secretly funded by foreign government"},"content":{"rendered":"

By SCOTT HIGHAM*, STEVEN RICH** and ALICE CRITES
\nThe Washington Post<\/em><\/p>\n

The state-owned oil company of Azerbaijan secretly funded an all-expenses-paid trip to a conference in Baku, on the Caspian Sea, in 2013 for 10 members of Congress and 32 staff members, according to a confidential ethics report<\/a> obtained by The Washington Post. Three former top aides to President Obama appeared as speakers at the event.<\/p>\n

\"\"<\/a>Lawmakers and their staff members received hundreds of thousands of dollars\u2019 worth of travel expenses, silk scarves, crystal tea sets and Azerbaijani rugs valued at $2,500 to $10,000, according to the ethics report. Airfare for the lawmakers and some of their spouses cost $112,899, travel invoices show.<\/p>\n

The State Oil Company of the Azerbaijan Republic, known as SOCAR, allegedly funneled $750,000 through nonprofit corporations based in the United States to conceal the source of the funding for the conference in the former Soviet republic, according to the 70-page report by the Office of Congressional Ethics<\/a>, an independent investigative arm of the House.<\/p>\n

The report reflects the most extensive investigation undertaken by the ethics office, which was created seven years ago in response to a number of scandals on Capitol Hill, including lobbyist Jack Abramoff\u2019s illegal funding<\/a> of lawmakers\u2019 trips.<\/p>\n

The nonprofit corporations allegedly filed false statements with Congress swearing that they were sponsoring the conference. The findings have been referred to the House Ethics Committee<\/a> for investigation of possible violations of congressional rules and federal laws that bar foreign governments from trying to influence U.S. policy.<\/p>\n

SOCAR released a statement saying that its support of the conference was no secret and blaming the nonprofits for not filing the proper disclosures.<\/p>\n

\u201cAt no time did SOCAR hide from the attendees of the conference our involvement,\u201d the statement said. \u201cSOCAR has never been under investigation in this matter because the responsibility for disclosing SOCAR\u2019s financial support for the conference fell to those who were the trip\u2019s sponsors.<\/p>\n

\u201cWe have cooperated fully. We are therefore disappointed that the compliance procedures may not have been followed correctly by the trip\u2019s sponsors and we are unclear why these disclosures were omitted.\u201d<\/p>\n

Tom Rust, chief counsel and staff director for the Ethics Committee, and Kelly Brewington, a spokeswoman for the Office of Congressional Ethics, declined to comment.<\/p>\n

The conference, titled \u201cU.S.-Azerbaijan Convention: Vision for the Future,\u201d took place on May 28 and 29, 2013. During the previous year, SOCAR and several large energy companies sought exemptions for a $28 billion natural gas pipeline project in the Caspian Sea from U.S. economic sanctions being imposed on Iran.<\/p>\n

The congressional investigators could not determine whether lawmakers used their official positions to benefit SOCAR or the pipeline project. They also found no evidence that the lawmakers or their staff members knew that the conference was being funded by a foreign government.<\/p>\n

The investigators noted that the lawmakers relied on representations made to them by two Houston-based nonprofit corporations, the Turquoise Council of Americans and Eurasians<\/a> (TCAE) and the Assembly of the Friends of Azerbaijan<\/a> (AFAZ). The lawmakers told investigators that they had obtained approval for the trip from the Ethics Committee.<\/p>\n

The report said members of the ethics panel wrote to the Office of Congressional Ethics requesting a halt to the investigation so that the matter could be taken up by their own committee. OCE officials declined the request. A government official who spoke on the condition of anonymity because of the sensitivity of the matter said OCE feared that the ethics panel, which has a reputation among watchdog groups for shielding lawmakers<\/a> from embarrassing disclosures, would not take any meaningful action.<\/p>\n

The pipeline has long been an important U.S. policy objective because it would bolster European security by offering an alternative to Russian gas.<\/p>\n

One of SOCAR\u2019s partners was the National Iranian Oil Company (NIOC), a relationship that had threatened to scuttle the deal if sanctions were approved without an exemption for the Shah Deniz Natural Gas Project. \u00adSOCAR and NIOC were partners with 10 percent of the project each, while BP and Norwegian-based Statoil each held 25.5 percent. Russian-based Lukoil also had a 10 percent share, and Turkish Petroleum Corp. had 9 percent.<\/p>\n

Congress had approved two sanctions bills containing passages that exempted the project, which Obama signed into law in August 2012 and January 2013. On June 3, 2013, five days after the Baku conference, Obama signed an executive order assessing economic sanctions against Iran that also exempted the project.<\/p>\n

The Post reported about the trip at the time<\/a>, in an article noting that three former Obama political advisers \u2014 Robert Gibbs, Jim Messina and David Plouffe \u2014 spoke at the conference, which was attended by current and former members of Congress. Politico also wrote about the trip<\/a>, and the Houston Chronicle reported<\/a> that SOCAR had been a sponsor of the conference and raised questions about the nonprofits involved. Only one Western news organization covered the event, the Washington Diplomat<\/a>, a monthly that writes about the diplomatic community in the nation\u2019s capital.<\/p>\n

But no information surfaced at the time about the alleged $750,000 payment from SOCAR to the nonprofits. Ethics investigators obtained a wire transfer showing that SOCAR sent the $750,000 to AFAZ. SOCAR\u2019s legal counsel told the investigators that the money was \u201cdues\u201d that were \u201cintended to be used as funding for the Convention.\u201d<\/p>\n

The lawmakers who took the trip were Reps. Jim Bridenstine (R-Okla.), Yvette D. Clarke (D-N.Y.), Danny K. Davis (D-Ill.), Rub\u00e9n Hinojosa (D-Tex.), Sheila Jackson Lee (D-Tex.), Leonard Lance (R-N.J.), Michelle Lujan Grisham (D-N.M.), Gregory W. Meeks (D-N.Y.) and Ted Poe (R-Tex.) and then-Rep. Steve Stockman (R-Tex.).<\/p>\n

Clarke is a member of the Ethics Committee.<\/p>\n

Another lawmaker, Rep. Michael R. Turner (R-Ohio), attended as part of a separate congressional delegation and his expenses were not paid by the conference, according to the report.<\/p>\n

\u201cMy official visit was part of my House Armed Services and NATO responsibilities,\u201d Turner told The Post in a statement. \u201cThe conference did not pay my expenses and I did not receive any gifts.\u201d<\/p>\n

Davis told The Post that the Ethics Committee approved the trip, which he took with his wife, and that he didn\u2019t realize it had been funded by SOCAR. He said he saw the oil company\u2019s logos in Baku, but \u201cto be very honest about it, I didn\u2019t pay them much attention, honestly.\u201d<\/p>\n

He also said that during the conference he received one rug, which was delivered to his hotel room and is in storage in his basement in Chicago. He said he is considering donating the rug to a museum or a charity.<\/p>\n

Davis also said lawmakers should ask more questions about the source of funding for travel.<\/p>\n

\u201cSome of these things that we take sometimes for granted probably require a bit more investigation or more prudence,\u201d he said. \u201cSo maybe we\u2019ll exercise a bit more scrutiny. I will.\u201d<\/p>\n

Hinojosa, who attended the conference with his wife, said he was also unaware of SOCAR\u2019s involvement.<\/p>\n

\u201cPrior to the trip to Azerbaijan and Turkey, I sought approval from the U.S. House Committee on Ethics to travel,\u201d he said in a statement. \u201cI believed the purpose of the trip was to strengthen U.S.-Turkey and U.S.-Azerbaijani relations. I received souvenirs of what I believed to be of minimal value and in compliance with the House Gift rule.\u201d<\/p>\n

The statement added: \u201cImportantly, the report notes that there is no evidence to suggest that Members of Congress who went on the trip knew that impermissible sponsors and organizers may have been involved and that Members relied on the sponsors\u2019 representations in good faith.\u201d<\/p>\n

Ladan Ahmadi, a spokeswoman for Meeks, said in a statement that the congressman \u201chad no reason to believe that the trip was in any way inappropriate. He understood the rug to be a permissible courtesy gift.\u201d<\/p>\n

Glenn Rushing, the chief of staff for Jackson Lee, said in a statement: \u201cCongresswoman Jackson Lee submitted to the House Ethics Committee all of the information available to her regarding sponsorship of this travel and received advance approval for this trip, in writing, from the House Ethics Committee, fully in accordance with House Ethics Rules. The congresswoman made this trip only because of the approval by the House Ethics Committee.\u201d<\/p>\n

Lance declined to comment, citing the ongoing ethics investigation. A senior staff member who spoke on the condition of anonymity said that the congressman was unaware SOCAR had sponsored the event and that he had returned the one rug he received after he got back to Washington. The staff member also said Lance received a pair of earrings and reimbursed the nonprofit group that helped organize the conference $100 immediately upon returning to New Jersey.<\/p>\n

Clarke and Stockman did not respond to requests for comment.
\n
\nTrip organized in plain sight<\/strong><\/p>\n

Although lawmakers told investigators that they were unaware that the Azerbaijani government had underwritten the trip through its oil company, investigators noted that SOCAR organized much of the conference in plain sight. The oil company issued invitations, sponsored visa entries for the lawmakers and staff members, and hung banners and placards emblazoned with SOCAR\u2019s logo throughout the conference halls in Baku.<\/p>\n

The investigators concluded in their report that \u201ca person\u2019s ignorance of the true source of travel expenses is not an absolute shield from liability for receipt of travel expenses from an improper source.\u201d<\/p>\n

Several members of the House Foreign Affairs Committee, which has oversight of U.S. relations with Iran and the economic sanctions, attended the conference. They included one of the panel\u2019s most influential members, Poe, who chairs its subcommittee on terrorism, nonproliferation and trade.<\/p>\n

The report said Poe was among those who did not fully cooperate with the Office of Congressional Ethics or did not acknowledge receipt of their request for information.<\/p>\n

In a statement to The Post, Shaylyn Hynes, Poe\u2019s spokeswoman said, \u201cCongressman Poe did cooperate,\u201d providing investigators with documents and answers to their questions.<\/p>\n

\u201cThe House Committee on Ethics then requested that the OCE cease its review because it was conducting its own investigation,\u201d Hynes\u2019s statement said. \u201cAs a result, we alerted OCE that we were communicating and cooperating directly with the House Committee on Ethics, the official arbiter of House ethics matters.\u201d<\/p>\n

Hynes\u2019s statement added that the congressman thought the conference was being sponsored by the nonprofits.<\/p>\n

\u201cIn its report, the OCE clearly states it did not receive any evidence that the Congressman knew that TCAE was not the sole organizer or sponsor of the travel,\u201d Hynes\u2019s statement said. \u201cThe OCE further correctly found that \u2018Representative Poe acted in good faith reliance on information received from the purported trip sponsor and approval from the Committee on Ethics.\u2019 \u201d<\/p>\n

According to the report, three other lawmakers who took the trip also declined to cooperate with the ethics office or did not respond: Jackson Lee, a member of the Homeland Security Committee; Lance, a member of the Energy and Commerce Committee; and Meeks, a member of the Foreign Affairs Committee.<\/p>\n

Lance\u2019s staff member said the lawmaker had been ready to cooperate with the Office of Congressional Ethics when he was told by the House Ethics Committee that it would examine the case. Lance is now cooperating with that panel.<\/p>\n

Meeks also provided documents to the OCE but did not give an interview to investigators after learning that the ethics panel was conducting its own investigation, his spokeswoman, Ahmadi, said in a statement.<\/p>\n

\u201cCongressman Meeks is committed to cooperate with the Ethics Committee in its review of this matter,\u201d she said.<\/p>\n

Several lawmakers said they thought they had properly reported their travel expenses on their disclosure forms. Several said they believed they did not need to disclose the gifts because their value did not exceed the $350 reporting threshold.<\/p>\n

Lujan Grisham told ethics investigators that she did not disclose the rugs because she did not think they were particularly valuable. She also thought that they were unattractive.<\/p>\n

\u201cIt\u2019s not a carpet I would have purchased,\u201d the congresswoman said.<\/p>\n

A spokesman for Lujan Grish\u00adam told The Post that the congresswoman \u201ctakes House Ethics rules seriously\u201d and sought approval for the trip by the House Ethics Committee.<\/p>\n

\u201cThe Office of Congressional Ethics concluded, as reported by the news media, that Rep. Lujan Grisham was led to believe the travel was sponsored by a nonprofit organization, and not any other source,\u201d Gilbert Gallegos, the spokesman, said in a statement. \u201cRep. Lujan Grisham acted in good faith as she relied on the approval by House Ethics Committee.\u201d<\/p>\n

In recent years, as relations between the United States and Iran have deteriorated over Iran\u2019s nuclear ambitions, Congress and the Obama administration have stepped up economic sanctions. The government of Azerbaijan, which shares a border with Iran, hired several lobbying firms to build a better relationship with policymakers in Washington.<\/p>\n

Considering new sanctions<\/strong><\/p>\n

As Congress weighed a new round of sanctions against Iran in 2012, SOCAR opened an office in Washington, buying a building in Dupont Circle for $12 million. On April 25 and 26, 2012, a conference called \u201cU.S.-Azerbaijan Relations: Vision for Future\u201d was held at the Willard InterContinental Hotel in downtown Washington.<\/p>\n

Among the attendees were Poe, Meeks and Jackson Lee. Ethics investigators said it appeared that SOCAR was a \u201cmajor funder\u201d of the conference, citing interviews and photographs published on a Web site for the event that showed banners with \u00adSOCAR\u2019s logos inside the hotel.<\/p>\n

At the time, Congress was considering the Iran Threat Reduction and Syria Human Rights Act. The bill contained a provision that would exempt the gas pipeline project from Iranian sanctions. The provision said that \u201cnothing\u201d in the measure would apply to \u201cthe development of natural gas and the construction and operation of a pipeline to transport natural gas from Azerbaijan to Turkey and Europe.\u201d<\/p>\n

Three months later, on July 30, 2012, Obama signed an executive order<\/a> authorizing additional sanctions against Iran and exempting the pipeline. On Aug. 1, Congress approved the sanctions legislation and the exemption. Obama signed it into law nine days later.<\/p>\n

Before adjourning for Christmas, Congress approved another sanctions bill called the Iran Freedom and Counter-Proliferation Act<\/a>, which was part of the National Defense Authorization Act of 2013. That bill also contained an exemption for the gas pipeline. On Jan. 2, 2013, Obama signed the legislation into law.<\/p>\n

Soon, members of Congress began receiving invitations to attend a springtime conference in Baku, the Azerbaijani capital, known for its mix of medieval architecture and gleaming modern buildings along the shores of the Caspian Sea.<\/p>\n

A month before the conference, the nonprofit AFAZ was set up in Houston, home to some of the world\u2019s largest energy companies. \u201cEvidence revealed that \u00adSOCAR founded AFAZ in the month prior to the Convention and transferred $750,000 to an AFAZ bank account prior to the Convention,\u201d the OCE report said. AFAZ was created as an \u201ceducational, cultural, business, congressional advocacy and charitable organization\u201d with the mission of building \u201cbridges between the United States and Azerbaijan,\u201d according to the nonprofit\u2019s Web site.<\/p>\n

The investigators for the Office of Congressional Ethics found that AFAZ and the other Houston-based nonprofit, TCAE, concealed the true source of the funding for travel and other expenses for the U.S. officials.<\/p>\n

\u201cThe OCE found that the disclosed nonprofit sponsors contributed virtually no money towards congressional travel to Azerbaijan and played a very limited role in organizing the Convention,\u201d the report said.<\/p>\n

On April 16, 2013, Kemal Oksuz, an executive in charge of the nonprofits, wrote to the president of SOCAR, requesting $750,000 to underwrite the conference, according to the report. In return, Oksuz pledged that SOCAR\u2019s \u201clogo will be used on all printed materials, banners and website, and that SOCAR will be recognized as the Main Sponsor of the Convention.\u201d<\/p>\n

On May 13, SOCAR transferred $750,000 into the Wells Fargo account of AFAZ, according to the report. Three days later, AFAZ made its first money transfer to pay for the plane tickets for the conference attendees.<\/p>\n

\u201cSOCAR and AFAZ provided gifts in the form of impermissible travel expenses to congressional travelers in violation of House rules, regulations and federal law,\u201d the ethics investigators said.<\/p>\n

Oksuz did not respond to requests for comment.<\/p>\n

No funding from \u2018sponsors\u2019<\/strong><\/p>\n

Last summer, the Houston Chronicle published an examination of the Baku conference and interviewed Oksuz. He told the newspaper that he was not required to disclose corporate sponsorships because \u201cthose contributions always came after the conventions.\u201d<\/p>\n

The investigators said five nonprofits affiliated with the Azerbaijani government said they sponsored the conference, filing sworn statements with the Ethics Committee in April and May 2013.<\/p>\n

\u201cThe five sponsoring organizations contributed no funding for the congressional travel in spite of false affirmations on the forms they submitted to the Committee on Ethics,\u201d the investigators wrote in the report.<\/p>\n

SOCAR assembled a list of lawmakers, other U.S. officials and private individuals it wanted to attend the three-day conference. The oil company invited more than 30 people to speak in Baku, according to the report, including Gibbs, Messina and Plouffe. SOCAR also invited Richard G. Lugar (R-Ind.), a former chairman of the Senate Foreign Relations Committee, who had lost his reelection campaign in 2012.<\/p>\n

In addition to SOCAR, BP, ConocoPhillips and KBR also helped to underwrite the costs of the conference, estimated at $1.5 million. Those costs included $100,000 for hotel accommodations, $75,000 for food and entertainment, and $1.2 million for travel and other expenses.<\/p>\n

Several members of Congress and their staff members also took side trips to Turkey, traveling to Istanbul, Ankara or both, the investigators found. They included Clarke, Hinojosa, Lance and Lujan Grisham.<\/p>\n

The Bosphorus Atlantic Cultural Association of Friendship and Cooperation, a Turkish nonprofit organization, covered the expenses, the report said. The lawmakers did not disclose the role of that nonprofit.<\/p>\n

\u201cMembers of Congress who traveled to Turkey accepted payment of travel expenses from impermissible sources, resulting in an impermissible gift, in violation of House rules and regulations,\u201d the report found.<\/p>\n

Investigators also said lawmakers received a number of gifts, including crystal tea sets, briefcases, silk scarves, turquoise earrings, gold-painted plates and Azerbaijani rugs. Some congressional staff members told the investigators they thought that the rugs were worth about $300 \u2014 $50 below the reporting threshold \u2014 and that they didn\u2019t need to disclose them on their forms filed with the Ethics Committee.<\/p>\n

The report said \u201cevidence suggests\u201d that all lawmakers received at least one rug and some got two, one prayer-size and one area rug. Many staff members also received rugs.<\/p>\n

Only one lawmaker, Bridenstine, disclosed the rugs on his financial forms. He had them appraised: the smaller rug at $2,500 and the larger at $3,500. In a July 2013 letter to the Ethics Committee, he said he wanted to donate the larger rug to the House Clerk\u2019s Office.<\/p>\n

Bridenstine was the only lawmaker to offer to pay for the rugs out of his own pocket, telling the committee that he would like to purchase the smaller rug \u201cat fair market value.\u201d<\/p>\n

But, ultimately, he decided not to keep the rugs.<\/p>\n

\u201cHaving sought advice from the Committee on Ethics, I determined the best course of action was to return the rugs and I did so,\u201d he said in a statement to The Post. \u201cI also received a porcelain tea set which was valued at $87, well under the Foreign Gifts Disclosure Act rules, and an educational book and four local traditional music CDs.\u201d<\/p>\n

Amy Brittain, Kimbriell Kelly, Robert O\u2019Harrow Jr. and Steven Mufson contributed to this report.<\/em><\/p>\n

* Scott Higham is reporter assigned to The Post\u2019s investigative unit.<\/em><\/p>\n

** Steven Rich is the database editor for investigations at The Washington Post. While at The Post, he\u2019s worked on investigations involving tax liens, civil forfeiture, cartels and government oversight. He was also a member of the reporting team awarded the Pulitzer for NSA revelations.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

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