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                                              House Calendar No. 87 


116th Congress }                                          { Report
                        HOUSE OF REPRESENTATIVES
  2d Session   }                                          { 116-465

======================================================================
     
                      IN THE MATTER OF ALLEGATIONS
                       RELATING TO REPRESENTATIVE
                            DAVID SCHWEIKERT


                               ----------                              

                              R E P O R T

                                OF THE

                          COMMITTEE ON ETHICS

                              BOOK 1 OF 2


               
               [GRAPHIC NOT AVAILABLE IN TIFF FORMAT] 


   July 30, 2020.--Referred to the House Calendar and ordered to be 
                                printed

                  
         
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                                              House Calendar No. 87 


116th Congress }                                          { Report
                        HOUSE OF REPRESENTATIVES
  2d Session   }                                          { 116-465

======================================================================
     
                      IN THE MATTER OF ALLEGATIONS
                       RELATING TO REPRESENTATIVE
                            DAVID SCHWEIKERT

                              __________

                              R E P O R T

                                OF THE

                          COMMITTEE ON ETHICS

    
                             BOOK 1 OF 2
             
             
             [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


   July 30, 2020.--Referred to the House Calendar and ordered to be 
                                printed


                                __________
               
               
                    U.S. GOVERNMENT PUBLISHING OFFICE                    
40-948                     WASHINGTON : 2020                     
       
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                          COMMITTEE ON ETHICS

THEODORE E. DEUTCH, Florida,         KENNY MARCHANT, Texas,
  Chairman                             Ranking Member
GRACE MENG, New York                 GEORGE HOLDING, North Carolina
SUSAN WILD, Pennsylvania             JACKIE WALORSKI, Indiana
DEAN PHILLIPS, Minnesota             MICHAEL GUEST, Mississippi
ANTHONY BROWN, Maryland

                              REPORT STAFF

              Thomas A. Rust, Chief Counsel/Staff Director
           Brittney L. Pescatore, Director of Investigations
                 David Arrojo, Counsel to the Chairman
              Chris Donesa, Counsel to the Ranking Member

                        Janet M. Foster, Counsel
                        C. Ezekiel Ross, Counsel
                    Danielle Appleman, Investigator
                  Caroline Taylor, Investigative Clerk
                  
                  
                  
                  
                  
                         LETTER OF TRANSMITTAL

                              ----------                              

                          House of Representatives,
                                       Committee on Ethics,
                                     Washington, DC, July 30, 2020.
Hon. Cheryl L. Johnson,
Clerk, House of Representatives,
Washington, DC.
    Dear Ms. Johnson: Pursuant to clauses 3(a)(2) and 3(b) of 
Rule XI and clause 5(a)(5) of Rule XIII of the Rules of the 
House of Representatives, we herewith transmit the attached 
report, ``In the Matter of Allegations Relating to 
Representative David Schweikert.''
            Sincerely,
                                   Theodore E. Deutch,
                                           Chairman.
                                   Kenny Marchant,
                                           Ranking Member.




                            C O N T E N T S

                              ----------                              
                                                                   Page
  I. INTRODUCTION.....................................................1
 II. PROCEDURAL HISTORY...............................................2
III. FINDINGS.........................................................3
 IV. RESPONSE TO REPRESENTATIVE SCHWEIKERT'S VIEWS....................5
  V. REASONS FOR RECOMMENDED SANCTION.................................7
 VI. STATEMENT UNDER HOUSE RULE XIII, CLAUSE 3(C).....................8

ATTACHMENT: Report of the Investigative Subcommittee and Appendices





                                                   Calendar No. 87 


116th Congress }                                          { Report
                        HOUSE OF REPRESENTATIVES
  2d Session   }                                          { 116-465

======================================================================
.     
                      IN THE MATTER OF ALLEGATIONS RELATING TO 
                           REPRESENTATIVE DAVID SCHWEIKERT

                                  _______
                                

   July 30, 2020.--Referred to the House Calendar and ordered to be 
                                printed

                                _______
                                

               Mr. Deutch, from the Committee on Ethics, 
                        submitted the following

                              R E P O R T 

                            I. INTRODUCTION

    The Committee on Ethics (Committee) hereby submits this 
privileged report pursuant to House Rule XI, clause 3(a)(2) and 
House Rule XIII, clause 5(a)(5), which authorize the Committee 
to investigate any alleged violation by a Member, officer, or 
employee of the House of Representatives, of the Code of 
Official Conduct or any law, rule, regulation, or other 
standard of conduct applicable to the conduct of such Member, 
officer, or employee and to submit to the House a privileged 
report recommending action by the House as a result of such 
investigation.
    This report: (1) summarizes the Committee's investigation 
of Representative David Schweikert relating to violations of 
House Rules, the Code of Ethics for Government Service, federal 
laws and other applicable standards related to campaign finance 
violations and reporting errors by his authorized campaign 
committees, the misuse of his Members' Representational 
Allowance for unofficial purposes, pressuring official staff to 
perform campaign work, and his lack of candor during the 
investigation; (2) adopts the attached report of the 
Investigative Subcommittee (ISC) in the Matter of 
Representative Schweikert; \1\ (3) addresses Representative 
Schweikert's views on the ISC Report; and (4) recommends to the 
House of Representatives that, pursuant to Article I, Section 
5, Clause 2 of the United States Constitution and Committee 
Rule 24(e), the House of Representatives adopt this report and, 
by such action, Representative Schweikert be reprimanded and 
fined $50,000.
---------------------------------------------------------------------------
    \1\ The Committee thanks the Members of the ISC for their efforts 
and attention to this matter.
---------------------------------------------------------------------------

                         II. PROCEDURAL HISTORY

    On April 16, 2018, the Office of Congressional Ethics (OCE) 
sent referrals (OCE's First Referrals) to the Committee 
recommending that the Committee further review allegations 
that: Representative Schweikert and his then-Chief of Staff, 
Richard Oliver Schwab, may have misused or authorized the 
misuse of House resources; Representative Schweikert may have 
failed to ensure that his campaign committees complied with 
applicable rules regarding contributions from congressional 
employees; Mr. Schwab may have improperly made personal outlays 
on behalf of Representative Schweikert's principal campaign 
committees; and Mr. Schwab may have received income beyond the 
outside earned income limit for senior staff. On June 14, 2018, 
the Committee unanimously voted to establish an ISC to review 
the allegations in OCE's First Referrals.\2\
---------------------------------------------------------------------------
    \2\ On July 9, 2018, Mr. Schwab left House employment after 
resigning from his position as Representative Schweikert's Chief of 
Staff. On the date of Mr. Schwab's resignation, the ISC's and the 
Committee's jurisdiction over Mr. Schwab ended.
---------------------------------------------------------------------------
    On September 5, 2018, OCE sent a second referral (OCE's 
Second Referral) to the Committee recommending the Committee 
further review allegations that: (1) Representative Schweikert 
may have used official resources to benefit his campaign or 
pressured congressional staff to perform political activity; 
(2) Representative Schweikert may have authorized compensation 
to an employee who did not perform duties commensurate with his 
House employment; (3) Representative Schweikert or his campaign 
committee may have received loans or gifts from a congressional 
employee; and (4) Representative Schweikert may have omitted 
required information from his annual House financial disclosure 
statements (FD Statements) and Federal Election Commission 
(FEC) candidate committee reports.\3\ On December 20, 2018, the 
Committee unanimously voted to expand the ISC's jurisdiction to 
include the allegations contained in OCE's Second Referral.
---------------------------------------------------------------------------
    \3\ OCE also reviewed an allegation that Representative Schweikert 
tied official activities to campaign or political support. OCE did not 
find substantial reason to believe the fifth allegation and recommended 
that the allegation be dismissed.
---------------------------------------------------------------------------
    The ISC met four times during the 115th Congress and 22 
times during the 116th Congress. The ISC interviewed 18 
individuals, including former and current staff of 
Representative Schweikert's congressional office and campaign. 
The ISC issued four subpoenas and 15 requests for information, 
and in response received over 200,000 pages of documents. 
Representative Schweikert voluntarily appeared before the ISC 
and answered questions under oath.
    Following its investigation, the ISC unanimously concluded 
there was substantial reason to believe that Representative 
Schweikert failed to uphold the laws and regulations of the 
United States, in violation of paragraph 2 of the Code of 
Ethics for Government Service and that he did not act in a 
manner that reflected creditably on the House, in violation of 
House Rule XXIII, clause 1 in connection with: his failure to 
take reasonable steps to ensure his campaign committees 
operated in compliance with applicable laws and standards of 
conduct; the misuse of his MRA for non-official purposes; 
pressuring official staff to perform campaign work; and his 
lack of candor and due diligence in the course of the 
investigation.
    On June 30, 2020, following negotiations with 
Representative Schweikert's counsel, the ISC unanimously voted 
to adopt a Statement of Alleged Violations (SAV) detailing 11 
violations and the facts giving rise to those violations. As 
part of the settlement, Representative Schweikert agreed to 
admit to all 11 violations in the SAV and waive all further 
procedural rights he was afforded under House and Committee 
rules. The ISC also agreed to recommend, and Representative 
Schweikert agreed to accept, a sanction of reprimand by the 
House of Representatives and a $50,000 fine regarding the 
conduct set forth in the SAV.
    On July 1, 2020, the ISC submitted a Report to the full 
Committee detailing the evidence in support of its findings and 
the rationale for its recommendation. Representative Schweikert 
also submitted a response to the ISC's report stating that he 
continues to take responsibility for his actions, noting that 
he has implemented a number of corrective actions, but 
challenging some of what Representative Schweikert 
characterized as ``assertions'' in the ISC's Report. 
Representative Schweikert, however, continues to admit to the 
violations contained in the SAV.
    In light of the above, on July 29, 2020, the Committee 
unanimously voted to adopt this Report and to approve 
Representative Schweikert's waiver agreement.

                             III. FINDINGS

    The Committee adopts as its findings in this matter the 
Report of the Investigative Subcommittee, as attached.
    In summary, the ISC Report details the substantial evidence 
in support of the violations of laws, rules and regulations 
contained in the SAV. First, Representative Schweikert failed 
to take reasonable steps to ensure his campaign committees 
operated in compliance with applicable laws and standards of 
conduct, including Federal Election Commission Act (FECA) 
reporting requirements. Specifically, between July 2010 and 
December 2017, Representative Schweikert's campaign committees 
erroneously disclosed or failed to disclose at least $305,000 
in loans or repayment of loans made or obtained for the benefit 
of his congressional campaigns; failed to report at least 
$25,000 in disbursements made by his campaigns; failed to 
report more than $140,000 in contributions received by his 
campaigns; and falsely reported making disbursements totaling 
$100,000.\4\ The errors violated FECA's reporting requirements, 
House Rule XXIII, clause 1, which requires Members to act in a 
manner that reflects creditably upon the House, and paragraph 2 
of the Code of Ethics for Government Services, which requires 
Members to uphold the laws of the United States. These errors 
also form the basis for Counts I through VI of the SAV.\5\
---------------------------------------------------------------------------
    \4\ SAV at 3.
    \5\ See id. at 22-27.
---------------------------------------------------------------------------
    Second, between January 2011 and July 2018, Representative 
Schweikert's former Chief of Staff made over $270,000 worth of 
impermissible outlays on behalf of Representative Schweikert's 
campaign \6\ and at least three other members of Representative 
Schweikert's congressional staff made impermissible outlays, 
totaling less than $500.\7\ Representative Schweikert knew or 
should have known that Mr. Schwab made substantial purchases on 
behalf of his campaign, but did not prevent the practice. 
Congressional employees are prohibited under federal law from 
making contributions to the campaign of their employing Member; 
certain outlays, even if reimbursed, are considered 
contributions and are thus impermissible. Accordingly, 
Representative Schweikert did not act in a manner that 
reflected creditably on the House, in violation House Rule 
XXIII, clause 1, and failed to uphold the laws and regulations 
of the United States in violation of paragraph 2 of the Code of 
Ethics for Government Service. This violation forms the basis 
for Count VII of the SAV.\8\
---------------------------------------------------------------------------
    \6\ Id. at 14.
    \7\ Id. at 17.
    \8\ Id. at 27-28.
---------------------------------------------------------------------------
    Third, Representative Schweikert misused campaign funds for 
personal purposes by accepting personal items from staff that 
were reimbursed by campaign funds. Between 2011 and 2018, at 
least four members of Representative Schweikert's congressional 
staff paid for personal items for Representative Schweikert, 
including food and babysitting services, and were then 
reimbursed for those items by Representative Schweikert's 
campaign.\9\ The conversion of campaign funds to personal use 
violated FECA and the FEC's implementing regulations, violated 
House Rule XXIII, clause 6, which states campaign funds must be 
kept separate and cannot be converted to personal use, and 
violated paragraph 2 of the Code of Ethics for Government 
Service.\10\ The conversion of campaign funds to personal use 
also forms the basis for Count VIII of the SAV.\11\
---------------------------------------------------------------------------
    \9\ Id. at 17-18.
    \10\ Id. at 29.
    \11\ Id.
---------------------------------------------------------------------------
    Fourth, Representative Schweikert's Members' 
Representational Allowance (MRA) was used for non-official 
purposes. Between January 2011 and November 2017, 
Representative Schweikert's official resources--including 
official funds, staff time, and congressional office space--
were improperly used for unofficial and campaign purposes.\12\ 
Members are responsible for ensuring proper management of their 
MRA and Representative Schweikert failed to provide the 
oversight necessary to prevent misuse of his MRA. The misuse of 
Representative Schweikert's MRA violated 31 U.S.C. Sec. 1301, 
House Rule XXIII, clause 1 and paragraph 2 of the Code of 
Ethics for Government Service and formed the basis for Count IX 
of the SAV.\13\
---------------------------------------------------------------------------
    \12\ Id. at 18-21.
    \13\ Id. at 29-31.
---------------------------------------------------------------------------
    Fifth, members of Representative Schweikert's congressional 
staff were pressured to perform campaign work. Representative 
Schweikert's former Chief of Staff testified that he was 
pressured to perform campaign work, specifically to fundraise, 
and in return, he had an expectation that congressional staff 
fundraise on behalf of the campaign.\14\ Pressuring official 
staff to perform campaign work violated House Rule XXIII, 
clause 1 and formed the basis for Count X of the SAV.\15\
---------------------------------------------------------------------------
    \14\ Id. at 21-22.
    \15\ Id. at 31-32.
---------------------------------------------------------------------------
    Finally, Representative Schweikert violated House Rule 
XXIII, clause 1 by failing to exercise the proper diligence 
necessary in responding to the allegations and the ISC 
determined that his testimony lacked credibility.\16\ 
Representative Schweikert's lack of candor and due diligence 
formed the basis for Count XI of the SAV.\17\
---------------------------------------------------------------------------
    \16\ Id. at 32-33.
    \17\ Id.
---------------------------------------------------------------------------
    The ISC also investigated additional allegations for which 
it did not find a violation. The ISC unanimously concluded 
allegations that Representative Schweikert may have authorized 
compensation to an employee who did not perform duties 
commensurate with his House employment and that he or his 
campaign committee may have received loans or gifts from a 
congressional employee could not be substantiated.\18\ The ISC 
further determined that no additional actions were necessary to 
address omissions in Representative Schweikert's FD Statements 
in consideration of the amendments filed to address those 
omissions.\19\
---------------------------------------------------------------------------
    \18\ See ISC Report at 90.
    \19\ Id. at 93.
---------------------------------------------------------------------------

           IV. RESPONSE TO REPRESENTATIVE SCHWEIKERT'S VIEWS

    On June 27, 2020, Representative Schweikert submitted views 
in response to the draft report of the Investigative 
Subcommittee stating, ``[c]ritically, I agree with the ISC's 
statement that 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.'' \20\ 
Representative Schweikert also accepted the ISC's conclusion 
that he fell short of his duty to adequately supervise his 
staff and others working on his behalf, deferred to the ISC's 
discretionary authority regarding his cooperation with its 
investigation, and requested that the Committee approve the 
settlement agreement negotiated with the ISC.\21\ 
Representative Schweikert, however, also challenges some of the 
``assertions'' in the ISC report.
---------------------------------------------------------------------------
    \20\ Appendix E at 2.
    \21\ Id. at 2, 6.
---------------------------------------------------------------------------
    Representative Schweikert suggests that Mr. Schwab's 
testimony should not be credited because he admitted to ``acts 
of dishonesty.'' The ISC, however, made clear throughout its 
report that it did not rely exclusively on Mr. Schwab's 
testimony to find violations. Furthermore, as the ISC 
explained, had it credited uncorroborated portions of Mr. 
Schwab's testimony, Representative Schweikert would likely be 
facing harsher penalties.\22\ Many aspects of Mr. Schwab's 
testimony were corroborated by other witnesses or documents 
obtained by the ISC and there is substantial evidence to 
support the violations contained in the SAV to which 
Representative Schweikert admits.
---------------------------------------------------------------------------
    \22\ ISC Report at 7.
---------------------------------------------------------------------------
    Representative Schweikert also expresses confusion at the 
ISC's finding that his cooperation fell short of the standards 
it expected, but his bewilderment ignores the ISC's central 
concern that he did not identify or address errors in his FEC 
reports identified by OCE for over a year. Representative 
Schweikert had reason to know of many FEC reporting errors but 
did not promptly advise the ISC of them, despite having 
numerous opportunities to do so and despite the ISC's specific 
requests that he identify the errors.
    In addition, the Committee defers to the ISC's findings 
that Representative Schweikert's testimony lacked candor at 
times. In taking issue with the ISC's questioning strategy, 
Representative Schweikert attempts to shift his responsibility 
to provide truthful and candid testimony into an affirmative 
duty of the ISC to inform him whenever he gave untruthful 
testimony. However, the ISC findings with respect to his lack 
of candor were not over minor memory lapses or slight 
deviations from others' testimony but were due to its serious 
concerns regarding Representative Schweikert's own affirmative 
and self-serving statements, some which were not responsive to 
any question posed, and which were squarely inconsistent with 
the record the ISC obtained.\23\
---------------------------------------------------------------------------
    \23\ Id. at 97.
---------------------------------------------------------------------------
    The Committee appreciates that Representative Schweikert 
made substantial efforts to cooperate with the investigation 
by, among other things, producing thousands of pages of 
documents in response to the ISC's requests for information and 
by submitting a sua sponte report detailing his campaign's 
acceptance of outlays; however, as the ISC explained, ``there 
is no number of pages produced or dollars spent on lawyers that 
can substitute for actually acknowledging and providing candid 
responses to specific allegations of unethical conduct.'' \24\
---------------------------------------------------------------------------
    \24\ Id.
---------------------------------------------------------------------------
    Throughout the course of this investigation, Representative 
Schweikert made vague or misleading statements to the ISC and 
OCE 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 FEC errors, and he 
gave self-serving testimony that lacked candor. 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.
    This matter should serve as an important reminder to all 
individuals within the House community that when confronted 
with allegations of unethical conduct, they should take 
immediate steps to investigate and correct the issues and 
ensure that they do not occur again in the future. Allowing 
unethical conduct to continue in a Member's campaign and/or 
congressional office makes that Member complicit in the 
violation and the offending Member will be held accountable. 
Moreover, when an individual delays acknowledging violations 
under review by the Committee that they know to be true, not 
only can the work of the Committee be impeded, but such 
stalling is inconsistent with the duty of candor owed to the 
Committee, may be viewed as an aggravating factor depending on 
the circumstances, or, as was the case in this matter, lead to 
a finding of a separate violation.

                  V. REASONS FOR RECOMMENDED SANCTION

    The cumulative violations in this matter are serious and 
occurred on a continuous and prolonged basis.\25\ While all of 
the violations detailed above were concerning, the Committee 
was disturbed by the events described in counts three and four 
of the SAV 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 fictious loan.\26\ 
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.\27\ The falsely reported loan 
was subsequently included in the Schweikerts' overall assets 
listed in personal financial statements they submitted to a 
bank in connection with a line of credit the bank provided in 
support of Representative Schweikert's campaign.\28\ However, 
as detailed in Count II of the SAV, the line of credit was 
never disclosed to the FEC.\29\ In addition to these 
interconnected reporting violations, Representative 
Schweikert's campaign further benefited from a scheme in which 
his former Chief of Staff made significant, yet impermissible, 
campaign expenditures.\30\ As detailed in Count VII of the SAV, 
Mr. Schwab waited weeks, and sometimes months, to seek 
reimbursements from the campaign for his purchases, thereby 
providing the campaign with enough liquidity to meet its other 
obligations, or in other instances, allowing the campaign to 
post higher cash on hand totals.\31\
---------------------------------------------------------------------------
    \25\ Compare Comm. on Standards of Official Conduct, In the Matter 
of Representative Charles B. Rangel, H. Rept. 111-661, 111th Cong. 2d 
Sess. 2 (2010) (seeking censure of Member based on cumulate nature of 
serious violations on a ``continuous and prolonged bases,'' where 
Member did not enter settlement agreement) (hereinafter Rangel).
    \26\ SAV at 25-26.
    \27\ ISC Report at 28-30.
    \28\ Id. at 21 n. 95.
    \29\ SAV at 23-25.
    \30\ ISC Report at 40-53.
    \31\ SAV at 27-28.
---------------------------------------------------------------------------
    The ISC considered whether a House-level sanction of 
censure was appropriate given that the violations in this 
matter were serious, cumulative, and occurred on a continuous 
and prolonged basis.\32\ The ISC ultimately agreed to recommend 
a lesser sanction than censure, ``due in large part to the 
congressman's willingness to accept responsibility and 
agreement to pay a substantial monetary fine.'' \33\ The 
Committee defers to the ISC's sanction recommendation, which is 
that Representative Schweikert be reprimanded and fined 
$50,000, and recognizes that by admitting to the violations and 
waiving his additional procedural rights, Representative 
Schweikert has saved the House the further use of significant 
resources and allowed this matter to be closed 
expeditiously.\34\
---------------------------------------------------------------------------
    \32\ See Rangel at 2 (censuring Member, who did not enter into a 
settlement agreement, for serious violations that occurred on a 
continuous and prolonged basis).
    \33\ ISC Report at 99.
    \34\ See Comm. on Ethics, In the Matter of Allegations Relating to 
Representative Laura Richardson, H. Rept. 112-642, 112th Cong. 2d Sess. 
15 (2012) (seeking reprimand of Member for serious violations following 
negotiated settlement agreement in which a Member admitted to 
violations).
---------------------------------------------------------------------------
    Therefore, the Committee recommends Representative 
Schweikert be reprimanded for the violations discussed above. 
In addition to public reprimand, the Committee recommends that 
the House, by adoption of this Report, impose a $50,000 fine on 
Representative Schweikert for his misconduct and that the fine 
be payable to the U.S. Treasury no later than October 30, 2020.
    The Committee further recommends that the House of 
Representative adopt a resolution in the following form and 
that the adoption of this Report will serve as a reprimand of 
Representative Schweikert and the imposition of a $50,000 fine 
under the conditions outlined herein:

                            HOUSE RESOLUTION

    Resolved, (1) That the House adopt the Report of the 
Committee on Ethics dated July 30, 2020, In the Matter of 
Allegations Relating to Representative David Schweikert.

            VI. STATEMENT UNDER HOUSE RULE XIII, CLAUSE 3(c)

    The Committee made no special oversight findings in this 
Report. No budget statement is submitted. No funding is 
authorized by any measure in this Report.

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