TALLAHASSEE (CBSMiami) – An investigation into U.S. Rep. Alan Grayson’s use of a hedge fund merits “further review,” the Office of Congressional Ethics said in a report released Tuesday by the U.S. House Ethics Committee.
But the committee has made no final decision regarding the complaint that the Orlando Democrat, who is running for U.S. Senate, used his position as a sitting member of Congress to solicit investments into the fund, which would violate federal law and House rules.
Grayson, a favorite of progressive groups, quickly denied any wrongdoing during a conference call with reporters in which he questioned the ethics of the committee’s staff and labeled the allegations first filed last summer as “politically motivated,” “a witch-hunt,” and “frivolous.”
“I think that nothing will happen between now and the election, and the most likely course of events is that after the election the complaint will be dismissed,” Grayson told reporters.
The campaign of U.S. Rep. Patrick Murphy, a Democrat from Jupiter who has received White House support in his run for the Senate, called the report “damning.”
“He broke the law. He broke ethics rules to make money with an off shore hedge fund. It’s that simple,” Murphy said in a conference call with reporters on Wednesday. “With this unethical action, I believe he’s disqualified himself from being a public servant.”
The Office of Congressional Ethics, an independent body, found in its report that there is “substantial reason to believe” several allegations, including that Grayson permitted the use of his name by four entities linked to his hedge fund and Grayson Consulting, Inc. of Virginia; that he omitted required information from his annual financial disclosure statements; and that a Grayson congressional staffer used official resources while working for Grayson’s hedge fund.
The office also found reason to believe that Grayson conducted multiple press interviews focused primarily on his Senate campaign from his U.S. House office.
Grayson said that the investigation fails to identify instances of actual ethics violations or violations of law. He added that the hedge fund was used only by himself, his children and two long-time friends.
“The OCE (Office of Congressional Ethics) referral is replete with amorphous catch-phrases like ‘reason to believe’,” Grayson said in a statement before talking to reporters.
Grayson added that he “welcomed” the decision by the committee for not establishing an investigative subcommittee to look into the charges.
“The Ethics Committee decision against establishing an investigative subcommittee is highly significant, because in every single case where the Ethics Committee has issued a formal sanction (expulsion, censure or reprimand) against a member of Congress based on an OCE referral, it has done so only after establishing an investigative subcommittee,” Grayson said in his statement.
Grayson went on in the statement, and during the conference call, to declare that the “fishing expedition” further illustrates the Washington political establishment’s support for Murphy.
“Patrick Murphy and his D.C. establishment allies are using (this) new political witch-hunt to try to distract our Florida voters from what they really care about,” Grayson told reporters.
Grayson also repeated a belief from his response to investigators in January – which was released with the findings on Tuesday – by calling for the Committee on Ethics to dismiss the report from the Office of Congressional Ethics due in part to a “close and sustained collaboration” between the office’s staff and Murphy.
“Throughout the OCE’s review of this matter, one or more members of the OCE staff and Congressional staff disclosed confidential information to the staff of Rep. Grayson’s primary opponent,” wrote Brett Kappel, an attorney for Grayson, in the response. “The confidential information was leaked to the media, and Rep. Grayson’s primary opponent then used it to intimidate Rep. Grayson’s campaign staff and try to dissuade potential donors from contributing to Rep. Grayson’s Senate campaign.”
Murphy scoffed at Grayson’s claims of improper behavior on the part of his people or investigators who worked months and generated “thousands of pages” of findings in making a probable cause case against Grayson.
“There’s no conspiracy against Alan Grayson,” Murphy said. “Sometimes the truth hurts. He was caught with his hands in the cookie jar.”
The chairwoman of the Democratic Progressive Caucus of Florida – a left-leaning group that supports Grayson – expressed hope that the Ethics Committee decision “marks the end of silly season in this race.”
“Progressive Democrats are the heart and soul of the Florida Democratic Party and if Patrick Murphy wants to win our support, he’ll need to stop slinging mud and start explaining why he worked with Republicans to cut Social Security benefits, deregulate Wall Street, force President Obama’s hand on the disastrous Keystone Pipeline and support the Benghazi witch hunt committee,” Chair Susan Smith said in a release.
The News Service of Florida’s Jim Turner contributed to this report.