Lawmaker faces federal indictment

Rep. Rick Renzi, a three-term Republican from Arizona, was charged in a federal indictment unsealed Friday with multiple counts of wrongdoing, including using his official position to promote a land deal that secretly brought millions to him and a business partner.

The indictment, handed up by a federal grand jury in Tucson late Thursday and revealed by Justice Department officials at a news conference Friday, charges Renzi with 35 counts, including extortion, money laundering and fraud. Aside from the land deal, Renzi, 49, was charged with illegally skimming hundreds of thousands of dollars from a closely held insurance firm he owned.

Two others -- Renzi’s former real estate partner, James W. Sandlin, 56, of Sherman, Texas, and Andrew Beardall, 36, a Rockville, Md., lawyer and another business associate -- were named as defendants.

The charges are the latest example of federal law enforcement officials pursuing allegations of ethical lapses by members of Congress.

A Justice Department crackdown on public corruption has resulted in jail sentences for two Republican members of Congress: former Rep. Bob Ney of Ohio and Rep. Randy “Duke” Cunningham of California. A third Republican, Sen. Ted Stevens of Alaska, is under investigation for alleged ties to the energy industry. The government is also gearing up for a federal court trial of a prominent Democrat -- Rep. William J. Jefferson of Louisiana -- who also is accused of using his congressional post for self-enrichment.

Renzi, who has been under federal investigation since October 2005, announced in August that he would not seek a fourth House term.

The investigation had been initiated by one of the nine U.S. attorneys who were dismissed by the Justice Department in 2006. Democrats charged that those firings were a politically motivated reprisal by the Bush administration against prosecutors pursuing Republican targets, a charge that the Justice Department has strongly denied.

“Congressman Renzi misused his public office by forcing a land sale that would financially benefit himself and a business associate, and in so doing, he betrayed the trust of the citizens of Arizona,” Diane Humetewa, the U.S. attorney in Phoenix, said Friday.

Renzi, a former real estate investor and insurance executive, has operated under a cloud of suspicion almost since his election to Congress in 2002. He was fined by the Federal Election Commission for reporting violations in connection with his first campaign for Congress. A Washington-based watchdog group, Citizens for Responsibility and Ethics in Washington, has included Renzi on its list of “most corrupt” Congress members for several years.

Critics also questioned his ardent support of legislation that benefited a major defense contractor where his father, a retired Army major general, served as an executive. Renzi’s father died Feb. 9 and was buried Thursday.

Renzi’s Washington lawyers, Reid Weingarten and Kelly Kramer, issued a statement saying Renzi did “nothing wrong.” They also criticized the Justice Department for bringing the charges shortly after his father’s death.

“We will fight these charges until he is vindicated and his family’s name is restored,” they said. Renzi is married with 12 children.

Renzi has been a supporter of Arizona Sen. John McCain, serving as an honorary co-chairman of his presidential campaign. McCain said Friday that Renzi would probably step down from that post. “He’s obviously going to be very busy,” McCain said when asked about the indictment.

The indictment alleges that Renzi peddled his influence to investment groups interested in doing land swaps with the federal government. In exchange for his support for the deals, according to the indictment, he insisted that the investment groups also purchase a 480-acre parcel of land that was owned by his former partner Sandlin. Unknown to the investors was the fact that Sandlin owed Renzi some $800,000 from a previous land venture.

The indictment hinted at a motive for the alleged scheme: “Renzi was having financial difficulty throughout 2005 and needed a substantial infusion of funds to keep his insurance business solvent and to maintain his personal lifestyle.”

One of the proposed land deals, involving an unnamed firm seeking congressional approval for surface rights for a copper mining project in Renzi’s district, collapsed in early 2005. “No Sandlin property, no bill,” Renzi told the investors, according to the indictment.

The lawmaker had discussions with a second group, also unnamed, and promised those investors that if they purchased the Sandlin property they would receive a “free pass” through the House Natural Resources Committee, on which Renzi served and which was considered a gatekeeper for approval of federal land swaps, the indictment states.

“Please be sensitive to the fact that we are going way out on a limb at the request of Congressman Renzi,” one of the investors wrote in an April 17, 2005, e-mail to a Renzi aide. “I am putting my complete faith in Congressman Renzi and you that this is the correct decision.”

The investment group agreed to pay $4.6 million for Sandlin’s land; Sandlin then paid Renzi $733,000. The indictment alleges that Renzi failed to disclose to Congress his earnings from the land deal in his 2005 financial disclosure statement.

The indictment also accuses Renzi and Beardall of embezzling more than $400,000 in premiums from an insurance agency owned by Renzi’s family. The money, the indictment alleges, helped bankroll Renzi’s first congressional campaign.

The case had drawn interest from congressional investigators looking into the firings of the nine U.S. attorneys. Investigators have been concerned that some of the prosecutors may have been targeted because they were zealously pursuing Republicans. Among those fired was the U.S. attorney in Arizona, Paul Charlton.

Some published reports have also said that agents in Arizona felt that they were prevented from moving ahead aggressively with the investigation because Justice officials in Washington withheld approvals they needed.

Humetewa, Charlton’s successor as U.S. attorney, said Friday that her office had received “tremendous support” from Washington.

Charlton declined to address that question Friday but said he was gratified that the case was moving forward.

“What is important for me is that Mr. Renzi was indicted,” he said in an interview. “That is a tribute to the hard work that prosecutors here in Arizona as well as the IRS and the FBI put into this case.”

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rick.schmitt@latimes.com

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Times staff writer Maeve Reston contributed to this report.