Rep. Rick Renzi (R-AZ)

Rep. Rick Renzi (R-AZ) is a third-term member of Congress, representing Arizona’s 1st  congressional district.  Rep. Renzi’s ethics issues stem from misusing his position on the House Resources Committee to force a company to purchase land from his business partner for his personal financial benefit and misappropriating insurance premiums and diverting the money into his campaign account.  Rep. Renzi was included in CREW’s 2005, 2006 and 2007 congressional corruption reports.  As a result of the investigation, in August 2007 he announced that he would be retiring at the end of his current term.  He was indicted by the U.S. Attorney for the District of Arizona on February 21, 2008 on 35 counts  including conspiracy, wire fraud, money laundering, extortion and insurance fraud.    

Federal Indictment

Just before Rep. Renzi’s reelection in 2006, federal authorities began investigating whether Rep. Renzi used his position as a member of Congress to promote the sale of land owned by his former business partner.  In 2005, mining company Resolution Copper sought to mine for copper in Superior, Arizona.  Before mining could commence however, Resolution needed Congress to approve a land swap of 5,000 acres of private land for 3,000 acres of public land near the mining area.  Rep. Renzi agreed to support the land exchange bill if, as part of the swap, Resolution bought a 480-acre alfalfa field in his hometown, Sierra Vista, owned by Rep. Renzi’s former business partner, James Sandlin.

After Resolution Copper refused the deal, Rep. Renzi solicited the Petrified Forest Group, an investment group that was looking to put together a separate land swap, to purchase the land for $4 million.  Rep. Renzi promised that if the Petrified Forest Group bought the land, he would make sure that the swap got through the Natural Resources Committee.  Ultimately, Petrified Forest paid $2.6 million for Mr. Sandlin’s land and gave him a note for an additional $2 million.  Throughout and after the negotiations, Rep. Renzi and Mr. Sandlin concealed their relationship from the company.  After the group purchased the alfalfa field, however, Resolution Copper complained that Petrified Forest had received priority treatment and Rep. Renzi dropped his support for the land swap.  

After receiving the land contract, through a series of transactions, Mr. Sandlin paid Rep. Renzi $733,000 all of which was concealed from Resolution Copper and Petrified Forest.  In
addition, Rep. Renzi omitted both the money owed to him by Mr. Sandlin and the $733,000 payment by Mr. Sandlin from his 2005 financial disclosure forms.

On the same day Mr. Sandlin received the first payment from the Petrified Forest Group, he wrote a $200,000 check to a wine company owned by Rep. Renzi.  A few days later, the wine company was sold to Rep. Renzi’s father.  Rep. Renzi has claimed that Mr. Sandlin paid the $200,000 to settle a debt stemming from a previous business transaction involving land in northeast Arizona.  This explanation is contradicted, however, by the fact that Rep. Renzi failed to report the payment on his 2005 financial disclosure form and the debt bore no relation to the wine company business.         

Rep. Renzi has been charged with honest services wire fraud, money laundering, extortion, engaging in transactions with criminally derived funds and conspiracy for his role in the land swap.
           
Insurance Fraud

Rep. Renzi ran Renzi and Company, a company licensed in Virginia and Arizona, which   obtained property and liability insurance for coverage for clients.  Andrew Beardall served as the company’s president and general counsel from November 2002 through December 2003.
The company contracted with an insurance broker in New York, North Island Facilities, Ltd. (“NIF”), which, in turn, contracted with Safeco Insurance Company (“Safeco”) to insure Rep. Renzi’s non-profit clients.  Premiums received by Renzi and Company were to be held in trust and then passed on to NIF and Safeco, minus a 10% commission.

From December 2001 through June 2003, Rep. Renzi and Mr. Beardall misappropriated more than $400,000 of clients’ funds and failed to pay NIF $236,000 in insurance premiums, leading NIF to cancel the coverage of those insured.  To conceal the theft, Rep. Renzi sent letters to his insurance customers falsely claiming that their coverage had been moved to another company, attaching fake certificates of coverage in the name of Jimcor Insurance Company, actually an insurance broker that did not issue policies.  When state insurance regulators investigated the cancelled policies, Rep. Renzi and Mr. Beardall claimed that the false certificates were sent due to a clerical error.  In a series of transactions between December 2001 and March 2002, Rep. Renzi moved over $300,000 of the misappropriated money to his congressional campaign.    
Rep. Renzi has been charged with insurance fraud and making false statements to insurance regulators.
    

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