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GOP lawmaker uses campaign fund to fight allegations he misuses funds

Rep. Steven Palazzo (R-MS) spent more than $61,000 on payments to a Mississippi-based law firm.

By Josh Israel - June 17, 2021
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Steven Palazzo

Rep. Steven Palazzo (R-MS), who is the subject of an ethics investigation stemming from allegations that he made improper use of campaign funds, reportedly has used those same funds to defend himself against the allegations.

According to a report published by Forbes on Tuesday, Palazzo spent more than $61,000 on payments to a Mississippi-based law firm in December, out of his House campaign account.

A spokesperson for Palazzo did not immediately respond to an inquiry for this story, but a campaign representative confirmed to the Clarion Ledger in Jackson on Wednesday that those funds were to pay for the congressman’s legal defense in the case.

Last August, the independent Office of Congressional Ethics unanimously voted to recommend that the House Committee on Ethics probe allegations that Palazzo misused campaign funds and his official House office allowance.

The board said in a report that it found “substantial reason to believe” that Palazzo “converted funds to personal use to pay expenses that were not legitimate and verifiable campaign expenditures attributable to bona fide campaign or political purposes,” spent some of his Members’ Representational Allowance funds “on personal or campaign expenditures,” and “performed special favors for his brother.” This included allegedly spending tens of thousands of dollars of his campaign donors’ money to renovate a riverfront home in D’Iberville, Mississippi, he had acquired from his mother and $60,000 to rent it from himself to be his campaign headquarters.

Palazzo has previously denied wrongdoing.

On March 1, Ethics Committee Chair Ted Deutch and Ranking Member Jackie Walorski issued a joint statement that their panel had received the Office of Congressional Ethics referral and would “review the matter.”

According to the Federal Election Commission, “using campaign funds for personal use is prohibited,” but donations may be spent on “legal expenses related to campaign or officeholder activity.”

But it does not appear Palazzo was transparent with his donors about the fact that their funds might go to paying his legal bills. The donation page on his campaign website says only, “Every little bit helps.”

An October 2019 Facebook ad soliciting donations for Palazzo’s campaign suggested the money would go entirely to efforts to win a GOP majority in the House and to “shutdown Shifty Schiff.” Palazzo has been a vocal critic of Rep. Adam Schiff (D-CA), the chair of the House Permanent Select Committee on Intelligence, and a Republican majority would have meant Schiff losing his position as chair.

On his campaign website’s issues page, Palazzo presents himself as a responsible steward of other people’s money. “As a Certified Public Accountant, I know the importance of fiscal control,” he claims, adding, “I truly believe that Americans are willing to accept cuts if the sacrifice is truly shared and wasteful spending is eliminated.”

Back during the 2010 House campaign, then-Minority Whip Eric Cantor (R-VA) pledged that if his party regained a majority, it would institute a “zero tolerance policy” for ethical violations. In October 2016, then-Republican presidential nominee Donald Trump promised to “drain the swamp” and restore ethics to Washington, D.C., if elected.

Those promises seem not to have been kept, and Palazzo is one of several House Republicans dealing with ethical issues.

The Ethics Committee announced on April 9 that it is investigating allegations that Rep. Matt Gaetz of Florida “engaged in sexual misconduct and/or illicit drug use, shared inappropriate images or videos on the House floor, misused state identification records, converted campaign funds to personal use, and/or accepted a bribe, improper gratuity, or impermissible gift.” Gaetz has denied those allegations, saying they are part of an extortion plot against him.

It announced the same day that it is investigating allegations that New York Rep. Tom Reed “engaged in sexual misconduct.” Reed apologized for his behavior, said he had entered treatment for alcohol addiction, and announced he will not seek reelection in 2022.

Last July, Rep. David Schweikert of Arizona admitted to 11 ethics violations and paid a $50,000 fine for misusing office funds, campaign finance violations, and other transgressions.

In December 2019, the committee reprimanded Rep. Cathy McMorris Rodgers of Washington and ordered her to reimburse the U.S. Treasury $7,575.95 over improper use of official resources.

Published with permission of The American Independent Foundation.


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