When Congressman Rick Renzi was indicted recently on 35 felonies, the surprise wasn't that the Arizona Republican was going down. Everybody who pays any attention to politics saw that coming.
The surprise came in the details.
I've been following Renzi's ethical troubles longer than, well, anybody. New Times broke the story that resulted in 27 counts of the indictment: Renzi's efforts to push land owned by his business partner. Renzi touted an alfalfa field owned by James Sandlin to two groups seeking his sponsorship for legislation — making it clear that buying the 480-acre parcel was the way to his heart ("Deal Breaker," October 12, 2006). When one of the groups paid top dollar to buy the acreage, Renzi and his partner cashed in.
Good stuff, huh? But the indictment had more.
As it turns out, Renzi embezzled money from clients at his insurance agency to finance his first race for Congress.
It makes for a fascinating twist on the old archetype about political corruption. You know: Idealist goes to Washington, fights for change, and eventually gets corrupted.
That wasn't Rick Renzi's story. According to the indictment filed February 20, he didn't get corrupted while in Congress. No, Renzi sold his soul to the devil just to get to Congress — and, once he arrived, just kept selling it.
His initial scam was simple. Renzi owned a small insurance brokerage firm. His clients wrote him checks to secure themselves insurance policies — but Renzi instead swiped the money and funneled it to his campaign. When clients learned that their policies had been canceled for nonpayment, Renzi and Company allegedly issued fake certificates to fool clients into thinking they were covered by a different insurer.
It's mind-blowingly selfish stuff, made even worse by the fact that Renzi did it while he was running for Congress. And this wasn't a case of a guy falling behind in the polls who decides that he needs a last-minute cash infusion. Renzi's race had barely begun in April 2002 when he started dipping into his clients' money — money that he would eventually use to run ads that painted him as a successful businessman.
And here's the real irony. Renzi's insurance company specialized in nonprofit agencies — particularly right-to-life groups and crisis pregnancy centers.
We don't know exactly which clients' premiums were embezzled (Renzi's lawyer didn't return calls for comment), but records from the Arizona Department of Insurance suggest that they included nearly a dozen local agencies — pregnancy clinics from Tucson to Flagstaff, a Boys & Girls Club in Sierra Vista, and even Arizona Right-to-Life were left temporarily uninsured. So Renzi was vowing to represent right-to-life interests in Washington even as he allegedly swiped money from the very groups that help pregnant women who choose life in Arizona.
The hubris is unfathomable.
There's a fascinating video on YouTube showing Congressman Renzi addressing the annual March for Life rally last year in Washington, D.C. In it, Renzi lectures on the sacrifices he made to raise his 12 children.
"I didn't have the cars. I didn't have the material things," Renzi shouts to the crowd, his voice hoarse. "I was open to new life and then those things came to me."
But the sad fact is, those things didn't just come to Renzi. If you believe prosecutors, he took them.
Took the insurance premiums, and took the congressional race, and took the power and influence that went with it. Just two years after landing in Congress, Renzi used his position to push a land deal benefiting his former business partner — a deal that resulted in $733,000 in Renzi's bank account.
Renzi wants us to believe that all these things just came to him. I think the prosecutors' version is infinitely more believable.
Beyond Renzi's sheer audacity, one of the most interesting parts of the indictment is the old Arizona politicos who play supporting roles in it.
Their names aren't in the actual indictment, which takes pains not to identify anyone involved in the land swap proposals other than Renzi and Sandlin. But it doesn't take much sleuthing to identify them.
I can tell you from my previous reporting that the first group seeking Renzi's help was Resolution Copper. To push the deal through, I've learned more recently, the copper company hired Policy Development Group.
That political consulting firm is fronted by Ron Ober, who was one of the people working on the deal, sources tell me. Ober is the brother-in-law of Phoenix Mayor Phil Gordon. More importantly, he was once also a top aide to former U.S. Senator Dennis DeConcini — and, at the time of the Keating Five scandal, faced glaring questions about his actions.
During the time when Keating was pressing Senator DeConcini to ease off federal regulators, DeConcini's top aide, Ober, was doing business with Keating to the tune of $80 million. ("DeConcini & Keating," John Dougherty, July 14, 1993.)
According to the indictment, Renzi pushed the Sandlin property to Resolution Copper in no fewer than three conversations. Renzi even "insisted that the Sandlin Property must be included in the land exchange if he was to be a sponsor," according to the indictment.
But this one proved much different than the Keating Five disaster.
The copper company figured out why Renzi was pushing the land so hard. "In the course of our due diligence we learned that Representative Renzi and James Sandlin had a business relationship that made us uncomfortable," a company spokesman e-mailed me last week.
Then Resolution Copper, and its consultants, walked away from the deal.
Isn't that great? They did the right thing. Kind of makes me want to hug my local copper-mining company — or at least give Ron Ober credit where it's due. Perhaps John McCain shouldn't be the only guy boasting that he learned a valuable lesson from the Keating Five fiasco.
But we don't have a happy ending, because Renzi wasn't done. He quickly moved to a second target: Four days after negotiations broke down with Resolution Copper, the indictment says, Renzi was peddling Sandlin's property to a second group of investors; he even told them their plan would receive a "free pass" if Sandlin's property were included.
These investors include former Arizona Governor Bruce Babbitt, an experienced — and controversial — land swapper named Guy Inzalaco, and Tucson developer Philip Aries, according to property records.
Unlike the copper company, Babbitt's group took the deal.
After the investors bought the land from Sandlin, Renzi quickly benefited. Turns out Sandlin owed him big bucks, and — thanks to Renzi's machinations — Sandlin had the money to pay up.
When the Babbitt group wired Sandlin its initial $1 million payment, Sandlin wrote a $200,000 check to Renzi on the very same day, the indictment says. Four months later, Sandlin wrote a $533,000 check to Renzi's insurance company to cover the rest of his balance.
Babbitt's group had hoped to buy an option on the land, not get stuck with full ownership. (What interest did they have in an alfalfa field?) But Sandlin refused; it was a sale or nothing.
The whole thing stunk. As an e-mail included in the indictment makes clear, even Babbitt's people seemed to realize it.
An e-mail sent from an unidentified member of Babbitt's group to a Renzi staffer makes that clear.
"Please be sensitive to the fact that we are going way out on a limb at the request of Congressman Renzi," the e-mail said. "I am putting my complete faith in Congressman Renzi and you that this is the correct decision."
It's not clear who blew the whistle on Renzi: The indictment never reveals how the investigation got started. Since no one other than Renzi and Sandlin is facing charges for the deal, I'm betting the feds got full cooperation from everybody on the other side. (Resolution Copper, for its part, issued a statement saying it began cooperating with the feds "in the early stages of the investigation.")
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But it's kind of funny to think of a freshman congressman, a guy who had to resort to embezzled money just to win his seat, imagining he could push around guys like Ron Ober and Bruce Babbitt.
Ober weathered the Keating Five — and, perhaps, learned some important lessons because of it. And Babbitt survived not only two terms as Arizona's governor but eight years as Bill Clinton's Secretary of the Interior.
Voters may have been fooled by the handsome insurance agent who talked a big game, but Ober and Babbitt? After Keating and Clinton, I'm guessing not so much.