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The other mail scandal: Rep. Jim Hagedorn’s office spending problems, explained

Hagedorn recently made headlines for spending 40% of his congressional office’s annual budget in the first quarter of 2020 — much of it with a firm part-owned by one of his staffers.

Rep. Jim Hagedorn
What exactly happened? And what could it mean for Rep. Jim Hagedorn’s term going forward — and his re-election campaign?
REUTERS/Leah Millis

In the middle of a competitive congressional race, Rep. Jim Hagedorn is in the news for being number one in the nation.

Hagedorn’s office spent around 40 percent of its taxpayer-funded budget in the first quarter of 2020, surpassing every other congressional office in the country.

Since the office’s spending was analyzed by Legistorm, a service that analyzes Congressional offices around the country, Hagedorn has fired his chief of staff and retained an ethics lawyer.

What exactly happened? And what could it mean for Hagedorn’s term going forward — and his re-election campaign?

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What happened?

In June, Legistorm reported that in the first quarter of 2020 Hagedorn’s office had already spent about $570,000 of his office’s total $1.4 million budget for the year. This money, which comes from the U.S. Treasury, is given to each congressional office and is meant to pay for regular office operations — everything from staff salaries to communications to constituents.

In total, Hagedorn’s office spent around $270,000 on printed mail alone (about 19 percent of his total budget), with much of it going to producing postcards and letters for his constituents advertising the number of Hagedorn’s town halls or what he was working on in Congress. In one mailer, he criticizes House Democrats’ approach to health care policy, ending the letter by saying: “Congress should be working toward bipartisan solutions, not partisan messaging.”

Spending a lot of office money on constituent mailings isn’t necessarily a problem, though. Hagedorn’s big problems started when it was revealed which firms got the money to prepare the mailings. A report by Daniel Newhauser in the Minnesota Reformer revealed that the money for the mailings went to two firms: Abernathy West LLC and Invocq Technologies LLC. The latter company is part-owned by John Brevard Sample, a part-time staffer in Hagedorn’s office.

Soon after reports on his office spending appeared, Hagedorn announced that he had fired his chief of staff, Peter Su. Su has a connection to Sample: Sample and Su both worked for Gov. Bob McDonnell’s administration in the Virginia Department of Business Assistance, which Su led. (According to the Reformer, Sample is still employed part-time by Hagedorn’s office.)

After firing Su, Hagedorn pledged changes in his office. “While these relatively routine duties were fully delegated to my former Chief of Staff and our finance officer, I acknowledge responsibility for the oversight of my office and will continue to make any necessary management improvements,” Hagedorn told the Associated Press.

Ethics investigation

Firing Su wasn’t Hagedorn’s only recent personnel move related to the spending. He also recently retained Elliot Berke, a prominent Republican attorney, likely to represent him in front of the House Ethics Committee. (Berke recently represented California Rep. Duncan Hunter, who is serving 11 months in prison for improper campaign spending, including using campaign contributions for a trip to Disneyland.)

As of today, there isn’t a formal ethics investigation into Hagedorn’s spending. But in hiring Berke, Hagedorn appears to be anticipating one. Berke’s first task is to conduct an internal review of his office’s spending.

The ethical issue involved is a rule that bars members of Congress from doing business with firms that their staffers own or run. But that rule is somewhat murky.

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There is also the question of legality. According to Newhauser in the Reformer, in the comparable case of Rep. Cathy McMorris Rodgers’ misuse of her office budget for political activities, the House Ethics Committee found that the Department of Justice’s interpretation of a Federal law that bars Congressional employees from contracting with members of Congress needs more clarity, meaning payments like the ones from Hagedorn’s office to a member of his staff could be illegal.

At the end of that investigation, the committee asked McMorris Rodgers to reimburse the treasury for $7,575 and for members in the future to evaluate the use of safeguards in place to prevent such a situation from occurring again. (Hagedorn’s lawyer, Berke, also represented McMorris Rodgers.)

Political fallout

Whatever the outcome of any House Ethics investigation, there is still the question of November’s election. Hagedorn is serving his first term representing the First District after defeating DFLer Dan Feehan by just 1,311 votes in 2018. (Prior to that, the district had been represented by DFLer and now-Gov. Tim Walz, who Hagedorn had unsuccessfully challenged for the seat in 2016 and 2014.)

Feehan is running again in 2020. Responding to the reports of Hagedorn’s spending, he posted on Twitter: “This is what people hate about politics and it’s why DC is broken. At a time when people need help, taxpayer dollars are going to benefit [Hagedorn] and his staff. It’s time for Jim Hagedorn to answer to the people of [the First District].”

Cook Political Report, a non-partisan evaluation of Congressional races, said in July that the race would be more competitive for Democrats than they originally thought because of Joe Biden’s strength in the polls nationally.