Cuellar indicted by DOJ on bribery, money laundering charges

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WASHINGTON — U.S. Rep. Henry Cuellar, a strong South Texas Democrat, was indicted along with his spouse Imelda on Friday on costs of accepting virtually $600,000 in bribes from Azerbaijan and a Mexican financial institution.

Cuellar allegedly accepted the funds from Azerbaijan’s state-run oil and fuel firm after they’d been laundered by means of faux consulting contracts to shell firms owned by Imelda Cuellar, in response to the indictment. In trade, the Laredo congressman allegedly pushed U.S. coverage in favor of Azerbaijan, an oil-rich former Soviet nation that borders Iran and Russia on the Caspian sea. That features including language to protection spending laws to prioritize ties to nations within the area, together with with Azerbaijan, and dealing to kill laws prioritized by members who supported Armenian pursuits.

Cuellar additionally allegedly took cash from a retail Mexican financial institution and influenced members of the manager department to work round an anti-money laundering coverage that threatened the financial institution’s pursuits, in response to the indictment. Cuellar additionally allegedly coordinated with a subsidiary of the financial institution on laws that might have been useful to the payday lending business — a type of lending normally concentrating on low earnings debtors with few options that features extraordinarily excessive rates of interest.

The indictment stated Cuellar and his spouse used the cash to finance bank card funds, taxes, automobile funds, eating and buying, together with $12,000 on a customized robe. It additionally stated one of many Cuellars’ grownup youngsters assisted within the creation of the sham shell firms used to launder funds. The Cuellars have two grownup youngsters: Christy and Catie.

The fees embody bribery, cash laundering, engaged on behalf of a overseas authorities and conspiracy. The indictment alleges Cuellar recruited household, pals and his former marketing campaign supervisor to facilitate the funds. If convicted and given the utmost sentence, Cuellar may face many years in jail.

Cuellar rapidly asserted his innocence in an announcement Friday minutes after NBC Information reported federal prosecutors’ plans for an indictment. The Cuellars appeared in a federal courthouse in Houston on Friday over the costs.

Cuellar stated his actions have been “in keeping with the actions of lots of my colleagues and within the curiosity of the American folks.”

“I wish to be clear that each my spouse and I are harmless of those allegations,” Cuellar stated. “Earlier than I took any motion, I proactively sought authorized recommendation from the Home Ethics Committee, who gave me multiple written opinion, together with an extra opinion from a nationwide legislation agency.”

A spokesperson for the Home Ethics Committee declined to touch upon Friday.

FBI brokers raided Cuellar’s Laredo dwelling and workplace in 2022 — simply weeks earlier than his aggressive major election. His lawyer on the time asserted he was not the goal of the investigation.

He ended up successful within the 2022 major towards Jessica Cisneros, a Laredo-based immigration legal professional by 0.6 proportion factors, and crusing to victory within the basic election just about unscathed by the police raid.

Cuellar is up for reelection once more this yr. He was unopposed within the major. Two Republican challengers will face off in a Might 28 runoff for the possibility to problem Cuellar within the basic: Jay Furman and Lazaro Garza.

Cuellar stated in his Friday assertion that he’ll nonetheless run for reelection in November.

Ties to Azerbaijan 

Cuellar is a member of the Congressional Azerbaijan Caucus and has been a fervent advocate for the nation’s pursuits in Congress.

He traveled to Turkey and Azerbaijan on a $25,000 journey along with his spouse Imelda in 2013, paid for by the Turquoise Council of Individuals and Eurasians. Shortly after, a Cuellar staffer went on one other journey to Azerbaijan with a number of members, together with Rep. Sheila Jackson Lee, D-Houston, that was additionally facilitated by the group.

After his 2013 journey, brokers engaged on behalf of the Azerbaijani authorities recruited Cuellar to work with them on U.S. coverage serving to their nation, in response to the indictment.

The group that hosted Cuellar’s journey is predicated in Texas and was led by Kemal Oksuz, who pleaded responsible in 2018 to partaking within the coverup of the Azerbaijani’s authorities’s function financing the 2013 congressional journey that included Jackson Lee. Oksuz admitted to mendacity in disclosures to the Home Ethics Committee on the supply of funding for the journey, which got here from the State Oil Firm of the Azerbaijan Republic.

After Oksuz’s responsible plea, funds from SOCAR to the Cuellar’s paused, in response to the indictment.

Oksuz additionally labored with Cuellar to determine a program for Texas A&M Worldwide College college students to review power points in Baku, the capital of Azerbaijan. ExxonMobil and the Azerbaijani authorities have been additionally concerned within the creation of this system.

Azerbaijan is understood for lavish spending on overseas lawmakers to advance its pursuits. The nation has reportedly spent billions on treating European lawmakers in a apply derisively generally known as “caviar diplomacy.” The nation spends about half one million {dollars} a yr on lobbying in Washington, in response to OpenSecrets.

Azerbaijan has had curiosity in influencing Western governments resulting from tense relations with its neighbors. The nation had been engaged in a long-running border dispute with Armenia over Nagorno-Karabakh, an enclave made up of largely ethnic Armenians, till Azerbaijan forcibly retook management of the territory final yr. The dispute had been a big roadblock to peace within the area for the reason that fall of the Soviet Union, with European, American and Russian governments combating the problems for many years.

Cuellar coordinated with Azerbaijani diplomats to eradicate laws that might finance land mine clearing in Nagorno-Karabakh in 2017, in response to the indictment, citing textual content messages between Cuellar and the diplomat. He additionally wrote to a U.S. official in 2016 accusing Armenia of being a “proxy” of Russia, urging the U.S. to push for the withdrawal of pro-Armenian forces in Nagorno-Karabakh.

The eventual take over of the area by Azerbaijan led to the fast evacuation of 1000’s of ethnic Armenians over fears the Azerbaijani authorities would commit ethnic cleaning.

U.S. Secretary of State Antony Blinken stated final yr that the administration was “deeply involved” with Azerbaijan’s aggression within the area and that “using power to resolve disputes is unacceptable and runs counter to efforts to create situations for a simply and dignified peace.”

Cuellar additionally allegedly included language to an annual protection spending invoice in 2014 directing the secretaries of state and protection to work on a “strategic framework for United States safety power help and cooperation within the European and Eurasian areas,” together with Azerbaijan. He additionally coordinated with an Azerbaijani diplomat on a gathering with the Protection Division to focus extra U.S. protection coverage on the area, in response to the indictment.

“Thanks Congressman! That is good certainly,” the diplomat stated in an e-mail to Cuellar cited within the indictment.

Serving to the financial institution

Cuellar and his spouse are additionally accused of accepting bribes in trade for advancing insurance policies that might assist a Mexican industrial financial institution’s enterprise pursuits. Utilizing a Mexican authorities official as an middleman, the Cuellars allegedly obtained over $200,000 in bribes from the financial institution, in response to the indictment.

Cuellar allegedly wrote to officers on the Treasury Division to arrange mechanisms to assist cross-border transactions essential to the financial institution’s enterprise. After federal legislation went into impact designed at stopping cash laundering, many U.S. monetary establishments pulled again partnerships with Mexican banks as a result of excessive threat of illicit transactions.

Like with the Azerbaijani case, the association concerned faux consulting charges paid to a shell firm operated by Imelda Cuellar, the indictment stated. The Cuellars allegedly negotiated the settlement with the financial institution across the similar time they have been establishing their transactions with the Azerbaijanis.

At one level, the Cuellars used Henry Cuellar’s marketing campaign supervisor and former chief of employees as an middleman to disguise the funds, in response to the indictment. The indictment doesn’t determine the marketing campaign supervisor by identify, however notes the particular person was a resident of Buda, Texas.

Cuellar additionally allegedly tipped off the vice chairman of the Mexican financial institution of a invoice that might pause the Client Monetary Safety Bureau from making new rules on the payday lending business for 2 years. Cuellar then coordinated with a U.S.-based subsidiary of the Mexican financial institution on language in protection of the invoice. The subsidiary was a payday lending firm.

A robust Democrat

Cuellar and his household have been political fixtures in Laredo and Webb County for many years, relationship again to 1987, when Cuellar started a 14-year stint representing the world within the Texas Home.

He was elected to Congress in 2004, a couple of years earlier than his brother, Martin Cuellar, ousted the incumbent Webb County sheriff — a place he nonetheless holds as we speak. Cuellar’s sister, Rosie Cuellar, beforehand served as Webb County tax assessor-collector. She is in search of the Democratic nomination for an open Texas Home seat that covers a part of Laredo and Webb County, a contest that might be determined later this month in a Might 28 major runoff.

Cuellar and his spouse have been married for 32 years, he stated in his assertion.

“On high of being an incredible spouse and mom, she’s an achieved businesswoman with two levels,” he stated in his Friday assertion. “The allegation that she is something however certified and laborious working is each mistaken and offensive. The allegations have been troublesome on my household. However, along with your prayers, we are going to overcome.”

Immediately, Cuellar is the fourth-longest serving Democrat within the Texas delegation and is a longtime fixture within the Home Democratic Caucus. He’s recognized for often crossing the aisle to vote with Republicans, particularly on border safety. He’s the one Democrat within the Home who opposes abortion rights.

He’s additionally a serious proponent of the oil and fuel business, which is chargeable for a big a part of his district’s economic system. Azerbaijan is a serious oil and fuel producer.

Nonetheless, he’s properly revered throughout the Democratic Caucus for his prolific fundraising and reliability on main votes that rely. Democratic management beneath Speaker Nancy Pelosi supported Cuellar when Cisneros challenged him within the 2020 and 2022 primaries. Cuellar received in each primaries and the 2022 basic election, regardless of heavy funding from Republicans to flip South Texas. He beat his 2022 Republican opponent, Cassy Garcia, by over 13 factors.

After Cuellar’s 2022 win, Republicans have thought-about the district much less aggressive and are investing extra closely within the close by Rio Grande Valley-based fifteenth and thirty fourth districts.

The Republicans working to unseat him the November have been fast to pounce on the Friday indictment.

Furman issued a video assertion, blasting Cuellar as being a part of an institution that’s “promoting us to different nations.”

“They’re buying and selling us for his or her deep pockets and their without end insurance policies which are towards the values of South Texas,” Furman stated. “Thrilling that possibly one in every of them will get their due.”

In a Fb put up on Friday, Garza stated: “There isn’t any place for corruption in Congress!”

The Nationwide Republican Congressional Committee additionally known as on Cuellar to resign.

“If his colleagues really imagine in placing ‘folks over politics,’ they are going to name on him to resign. If not – they’re hypocrites whose statements about public service aren’t definitely worth the paper they’re written on,” NRCC spokesperson Delanie Bomar stated in an announcement.

Some Texas Democrats have already carried out so for one more longtime lawmaker who was just lately indicted. After the Justice Division charged Sen. Bob Menendez, D-New Jersey, on a number of counts of corruption and bribery associated to his ties to Egypt, a handful of Texas members of the Congressional Hispanic Caucus known as for his resignation.

Home Minority Chief Hakeem Jeffries stated in an announcement that Cuellar deserved a good trial and the “presumption of innocence all through the authorized course of.” Jeffries stated Cuellar would forfeit his place atop the Appropriations subcommittee on Homeland Safety. Home Democratic guidelines require a committee chair to step down if they’re indicted on a criminal offense with a attainable jail sentence of greater than two years.

Jasper Scherer contributed to this report.

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