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House Ethics Committee Details Accusations Against 4 Lawmakers

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WASHINGTON — The House Committee on Ethics on Thursday released four reports into separate violations of ethics rules by four congressmen, portraying what investigators suggested was a sweeping array of improper financial conduct.

The allegations against three Republicans and one Democrat center on stock trades and the improper use of campaign funds, according to the Office of Congressional Ethics, which investigated the cases.

Representative Mike Kelly, Republican of Pennsylvania, is under scrutiny over stock purchases by his wife that investigators say were affected by his actions as a member of Congress. Representative Tom Malinowski, Democrat of New Jersey, is facing allegations that he failed to properly disclose hundreds of thousands of dollars in stock trades. Representative Alex X. Mooney, Republican of West Virginia, is accused of improperly using campaign funds for personal expenses, and Representative Jim Hagedorn, Republican of Minnesota, of improperly awarding contracts to companies owned by his aides’ relatives.

All four cases will continue to be reviewed by the House Ethics Committee, a bipartisan panel of lawmakers charged with enforcing the chamber’s internal rules.

In a particularly scathing report about Mr. Kelly and his wife, Victoria Kelly, investigators concluded that there was “substantial reason to believe” that she had bought stock in a steel company with a plant in her husband’s district “based upon confidential information” that he had “learned from his official job duties.”

Mr. Kelly’s case involves a frantic effort to aid the steel plant that employs 1,400 people in his district after it was acquired last year by Cleveland-Cliffs. The chief executive of Cleveland-Cliffs publicly testified that unless the federal government was able to provide his company with additional trade protections, it would shutter that plant, as well as one in Ohio.

Investigators found that Mr. Kelly became personally involved in Cleveland-Cliffs’s efforts to lobby the White House, pressing officials at the Commerce Department, as well as Mark Meadows, then President Donald J. Trump’s chief of staff, to enact additional protections.

A purchase of stock in a steel company by the wife of Representative Mike Kelly, Republican of Pennsylvania, is under scrutiny for possibly being “based upon confidential information,” investigators wrote.Credit…Jose Luis Magana/Associated Press

On April 28, 2020, investigators wrote, the Commerce Department informed the chief of Cleveland-Cliffs that it intended to open an investigation that could benefit the company. Relieved, Cleveland-Cliffs executives canceled planned layoffs. The news traveled to Mr. Kelly’s office, investigators wrote, citing witness interviews and emails.

The next day, Mrs. Kelly bought $15,000 to $50,000 of stock in Cleveland-Cliffs, according to the congressman’s financial disclosures. Investigators deemed that purchase “atypical” because she had not held or purchased individual stocks for nearly a year before then.

When she sold the stock in January, she earned a profit: While she had bought the shares at $4.70, she sold them for approximately $18, investigators said.

Neither Mr. Kelly nor his wife cooperated with the investigation, though members of his staff and officials at Cleveland-Cliffs did. Mr. Kelly has since maintained that neither he nor his wife committed any wrongdoing, and a lawyer for Mr. Kelly called the investigation “fatally flawed.”

A spokesman for Mr. Kelly told The Pittsburgh Post-Gazette in September 2020 that Mrs. Kelly had made “a small investment to show her support for the workers and management of this 100-year-old bedrock of their hometown.” He did not explain why Mrs. Kelly did not publicly disclose the purchase at the time, if her intent was to show solidarity with the company.

Representative Tom Malinowski, Democrat of New Jersey, failed to disclose hundreds of thousands of dollars in stock trades, a report says.Credit…Pool photo by Ken Cedeno

In the report on Mr. Hagedorn, investigators found that there was substantial reason to believe that his office had steered nearly half a million dollars in government funds to contract services from companies owned or controlled by his aides’ relatives, and that it used private office space at a cost far below market rate and tried to mislead the public about it.

Investigators concluded that Mr. Hagedorn’s office spent an unusually large sum of government money on official mail to his constituents and that much of it went to two separate printing companies owned by relatives of two of his aides, who charged Mr. Hagedorn “significantly more” than the fair market price for such services. While the average congressional office spent less than 1 percent of its budget on such mail, Mr. Hagedorn’s office spent nearly 20 percent.

Investigators were unable to verify whether one of the companies, owned by the brother of Mr. Hagedorn’s former chief of staff, had any clients other than the congressman’s office.

Because Mr. Hagedorn did not cooperate with the inquiry, investigators wrote, they were unable to definitively determine whether he was aware of the practices. But they said they had uncovered evidence showing he “knew or should have known” of the irregularities in his mail operation.

Mr. Hagedorn hired outside counsel last year to look into the matter and came to many of the same conclusions as the Office of Congressional Ethics investigators. However, that internal review concluded that he was unaware that the contracts were benefiting his aides’ relatives.

Investigators accused Representative Alex X. Mooney, Republican of West Virginia, of using campaign funds to eat at fast-food restaurants.Credit…Andrew Harnik/Associated Press

In their inquiry of Mr. Mooney, investigators faulted him for using campaign funds for what they said were most likely personal purposes. The report found that there was substantial reason to believe that Mr. Mooney used campaign contributions during frequent visits to fast-food restaurants such as Chick-fil-A, Panera Bread, Taco Bell and a variety of pizza vendors near his house, when there was no clear campaign purpose to the spending.

Mr. Mooney also twice used campaign dollars to pay for trips in West Virginia that he called “site visits” but investigators said were “primarily personal in nature.” He used $2,445 in campaign funds at the Canaan Valley Resort and spent $302 on a private guided fishing tour at the Smoke Hole resort, investigators said.

“While Rep. Mooney’s cooperation greatly facilitated this investigation, and he attempted to remedy violations as they became apparent to him and his counsel during this review, the nature and overall pattern of the violations raised concerns,” the report said.

The investigation into Mr. Malinowski’s stock trades found that he did not file required reports for transactions in 2019 and 2020, and he admitted to failing to do so in an interview with investigators. The report is likely to cast a cloud over Mr. Malinowski as he faces a difficult re-election race next year.

In the interview, Mr. Malinowski blamed “carelessness on my part” for the lack of disclosure and said he regretted and took full responsibility for it.

“This is not a justification or excuse,” he said.

“I have an overwhelmingly busy job, and this was one of the things I knew I needed to do,” he added. “But I did not put enough pressure on myself to do it every 45 days, and that was simply careless.”

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