WASHINGTON — U.S. Rep. Jim Hagedorn’s chief of staff was funneling expensive printing contracts to his brother and an employee, in probable violation of House Ethics rules, according to an internal review the congressman’s office released on Monday.
But Hagedorn was in the dark, according to a summary of the internal review shared with the press. He has since reported the matter to the House Ethics Committee and implemented a policy that he will have final approval of all office contracts.
“Congressman Hagedorn fully agrees that he is ultimately responsible for actions of those in his employ, even when those actions are taken without his knowledge,” said Eliot Berke, a D.C. ethics lawyer Hagedorn hired to perform the investigation. “But upon thoroughly reviewing this matter for more than two months, I can state with certainty that Congressman Hagedorn acted in good faith and did not personally direct, profit or intend for his office to bypass any established office procedures or potentially or technically violate any rule of the House.”
The review found that Abernathy West, a company to which the office gave more than $340,000 of taxpayer money, is likely owned by Szu-Nien Su, a former high-ranking aide in the U.S. House and the brother of Hagedorn’s former chief of staff, Peter Su.
The review also found that another Hagedorn office employee, John Sample, is the owner of Invocq Technologies, as first reported by the Minnesota Reformer last month.
“Congressman Hagedorn had no knowledge of the potential interest or the direct staff interest prior to the Internal Review,” according to the document. “Upon learning of them, he suspended the two employees until further notice while the Internal Review was pending and barred the two staffers from returning to the official office.”
Su and his brother refused to comply with the internal review, according to a summary of its findings, written by Berke. The investigation was sparked by a June article in Legistorm noting that the office had spent nearly 40% of its official budget in the first three months of the year.
Berke noted that Su, who was fired the day after the investigation started, and a lawyer for his brother did not deny that the company is owned by the brother. The evidence tying the brother to the company includes that Abernathy West has the same co-working address, phone service, and registered agent as Artemis ESB, whose CEO is Szu-Nien Su.
Sample, meanwhile, has since returned to work in the office after complying with the review. Berke noted that Sample volunteered the graphic design services of his company after Su expressed that other vendors were producing constituent mailers that were too bland.
The actual design work was performed by Catherine Keszei, Sample’s partner in Invocq Technologies. But after she died last year, the company was no longer able to perform the work.
“Mr. Sample stated he did not believe his ownership interest, which was disclosed to Mr. Su, raised any concerns,” according to the summary of the review. “If Mr. Sample’s ownership interest in Invocq rendered it ineligible to serve as a vendor to Congressman Hagedorn’s office in accordance with the Member’s Congressional Handbook provision discussed herein, it did not enter into contract with Congressman Hagedorn’s office with any intent to violate, or knowledge of, the provision.”
Also of note: Both firms significantly overbilled the office.
“No actual contracts were located for either vendor, but the fees charged by Abernathy West and Invocq were compared against three independent firms recognized in the industry. Based on these objective comparisons, it appears that Abernathy West and Invocq charged Congressman Hagedorn’s office significantly more than the fair market for franking services,” according to the review.
Sample will return $16,500 to Hagedorn’s office, after the review found Invocq Technologies incorrectly charged a $0.25 per-page postage fee to two vouchers. But he defended the high rates over the course of the internal review by providing “a client comparison for Ms. Keszei demonstrating that the rate charged by her was commensurate to other non-franking graphic design production clients.”