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 expenses of accepting nearly $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 that they had been laundered by way of faux consulting contracts to shell corporations owned by Imelda Cuellar, in line with the indictment. In alternate, 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 international locations 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 chief department to work round an anti-money laundering coverage that threatened the financial institution’s pursuits, in line with the indictment. Cuellar additionally allegedly coordinated with a subsidiary of the financial institution on laws that may have been useful to the payday lending trade — a type of lending normally concentrating on low earnings debtors with few alternate options that features extraordinarily excessive rates of interest.

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

The costs embrace bribery, cash laundering, engaged on behalf of a international authorities and conspiracy. The indictment alleges Cuellar recruited household, buddies and his former marketing campaign supervisor to facilitate the funds. If convicted and given the utmost sentence, Cuellar might face a long time in jail.

Cuellar rapidly asserted his innocence in a press release 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 mentioned his actions have been “in line with the actions of a lot of my colleagues and within the curiosity of the American folks.”

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

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

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

He ended up profitable within the 2022 main towards Jessica Cisneros, a Laredo-based immigration legal professional by 0.6 share factors, and crusing to victory within the basic election nearly unscathed by the police raid.

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

Cuellar mentioned 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 People 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 line with 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 position 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 line with the indictment.

Oksuz additionally labored with Cuellar to ascertain 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 international 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 line with OpenSecrets.

Azerbaijan has had curiosity in influencing Western governments as a result of 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 major roadblock to peace within the area for the reason that fall of the Soviet Union, with European, American and Russian governments scuffling with the problems for many years.

Cuellar coordinated with Azerbaijani diplomats to get rid of laws that may finance land mine clearing in Nagorno-Karabakh in 2017, in line with 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 speedy evacuation of 1000’s of ethnic Armenians over fears the Azerbaijani authorities would commit ethnic cleaning.

U.S. Secretary of State Antony Blinken mentioned final yr that the administration was “deeply involved” with Azerbaijan’s aggression within the area and that “the usage of 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 line with the indictment.

“Thanks Congressman! That is good certainly,” the diplomat mentioned 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 alternate for advancing insurance policies that may 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 line with 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 regulation went into impact designed at stopping cash laundering, many U.S. monetary establishments pulled again partnerships with Mexican banks as a result of excessive danger 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 mentioned. The Cuellars allegedly negotiated the settlement with the financial institution across the identical time they have been organising 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 line with the indictment. The indictment doesn’t establish the marketing campaign supervisor by title, 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 may pause the Client Monetary Safety Bureau from making new laws on the payday lending trade 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, courting again to 1987, when Cuellar started a 14-year stint representing the realm 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 in the present day. Cuellar’s sister, Rosie Cuellar, beforehand served as Webb County tax assessor-collector. She is looking for 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 Could 28 main runoff.

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

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

At the moment, 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 sometimes 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 significant proponent of the oil and fuel trade, which is chargeable for a big a part of his district’s financial system. Azerbaijan is a significant oil and fuel producer.

Nonetheless, he’s effectively revered inside the Democratic Caucus for his prolific fundraising and reliability on main votes that rely. Democratic management underneath 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 operating 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 endlessly insurance policies which might be towards the values of South Texas,” Furman mentioned. “Thrilling that perhaps one among them will get their due.”

In a Fb submit on Friday, Garza mentioned: “There isn’t a 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 may 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 mentioned in a press release.

Some Texas Democrats have already finished so for an additional 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 mentioned in a press release that Cuellar deserved a good trial and the “presumption of innocence all through the authorized course of.” Jeffries mentioned 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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