Attorney: Chabot campaign conducting ‘thorough audit of its finances', will share findings with feds

Attorney: Chabot campaign conducting ‘thorough audit of its finances', will share findings with feds
U.S. Rep. Steve Chabot (Source: Facebook)

CINCINNATI (FOX19) - Congressman Steve Chabot’s campaign is conducting a ‘thorough audit of its finances’ and will share findings with law enforcement officials and federal election authorities, his campaign’s attorney tells FOX19 NOW.

Earlier this week, the attorney, Mark Braden, released a statement disclosing the campaign and Chabot appear to be the victims of a financial crime. Chabot, he said, was “shocked and deeply disappointed to learn of this financial malfeasance" was taking every appropriate action to resolve the matter.

“The Chabot for Congress campaign has begun the process of conducting a thorough audit of its finances and will share its findings with law enforcement and the FEC," Braden said Friday in another statement. "The campaign will take the additional step today of proactively alerting the FEC of the possibility of inaccurate filings due to this financial malfeasance.”

“As noted Wednesday, the campaign is fully prepared to work with law enforcement and the FEC to ensure those responsible are held to account and to correct any inaccurate campaign finance filings — if any exist.”

Braden said Chabot “will not be able to give an interview on this since it is an ongoing legal matter.”

The Federal Election Commission sent Chabot’s campaign treasurer a letter late last month seeking details about an amended campaign finance report showing an increase of receipts totaling more than $100,000.

The Aug. 27 letter to the campaign’s treasurer, Jim Schwartz, from the FEC noted that an amended report filed by Chabot’s campaign showed a $123,625.72 increase and asked Schwartz to clarify why the money wasn’t originally disclosed.

A response is due Oct. 1.

“Failure to adequately respond by the response date noted above could result in an audit or enforcement action,” the letter states.

The Federal Election Commission can’t comment on any kinds of investigations as a matter of standard practice, FEC spokesman Miles Martin tells FOX19 NOW.

The FEC has not received any response yet from Chabot’s campaign, he said.

He said he would not discuss if the agency was investigating Chabot’s campaign accounts.

A spokesman for the FBI Cincinnati has said as a matter of policy they cannot confirm or deny the existence of potential investigation.

A spokeswoman for the U.S. Attorney’s Office for the Southern District of Ohio has not responded to requests for comment this week.

Democrats, however, are talking.

Local and state party leaders leaders plan to discuss Chabot’s campaign finance issues at an 11 a.m. news conference Friday.

Chabot’s campaign failed to report over $120,000 in campaign finance receipts earlier this year, the Democratic Congressional Campaign Committee contends.

They released a statement Thursday saying his “beleaguered campaign suffered another blow as another controversy emerged from his plodding and half-hearted reelection effort.”

“Federal authorities are investigating Chabot’s campaign for the discrepancy of an unreported $123,625.72 on Chabot’s campaign finance filings. Chabot’s lawyers appeared to quickly pin blame on career Chabot loyalist Jamie Schwartz, describing him merely as a nameless “campaign treasurer,” their statement reads.

"But that vastly undersells Schwartz’s importance in Chabot’s orbit. A longtime Chabot aide, Schwartz has served as Chabot’s deouty chief of staff, spokesman, campaign manager and finance director. To this point, Chabot has steered more than $2 million to Schwartz’s Cincinnati-based companies: Prime Media and Fountain Square Group.

"So, don’t forget what Steve Chabot’s own campaign said just last year about how claims of malfeasance reflect on political candidates: “By not holding anyone accountable throughout this campaign, [he] created a culture in which illegal activity is condoned, if not encouraged.”

It’s the latest example of curious campaign finance issues for Chabot, who’s raised eyebrows for his habit of questionable spending over the years, they contend.

“There was the time Chabot kicked nearly $200,000 in campaign cash to his son-in-law’s business, enriching his family.”

Jim Schwartz, listed on other campaign paperwork as James Schwartz Sr., is the father of Chabot’s campaign manager since 2009, Jamie Schwartz, president of Fountain Square Group, a political strategy consulting firm.

That company abruptly shut this week and its Facebook page was taken down Wednesday morning.

Jim Schwartz could not be reached for comment this week.

Neither could Jamie Schwartz, 39, of Oakley. His cell phone has been disconnected since at least Tuesday.

Fountain Square Group was widely used several Republican campaigns such as Hamilton County Commission hopeful Andy Black and Matthew Wahlert, candidate for Colerain Township trustee.

One employee, Katie Streicher Metz, said in email Tuesday night to county GOP activists she has left the company “after being made aware of an issue with the Fountain Square Group.”

Wahlert said when news broke of the possible financial irregularities earlier this week, he "immediately severed my relationship with Fountain Square Group retroactive to last day of August."

“I will continue to run a positive campaign for the people of Colerain Township.”

The Democratic Congressional Campaign Committee released an updated statement Friday:

"Today in Cincinnati, Southwest Ohio leaders are raising serious questions about the culture of corruption Congressman Steve Chabot has surrounded himself with and shedding new light on Chabot’s years and years of campaign finance irregularities.

Since 2013, authorities at the Federal Election Commission have sent 21 different letters to Congressman Chabot’s campaign – including the August 27, 2019 FEC correspondence triggering Chabot’s latest scandal.

Meanwhile, Jim and Jamie Schwartz – the father and son duo quickly emerging at the center of the scandal roiling Southwest Ohio’s political scene – have deep, longstanding and well-known ties to Chabot’s campaign. So deep that Chabot’s lawyers, in an attempt to distance themselves, referred to the elder Schwartz merely as a nameless “campaign treasurer.” Huh?

Even more curious is the rushed attempt made by Chabot’s lawyers to pre-emptively claim victimhood on the part of the embattled congressman, raising obvious questions Congressman Chabot must answer about what he knew and when he knew it.

“Congressman Chabot’s newest scandal is just the latest example of the malfeasance and corruption that Chabot surrounds his office with wherever he goes,” DCCC spokesman Avery Jaffe said. “Here’s a simple question for Steve Chabot’s lawyers: What did Congressman Chabot know and when did he know it?”

Below, please find 21 instances since 2013 of the FEC flagging campaign finance irregularities by Steve Chabot’s campaign:

1. RFAI: April Quarterly 2019 – Filed 8/27/19

2. RFAI: Post-General 2018 – Filed 12/18/18

3. RFAI: Pre-General 2018 – Filed 12/11/18

4. RFAI: October Quarterly 2018 – Filed 12/11/18

5. RFAI: July Quarterly 2018 – Filed 8/19/18

6. RFAI: April Quarterly 2018 – Filed 5/31/18

7. RFAI: Year End 2017 – Filed 7/29/18

8. RFAI: October Quarterly 2017 – Filed 11/5/17

9. RFAI: July Quarterly 2017 – Filed 8/3/17

10. RFAI: April Quarterly 2017 – Filed 6/11/17

11. RFAI: Post-General 2016 – Filed 2/14/17

12. RFAI: October Quarterly 2016 – Filed 11/24/16

13. RFAI: July Quarterly 2016 – Filed 8/21/16

14. RFAI: April Quarterly 2016 – Filed 4/26/16

15. RFAI: July Quarterly 2015 – Filed 8/5/15

16. RFAI: April Quarterly 2015 – Filed 5/14/15

17. RFAI: Post-General 2014 – Filed 1/6/15

18. RFAI: April Quarterly 2014 – Filed 5/28/14

19. RFAI: Year-End 2013 – Filed 3/11/14

20. RFAI: October Quarterly 2013 – Filed 12/3/13

21. RFAI: July Quarterly 2013 – Filed 8/9/13″

Hamilton County GOP Chairman Alex M. Triantafilou released a statement regarding the DCCC’s comments:

"For David Pepper and State Democrats to attack the victim of a crime for the sake of politics is disgraceful. The Chabot campaign promptly notified the public and began cooperating with authorities immediately when they learned of this incident, doing exactly what we would expect from an elected leader with integrity. For Democratic Party leaders to claim anything otherwise is a deliberate attempt to mislead the public and they should be ashamed. The Democrats in this state have regularly failed at the ballot box and are attacking Steve Chabot out of desperation.”

Kate Schroeder, who is running for Congress, also released a statement about what she’s calling Chabot’s financial crimes:

"Today, I am calling on the House Ethics Committee to conduct a full and thorough investigation into Congressman Chabot’s campaign and congressional office spending.

Steve Chabot not the victim here; he is the enabler. He is accountable for dollars entrusted with him-- in both his campaign and his government office -- and taxpayers deserve to know which funds were misspent or misappropriated. Congressman Chabot was either asleep at the switch or complicit as his campaign funds were embezzled. It remains to be seen if he was equally complacent with taxpayer dollars.

The corruption must end, and my opponent has been asleep at the switch. Our public servants

should be working for us, rather than enriching people in their inner circle.

I am running for Congress to turn the page on the inside dealing and culture of corruption we see from Steve Chabot and too many others in Washington. It is time for change."

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