Ethics investigation likely after Hagedorn's office found to have funneled funds to staffer's company

First District Rep. Jim Hagedorn is coming under fire from critics and congressional ethics experts who contend the first-term Republican violated government rules by directing more than $100,000 in public funds to a company partially owned by one of his staffers.

The payments, made between September 2019 and March 2020, are part of larger pattern of questionable spending by Hagedorn, who expended more of his total office budget in the first quarter of this year than any other member of Congress. Earlier this month, Hagedorn announced he had fired his chief of staff, Peter Su, after learning about the spending activities.

Hagedorn stated then that “relatively routine duties” — such as sending outs mailings — had been “fully delegated” to Su and another staffer. He said his office had alerted the appropriate House committees that outside counsel had been brought in to conduct an independent review.

But on Wednesday, a report from the Star Tribune raised questions about how far disconnected Hagedorn was from the mailing-related activity. Emails obtained by the paper showed that the congressman was often directly involved in decisions about the mailings being sent out.

In a virtual press conference Wednesday, DFL Party Chairman Ken Martin said the reporting offers proof that Hagedorn was not only involved in directing the program, but knew about it every step of the way.

“Franking [the privilege allowing lawmakers to send mail to constituents without having to pay postage] on its own is not illegal, but when you consider how much franking he’s doing, which is out of the norm compared to his other colleagues, and then the fact that he’s using the companies that are owned by his own staff members, there are clearly ethical lines that were crossed here and Congressman Hagedorn was directly involved with that,” said Martin. “This is a serious ethical lapse of judgement.”

Hagedorn’s camp has dismissed the notion of any link between the congressman’s oversight of the messaging used on the mailings and the practice of hiring vendors and sending the communication out.

In a statement following the DFL press conference, Hagedorn blamed his political opponents — and the media — for trying to “give life to a non-issue” and to “prop up” up his Democratic challenger, Dan Feehan.

“The nuts and bolts duties of establishing franking services, hiring vendors, and sending out mail were fully delegated to my former chief of staff,” he said. “For Democrats and the Star Tribune to conflate those duties with my work to review mass mail communications or help staff field media inquiries about our office budget is complete nonsense, careless journalism and purposefully mixing apples and oranges to further this non-story.”

Irregular spending

Hagedorn’s spending first raised eyebrows after reports came out showing that the congressman had spent nearly 40 percent of his annual $1.4 million office budget — about $570,000 — in the first quarter alone.

Further sparking interest was how Hagedorn used the funds. Just under half of the spending between January 1 and March 31 went toward printing and sending mailings to constituents across southern Minnesota. By comparison, the average member of Congress spent under 1 percent of their budgets on mailings during the same time frame, according to Legistorm, a web-based platform that tracks activity on Capitol Hill.

But while the expenditures were unusual, they did not appear initially to have been in violation of any laws or congressional rules.

Scrutiny around the spending, however, took on new life this month when the nonprofit news source Minnesota Reformer published a report showing that a Texas-based company known as Invocq Technologies LLC had been the recipient of printing contracts worth more than $60,000 in 2020 and $41,000 last September. The company is partially owned by John Sample, a part-time employee in Hagedorn’s congressional office.

The relationship has since drawn the attention of government ethics watchdogs, who believe the spending is a violation of House rules prohibiting members of Congress from doing business with their staff.

“That is a clear violation of congressional rules and this is clearly on the agenda of the House Ethics Committee,” said Craig Holman, an ethics lobbyist with Public Citizen, a left-leaning think tank and advocacy group based in Washington, D.C. “At the very least, I would expect Hagedorn to reimburse the federal treasury for whatever spending was in violation of the rules. However, if Hagedorn was more culpable and knew what was going on, the consequences would be even more severe, including a possible censure from the House of Representatives.”

In addition to Invocq, there are questions about another company that has received $339,000 from Hagedorn’s office since last October for printing and reproduction. The company, Abernathy West LLC, was incorporated in Delaware last summer. However, little else is known about their operation.

Hagedorn enlists legal help

Presumably anticipating a congressional ethics investigation, Hagedorn has recently hired a prominent D.C. lawyer to represent him.

That person, as first reported by the Reformer, is Elliot Berke. (Berke most recently represented Duncan Hunter, the former California congressman who was sentenced to 11 months in federal prison for using $150,000 in campaign money to pay for personal expenses, including vacations.)

Though it appears inevitable the House Ethics Committee will take up Hagedorn’s case, it is unlikely the public will learn of the results of the review until after this November’s election. (It is common practice not to release the findings of congressional investigations in the months leading up to Election Day, so as not to influence the outcome.)

In the meantime, Hagedorn says his office will continue its internal review. Once complete, he says the findings will be provided to the public.

It remains unclear, however, how long that process will take. And regardless of the outcome, Hagedorn’s challenger Dan Feehan believes that either version of the story warrants a change in leadership.

Hagedorn defeated Feehan by just 1,311 votes in 2018.

“Congressman Hagedorn either directly engaged in illegal corruption with taxpayer dollars or created the culture for it to happen,” Feehan wrote on Twitter. “He has failed this test of leadership and we can't trust him to represent [Minnesota’s First District].”

Sean Baker is a Rochester journalist and the founder of Med City Beat.

Cover photo: Hagedorn in 2019 / William Forsman