Fb / U.S. Congressman Henry Cuellar
Former Democratic Home Speaker Nancy Pelosi was a staunch ally of U.S. Rep. Henry Cuellar throughout his current reelection fights.
This text was initially printed by the Texas Observer, a nonprofit investigative information outlet. Join their weekly e-newsletter, or comply with them on Fb and Twitter.
In January 2013, U.S. Consultant Henry Cuellar and his spouse Imelda took an 8-day journey to Istanbul, Turkey, then to Baku, Azerbaijan, the place they met with high-level officers within the latter nation’s authoritarian regime and dined with executives from the state-owned oil firm.
The Cuellars’ overseas tour, which was sponsored by an obscure Houston-based nonprofit referred to as the Turquoise Council of Individuals and Eurasians, initially drew little discover. However they made an enormous impression on officers in Azerbaijan, a former Soviet Republic nation with big oil and gasoline reserves that’s run by an oppressive dictatorship rife with kleptocracy and corruption. For a number of years, the State Oil Firm of the Republic of Azerbaijan, higher often called SOCAR, operated a buying and selling workplace in Texas and was actively courting American politicians to help its initiatives.
Quickly Azerbaijani officers, together with its high diplomat within the U.S., started discussing how they may recruit the highly effective Laredo congressman as a helpful ally in the USA to sway overseas coverage in its favor—and away from Armenia, with which it had been locked in battle for many years.
Certainly, Cuellar eagerly turned one of the crucial outspoken allies of Azerbaijan. He turned a co-chair of the Congressional Azerbaijan Caucus, gave speeches praising the nation’s leaders, and promoted its overseas coverage and power pursuits in Congress and his district. However there was a darkish facet to that relationship, in response to a federal indictment unsealed final week charging Cuellar of conspiracy, bribery, cash laundering, and performing as a overseas agent.
In 2014, a 12 months after his journey, Cuellar entered into what could be an allegedly profitable and felony relationship with Azerbaijan, federal prosecutors allege, advocating for the nation’s pursuits in the USA in alternate for money bribes routed from the Azerbaijani state-owned oil firm to shell corporations arrange by his spouse for allegedly “sham” consulting companies. The indictment alleges Azerbaijani diplomats have been straight concerned. A minimum of one deal was allegedly brokered in texts or emails between Cuellar and Elin Suleymanov, the person who then served as Azerbaijan’s U.S. ambassador primarily based in Washington, D.C.
Neither the Azerbaijani authorities nor Suleymanov have publicly responded to the allegations; the embassy didn’t reply to queries from the Texas Observer. Suleymanov served as ambassador of Azerbaijan to the USA from 2011 to 2021 and stays a diplomat.
Across the similar time, Cuellar entered into an analogous settlement with a significant Mexico financial institution for which he helped affect federal coverage, together with makes an attempt to calm down anti-money laundering guidelines, in alternate for extra purported consulting offers that despatched payoffs to his spouse’s corporations, the indictment says.
From 2014 by 2021, Cuellar’s spouse obtained almost $600,000 in so-called consulting funds from the Azerbaijan authorities and the Mexican financial institution, which the Cuellars used to pay taxes, make a down cost on a brand new automotive, buy a $12,000 robe, and canopy restaurant meals and different bills.
The Division of Justice claims these have been bribes paid to shell corporations arrange by Cuellar’s spouse, made underneath the guise of “sham” consulting contracts that the congressman was straight concerned in negotiating and for which his spouse “carried out little or no professional work,” in response to the indictment.
Hours earlier than the indictment was unveiled, Cuellar issued a sweeping denial of wrongdoing and defiantly pledged that he would nonetheless run for reelection—and win—in November. Questions on Cuellar’s Azerbaijani entanglements beforehand emerged when the FBI raided the consultant’s Laredo house and workplace in January 2022. Henry and Imelda appeared in federal court docket in Houston Friday and pleaded not responsible.
In his denial, Cuellar mentioned that he and his spouse have been harmless of all fees and that his legislative actions referenced within the indictment have been “in line with the actions of a lot of my colleagues and within the curiosity of the American folks.” He added that, “Earlier than I took any motion, I proactively sought authorized recommendation from the Home Ethics Committee, who gave me a couple of written opinion, together with a further opinion from a nationwide regulation agency.” Two ethics specialists advised the Observer that Cuellar might use that opinion in his personal protection, if the steerage was supplied in writing and if Cuellar supplied all of the related details.
“The indictment reads like a spy novel. And additionally it is fiction,” Cuellar’s protection lawyer Chris Flood advised Punchbowl Information, suggesting that the DOJ has “another agenda right here aside from fact and justice.”
The blockbuster allegations towards Cuellar, a strong and controversial conservative Democrat, have despatched shockwaves by Washington and his hometown of Laredo.
Brett Kappel, a Washington D.C.-based lawyer who focuses on marketing campaign finance and ethics legal guidelines, mentioned the indictment will stand out in historical past each for accusing a member of the Home of Representatives for the primary time ever of illegally performing as an agent for a overseas authorities and for concurrently finishing up “Two completely totally different bribery schemes involving two totally different nations.”
A number of highly effective overseas gamers and different Texans in Cuellar’s sphere are allegedly implicated within the scheme primarily based on particulars supplied about people within the indictment. The listing consists of Suleymanov, who was in shut communication with Cuellar on coverage issues whereas the congressman was allegedly receiving bribes from the nation’s oil firm, SOCAR. (Two of Cuellar’s longtime Texas political allies have already pleaded responsible; nobody else has been charged.)
Additionally described as taking part in arranging allegedly improper funds is Luis Niño de Rivera, who in February resigned as president of Banco Azteca, a Mexican financial institution. Niño de Rivera, who additionally served as vp of the Mexican Nationwide Banking Affiliation on the time the alleged scheme occurred, couldn’t be reached for remark. Banca Azteca posted a tweet apparently referencing the accusations: “We need to reiterate that our operations are ruled by the very best worldwide compliance requirements.”
Banco Azteca is a part of a large Mexican company empire referred to as Grupo Salinas, which is run by Ricardo Salinas Pliego, a strong and outspoken billionaire. The indictment alleges that funds have been routed by the Los Angeles affiliate of its media firm, TV Azteca, one among Mexico’s main networks.
The indictment additionally says that an unnamed Mexican authorities official allegedly helped dealer the deal and suggested the congressman that the consulting funds from Banco Azteca be routed by different corporations.
With the intention to additional conceal the character of the alleged bribes, Cuellar enlisted two distinguished political operatives in Texas to behave as middlemen in alternate for every getting a lower of the money, in response to federal court docket information. Each agreed to plead responsible to conspiracy to commit cash laundering and cooperate with federal prosecutors, in response to information unsealed this week, as first reported by the San Antonio Specific-Information.
The first go-between, named as “Particular person-3”, is a longtime Cuellar affiliate named Florencio “Lencho” Rendon, who used his consulting firm to funnel the cash. in response to the indictment. Cuellar allegedly ordered Rendon to repay the Mexican politician as a result of he “introduced the deal to the desk,” in response to his plea settlement. Rendon ultimately paid him as a lot as $9,000 utilizing money he stored at a Mexican regulation agency.
The opposite alleged intermediary is Cuellar’s former chief of workers and marketing campaign supervisor, Colin Strother, who served as Cuellar’s notoriously aggressive and constant political guide for over 20 years. Rendon would ship the month-to-month funds to Strother, who would then cross the cash to the corporate owned by Cuellar’s spouse, prosecutors allege.
Henry Cuellar was the “true, meant beneficiary recipient” of the cash, in response to Strother’s plea settlement, and Strother participated within the scheme with the understanding that the funds “have been obtained by illegal exercise, specifically bribery.”
“If I have been Henry or Imelda Cuellar, I’d be involved,” Strother’s lawyer advised the San Antonio Specific-Information on Wednesday.
Rendon beforehand served as high aide to longtime Corpus Christi Congressman Solomon Ortiz. Notably, Ortiz turned one of many first allies in Congress of the nascent Azerbaijani foyer and co-founded the Congressional Azerbaijan Caucus. After leaving workplace in 2010, Ortiz lobbied for an Azerbaijani entrance group to enhance the nation’s unhealthy fame in Washington. In that point, he was additionally a part of a delegation that traveled to Azerbaijan and declared its extensively criticized presidential election in 2013 to be “free, truthful, and clear.”
Cuellar’s “grownup baby” can also be named as “Co-Conspirator 6” in Rendon’s plea settlement. In late 2021, Cuellar advised Rendon to arrange an analogous consulting association together with his baby. Rendon met with Cuellar baby’s in late 2021 and gave them a $2,000 examine, in response to court docket information.
Not lengthy after, in January 2022, Rendon was served with a federal grand jury subpoena relating to the scheme, and the FBI raided Cuellar’s house.
Henry Cuellar started negotiating the primary of a sequence of “sham” consulting agreements with the Azerbaijani state oil firm SOCAR and its associates in 2014, a couple of 12 months after his journey to the nation. Over the following a number of years, the oil firm despatched $360,000 to Cuellar shell corporations, and in alternate, federal prosecutors declare, the congressman used his workplace and affect to benefit the nation’s overseas coverage pursuits.
After exchanging textual content messages with Suleymanov, the ambassador, Cuellar emailed Imelda a contract draft with handwritten edits detailing an settlement by which SOCAR would pay a month-to-month payment for consulting companies to an organization owned by Imelda Cuellar referred to as IRC Enterprise Options.
“In actuality,” prosecutors allege, “the contract was a sham used to disguise and bonafide the corrupt settlement between Henry Cuellar and the Authorities of Azerbaijan.” Within the coming months, the Cuellars additional negotiated phrases with SOCAR, selecting a month-to-month consulting payment of $20,000. Via varied contract agreements, cash was funneled by SOCAR by Azerbaijani entrance corporations and two U.S. associates primarily based within the Houston space to the Cuellar corporations.
“The indictment is spectacular. It’s a type of issues that’s stunning for the magnitude and stunning for the unprecedented nature,” mentioned Casey Michel, a kleptocracy skilled on the Human Rights Basis who has carefully adopted Azerbaijan’s uniquely brazen overseas affect efforts. “I by no means in a thousand years would anticipate that we’d see fees like this. It’s actually simply stunning high to backside.”
One of many SOCAR associates was managed by a former Azerbaijani diplomat who had beforehand served with Suleymanov, the indictment says. That particular person seems to be Elshan Baloghlanov, who’s listed as director of a defunct Katy firm referred to as OLIMP USA, LLC. Public information present the corporate was arrange in August 2017 and folded in 2021. Baloghlanov didn’t return calls looking for remark.
The Azerbaijani funds to Cuellar paused for a time starting in mid-2015, when the press started reporting on a congressional investigation into 10 different federal lawmakers who had accepted lavish journeys to Baku. These journeys have been organized by Kemal Oksuz, a Houston-based nonprofit operator who secretly used SOCAR cash to fund the journey.
The funds restarted in 2017, when the Cuellars negotiated a 3rd “sham contract” with the state oil firm. Once more, Congressman Cuellar was straight concerned in these contract negotiations, organizing a lunch assembly in October 2017 between his spouse and SOCAR officers in San Antonio to debate the deal, in response to the costs. Textual content messages within the indictment present that Suleymanov was conscious of the assembly and that the gathering occurred at a San Antonio steakhouse.
Whereas the indictment doesn’t identify the steakhouse, marketing campaign finance experiences recommend it was the Ruth’s Chris in downtown San Antonio. His marketing campaign committee reported an expense of $103 on the steakhouse round that point.
The following month, Imelda shaped a brand new shell firm referred to as World Gold Group, LLC, that was allegedly used to obtain extra bribe funds from the Azerbaijani oil firm, prosecutors declare. Henry Cuellar was concerned with forming that firm and negotiating the contract with the Azerbaijani affiliate firm. “Sort and get me one other draft. I’ve extra additions,” Cuellar texted his spouse in November.
The contract funds to this shell firm started in January 2018 and resulted in March 2019. A number of months earlier, in December 2018, Oksuz, the Houston businessman who admitted to illegally utilizing SOCAR cash to rearrange journeys to Azerbaijan for U.S. congressmen, pleaded responsible to a scheme concealing overseas authorities funding.
The federal authorities’s investigation of the Cuellars apparently started with Oksuz.
However not one of the lawmakers who accepted the illegally funded overseas journey to a 2013 Baku convention have been formally sanctioned or prosecuted. Most returned presents and journey funds and claimed ignorance of SOCAR’s involvement primarily based on Oksuz’ false statements.
All through the complete alleged scheme, Cuellar was in shut contact with Suleymanov, discussing varied plans to make speeches in help and take legislative motion on the behest of the Azerbaijanis.
The indictment consists of a number of textual content messages that Cuellar and Suleymanov exchanged concerning the congressman’s efforts to advance the Azerbaijanis’ overseas coverage agenda. In April 2016, Cuellar wrote a letter to a “high-ranking” official in President Barack Obama’s administration claiming that Armenia was a “proxy” for Russia and lobbying for the withdrawal of navy forces from the Nagorno-Karabakh area, an Armenian enclave in western Azerbaijan.
In fall 2017, Suleymanov texted Cuellar a screenshot of an modification to a Home appropriations invoice that would offer $1.5 million in funding to clear land mines in Nagorno-Karabakh, an effort supported by Armenia and opposed by Azerbaijan. Suleymanov requested Cuellar if the latter knew the consultant who was pushing the modification. “Sure sir.” Cuellar mentioned. “Any likelihood of speaking him into withdrawing his modification or no means? Developing on the ground at present,” Suleymanov requested.
“I’ll discuss to him,” Cuellar mentioned.
The Azerbaijan ambassador plied Cuellar, often calling him “boss.” In a single alternate, Cuellar despatched an replace on a matter. “You’re the finest El Jefe!” Suleymanov replied. At one level, Cuellar’s workers was persuaded to “advise and strain” the State Division to resume the passport of Suleymanov’s daughter, in response to the indictment.
In spring 2014, in the identical interval when he was arranging his first Azerbaijani deal, Cuellar was negotiating a “comparable corrupt settlement” with a Mexico Metropolis-based financial institution, in response to data within the indictment.
Cuellar is maybe finest often called an advocate for commerce with Mexico, and he’s a fixture at high-powered conferences on border points. So when Banco Azteca officers began having bother transferring cash to the USA due to U.S. insurance policies, they turned to Cuellar for assist.
Due to a U.S. crackdown on cash laundering beginning in 2012, Banco Azteca started to have issue discovering “correspondent banks” that it might use to “repatriate massive reserves of bodily U.S. forex” it held in Mexico again to the USA. One among Banco Azteca’s U.S. companions caught up within the crackdown was the Lone Star Nationwide Financial institution of Pharr, which the feds repeatedly cited and fined for failing to take preventative motion towards cash laundering.
Whereas in Mexico Metropolis in 2014, Cuellar met with Niño de Rivera, the financial institution govt, the place prosecutors declare they mentioned the phrases of a corrupt association for the financial institution to rent Cuellar’s spouse as a guide. At the moment, Banco Azteca was nonetheless on the lookout for extra U.S. banking companions.
The phrases of the proposed consulting contract have been between Imelda Cuellar’s firm and a Los Angeles-based media firm that was a part of the identical conglomerate as Banco Azteca. The settlement paid a month-to-month $12,000 payment with further efficiency charges as much as $500,000 if Cuellar’s shell firm succeeded in rapidly “set up[ing] enterprise relationships” with American banks.
A Mexican political official who served as a congressman from 2012 to 2015 was allegedly brokering the deal. He later suggested Cuellar that it could be finest to make use of a intermediary to obscure the deal between Banco Azteca and Imelda Cuellar’s firm, suggesting utilizing “a Mexican firm in Mexico.”
Cuellar responded: “Desire American.”
In October 2015, Cuellar met with Rendon, the political fixer for ex-Congressman Ortiz, over breakfast at a resort in Mexico Metropolis the place Cuellar recruited him to function his US-based intermediary to “additional disguise and bonafide the bribe funds” from the financial institution, prosecutors allege. A pair days later, Rendon met with the previous Mexico congressman to debate the “sham contract,” the indictment says. Rendon, for his half, would take a lower of the month-to-month funds.
Nonetheless Rendon thought it finest so as to add one more layer between his agency and the Cuellar shell firm, the indictment mentioned. Cuellar instructed utilizing Strother’s consulting firm as one other intermediary. In line with the criticism, Rendon advised Strother that this was a part of a deal to promote Mexican gasoline lubricants in the USA, which was “merely a canopy story to disguise and bonafide the funds” to Strother.
Whereas receiving alleged payoffs, Cuellar used his affect to strain White Home officers and help laws that might profit Banco Azteca whereas sending updates and asking for enter from Niño de Rivera, prosecutors say.
In 2012, Banco Azteca had additionally acquired the United State’s largest American payday lending corporations. At one level, in 2016, Cuellar texted Niño de Rivera to ask for his “individual in cost” of payday lending, saying there was “laws that would have an effect on you.” Cuellar’s workers later adopted up with the financial institution govt, asking for his opinion on a invoice that might tighten payday rules.
The indictment claims there’s little to no proof that Cuellar’s spouse, a former Texas state worker, did any actual consulting work to earn the varied funds. “What comes throughout within the indictment is that these have been sham transactions and this was a sham consulting association—and it seems like principally he’s the principal, despite the fact that she’s the one represented to be delivering the companies,” unhappy Virginia Canter, chief ethics counsel for CREW, a Washington, D.C.-based watchdog nonprofit that has referred to as on Cuellar to resign. “There’s a few issues that make it problematic. She’s not offering any companies and he’s just about concerned within the negotiations.”
The case towards Cuellar is trying more and more extreme with two shut associates, Strother and Rendon, flipping on him. In the meantime, his Democratic allies in Congress have up to now prevented condemning Cuellar or calling for his resignation.
“Henry Cuellar has admirably devoted his profession to public service and is a valued Member of the Home Democratic Caucus. Like every American, Congressman Cuellar is entitled to his day in court docket and the presumption of innocence all through the authorized course of,” Democratic Home Minority Chief Hakeem Jefferies mentioned in a press release. Per Home caucus guidelines, Cuellar has stepped down from his submit because the rating member of the Homeland Safety Appropriations subcommittee whereas the case is ongoing.
Former President Donald Trump, who’s going through federal felony fees, has come to his protection, dubiously claiming on his social media platform that President Biden sicced his Justice Division on Cuellar as political retribution for the latter’s outspoken requires border safety.
If the felony case goes ahead towards the Cuellars, it would attract high-powered lobbyists, extraordinarily rich company officers, and even diplomats—if U.S. prosecutors can get hold of entry to them, Canter mentioned. The allegations paint a stark image of how overseas journey taken by a member of Congress outdoors of official U.S. Division of State journeys might have been utilized by a overseas nation to domesticate highly effective American officers.
“What it highlights is that journeys[involving] overseas governments and overseas entities ought to be extremely regulated,” Canter added. “There ought to be rigorous protocols arrange … to warn members [that trips] may be considered as academic experiences however they may even be used for grooming folks to serve overseas pursuits.”
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