Rep. Linda Sanchez’ husband indicted over lavish family trips he paid for with federal funds





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California Rep. Linda Sanchez has withdrawn her name for consideration as the chairman of the House Democratic caucus after the Department of Justice announced her husband had been indicted for misuse of funds. From CBS News :

The U.S. attorney in New Haven, Connecticut announced that a federal grand jury has returned two indictments charging five people with the theft of federal funds. One if the individuals charged is James Sullivan, who is married to California Democratic Rep. Linda Sanchez.
According to a government release, the U.S. attorney alleges that the defendants conspired to misuse an account that held funds provided by federal grants to the Connecticut Municipal Electric Energy Corporation (CMEEC), a public corporation that allows municipal electric utilities in Connecticut to provide electricity.

According to the DOJ press release, the CMEEC had received $9 million from the Department of Energy between 2010 and 2015. The five indicted members allegedly had a slush fund and then used that money to arrange lavish out-of-state trips which involved no CMEEC business .

The first indictment alleges that Rankin, Sullivan, Bilda, DeMuzzio and Pryor planned, organized and directed lavish trips outside of Connecticut, including trips to the Kentucky Derby in 2015 and 2016, and to a luxury golf resort in West Virginia in 2015.  These trips did not relate to CMEEC business or CMEEC Member business, but were intended to personally benefit, compensate and reward the co-conspirators, their family members, friends and associates.  Costs for the trips, which totaled more than $800,000, included travel expenses, private chartered airfare, first-class hotel accommodations, meals, tickets to sporting events, golf fees, souvenirs and gifts.

The second indictment involves Sanchez as a beneficiary of the scheme [emphasis added]:

The second indictment charges Rankin and Sullivan with engaging in a conspiracy to pay for Sullivan’s personal expenses with CMEEC funds. It is alleged that Sullivan submitted his personal expenses on a regular basis via “expense reports” that Rankin approved and directed to be paid out of CMEEC funds. Sullivan’s personal expenses were charged to the CMEEC’ account for lobbying expenses, even though Sullivan was not a registered lobbyist for CMEEC. Between January 2012 and August 2015, Rankin authorized the payment of numerous personal expenses for Sullivan, including airfare for dozens of flights Sullivan took, trips for Sullivan and his family members to attend the Kentucky Derby in 2013, 2014, and 2015, and airfare for a flight for Sullivan’s wife to travel to Key West, Florida, in December 2014 .

Sanchez’ attendance at the 2013 NS 2014 Kentucky Derby was first reported in January 2017 . At the time her spokesman said, “Congresswoman Sanchez attended the event in her personal capacity as the spouse of a board member, which is expressly allowed under House rules.”
Earlier today, Sanchez released a statement saying she was withdrawing her bid for chairman of the House Democratic caucus. From Roll Call :

“Having served in leadership for the past two years I appreciate that the position has important responsibilities requiring extraordinary time and effort,” she said. “Unfortunately, an unexpected family matter requiring my attention compels me to withdraw my name as a candidate for chair of the Democratic Caucus.”

IRS Special Agent in Charge Kristina O’Connell said of the indictment, “The funds CMEEC allegedly misappropriated for these extravagant trips was motivated by greed, to the detriment of the member towns and ratepayers.” All five defendants in the case pleaded not guilty today.

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