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Published: Friday, 2/22/2008

Arizona Republican indicted in conspiracy involving federal land swap

ASSOCIATES PRESS

WASHINGTON, D.C. Republican Rep. Rick Renzi was indicted Friday on charges of extortion, wire fraud, money laundering and other matters in an Arizona land swap scam that allegedly helped him collect hundreds of thousands of dollars in payoffs.

A 26-page federal indictment unsealed in Arizona accuses Renzi and two former business partners of conspiring to promote the sale of land that buyers could swap for property owned by the federal government. The sale netted one of Renzi's former partners $4.5 million.

Renzi is a three-term member of the House. He announced in August that he would not seek re-election.

Attempts to reach Renzi by phone through his congressional office in Flagstaff and his lawyer were unsuccessful Friday.

As part of the alleged scam, Renzi and his former business partner, James W. Sandlin, concealed at least $733,000 that the congressman took for helping seal the land deals, the indictment says.

"Renzi was having financial difficulty throughout 2005 and needed a substantial infusion of funds to keep his insurance business solvent and to maintain his personal lifestyle," the indictment says.

The indictment accuses Renzi of using his position as a member of the House Natural Resources Committee to push the land swaps for Sandlin, who was also charged. It comes after a lengthy federal investigation into the land development and insurance businesses owned by Renzi's family.

The extensive legal document says Renzi refused in 2005 and 2006 to secure congressional approval for land swaps by two unnamed businesses if they did not agree to buy Sandlin's property as a part of the deal.

Renzi had previously owned some of Sandlin's property, the indictment says.

In early 2005, one of the businesses seeking surface rights for a copper mining project in Renzi's district failed to buy Sandlin's land. As a result, the indictment says, Renzi allegedly told the business, "No Sandlin property, no bill."

At the time, Sandlin owed Renzi $700,000 out of the land's selling price of $800,000. Renzi also allegedly concealed his business relationship with Sandlin, even though the company had expressly asked if there was one.

Renzi allegedly pushed the land on a second firm, an unnamed investment group, that was trying to secure a federal land swap. If the firm accepted Sandlin's property as part of the transaction, Renzi allegedly said investors would receive a "free pass" through the House Natural Resources Committee, according to the indictment.

In April 2005, the investors reluctantly agreed to the deal.

"Please be sensitive to the fact that we are going way out on a limb at the request of Congressman Renzi," one of the investors wrote in an April 17, 2005 e-mail to a Renzi aide. "I am putting my complete faith in Congressman Renzi and you that this is the correct decision."

The investment group agreed to pay $4.6 million for Sandlin's land, the indictment says. Sandlin then paid Renzi $733,000 for his help in securing the land swap from the second business.

Renzi failed to report the income on financial disclosure reports to Congress, as is required.

Read more later editions of The Blade and toledoblade.com



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