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Report says Iowa congressman likely violated ethics rules

FILE - In this Oct. 18, 2014, file photo, 1st District congressional Republican candidate Rod Blum speaks during a debate in Waterloo, Iowa. Blum likely violated a host of ethics rules in his private business dealings, including his ownership in a company that used false claims and House resources to promote itself, according to an independent report released Monday, Dec. 17, 2018 by the The Office of Congressional Ethics. (Matthew Putney/The Courier via AP, File)

IOWA CITY, Iowa (AP) — An Iowa congressman likely violated a host of ethics rules in his private business dealings, including his ownership in a company that used false claims and House resources to promote itself, according to an independent report released Monday.

The Office of Congressional Ethics launched the review into Republican Rod Blum and his internet marketing business, Tin Moon Corp., following an investigation by The Associated Press earlier this year.

Its nonpartisan board voted in July to adopt an investigative report that concluded Blum “may have violated federal law, state law, House rules, and standards of conduct” and called for further investigation.

The House Committee on Ethics on Monday released the office’s lengthy report , which had been kept confidential as required by congressional rules. Committee leaders signaled that they would not take any further action against Blum, who is leaving Congress after losing his bid for a third term to Democrat Abby Finkenauer in the Nov. 6 election.

Democrats had used the AP’s revelations and pending investigation to attack Blum during the campaign as unethical.

Blum and his longtime business partner, Ed Graham, founded Tin Moon in 2016 during Blum’s first term in Congress. It shares a Dubuque office and staff with Blum’s other software company, Digital Canal, which invested at least $130,000 for a software license to start Tin Moon, the report found. Tin Moon boasts that it is a “reputation management” company that can help businesses bury unflattering online information, such as Food and Drug Administration warning letters , below positive search results.

The report found that Blum failed to list Tin Moon as an asset and his role as a director in his financial disclosure form. Investigators also found that Blum’s ownership stake of the firm may have been worth as much as $91,000, far more than the $700 private investment that Blum later acknowledged and listed on an amended disclosure form.

The report found that Blum may have misused House resources by allowing the company to use his official congressional photo on its website and a false video testimonial of his chief of staff posing as a satisfied customer. Tin Moon also engaged in other deceptive advertising, including falsely claiming to have 11,000 customers and to have won certain awards and endorsements, the review found. Blum, who owns 70 percent of the company, either allowed the deceptive practices or failed to prevent them.

In addition, investigators said they found that Blum failed to properly disclose his ownership and transactions related to a different company, Salto de Fede, LLC, on his 2014 and 2015 filings. That company, which has since dissolved, sold six real estate properties in three separate transactions that weren’t disclosed, the report found. Blum owned a 42 percent stake in the firm and may have failed to report its investment holdings and $58,000 in income from sales.

Investigators said that Blum, his companies, Graham, his chief of staff John Ferland and other associates largely refused to cooperate with their inquiry. The report stopped short of determining whether violations occurred but said the ethics committee should investigate, including by subpoenaing testimony and records from Blum and his associates. It’s unclear whether that occurred.

Blum responded to the report in an Aug. 2 letter to the ethics committee, which was also released Monday, saying he made a “minor, unintentional oversight” in failing to disclose Tin Moon. He said he was unaware the company used his photo or Ferland’s false video and demanded they be removed when he found out. He also said he could not be held responsible for any deceptive advertising since he’s only a “passive investor” in Tin Moon and that Graham ran its operations.

The report said Blum may have participated in the false advertising, noting that YouTube user “rodblum” uploaded a false Tin Moon testimonial video in 2016.

Blum complained that the scope of the inquiry was overly broad, calling the revelations about his failure to disclose Salto de Fede the result of a “fishing expedition.”

In an April letter to investigators, Graham said that he was responsible for mistakenly using Blum’s congressional photo and that he asked Ferland to record the testimonial without Blum’s knowledge.

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