May 23, 2022 - Politics & Policy

Cawthorn under House probe for possible fraud, improper relationship

Rep. Madison Cawthorn (R-N.C.)

Rep. Madison Cawthorn (R-N.C.). Photo: Jabin Botsford/The Washington Post via Getty Images

Outgoing Rep. Madison Cawthorn (R-N.C.) is under investigation by the House Ethics Committee over allegations of financial fraud and an improper relationship with a staffer.

Why it matters: The probe is the culmination of weeks of damaging scandals and media reports that led to the right-wing firebrand losing reelection to a GOP primary challenger.

Driving the news: The Ethics Committee said Monday in a press release that its members — five Democrats and five Republicans — voted unanimously to launch the probe.

  • Its aim is to determine whether Cawthorn "improperly promoted a cryptocurrency in which he may have had an undisclosed financial interest" and "engaged in an improper relationship" with a staffer.

The context: A super PAC focused on opposing Cawthorn filed a complaint with the Office of Congressional Ethics alleging Cawthorn provided housing, travel and loans to a staffer, which they said was improperly disclosed.

  • According to the complaint, the staffer, Stephen L. Smith, accompanied Cawthorn on his honeymoon in Dubai.
  • Smith is Cawthorn's cousin, Cawthorn spokesperson Luke Ball told Insider, calling the complaint "ridiculous."

The complaint also seized on a Washington Examiner report that Cawthorn was involved in a cryptocurrency "pump-and-dump" scheme.

  • Cawthorn reportedly commented that the cryptocurrency, Let's Go Brandon Coin, would "go to the moon" — or rocket up in price — on a photo of him and the hedge funder behind the coin, one day before an announcement caused its value to surge.

The other side: “We welcome the opportunity to prove that Congressman Cawthorn committed no wrongdoing and that he was falsely accused by partisan adversaries for political gain," Cawthorn's chief of staff Blake Harp told Axios.

  • "This inquiry is a formality. Our office isn’t deterred in the slightest from completing the job the patriots of Western North Carolina sent us to Washington to accomplish," said Harp. 

Go deeper: A separate report from the committee says its members voted to forgo an investigation into misdemeanor charges against Cawthorn for speeding and driving with a revoked license.

  • Cawthorn reportedly told the panel he paid a fine to resolve one of the driving charges and "intends to pay any fines associated with the remaining charges."
  • "The Committee believes that the handling of this matter by local authorities is sufficient given the facts of the matter," the report says.

Editor's note: This story has been updated to include a statement from Rep. Cawthorn's chief of staff.

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