News: Former congressman in handcuffs

Wednesday, August 17, 2022

Former congressman in handcuffs

Aug 17, 2022

By Lara Korte, Jeremy B. White and Sakura Cannestra

Presented by Southern California Edison

THE BUZZ: Former Rep. T.J. Cox is facing the possibility of prison and fines after FBI agents arrested him Tuesday in Fresno on fraud charges — some related to his congressional campaign.

Cox, as you may recall, rode a national wave of post-Trump-fervor to steal California's 21st Congressional District away from Republican Rep. David Valadao in 2018. Cox's tenure was short lived, however. In a 2020 rematch, he fell short of beating Valadao by just 1,500 votes. He declined to run again this year, instead backing Assemblymember Rudy Salas (D-Bakersfield) for the seat.

Salas, by the way, wasn't too keen on touting that endorsement following the indictment, saying in a statement, "T.J. Cox has disgraced himself."

Then-Rep. T.J. Cox speaks at a news conference on Capitol Hill with others standing behind him.

Then-Rep. T.J. Cox, D-Calif., of California's 21st Congressional district, speaks at a news conference on Capitol Hill in Washington on Jan. 17, 2019. | AP Photo/Andrew Harnik, File

The picture painted by federal prosecutors in the 28-count indictment, which was unsealed Tuesday, alleges Cox used a network of nonprofit and for-profit businesses to enrich himself while saddling business partners with losses between 2013 and 2018. The document, as Jeremy and POLITICO's Anthony Adragna reported, describes several schemes in which the former congressman siphoned money into secret accounts and used the proceeds to pay debts, cover private school tuition and fund his political ambitions. In total, the Justice Department estimates Cox illicitly obtained more than $1.7 million.

One of the ploys, according to the indictment, allegedly involved Cox disbursing $25,000 of his own money to family members and business associates, who in turn donated the money to his congressional campaign, with the hope it would give the appearance of more individual donors.

"The purpose of emphasizing individual donations was to keep pace with competitors that received high numbers of private donations and to show viability of the candidacy through individual donations," federal prosecutors wrote. "The numbers of private donations received by TJ Cox for Congress in the third and fourth quarters of 2017 assisted COX in seeking election and receiving political party support…"

This is not the first time a member of the California Congressional delegation has landed in hot water with the feds. In 2019, Republican Rep. Duncan D. Hunter pleaded guilty to stealing hundreds of thousands of dollars in campaign funds that he and his wife spent on fast food, movie tickets, sneakers, video games, luxury hotels, overseas vacations and plane tickets for the family's pet rabbits, Eggburt and Cadbury, among other things.

Hunter resigned from Congress and was set to spend 11 months in prison, until former President Donald Trump pardoned him and his wife in the final weeks of his presidency.

If convicted, Cox faces a maximum statutory penalty of 20 years in prison and a fine of $250,000 for wire fraud and money laundering. He could face 30 years and a $1 million fine for wire fraud affecting a financial institution and financial institution fraud. For campaign contribution fraud, he could face a max of five years in prison and a $250,000 fine.

BUENOS DÍAS, good Wednesday morning. Everyone say a prayer for the electric grid. It's going to be so hot today that the California Independent System Operator has issued a statewide Flex Alert, calling for voluntary electricity conservation from 4 p.m. to 9 p.m. this evening. That means easing up on the A/C and avoiding the use of big appliances like dishwashers and electric ovens.

Got a tip or story idea for California Playbook? Hit us up: jwhite@politico.com and lkorte@politico.com or follow us on Twitter @JeremyBWhite and @Lara_Korte.

QUOTE OF THE DAY: "I think Gov. Newsom is more interested in carrying the swing states in the presidential election, rather than phasing out power plants. A lot of environmental groups are unhappy about this." Redondo Beach Mayor Bill Brand speaking to the Sac Bee about the governor's move to buy directly from gas-fired power plants.

TWEET OF THE DAY: Los Angeles City Councilmember @mikebonin celebrating the failed recall attempt of LA County District Attorney George Gascón: "The failure of the Gascón recall is further proof Tucker Carlson, John & Ken, MAGA twitter, Nextdoor etc don't speak for most of LA. LA demands real solutions and wants leaders willing to do the tough, detailed work of making systemic change."

WHERE'S GAVIN? Nothing official announced.

A message from Southern California Edison:

Southern California Edison is taking steps every day to protect the safety of our customers and communities. By installing covered power lines, upgrading our electric infrastructure, investing in new technologies and strengthening our partnerships with fire agencies, we can prevent wildfires before they happen, better predict when they may occur and respond quickly if one starts. Protecting 32 million acres in Southern California and the people that live here is a job we take seriously.

TOP TALKERS

CLASS IN SF — "Back-to-school in San Francisco: Data shows severity of teacher shortage, absenteeism, low reading scores," by the San Francisco Chronicle's Jill Tucker and Alex K. Fong: "But as San Francisco's 49,000 students pour into classrooms for the first day of school Wednesday, the district will once again be juggling the ongoing fallout from the pandemic, financial woes, a bug-infested payroll system and a teacher shortage, among other challenges."

CLASS IN LA — "LA's back-to-school challenges: low test scores, scramble for teachers, missing students ," by the Los Angeles Times' Howard Blume: "Los Angeles school officials began the new school year Monday with a sense of urgency over the pending release of low and declining standardized test scores, a scramble to get the best professionals helping students and the ongoing search for an estimated 20,000 "missing" students."

— Interior imposes limited water cuts, but lets Colorado River negotiations go into overtime, by POLITICO's Annie Snider: Instead of following through on its threat to intervene if states couldn't agree on a way of saving massive quantities of water, the Interior Department is giving states more time and moving only to institute much smaller water delivery cuts to Arizona, Nevada and Mexico that were already agreed to under a 2019 deal.

HEATING UP — "'Super-duper hot': Hot temperatures roast Bay Area, Northern California," by the Mercury News' Rick Hurd and Jakob Rodgers: "The mix of hot, stagnant air, as well as wildfire smoke from a series of blazes in Humboldt County, caused air quality to deteriorate across the Bay Area on Tuesday — leading the Bay Area Air Quality Management District to issue a Spare the Air alert."

CAMPAIGN MODE

— "Inland candidate isn't registered to vote in Assembly district he wants to represent," by the Press-Enterprise's Jeff Horseman: "Bill Essayli, 36, is running as a Republican in the November general election for California's newly drawn 63rd Assembly District, which includes Norco, Canyon Lake, Menifee and Lake Elsinore as well as parts of Riverside, Eastvale and Corona."

KEEP AN EYE ON THIS ONE — Poll: Abortion enters top five Latino issues , by POLITICO's Marissa Martinez: More than 70 percent of respondents said the procedure should be legal regardless of their personal beliefs, according to the survey from Hispanic civil rights and advocacy group UnidosUS and civic engagement organization Mi Familia Vota.

— " Caruso touts support of Hollywood, while his firm battles studio expansion near the Grove," by the Los Angeles Times' Julia Wick and David Zahniser: "The development battle could complicate Caruso's message as a businessman focused on strengthening the region's economy. And it raises questions about how Caruso, if elected, would respond to businesses whose activities are potentially at odds with his company's interests."

STEP INSIDE THE WEST WING: What's really happening in West Wing offices? Find out who's up, who's down, and who really has the president's ear in our West Wing Playbook newsletter, the insider's guide to the Biden White House and Cabinet. For buzzy nuggets and details that you won't find anywhere else, subscribe today.

CALIFORNIA AND THE CAPITOL CORRIDOR

ANTICI… PATION — "California lawmakers use secretive process to kill would-be laws: 'Where good bills go to die'," by the Sacramento Bee's Andrew Sheeler, Lindsey Holden and Stephen Hobbs: "Proponents say the suspense file is a tool of efficiency, essential for screening the hundreds of bills that come through the legislature each year for their potential fiscal impact. Detractors call it a burial ground, used by lawmakers for decades to inter politically hazardous measures before they are forced to vote on them."

— " Sellers strike? Some homeowners back out of a slowing housing market," by the Los Angeles Times' Andrew Khouri: "Homes that would have received dozens of offers at the beginning of the year get just a few these days. Other properties receive none, forcing owners to slash their asking price and relinquish dreams of record profits."

— " Fast Food workers rally outside California Capitol for action on legislation," by KCRA3: "The group plans to sleep overnight outside the Capitol and hold two more rallies on Wednesday."

— " Gavin Newsom clashes with California environmentalists on climate, water," by the Sacramento Bee's Dale Kasler and Ryan Sabalow: "While Newsom is almost certain to win a second term, political analysts say he is working even harder to strike a balance between pushing California forward on environmental issues without doing something that could weaken the economy — and, in turn, harm any ambitions he might have for higher office."

DISCOVERIES — " Devin Nunes has to turn over details on his job for Trump's company in lawsuit he started," by the Sacramento Bee's Gillian Brassil: "Lawyers for the magazine company, which Nunes sued over an article about his family's Iowa dairy farm, contend the information will show that the 2018 story did not harm his reputation in the form of $75 million the congressman seeks."

— "Editorial: 10 more years of nuclear power? Gov. Newsom needs to make the case," opines the Los Angeles Times' editorial board: "This board has argued against extending the life of the aging plant, based not only on the environmental and seismic hazards but the practical realities of getting it relicensed and approved to stay open beyond 2025."

HOUSING BATTLES — "Dean Preston and Matt Haney spar on Twitter over San Francisco's housing track record," by the San Francisco Chronicle's J.D. Morris: "Haney and Preston served on the Board of Supervisors together before Haney was elected to the Assembly this year. Haney voted for the SoMa project while Preston voted against it."

PEACE BE WITH YOU — "Oakland church gives out cannabis and psychedelics as 'sacrament.' Now, it's suing over a police raid ," by the San Francisco Chronicle's Sarah Ravani: "The Zide Door Church of Entheogenic Plants filed a lawsuit Friday in federal court alleging that the city, the Oakland Police Department and an Oakland police officer violated the First and 14th amendments by discriminating against the church's religious beliefs, according to the complaint."

— " Shifting stories, sudden amnesia mark Kobe Bryant crash photos trial testimony," by the Los Angeles Times' Alene Tchekmedyian and Michael Finnegan: "Bryant and [Christopher] Chester have sued Los Angeles County in federal court, alleging the photos of the victims' bodies that deputies and firefighters took and disseminated amounted to negligence and invasion of privacy."

A message from Southern California Edison:

BIDEN, HARRIS AND THE HILL

— "Biden administration cancels $3.9 billion in student debt for 208,000 borrowers defrauded by ITT Tech," by CNBC's Annie Nova: "ITT Educational Services was at one point one of the largest operators of for-profit technical schools in the U.S., and shut down in 2016. Borrowers shouldn't have to apply for the relief, the Education Department said."

— GOP govs who hate Biden's climate bill stand to benefit big from it , by POLITICO's Catherine Morehouse: Renewable energy has helped add jobs, lower electricity costs and stave off blackouts in many red states like Texas, Nebraska and Oklahoma thanks to the Obama-era renewable energy policies that launched a wind and solar boom more than a decade ago. But that has not stopped Republican governors from attacking Biden's bill, even as their states stand to reap financial incentives for wind and solar and benefit from the legislation's new credits for carbon capture, clean hydrogen, advanced nuclear and energy storage.

SILICON VALLEYLAND

BACK TO BUSINESS — "Adam Neumann Gets a New Backer: WeWork's founder is back with a billion-dollar venture, " by the New York Times' Andrew Ross Sorkin, Vivian Giang, Stephen Gandel, Lauren Hirsch and Ephrat Livni: "Neumann's new company Flow wants to transform the residential rental real estate market. Notably, it has the financial support of Andreessen Horowitz, the prominent Silicon Valley venture capital firm that was an early investor in everything from Facebook to Airbnb."

INTRODUCING POWER SWITCH: The energy landscape is profoundly transforming. Power Switch is a daily newsletter that unlocks the most important stories driving the energy sector and the political forces shaping critical decisions about your energy future, from production to storage, distribution to consumption. Don't miss out on Power Switch, your guide to the politics of energy transformation in America and around the world. SUBSCRIBE TODAY.

MIXTAPE

MONKEYING AROUND — "Monkey business behind 911 call from California zoo," by the Associated Press.

— "First came love, then a fiddle-leaf fig and a bustling plant store," by the Los Angeles Times' Jessica Benda.

— " E-bikes aren't just faster, they're a different ride. Here are safety tips," by the Los Angeles Times' Karen Garcia.

— "Renegade campers face huge fines at one of California's most cherished spots ," by SFGate's Amy Graff.

BIRTHDAYS

Andrew Pratt … Kensey Johnson … Mike Davis … Jamie Gillespie of House Minority Leader Kevin McCarthy's office

A message from Southern California Edison:

Evolving climate conditions throughout California have made wildfires a year-round concern to many communities. With safety as our number one priority, we are working to protect our customers and communities. Our engineers, field crews and fire science experts are developing and implementing industry-leading technologies and operational practices to reduce the risk of electrical equipment igniting wildfires. We've invested $1.3 billion in 2020 and are on track to spend an additional $3.5 billion in 2021-2022 to continue to prevent wildfires and act quickly when they occur. This includes installing covered power lines, strengthening situational awareness capabilities, and expanding operational practices like enhanced overhead inspections and vegetation management. We're also improving fire agencies' ability to detect and respond to emerging fires using satellite imagery and providing aerial fire suppression resources.

CALIFORNIA POLICY IS ALWAYS CHANGING: Know your next move. From Sacramento to Silicon Valley, POLITICO California Pro provides policy professionals with the in-depth reporting and tools they need to get ahead of policy trends and political developments shaping the Golden State. To learn more about the exclusive insight and analysis this subscriber-only service offers, click here.

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