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Schmidt Has Yet to Disclose, Repay Legal Fees

Four months after the House Ethics Committee told Rep. Jean Schmidt to disclose and repay about $500,000 in legal expenses she unknowingly accepted from a Turkish-American interest group, the Ohio Republican has yet to amend her financial disclosures or begin repaying the debt.

In August, the Ethics Committee concluded that because Schmidt was unaware of an agreement between her lawyers at the Turkish American Legal Defense Fund and the Turkish Coalition of America ­— which was reimbursing her attorneys for their work on several matters related to the Democratic challenger in her last re-election bid — it would not seek sanctions against her. However, the committee concluded that the receipt of legal fees was an impermissible gift that should be repaid.

“In sum, Representative Schmidt must: 1) ensure that TCA does not pay for any further legal services on her behalf; 2) pay from a permissible source the lawyers associated with TALDF for all legal services they performed to date; 3) amend her 2009 and 2010 Financial Disclosure Statements to disclose the gifts from TCA; and 4) disclose any unpaid legal fees from TCA as liabilities on her future Financial Disclosure Statements, until the lawyers associated with the TALDF have been repaid in full,” Ethics Chairman Jo Bonner (R-Ala.) and ranking member Linda Sánchez (D-Calif.) said in a joint statement.

The committee noted at the time of its announcement that Schmidt had been working with its members and staff since September 2009 to determine the appropriate way to repay her attorneys and that it believed the Congresswoman was acting in good faith. The committee’s report said it had given Schmidt guidance on how to pay the legal debt, namely that she could open a legal expense fund to pay the legal bills incurred for two matters, one before the Ohio Elections Commission and a defamation lawsuit, but could not use such an account to pay for a related but separate amicus brief submitted to the Ohio Elections Commission.

“The Committee recognizes that the lawyers associated with TALDF have been representing Representative Schmidt for more than two years, in at least three different legal proceedings, and the legal fees for this work are substantial,” the report on the Schmidt matter noted. “For this reason, the Committee does not expect Representative Schmidt to fully pay the lawyers associated with TALDF immediately. However … Representative Schmidt must begin paying the lawyers associated with TALDF as soon as funds are available … additionally, the Committee notes that it did not approve the use of [a legal expense fund] for fees related to the amicus brief. She must pay those fees immediately and provide the Committee with a cancelled check as proof of payment of the legal services related to the amicus brief.”

At the beginning of September, Schmidt filed the paperwork to open a legal expense trust. A report detailing the trust’s transactions during the third quarter of the year showed that it had not received any contributions as of the end of September. In October, the treasurer of Schmidt’s re-election campaign asked the Federal Election Commission for guidance on whether it could use campaign contributions to pay for the amicus brief effort that cannot be covered by Schmidt’s legal defense fund, but the request was later withdrawn. Schmidt has yet to file amended reports of her personal finances for 2009 and 2010 that reflect the legal fees.

A Schmidt spokesman said the request for an FEC advisory opinion could be re-submitted as the Congresswoman sorts out how she will reimburse the attorneys for their services.

“The Congresswoman has always intended to pay the bills, and she has begun the process of putting in place a mechanism to do so. She wants matters resolved as soon as possible,” Schmidt Communications Director Barrett J. Brunsman said. “It is a deliberate and painstaking process. The House Ethics Committee has noted that she has worked in good faith with its members. It was on the advice of the Ethics Committee that we looked into setting up a legal expense trust. We want to get an accurate accounting of all legal bills and expenses, that effort is ongoing. The financial disclosure reports will be amended as soon as all of the information has been compiled and checked for accuracy.”

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