Rep. Michael Grimm Pleads Guilty to Tax Evasion (Updated)
Updated 2:21 p.m. | NEW YORK — Rep. Michael G. Grimm said he won’t step down, despite pleading guilty Tuesday to one of the 20 felony tax fraud charges he’s been battling since April — immediately raising questions about whether the New York Republican will be forced to resign his seat in Congress.
A two-term lawmaker who won re-election in November by steadfastly maintaining his innocence, Grimm entered a Brooklyn courthouse on Tuesday afternoon and admitted to tax evasion in connection to the health food restaurant he owned and operated prior to serving in Congress.
Grimm, who represents the borough of Staten Island and a portion of Brooklyn, will be sentenced June 8 at 10:30 a.m. On Tuesday, he pleaded guilty to the fourth count of the 20-count indictment, which implicated him in “willfully aid[ing] and assist[ing] in and procure[ing], counsel[ing] and advise[ing] the preparation and presentation” of inaccurate tax returns to the IRS.
“While operating a restaurant we underestimated the gross receipts,” Grimm said in court, adding that some of that money was used to pay employees “off the books.”
Therefore, the tax returns were false. Grimm later clarified that by “underestimated” he meant “under reported.”
“Now, I want you to know, I’ve already been inundated with messages and comments by many that everyone does this, everyone pays people off the books and it’s very common,” Grimm explained to reporters outside the courthouse after the hearing. “But let me be very clear: It’s wrong. I should not have done it and I’m truly sorry for it.”
Leading up to Tuesday’s guilty plea, there was no indication what Grimm would do next. He had already given up his seat on the House Financial Services Committee, saying he would reclaim it once he’d been cleared of wrongdoing.
On the campaign trail earlier this year, he suggested he would leave office if he was found unfit to serve, but the scenario he laid out then didn’t account for what would happen if he preempted his trial, scheduled for February 2015, and admitted to culpability on his own terms.
But at the press conference immediately following the Tuesday afternoon hearing, Grimm said he would not step down if he had anything to do with it.
“Absolutely not,” Grimm said when asked the question directly. “It happened before I was in Congress, and for the past four years I’ve been a strong, effective member of Congress.”
Grimm said, “As long as I am able to serve, I’m going to serve, and that’s exactly what I plan on doing.”
Two days before Christmas and three weeks before the start of the 114th Congress, House GOP leaders were initially taking a wait-and-see approach on whether Grimm should be allowed to stay in office.
A spokesman for Speaker John A. Boehner said Tuesday morning that the Ohio Republican would not weigh in publicly until he spoke to Grimm directly. At his press conference, Grimm said he had spoken with GOP leadership, but would not provide details on that conversation.
“I am truly truly sorry for the mistakes I made,” Grimm told reporters, adding that his constituents “have strengthened my resolve to finally bring this terrible chapter of my life to a close.”
He also remained on the offensive: “I know that some are going to use this to demonize me. They’re going to use it for political purposes like they have for the past 3 years.”
Grimm, who gained national attention for infamously threatening to throw a reporter off a balcony in January, was already under federal scrutiny for alleged campaign finance fraud by the time revelations surfaced that the U.S. attorney’s office for the Eastern District of New York had also been pursuing another, entirely different investigation into the congressman’s career before he joined the political world.
In late April, branch head Loretta Lynch, who is now President Barack Obama’s nominee for U.S. attorney general, handed down a federal indictment implicating Grimm in a host of illegal activities while running his Manhattan-based health food store “Healthalicious” — from tax evasion to mail fraud, hiring undocumented immigrants and lying under oath, and possibly failing to report more than $1 million over the course of overseeing the business.
At a news conference detailing the charges, Lynch called Grimm’s efforts to cover up his activities “breathtaking,” especially considering he had, prior to 2006, worked as an undercover FBI agent sussing out white collar crime on Wall Street.
“Mr. Grimm made the choice to go from upholding the law to breaking it,” she said. “In doing so, he turned his back on every oath he had ever taken.”
In the event that Grimm, a Marine veteran, does not leave office voluntarily or after being compelled by party leaders, there are other options available to punish a sitting lawmaker who admits to certain misconduct. According to a 2014 report from the nonpartisan Congressional Research Service, while a member convicted of a crime is not forced to leave office, there are several potential repercussions for a conviction. Under official House rules, a “conviction” also includes a guilty plea.
The most immediate consequence, if Grimm’s plea agreement included two or more years in prison, would be that he “should” refrain from participating in committee business and from voting on the House floor.
Without Grimm’s resignation, the House could take further disciplinary action. The most severe consequence would be expulsion, which would require a vote on the chamber floor with two-thirds of members voting in favor. But as House Ethics rules note, expulsion has only been applied to members who committed crimes while they were in office, and since Grimm’s alleged transgressions occurred before he was elected to Congress, that punishment is unlikely.
Lesser punishments include censure or reprimand, which are formalized in resolutions of disapproval approved by a majority vote.