Questions are swirling around irregularities in campaign finance reports from the campaign of U.S. Rep. Steve Chabot, who represents the west side of Hamilton County and all of Warren County.
The Federal Elections Commission Aug. 27 sent Jim Schwartz, the campaign treasurer of the long-tenured Republican, a letter raising questions about $123,625 that appeared on an amended campaign report but did not appear on the campaign's original report.
In the aftermath of that letter, Fountain Square Group, a campaign strategy firm run by Jamie Schwartz, abruptly deleted its Facebook page. Schwartz has been a longtime high-level campaign staff member for Chabot, as well as an employee in his congressional office, and Fountain Square Group has a number of contracts with other local Republican campaigns, including Hamilton County Commission candidate Andy Black.
Mark Braden, an attorney for Chabot's campaign, said in a statement that Chabot is the victim of "financial malfeasance."
"Congressman Chabot was shocked and deeply disappointed to be informed yesterday afternoon that his campaign committee may be the victim of financial malfeasance and misappropriation of funds," the statement reads. "Unfortunately, the misappropriation of funds by some campaign treasurers has been far too common an occurrence over the years."
Braden said in the statement that the campaign is cooperating with an investigation into the missing money and is conducting an audit of the campaign's finances. He said the campaign will be making no further comment in the meantime.
Hamilton County GOP Chair Alex Triantafilou echoed the campaign's explanation.
"It appears that Steve Chabot, like millions of Americans and even other members of Congress, has been victimized in a possible financial crime," Triantafilou tweeted Sept. 4. "This unfortunate and shocking development will never deter Congressman Chabot and Republicans from advancing our important agenda."
Chabot, serving his 12th term in Congress, handily beat Democratic challenger Hamilton County Clerk of Courts Aftab Pureval last year, netting 51 percent of the vote in a district that includes both blueing Hamilton County and deep-red Warren County. One of the more dramatic issues in that campaign hinged on questions around Pureval's use of money from his Clerk of Courts campaign account for his congressional run. The Ohio Elections Commission eventually dropped most of the charges against Pureval, who was fined $100 for paying a photographer who captured his congressional bid announcement from his Clerk of Courts campaign account.
Two Democrats — former military pilot Nikki Foster and health care executive Kate Schroder — are vying to challenge Chabot in 2020. Foster Sept. 4 called on Chabot to resign via a Twitter post.
Schroder called on the House Ethics Committee to investigate Chabot's spending during a news conference Sept. 6 in downtown Cincinnati to discuss the allegations around Chabot's campaign finances.
"Taxpayers and donors deserve to know the truth," she said. "Chabot is accountable for the dollars that have been entrusted with him."
That news conference by the state Democratic Party included Ohio Democratic Party Chair David Pepper, Hamilton County Democratic Party Chair Gwen McFarlin, as well as Schroder and Foster. During that news conference, Democrats sought to paint Schwartz as a major player both within Chabot's campaign and congressional office and in the campaigns of other Republicans.
"What we've seen with Mr. Schwartz is that he has been a major leader of each and every campaign for reelection of Steve Chabot," McFarlin said. "He's also served as an outside vendor, receiving more than $2 million from the Chabot campaign over his career. His company has served as a campaign spokesperson for Chabot. Mr. Schwartz has been a deputy chief of staff in Chabot's congressional office as well."
Pepper said that Chabot is responsible for whatever lapses allowed the money to go missing, citing statements Chabot made about Pureval during the race between the two suggesting he could face jail time. He also questioned why the campaign's treasurer had such close ties with a major vendor.
"Already we're seeing Chabot's lawyer today acting as if Chabot somehow wasn't involved, or even making statements that the campaign wasn't involved. They're clearly attempting to evade responsibility. But as Steve Chabot the candidate himself said, that's not good enough. It's not going to fly... you're supposed to be in charge."
At first, it appeared the letter from the FEC about Chabot’s campaign financing irregularities was addressed to Jamie Schwartz’s father, Jim R. Schwartz. The letter from the FEC is addressed to a “Jim Schwartz,” the FEC has a "James Schwartz, Sr." listed as the campaign's treasurer since 2011 and multiple media outlets reported the missive was sent to the elder Schwartz. But that is also murky.
Jim R. Schwartz Sr. released a statement Sept. 9 disavowing any major role in Chabot’s campaign or the controversy around its handling of financial contributions.
“I am not now, nor have I ever been, the treasurer of the Steve Chabot for Congress campaign,” the statement from his attorney Daniel J. McCarthy reads. “I have never served the campaign in any official capacity, including as treasurer, at any time. I played no role in the campaign other than as an occasional volunteer. I had no knowledge of the use of my name on any campaign documents or filings until recent reports.”
That was news to Chabot's campaign, which has said it thought the elder Schwartz had been its treasurer since 2011.
The younger Schwartz has not released a statement yet.
The FEC has asked Chabot to respond to its questions by Oct. 1. The FEC has asked Chabot to respond to its questions by Oct. 1.
This story has been updated to include a statement from James R. Schwartz, Sr.