NC’s Madison Cawthorn fined after investigation into crypto purchase
With just weeks left in Rep. Madison Cawthorn’s only term in Congress, he found himself in trouble again.
On Tuesday, the House Ethics Committee announced substantial evidence exists showing Cawthorn promoted the meme coin cryptocurrency, “Let’s Go Brandon,” in which Cawthorn had a financial interest, in violation of U.S. House ethics rules.
He also received the meme coin at a discounted rate, the investigation found.
The committee couldn’t agree on the severity of Cawthorn’s actions, but agreed to publicly release investigators’ report that showed evidence of ethics violations, and to fine him.
Sen. Thom Tillis, a fellow Republican from North Carolina, requested the investigation.
The findings led to Cawthorn being forced to pay more than $14,000 to an appropriate charitable organization and $1,000 to the U.S. Department of Treasury. He also must submit a new disclosure report for his meme coin transaction.
In a written statement, Cawthorn’s spokesman Micah Bock said Cawthorn plans to split the donation between the Firearms Policy Coalition and the Shepherd Brain and Spinal Cord Center in Georgia. Cawthorn is a Second Amendment supporter, and he was a patient at the Shepherd Center following a car accident in Florida that left him partially paralyzed.
“Rep. Cawthorn hopes that his donation will prove substantially beneficial to those suffering from spinal cord injuries like his own,” Bock said.
Cawthorn, 27, became the youngest member of the 117th Congress after being elected in 2020, but failed to win reelection, or even a nomination from the Republican Party, following months of scandals before the May primary election.
It would have been unsurprising to those on Capitol Hill if the ethics committee let the investigation expire because of Cawthorn’s loss. But the investigative subcommittee, referred to as ISC, addressed that in its 82-page report.
“Representative Cawthorn did not win reelection to the House for the 118th Congress and, accordingly, the Committee will lose jurisdiction over him soon,” the report noted. “The ISC hopes, however, that its findings will serve to educate all Members about the laws and rules designed to protect the integrity of the House against conflicts of interest, including as they apply to digital assets.”
In the months leading up to the Republican primary, Cawthorn found himself at the center of numerous controversies, including bringing guns to airports, calling Ukrainian President Volodymyr Zelenskyy a thug and telling a podcast host that his colleagues participated in congressional orgies and snorted cocaine.
During that time, several explicit or embarrassing videos and photographs circulated of Cawthorn, leading to a parallel investigation by the committee into whether Cawthorn was engaged in inappropriate relationship with a staffer, his distant cousin. The committee said it found no evidence of that relationship.
Cawthorn called the series of scandals that plagued him in the 2022 primary “a drip campaign” by opponents.
“Rep. Cawthorn thanks the Committee for their thorough investigation and is pleased to note that the Committee fully exonerated him of the false, malicious, and stupendously idiotic allegations of an improper relationship with staff members,” Bock said. “The Committee stands lock step with Rep. Cawthorn in declaring that there is ‘no evidence of an improper relationship’ between Rep. Cawthorn and any staff member.”
Investigators said the photos and videos showed Cawthorn and the male staffer engaged in “explicit and sexually suggestive comments and conducts” and “potentially intimate, sexual, or crass comments or conduct.” The committee said both Cawthorn and the staffer denied a romantic or sexual relationship, and numerous staffers told investigators the two were like brothers.
Investigators also found that any “sexually-themed or otherwise inappropriate comments or conduct” happened before Cawthorn took office, which is outside their jurisdiction.
The report did make clear that some of the photos and videos published were improper if they involved a member of Congress with a staffer.
“With respect to the few images posted after Representative Cawthorn’s election showing Representative Cawthorn and Current Staffer 4 acting in a familiar manner, the ISC felt that they did not themselves indicate an improper relationship,” the report says.
The investigation found no evidence of an unprofessional office environment and said nepotism did not exist because the staffer is not a first cousin.
Let’s Go Brandon coin
As for the allegations by Tillis, seven months of investigating led to the committee fining Cawthorn over his involvement with the Let’s Go Brandon cryptocurrency.
First, he failed to file reports on time regarding his investment, though investigators said they believed that was unintentional and that he was misinformed on the rules. Exhibits showed communication between his staff and his accountant, showing that his accountant was misinformed on when Cawthorn needed to declare the purchase.
Investigators also found that Cawthorn’s purchase was made on terms more favorable than what was available to the public, making it an improper gift. That led the committee to force Cawthorn to repay the difference as well as the fees applying to his late filing disclosure.
The investigation found that Cawthorn received 180 billion Let’s Go Brandon Coin on Dec. 21, 2021. He told the seller that he could not receive it at a discounted rate, but then accepted it at less than the market value. He bought the meme coin immediately ahead of the announcement that the company would sponsor NASCAR driver Brandon Brown’s 2022 season. Brown is the namesake of the phrase “Let’s go, Brandon,” based on a NASCAR reporter saying on television that the audience was shouting that phrase instead of an expletive followed by President Joe Biden’s name.
The meme coin announced its sponsorship on Dec. 30, 2021, but NASCAR withdrew its approval of the sponsorship on Jan. 4, 2022. Meanwhile, investigators found, Cawthorn sold his meme coins off on Dec. 31, Jan. 4 and Jan. 17.
Promotional material using photos and videos of Cawthorn led to his investment becoming public.
“While much of the promotional activity was shared on social media by individuals other than Representative Cawthorn, the ISC, recognized that he was not a passive participant,” the report said. “The ISC found Representative Cawthorn made direct and unambiguous comments about purchasing or supporting a cryptocurrency in which he had invested, that he did so in contexts that he reasonably should have known would be used for public promotion, and that he also used his own social media account to share and comment on promotional posts.”
The ISC said it did not know whether Cawthorn tried to profit personally from the promotion.
“However, the ISC found that he should have been sensitive to the appearance of impropriety that his actions might create,” the report said. “The ISC Report explains that, as a Member of the House, Representative Cawthorn has a duty to protect the integrity of that institution, and his participation in promotional efforts for the cryptocurrency he owned was inconsistent with that duty.”
There were questions about whether Cawthorn’s participation in the meme coin was fraudulent, and investigators said they question his explanations for his trading activities, but could not find sufficient evidence of the allegation.
The ISC said Cawthorn fully cooperated with its investigation but sometimes gave inconsistent answers. Investigators said a witness involved with the cryptocurrency was less than forthcoming, especially when it came to information about Cawthorn and his specific involvement.
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This story was originally published December 6, 2022 2:34 PM.
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