US lawmaker Cuellar hit with bribery charges tied to Azerbaijan, Mexican bank

[May 04, 2024]  By Sarah N. Lynch

WASHINGTON (Reuters) -U.S. Representative Henry Cuellar and his wife were indicted for allegedly accepting close to $600,000 in bribes in two schemes meant to benefit an Azerbaijani state-owned energy company and an unnamed bank based in Mexico, court papers showed.

The federal indictment, returned by a grand jury in Texas on Tuesday and unsealed on Friday, said the bribes were laundered through sham consulting contracts into shell companies owned by Imelda Cuellar, the Democratic congressman's wife, from December 2014 through at least November 2021.

In exchange, it says Henry Cuellar sought to use his public position to influence U.S. foreign policy in Azerbaijan's favor and to pressure U.S. government officials to help the Mexican bank lobby against anti-money laundering enforcement policies and payday lending regulations that threatened its business.

Before the charges were unsealed, Cuellar issued a statement denying the allegations.

"Both my wife and I are innocent of these allegations," said Cuellar.

One of the most conservative Democrats in the House of Representatives, Cuellar is seeking an 11th two-year term in the Nov. 5 election. He represents a Texas district that borders Mexico and includes Laredo and parts of San Antonio.

The 54-page indictment identifies the bank only as "Foreign Bank-1," a Mexico City-based institution that conducts payday lending in the U.S. and is part of a Mexican finance and retail holding company that also owns a Mexican media company.

That appears to match Grupo Salinas, a sprawling conglomerate controlled by Mexican billionaire Ricardo Salinas, whose business empire includes Banco Azteca. The indictment also provides identifying details of a bank executive who appears to match a recently retired Banco Azteca executive.

"Right now, we don't have information about this," Grupo Salinas executive Luciano Pascoe told Reuters by email in response to a request for comment.

Cuellar will step down as the ranking member of the Homeland Security Appropriations subcommittee while the case is pending, said a spokesperson for Democratic House Minority Leader Hakeem Jeffries.

Cuellar's home and campaign office in Laredo were searched by federal law enforcement in January 2022, when Cuellar served as a co-chair of the Congressional Azerbaijan Caucus.

U.S. Rep. Henry Cuellar (D-TX) questions Department of Homeland Security (DHS) Secretary Alejandro Mayorkas during a Homeland Security Subcommittee hearing on the DHS budget request on Capitol Hill in Washington, U.S., April 10, 2024. REUTERS/Michael A. McCoy/File Photo

In that capacity, he and several other members of Congress signed a letter urging Congress to provide humanitarian support to assist people displaced following the war between Azerbaijan and Armenia.

The indictment cites Cuellar's support for providing funding to Azerbaijan and a pro-Azerbaijan speech he gave on the House floor, among other actions.

Cuellar said in his statement he had sought legal advice from the House Ethics Committee and a national law firm.

"We requested a meeting with the Washington DC prosecutors to explain the facts and they refused to discuss the case with us or to hear our side," he added.

The Justice Department said Cuellar and his wife made initial appearances before a federal magistrate judge in Houston on Friday. They were released on bond.

Each faces 14 counts on charges including conspiracy, bribery, honest services wire fraud, being a public official acting as an agent of a foreign principal, and money laundering.

Several of the charges carry a statutory maximum of 20 years in prison.

Cuellar is not the only member of Congress facing federal charges.

Democratic Senator Bob Menendez is awaiting trial on corruption charges in New York, while Republican George Santos last year was expelled from the House while he awaits trial on charges of violating campaign finance laws.

Both Menendez and Santos deny wrongdoing.

(Reporting by Sarah N. Lynch; Additional reporting by Patricia Zengerle, Doina Chiacu, Richard Cowan and David Alire Garcia; Editing by Scott Malone, Richard Chang and William Mallard)

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