This article has been updated.
The U.S. Department of Justice says U.S. Rep. Henry Cuellar (D-Laredo) and his wife accepted bribes from a foreign energy company and foreign bank in exchange for favorable legislation and representation in Congress.
Cuellar and his wife, Imelda, were indicted on charges of bribery, unlawful foreign influence and money laundering, as part of the broader federal investigation into Azerbaijan business dealings, the DOJ announced Friday.
The 54-page indictment alleges the couple received $600,000 over seven years. During this time, Cuellar “promised to use the power and prestige of his office to advance Azerbaijan’s and [the foreign bank’s] interests in the United States,” according to the indictment.
While working for the foreign bank, he’s accused of using two unnamed associates with San Antonio ties as “middlemen” to launder payments.
Proceeds from both schemes were used by the Cuellars “to satisfy their debts, pay family expenses, and make purchases,” according to the indictment, including $58,000 in credit card payments, $11,000 in car payments and tens of thousands of dollars spent at restaurants and retail stores.
“I want to be clear that both my wife and I are innocent of these allegations,” Cuellar said in a statement before the indictment was unsealed. “Everything I have done in Congress has been to serve the people of South Texas.”
The FBI raided Cuellar’s Laredo home in January 2022, but little news about the investigation was released over the next two years. During that time he fended off a Democratic primary challenger, as well as a well-funded Republican opponent, in 2022.
National Republicans didn’t target his race this year, citing a tough national map with better prospects elsewhere. In November Cuellar will face either retired U.S. Navy Cmdr. Jay Furman or businessman Lazaro Garza Jr., who are still engaged in a May 28 primary runoff.
“Let me be clear, I’m running for re-election and will win this November,” Cuellar said in his statement Friday.
The Cuellars made their first court appearance Friday in Houston. Each could face penalties that include lengthy prison sentences if convicted, according to the DOJ.
Position of power
Cuellar has represented Texas’ 28th Congressional District, which stretches from south New Braunfels to the U.S.-Mexico border, since 2005 and serves as ranking member of the Homeland Security Subcommittee on Appropriations.
“As such, Henry Cuellar wields influence over a wide variety of federal policy and budgetary issues,” the indictment says.
Azerbaijan’s economy relies on oil and natural gas, and the company on whose behalf the indictment says Cuellar worked was owned entirely by its government.
Among the promises he made to the company, the indictment alleges, was to help with legislation relating to Azerbaijan’s conflict with neighboring Armenia. It alleges he also agreed to slip helpful language into legislation and committee reports governing security and economic aid programs.
The indictment says arrangements were laid out in “consulting agreements” for Imelda Cuellar, who worked as a tax enforcement officer for the Texas comptroller until 2012.
The indictment lays out dozens of instances where it says she and the congressman worked together on behalf of the foreign entities, such as a meeting with leaders of the Azerbaijan oil company in 2017.
“U need to be in SA [San Antonio] to meet for lunch on Friday with folks. All set up,” Henry Cuellar texted his wife on Oct. 4, 2017, according to the indictment, which adds that she responded the next day, “You pick a steak house in SA for meeting.”
Bribe payments were laundered “pursuant to sham consulting contracts, through a series of front companies and middlemen into shell companies owned by Imelda Cuellar, who performed little to no legitimate work under the contracts,” the indictment alleges.
San Antonio ties
At the same time, the indictment alleges, Cuellar was negotiating a similar arrangement with an unnamed foreign bank that served low-income sectors in Mexico and Central America.
Cuellar agreed to help the bank by supporting legislation to stop federal regulation of the payday lending industry, supporting revisions to the criminal money-laundering statutes that the bank wanted and lobbying White House officials about anti-money laundering enforcement practices that threatened the bank’s interests, the indictment alleges.
The indictment refers to an unnamed “longtime associate” in San Antonio that it says Cuellar brought into the deal “to further disguise and legitimate the bribe payments” in exchange for a fee.
Together, Cuellar and the associate conspired to involve the congressman’s campaign manager and former chief of staff to help disguise payments directed to Cuellar’s wife, the indictment alleges. It was unclear whether the campaign manager was aware of the source of the funds.
Colin Strother, a campaign manager and former chief of staff to Cuellar, did not respond to calls and text messages seeking comment.
The indictment alleges Cuellar and the associate met the campaign manager Feb. 25, 2016, at a San Antonio restaurant and made up a fake fuel lubricant business to explain the payments. Roughly $261,000 was transferred from the associate to the campaign manager’s political consulting company in Buda between March 2016 and June 2019, according to the indictment.
It was unclear Friday whether either associate is a target of the investigation.
Pushback
Cuellar said in his statement Friday he had requested a meeting with prosecutors in Washington, D.C., who refused to discuss the case.
“Before I took any action, I proactively sought legal advice from the House Ethics Committee, who gave me more than one written opinion, along with an additional opinion from a national law firm,” he said. “The actions I took in Congress were consistent with the actions of many of my colleagues and in the interest of the American people.”
He also defended his wife, whom he called “an accomplished businesswoman with two degrees.”
“She spent her career working with banking, tax, and consulting,” he said. “The allegation that she is anything but qualified and hard working is both wrong and offensive.”
The National Republican Congressional Committee released a statement Friday saying Democrats should ask Cuellar to step down.
“Henry Cuellar does not put Texas first, he puts himself first. If his colleagues truly believe in putting ‘people over politics,’ they will call on him to resign,” NRCC spokeswoman Delanie Bomar said in a statement.
