The House Ethics Committee announced it would further probe allegations that Rep. Troy Nehls may have misused campaign funds for personal purposes.
The committee said in March that it had received a referral about Nehls last year from the Office of Congressional Ethics. On Friday, the committee announced its plans to conduct a further review and released an OCE report detailing allegations against the Republican, who has represented Texas’ 22nd District since 2021.
The OCE, an independent, nonpartisan entity tasked with investigating allegations of misconduct made against House members and staff, said Nehls had declined to participate in its inquiry.
Despite Nehl’s campaign committee listing its headquarters as “Freedom Hall,” in Richmond, Texas, it made no rent payments to that location, which was formerly a bar and sometime in 2023 became an Islamic center, according to the OCE report.
Instead, the OCE found that Nehls’ campaign made more than $25,000 in rent payments to an entity known as Liberty 1776 that is owned and operated by Nehls and registered to his home address. The congressman and other witnesses contacted by OCE “provided no information about what the campaign committee was renting from Liberty 1776 or if the campaign committee received anything for these payments,” according to the report.
Federal law prohibits the use of campaign funds for personal use. “The sporadic nature of the payments, as well as the lack of publicly available information linking Liberty 1776 to the campaign headquarters, raises concerns regarding the personal use of campaign funds,” the report states.
The report recommends that the Ethics Committee further review the matter “because there is probable cause to believe that Rep. Nehls may have converted campaign committee funds to personal use.”
The OCE also found that Nehls failed to disclose his stake and any money made from Liberty 1776 in mandatory financial disclosure reports filed since his candidacy through 2022. That omission contradicts public records that list Nehls as the owner of Liberty 1776 during that same period, according to the report.
“Without cooperation from Rep. Nehls, it is not possible to confirm that the failure to report his position, or any income derived from Liberty 1776, was a result of carelessness or, given the information discussed above, a deliberate act to conceal the misuse of campaign funds,” the report states.
Nehls, through his attorney, Jerad Najvar, issued a written response to the Ethics Committee in January acknowledging the omission of Liberty 1776 on his financial disclosures and vowing to “amend the relevant reports.” He also claimed rent payments made to Liberty 1776 were, in fact, to cover expenses for his “Freedom Hall” headquarters. Freedom Hall was a former tavern that had been empty and was used by Nehls and other local candidates beginning in 2019, according to the letter from Nehls’ attorney.
“They approached the landlord, EBP Property Holdings Ltd., who agreed that he would lease the property for these purposes. Respondent and the other candidates therefore decided that an LLC should be established to enter into the lease agreement, which would offer the typical liability protections important for such engagements,” the letter states.
Liberty 1776 was formed and an “oral contract” was agreed to with EBP Property Holdings in which both parties agreed that Nehls’ LLC would “pay rent periodically and to make certain improvements to the property and maintain it during the lease as necessary,” according to Najvar.
Najvar denied the OCE’s claims that Nehls declined to cooperate.
Nehls ran unopposed in the March 5 primary and had $593,000 in his campaign account on March 31, according to the latest disclosure with the Federal Election Commission. The winner of the Democratic primary to challenge him, Marquette Greene-Scott, had $3,300.
The Ethics Committee on Thursday announced in separate statements that it would extend inquiries into two fellow Texas Republicans, Reps. Ronny Jackson and Wesley Hunt. Details of the allegations against Jackson and Hunt were not provided by the committee.
House Republicans at the beginning of the 118th Congress sought rule changes to the OCE, including placing term limits on its board members. Watchdog groups like Public Citizen and Issue One blasted the move, saying it was an attempt to undermine the OCE, which lacks subpoena powers but can refer matters to House Ethics.
“The Office of Congressional Ethics (OCE) was created under Nancy Pelosi, which is why I refused to cooperate with the office,” Nehls said. “My books remain open, and I am cooperating with the legitimate House Committee on Ethics.”
In its Friday statement, the House Ethics Committee included its usual reminder that “the mere fact of conducting further review of a referral, and any mandatory disclosure of such further review, does not itself indicate that any violation has occurred, or reflect any judgment on behalf of the Committee.”
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