WASHINGTON — Rep. Madison Cawthorn is now under investigation by the U.S. House Committee on Ethics over two questions: whether he engaged in insider trading and whether he had an inappropriate relationship with a staffer.
The committee declined to investigate Cawthorn over the charges against him of driving while his license is revoked and speeding, which are pending in court.
The Democratic chairperson and top Republican on the ethics committee announced the investigation in news releases Monday afternoon.
The news releases stress that just because an investigation has been started does not mean wrongdoing has taken place.
Cawthorn, who had been quiet on social media since Thursday, tweeted in response, “Wow — I must still be a problem for the swamp! They’re still coming after me!”
On May 17, Cawthorn lost the Republican primary election in his Western North Carolina district to state Sen. Chuck Edwards, making this his last year in Congress.
He resurfaced Thursday to invoke the phrase “Dark MAGA” in pushing for the defeat of “weak” Republicans. Dark MAGA is a movement originating on the shadowy “dark web” that believes President Donald Trump was too “kindhearted” during his presidency and wants to see him return for vengeance in a second term. Some took Cawthorn’s post as a possible call for violence.
He had faced a bevy of scandals in the closing weeks of the campaign that he said were a “drip campaign” from fellow Republicans who wanted to destroy him. During that time, he was caught bringing a loaded gun to an airport for the second time, saying that his colleagues on Capitol Hill participate in orgies and cocaine use and calling Ukrainian President Volodymyr Zelenskyy “a thug.”
Republican Sen. Thom Tillis last month requested the ethics investigation into whether Cawthorn participated in insider trading.
His staff declined comment Monday afternoon following the committee’s announcement.
In late April, The Washington Examiner uncovered a photo Cawthorn had posted on Instagram on Dec. 29 with hedge fund manager James Koutoulas, the man behind the cryptocurrency “Let’s Go Brandon” meme coin. Cawthorn announced in the post that he owned the cryptocurrency and that tomorrow it would “go to the moon.”
Cawthorn’s prediction came true when NASCAR driver Brandon Brown announced the next day that the meme coin would be his primary sponsor in the 2022 racing season. The meme coin spiked by 75% and reached a value of $570 million before bottoming out to $0 a month later; Koutoulas is now facing litigation.
After the initial story broke, Tillis tweeted, “Insider trading by a member of Congress is a serious betrayal of their oath, and Congressman Cawthorn owes North Carolinians an explanation. There needs to be a thorough and bipartisan inquiry into the matter by the House Ethics Committee.”
This is the second member of North Carolina’s congressional delegation to face an investigation for potential insider trading. Sen. Richard Burr, a Republican, was accused of using nonpublic information regarding COVID-19 to sell off $1.6 million in stocks, according to court filings by the Securities and Exchange Commission. An investigation into Burr’s actions stretches to include some members of his family’s actions as well.
Tillis called on Burr to explain himself, but also was one of at least 25 senators whose campaigns contributed to Burr’s legal defense fund in the first months of 2021 while he dealt with the mounting legal costs, The N&O previously reported.
The second part of the investigation is tied to a complaint that came from the American Muckrackers PAC, known as Fire Madison Cawthorn.
The group filed an ethics complaint on April 27, alleging wrongdoing by Cawthorn including his treatment of his scheduler, Stephen Smith, who also is his cousin.
“No one is above the law including elected officials,” David Wheeler, the PAC’s president, said Monday in an email to The News & Observer. “We are proud that the U.S. House (is) investigating our allegations against Rep. Cawthorn. We will cooperate with the investigators and look forward to Cawthorn finally being held accountable in D.C. after being held accountable by the voters.”
Cawthorn is accused of providing Smith free housing, more than $250 in travel as a gift, including money to attend Cawthorn’s honeymoon to Dubai, and an unreimbursed loan, and failing to disclose any of the gifts or housing in financial disclosure statements.
Cawthorn and Smith have used the same home address. Several photos and videos of Cawthorn emerged near the end of this campaign, and one suggestive video showed him with Smith. On social media, Smith has received crass criticism about his relationship with Cawthorn. He set his Twitter to private, but changed his bio to “Madison Cawthorn’s 2nd Cousin” with an American flag emoji.
In a public post, he defended himself on Facebook.
He said it is untrue that he and Cawthorn live together now or while Cawthorn was married to Cristina Bayardelle, who Cawthorn announced his separation from in December after eight months of marriage.
“Before Congress, we were roommates and once he became engaged, I then moved out,” Smith wrote. “Yes, my voter registration is still under that address, however I am renting elsewhere.”
He also wrote that he did not travel to Dubai on Cawthorn’s honeymoon, nor does Cawthorn provide him free housing, travel or loans.
“Madison and I are cousins and best friends and have been for years beyond congress, and I am his ADA,” Smith wrote.
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