Rep. Grimm indicted on 20 counts

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Rep. Michael Grimm (R-N.Y.) was indicted Monday on 20 federal criminal counts, including mail fraud, perjury, and employing illegal immigrants at a Manhattan restaurant he once owned.

The former FBI agent turned himself in to authorities Monday morning and was transported to FBI headquarters in New York, just hours before the 29-page indictment was unsealed.

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Grimm remained defiant on Monday and pleaded not guilty in his first court appearance. He was released on $400,000 bond secured by his house, calling the charges a “political witch hunt” against him at an afternoon press conference, promising that he wouldn’t abandon his post and saying he has an election to win in November.

But that task just got monumentally harder, with the explosion of the congressman’s long-rumored legal troubles endangering one of the GOP’s few remaining strongholds in New York, giving Democrats the edge in the swing district.

Senior House Republicans largely declined to comment on Grimm as they emerged from a leadership meeting in Speaker John Boehner’s (R-Ohio) office late Monday afternoon. Rep. Pete Sessions (R-Texas) said leaders needed more than “a few minutes” to determine how they would handle the situation.

In a letter to Boehner, Grimm did ask to be removed from his position on the House Financial Services Committee. Boehner spokesman Michael Steel said that, “The Speaker believes Rep. Grimm’s decision is appropriate under the circumstances.”

And House Majority Leader Eric Cantor (R-Va.) told The Hill: “I’m going to let the court process take place and allow him to go through that. I think that’s the precedent around here, but I think it is appropriate for him to withdraw from his [committee] seat.”

But Empire State GOP leaders are realizing they’re likely stuck with Grimm, as the timing of the indictment — weeks after the candidate filing deadline — has left them with few opportunities to replace him on the ballot.

New York Conservative Party Chairman Michael Long told The Hill that he had spoken with Republican Party leaders in the state and most have accepted that the embattled congressman is their candidate.

“They understand it’s past the time of consideration for anyone else,” he said. “It’s not gonna happen.”

Long said, however, that he and his fellow party officials hope voters will give Grimm a second look, admitting “this makes his race tougher to win, but not impossible.”

Long and Republican Party officials charged that the timing of the indictment, after the filing deadline has passed, was politically motivated.

“I do heavily regard the timing of the indictment as very politically motivated,” Long said.

David Laska, spokesman for the New York GOP, echoed Long’s comments, declaring that “the Holder Justice Department has been among the most political in history.”

But he declined to comment further on the situation, saying only that “Congressman Grimm will have his day in court and we would all be wise to reserve judgment until more facts emerge.”

Grimm himself said at a press conference Monday, after turning himself in to authorities earlier that morning, that he plans to win his reelection fight.

“I will not abandon my post,” Grimm said, adding, “I have a lot more service to provide to this country. That’s exactly what I intend to do.”

But the breadth of the charges have Republicans worried and Democrats gleeful. The party already has a top recruit in former New York City Councilman Domenic Recchia.

“Obviously being arrested and indicted certainly makes running a reelection bid an uphill battle — but he’s vowed to stick it out and he’s a fighter,” one New York GOP strategist said. “We’ll have to wait for more facts to emerge to see how heavy of a lift it’ll be for him.”

The indictment against Grimm outlines a colorful scheme by the congressman to conceal “over $1,000,000 in Healthalicious gross receipts alone, as well as hundreds of thousands of dollars of employees’ wages, fraudulently depriving the federal and New York State governments of sales, income and payroll taxes.” Grimm owned the Healthalicious restaurant before being elected to Congress.

The indictment also charges that Grimm paid some employees off the books and entirely in cash to avoid taxes, intentionally hired illegal immigrants and lied under oath in January 2013 when he denied paying his employees in cash.

Despite allegedly using an AOL email account for communications with a restaurant manager outlining some of the off-the-books dealings, Grimm at one point denied he used email for his business communications.

“Almost everything was done on the phone or in person then,” he said during his January 2013 testimony. “I wasn’t big on email then.”

Grimm further said that “other than handing out the envelopes,” he had no responsibility for the payroll of the business.

Democratic Congressional Campaign Committee Chairman Steve Israel (N.Y.) trumpeted his party’s chances in the district on Monday. The Staten Island- and Brooklyn-based district voted for Obama the past two presidential elections and is one of a handful in the nation where the president actually grew his margin from 2008 to 2012.

“This race was already one of our best pickup opportunities in the country, with a strong Democratic candidate running against a scandal-plagued Republican congressman for a seat where voters supported President Obama,” he said.

Recchia said in a statement that Grimm’s constituents “deserve better … a Congressman who abides by the law just like everybody else.”

And Democrats are already looking to make Grimm a headache for other Republicans, calling on at least one lawmaker who took cash from the congressman’s political action committee to return the contributions.

If nothing else, it’s likely that his formerly prolific fundraising will dry up. Grimm raised $346,000 in the first quarter of the year and ended the quarter with about $1.2 million cash on hand.

But $50,000 of that went to legal bills in the first two months of the year, and he has hundreds of thousands in legal fees outstanding.

New York elections experts confirmed that the state GOP has few options to replace him on the ballot.

According to Laurence Laufer, a New York City campaign finance and election law attorney at Genova, Burns, Giantomasi and Webster, an alternative candidate could mount a write-in campaign, but that remains a long shot with Grimm’s name taking up most of the ballot.

Laufer said the GOP’s best chance at fronting another candidate could be to nominate Grimm for Supreme Court Justice at a nominating convention in late September.

“That would create two offices in conflict being sought by the same candidate, which would be a basis for declaring the nomination for Congress to be vacated,” he said.

A committee on vacancies would then select a replacement for Grimm on the ballot. But Long and others said that outcome is unlikely — in part because it would require Grimm’s cooperation — and he’s given no indication he plans to go quietly.

Grimm’s next hearing is scheduled for May 19, and the government has 70 days to bring the case to trial, so the issue could come to a conclusion in late July. If he’s found guilty, Long said, “he’d be forced to resign.”

The New York GOP strategist had a similar prognosis for Grimm’s chances in case of a conviction.

“If he’s convicted, it’s certainly a death knell,” the strategist said.

Russell Berman and Bernie Becker contributed.