Grimm pleads guilty to tax fraud but rejects calls for resignation

Rep. Michael Grimm pleaded guilty to a single count of felony tax evasion on Tuesday, setting off rampant speculation about whether the New York Republican will resign or fight to keep his job.

Grimm apologized and admitted to aiding and assisting in the preparation of fraudulent tax returns, part of a 20-count indictment federal prosecutors brought against him in April. But outside the federal courthouse in Brooklyn, Grimm was defiant and said he had no plans to step down.

"As long as I'm able to serve, I'm going to serve," Grimm told reporters, according to CNN.

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The prosecution of Grimm was led by Loretta Lynch, the U.S. attorney for the Eastern District of New York who is also President Obama’s nominee for attorney general.

Lynch said that, aside from the guilty plea, Grimm has also signed a statement “admitting to the conduct underlying every charge filed against him.”

“Michael Grimm has now publicly admitted that he hired unauthorized workers whom he paid ‘off the books’ in cash, took deliberate steps to obstruct the federal and state governments from collecting taxes he properly owed, cheated New York State out of workers’ compensation insurance premiums, caused numerous false business and personal tax returns to be filed for several years, and lied under oath to cover up his crimes.

“He will now be held to account for all of his actions that led to those charges,” Lynch said in a statement.

At a hearing next year, U.S. District Court Judge Pamela K. Chen could sentence the combative Staten Island congressman to several years in prison. But some legal experts have said he could avoid jail time, given that he has no criminal history and previously served in the FBI and Marines.

So far, Speaker John BoehnerJohn Andrew BoehnerLobbying world A new kind of hero? Last week's emotional TV may be a sign GOP up in arms over Cheney, Kinzinger MORE (R-Ohio) and his leadership team haven’t weighed in about whether Grimm should go, giving him a bit of breathing room over the holidays to decide on his own terms.

"We won't have any announcements until the Speaker discusses the matter with Mr. Grimm,” BoehnerJohn Andrew BoehnerLobbying world A new kind of hero? Last week's emotional TV may be a sign GOP up in arms over Cheney, Kinzinger MORE spokesman Michael Steel said in an email.

Grimm cruised to a third term in November despite the ethical cloud hovering over him during the campaign. But Grimm himself had vowed during an October debate that he would resign if he was found guilty at a trial that had been set for February before he struck a plea deal.

"Certainly, if I was not able to serve, then of course I would step aside and there would be a special election,” Grimm said at the debate.

Boehner has had little tolerance for bad behavior in the GOP conference in the past. And if he believes Grimm’s conviction is harming the party — especially as Republicans take the reins of what the Speaker’s dubbed the “New American Congress” — GOP leaders do have ways to force him out.

After his indictment, Grimm had to relinquish his seat on the Financial Services Committee, so leaders won’t be able to strip him of any committee assignments.

But House rules allow a simple majority of members to vote to censure or reprimand a colleague as a way of voicing disapproval of a member’s behavior. If that’s not enough, under the Constitution, two-thirds of House members can vote to expel a colleague from Congress, though that’s extremely rare.

"If he doesn’t go on his own accord, resignation calls will come swiftly, virtually neutering any ability for him to be effective," said one GOP campaign strategist. "The House could very well expel him."

The last congressman to be expelled was Rep. Jim Traficant (D-Ohio), who was convicted in 2002 on 10 counts, including taking bribes.

But since then, there have been many more lawmakers who have resigned or been booted from office for lesser offenses.

Boehner didn’t call on Rep. Vance McAllister (R-La.) to step down after the married congressman was caught on video kissing a female staffer in his office. But voters ousted him from office anyway in the state’s November primary.

In January, Rep. Trey Radel (R-Fla.) resigned from office after he was caught in a sting buying cocaine from a federal agent. But his resignation came two months after the story became public, and GOP leaders had not called on him to quit.

New York lawmakers, in particular, have had a history of ethical lapses in recent years. Rep. Chris Lee (R), who represented western New York, resigned in February 2010 after Gawker published emails and a shirtless photo of himself he had sent to a woman on Craiglist.

A month later, Rep. Eric Massa (D-N.Y.) resigned just days after news reports surfaced that the House ethics committee was investigating allegations that he had sexually harassed a male staffer.

It’s not just Republicans. Later in 2010, longtime Rep. Charles Rangel, a Democrat from Harlem, was censured by his colleagues for a series of ethics violations, including failing to pay taxes on a vacation home in the Dominican Republic. The intense scrutiny had forced Rangel to relinquish his Ways and Means Committee gavel much earlier.

House Minority Leader Nancy Pelosi (D-Calif.) and the House Democrats’ campaign arm have called on Boehner to demand that Grimm resign.

“Speaker Boehner and Republican leaders' continued complicity in letting Michael Grimm stay in Congress despite his guilt of felony tax evasion is a disservice to the people of Staten Island and Brooklyn and a stain on the institution of the United States House of Representatives,” said Josh Schwerin, a spokesman for the Democratic Congressional Campaign Committee.

“After Speaker Boehner abetted Grimm's lies to voters about his guilt in this past election, he owes it to the constituents and the Congress to make sure Michael Grimm doesn't serve in this next Congress."

But GOP aides said Pelosi never did the same to Rangel and other Democrats when they faced ethical issues of their own.

“After standing behind Reps. Bill Jefferson, Charlie Rangel, Jack Murtha, and many others, Rep. Pelosi has zero credibility of these issues,” said one GOP aide.

Grimm, the colorful congressman who was swept into office in the 2010 Tea Party wave, has a penchant for generating headlines.

Last January, he threatened to toss a reporter off a balcony and break him in half “like a boy.” The altercation in the Capitol, caught on video, came the night of President Obama’s State of the Union address after the reporter asked Grimm about allegations of campaign-finance misconduct.

Then last April, federal prosecutors hit Grimm with a 20-count federal indictment that included perjury, mail fraud, wire fraud and hiring illegal immigrants. He was also charged with trying to hide more than $1 million in sales receipts and under-reporting hundreds of thousands of dollars in wages at his Manhattan restaurant "Healthalicious" — an effort, authorities say, to fraudulently lower Grimm’s federal and state taxes.

Grimm pleaded not guilty, and went on this November to rout his Democratic opponent, former City Councilman Domenic Recchia, despite the indictment hanging over his head. But Grimm reversed himself this week, striking a plea deal with prosecutors.

His guilty plea came on the same day that the leaders of the House Ethics Committee sent emails to all offices with a reminder that all congressional staffers are required to take ethics training classes.

Last updated at 3:34 p.m.

This story has been corrected to reflect that Rep. Eric Massa was a Democratic congressman.