Race to replace Rubio in Senate roiled by probe of Alan Grayson | McClatchy Washington Bureau

The bid by Rep. Alan Grayson to replace Marco Rubio as one of Florida’s U.S. senators took a hit Tuesday when the House of Representatives ethics panel declined to drop its investigation into Grayson’s alleged use of his congressional office to draw investors to a multimillion-dollar hedge fund he owned.

The House Ethics Committee for the first time released an official account of the allegations against Grayson, an Orlando Democrat considered a leading contender to win the Senate seat to be vacated by the retiring Rubio, who dropped his presidential bid last month after Donald Trump won all but one county in the Florida primary.

Beyond leveraging his office for private gain, the allegations against Grayson include using congressional resources – including at least one aide – for his outside companies, filing incomplete finance forms and accepting contingency legal fees tied to litigation involving the federal government.

The documents made public Tuesday also included strong past denials of the allegations by Grayson, a third-term congressman who first gained election in 2008, was defeated in 2010 and then won back his House seat in 2012.

Grayson’s Senate campaign aides on Tuesday accused Rep. Patrick Murphy, his main opponent in the Democratic Senate primary race, of being behind the allegations.

Prominent experts on congressional ethics said the allegations were disturbing.

The allegations against Grayson were referred to the committee in December by the Office of Congressional Ethics, an independent and nonpartisan agency established in 2008 to review allegations of misconduct by House members or their aides.

The referral used strong language in recommending an ethics probe. It said “there is substantial reason to believe” that Grayson had misused his office in at least six ways, including omitting information from required financial-disclosure reports and being a member of limited partnerships that held federal contracts prohibited for a member of Congress.

In his January response to the allegations, Brett Kappel, a lawyer for Grayson, said the referral had been “irreparably tainted by the gross misconduct of the OCE staff.”

Kappel said the Ethics Committee “should dismiss it summarily.”

Grayson didn’t comment on the developments, but his Senate campaign aides tried to turn the tables on Murphy, his rival in the Aug. 30 Senate primary.

David Damron, Grayson’s Orlando-based campaign communications director, accused Murphy of having initiated the ethics probe by taking the allegations to the Office of Congressional Ethics.

“This Murphy-instigated fishing expedition is just like the Benghazi Committee witch hunt, another taxpayer-funded political inquisition which Patrick Murphy voted with Republicans to set loose,” Damron said.

Damron added: “Patrick Murphy and his D.C.-establishment allies are using this new political witch hunt to try to distract Florida voters from what they really care about – Patrick Murphy’s miserable record of trying to cut Social Security, and voting with his Wall Street donors to put the life savings and homes of Florida families at risk.”

Murphy stayed silent, but his Senate campaign released a summary of the “damning report” with highlighted findings from the Office of Congressional Ethics referral.

Grayson, a prominent trial lawyer, is rated as one of the most liberal members of Congress, while Murphy is considered more conservative.

Several liberal advocacy groups quickly came to Grayson’s defense, among them Democracy for America and the Progressive Change Campaign Committee.

Damron noted that the House ethics panel hadn’t set up an investigative subcommittee, which he said had been a decisive step in past ethics cases against lawmakers who were ultimately sanctioned by the committee.

Several outside congressional experts, however, said the newly released findings did not bode well for Grayson.

“I’m not going to get out in front of the Ethics Committee or prejudge their determinations, but the language from the OCE is strong,” Kenneth Gross, a prominent Washington attorney in political law, told McClatchy. “It exhibits a conviction on their part that they think there’s a strong likelihood of wrongdoing.”

John Wonderlich, an analyst with the Sunlight Foundation, said his Washington-based group often trained newly elected lawmakers on congressional ethics.

“There’s a massive amount of House rules on preventing conflicts of interest,” Wonderlich said. “All the rules are spelled out in a lot of detail in the ethics manual. It’s not as if the ethics rules are vague.”

The House Ethics Committee, which is chaired by Republican Rep. Charlie Dent of Pennsylvania and includes Rep. Ted Deutch, a fellow Florida Democrat who represents Palm Beach County, could have dropped the matter but chose not to do so.

“In order to gather additional information necessary to complete its review, the committee will (further) review the matter,” Dent and Rep. Linda Sanchez of California, the panel’s senior Democrat, said in a joint statement.

In making the original referral public and agreeing to extend its probe, the House ethics panel acted on the last day of a 90-day deadline set by law to report the original allegations and decide whether to move forward in probing them.

Grayson, 58, was born and grew up in the New York City borough of the Bronx. After receiving undergraduate and law degrees from Harvard, he started a telecommunications firm that would make him wealthy.

Before his congressional run, Grayson earned widespread attention for suing defense contractors over claims that they’d provided defective equipment to U.S. forces in the Iraq War.

James Rosen: 202-383-0014; Twitter: @jamesmartinrose