Zinke could face months-long Justice investigation

Interior Secretary Ryan Zinke could be facing a months-long investigation by the Department of Justice (DOJ) now that his agency’s internal watchdog has referred one of its probes to the DOJ.

The investigation, which is expected to focus on a personal real estate deal Zinke made with Halliburton Co. Chairman David Lesar, according to The New York Times, sets the stage for a comprehensive review of the former Montana lawmaker’s business ties.

{mosads}Interior’s Office of the Inspector General (IG) referred one of its investigations into Zinke to the DOJ more than two weeks ago. The specific nature of the investigation into Zinke has not been made public, and DOJ is not commenting on the matter.

Public integrity law experts said that if the probe ends up focusing on business transactions, that would likely involve criminal conflict-of-interest statutes that prohibit federal employees from participating “personally and substantially” in decisions in which they or a relative have a financial interest.

“The conflict-of-interest statute requires a very high level of criminal intent,” said one attorney who formerly worked in DOJ’s Public Integrity Section, the office that generally deals with federal ethics cases. “You have to prove that he knew he was violating the law.”

Violators of the conflict-of-interest law can face up to five years in prison and a $50,000 fine per violation.

In June, Politico reported that Zinke and his wife were part of an investment that he initially proposed in 2012. The project, a large commercial development on a former industrial site, is largely backed by a group funded by Lesar, and a foundation established by Zinke is playing a key role in the plans.

Financial disclosure forms show that Lesar and his wife have political ties to the Zinkes, and in 2014 they gave $10,400 to Zinke’s first congressional campaign, the maximum amount allowed by law.

Interior’s IG opened an investigation into the business dealings in July.

If DOJ decides to take up the investigation it received two weeks ago, it will have much more power than Interior’s IG to compel potential witnesses to testify under subpoena. It also has the power to prosecute, which would bring into play the possibility of fines or jail time.

One red flag investigators might be looking for, according to a former high-ranking government official, is whether Lesar would benefit from the deal, or if was more of a quid-pro-quo.

“Another extreme is: Before he got the job, or right after he got confirmed, he got a sweetheart deal that doesn’t make any financial sense on the other party’s side, the Halliburton guy’s side, other than that he expected some favorable treatment,” the official said.

Emily Mir, a spokeswoman for Halliburton, said the company is not involved in the matter.

“Mr. Lesar’s personal investment in a small land development in Montana has nothing to do with Halliburton,” she said.

Mir did not respond to a request to make Lesar available for comment.

Zinke has acknowledged the deal and a meeting he had with Lesar and others involved in the project in his office at Interior’s Washington, D.C., headquarters. But he has denied wrongdoing, pointing out that he exited the nonprofit when he arrived at Interior.

“We meet in the office,” Zinke said in a June radio appearance. “We go out to dinner, we talk about the background of the park. What are the neighbors like, what was the vision of the park, where the boundaries are, where the water table is, because the water table has changed over time. What the railroad is. So they have the background.”

If DOJ takes up the investigation, Zinke will likely have a long road ahead of him.

“Being a subject of a criminal investigation is a serious matter. It’s stressful and it’s expensive for targets,” said Peter Zeidenberg, a former Public Integrity Section attorney.

“And there’s not a whole heck of a lot you can do. It’s very reactive at this point,” he added. “You’re left in the dark. You don’t know who exactly the government’s been talking to. You don’t know what witnesses are saying. You don’t know what records are being reviewed.”

There are also additional steps DOJ could take in the investigation — such as the creation of a special counsel who would be independent of political leadership.

Experts say removing the probe from DOJ may be one way the government could address the sensitivity of investigating a Cabinet secretary.

“You would think that they would be pretty aggressive about it in order to deflect any claims that they are going easy on one of their own,” the high-ranking official said.

“If this were back in the ‘80s and ‘90s this would have almost certainly lead to the appointment of an independent counsel,” the official added. “That was the institutional way back then of making sure a high-level government official, mainly Cabinet member, would be examined carefully and closely and that there would not be a political conflict of interest.”

The law allowing for an independent counsel expired in 1999, but DOJ regulations allow for a special counsel with some independence.

It’s rare for a Cabinet member to be the subject of a DOJ investigation. Previous instances of similar probes include an Office of Special Counsel referral of Hilda Solis, Labor secretary during the Obama administration, to DOJ for a criminal investigation into a potential Hatch Act violation in 2012. She left the administration shortly after the referral.

The DOJ’s investigation into former Secretary of State Hillary Clinton for her handling of emails began after Clinton left her post.

The Lesar matter is the latest ethics controversy to ensnare Zinke since he took charge at Interior in March 2017.

Interior’s IG is also looking into why Zinke rejected a bid to build an American Indian casino in Connecticut after lobbying by competitor MGM Resorts International, and whether his efforts to shrink the Grand Staircase-Escalante National Monument in Utah benefitted a lawmaker in the state. Additionally, the IG recently published a report saying Zinke improperly let his wife ride in government vehicles.