An independent review found that there is “substantial reason to believe” U.S. Rep. Rod Blum violated multiple ethics rules in his private business dealings, according to documents made public Monday.
The Office of Congressional Ethics’ nonpartisan board voted in July to adopt an investigative report that concluded the Republican from Dubuque “may have violated federal law, state law, (U.S.) House (of Representatives) rules and standards of conduct.” The report called for further investigation and was forwarded to the House Committee on Ethics.
The report concludes that Blum might have undervalued his interest in internet company Tin Moon by about $90,000, that his congressional photo was improperly used on the company’s website and that Tin Moon engaged in deceptive trade practices that included a false testimonial by a Blum staffer.
The House Committee on Ethics on Monday afternoon released the congressional office’s lengthy investigative report, which had been kept confidential as required by congressional rules.
Committee leaders signaled that they would not take any further action against Blum, who is leaving Congress after losing his bid for a third term to Democrat Abby Finkenauer in the Nov. 6 election.
Efforts to reach Blum on Monday afternoon were unsuccessful. A call to his congressional office rang unanswered, and an email seeking comment sent to a spokeswoman was not returned.
Blum and his longtime business partner, Ed Graham, founded Tin Moon in 2016 during Blum’s first term in Congress. It shares a Dubuque office and staff with Blum’s other software company, Digital Canal, which invested at least $130,000 for a software license to help start Tin Moon, the report found. Tin Moon boasts that it is a “reputation management” company that can help businesses bury unflattering online information, such as Food and Drug Administration warning letters, below positive search results.
The company website previously listed Blum as Tin Moon’s CEO, but after a February AP investigation found that he did not disclose his involvement with the company in a 2016 financial disclosure, that title changed. The OCE report states Blum was renamed “majority shareholder,” but soon after, his name was removed from the company’s website.
Blum amended his 2016 financial disclosure statement and called that omission an “administrative oversight” because the company was not doing business in 2016. He also wrote in a letter to the OCE that he has “nothing to do with the operations of this company.”
His amended disclosure states the value of his interest in the company in 2016 was $700 and that he was a 70 percent shareholder.
However, the OCE found that, in 2016, the company was actively training employees, launched a website that sought clients and had a software license that was worth $130,000.
“In spite of noncooperation by Rep. Blum, Tin Moon and other entities and individuals connected to Rep. Blum, the OCE found that Rep. Blum’s interest in Tin Moon in 2016 likely exceeded the $700 he reported in his amended 2016 financial disclosure statement and may have been valued at as much as $91,000,” the report states.
The report further states Blum’s 2015 financial disclosure statement also might be inaccurate. OCE found Blum might not have properly disclosed as much as $58,170 in real estate transactions through real estate holding company Salto de Fede, of which Blum held a 42 percent ownership stake. That business was dissolved in 2017.
“Rep. Blum also may have failed to identify at least six different properties that his company held for investment in his 2014 financial disclosure statements,” the report states.
Deceptive trade practice
The OCE report also details issues with testimonials used on Tin Moon’s website.
The site previously had a video in which John Ferland, then Blum’s chief of staff, claimed to represent Digital Canal Corp., which was portrayed as a satisfied client of Tin Moon. That video was later deleted.
“The OCE found no evidence that Mr. Ferland ever worked for Digital Canal or was a client of Tin Moon,” the report said.
The report also states that Tin Moon appeared to use several testimonials on its website that were taken from reviews of GetMePlacement LLC. That company provides search engine optimization software and staff training to Tin Moon.
In particular, a GMP executive told OCE investigators that Tin Moon claimed on its website “11,000 website clients can’t be wrong,” which the executive said actually represents GMP’s clients, not Tin Moon’s. That claim still was on Tin Moon’s website as of Monday.
The OCE report states Blum, Graham, Ferland and three other connected individuals refused to cooperate with the investigation.
The report stopped short of determining whether violations occurred but said the ethics committee should investigate, including by subpoenaing testimony and records from Blum and his associates. It’s unclear whether that occurred.
Blum responded to the report in an Aug. 2 letter to the ethics committee, which was also released Monday, saying he made a “minor, unintentional oversight” in failing to disclose Tin Moon. He said he was unaware the company used his photo or Ferland’s false video and demanded they be removed when he found out. He also said he could not be held responsible for any deceptive advertising since he’s only a “passive investor” in Tin Moon and that Graham ran its operations.
The report said Blum might have participated in the false advertising, noting that YouTube user “rodblum” uploaded a false Tin Moon testimonial video in 2016.
Blum complained that the scope of the inquiry was overly broad, calling the revelations about his failure to disclose Salto de Fede the result of a “fishing expedition.”
The investigative report states that Blum provided the letter and an email chain between Ferland and the committee. But it notes that “Blum refused to produce any information in response to the OCE’s requests for information and declined to interview with the OCE.”
In an April letter to investigators, Graham said he was responsible for mistakenly using Blum’s congressional photo and that he asked Ferland to record the testimonial without Blum’s knowledge.