The House Ethics Committee announced Wednesday that it will not open an investigation into allegations that Representative John Tierney failed to disclose money his wife received from gambling proceeds, essentially ending official review of an issue that has dogged the Salem Democrat in his last two reelection campaigns.
Tierney has faced questions about whether he should have reported on his taxes $223,000 that his wife, Patrice, paid to herself in the late 2000s while managing a joint back account for her brother, federal fugitive Robert Eremian, who was running an illegal gambling enterprise on the Caribbean island of Antigua.
But Ethics Committee chairman K. Michael Conaway, a Texas Republican, and the committee’s ranking Democrat, Linda Sanchez of California, said the evidence was inconclusive as to whether the money Patrice Tierney received was taxable income or a gift from a relative, as she and John Tierney have insisted, that would not be subject to federal taxes.
“The committee reviewed the allegations, conducted additional investigation as necessary, and unanimously concluded that the presently available evidence was inconclusive as to whether the payments to Mrs. Tierney were income or gifts,” Conaway and Sanchez said in a joint statement.
In a prepared statement, Tierney thanked the committee for its unanimous, bipartisan vote to drop the issue.
“After three years of politically motivated, partisan attacks on this issue, I look forward to putting it behind me. The focus belongs on the residents of the Sixth District,” Tierney said.
In its report, the committee said there are conflicting legal opinions on the question of whether the money Patrice Tierney received should be considered income or a gift, saying “the courts have almost never addressed circumstances clearly analogous to these.” The panel also noted that it had never issued advice to members of Congress on how to handle a situation similar to Tierney’s.
“Therefore, after careful consideration, the committee has unanimously voted to close the matter” and “determined that no further action is required at this time,” Conaway and Sanchez said.
In three additional cases involving allegations against Michele Bachmann, Republican of Minnesota, Peter Roskam, Republican of Illinois, and Tim Bishop, Democrat of New York, the committee voted to continue to review whether to open formal investigations.
Last year, Tierney barely defeated Republican Richard Tisei after a bruising campaign in which Tisei repeatedly raised questions about whether Tierney should have listed the money his wife received from her brother-in-law as spousal income on his annual congressional financial disclosure forms, and reported the money as income to the IRS.
On Wednesday, Tisei said he is considering another run and appeared ready to again raise the issue of the money Tierney’s wife received, despite the Ethics Committee’s decision.
“Regardless of whether the money is income or a gift, the fact of the matter is it came from an illegal source,” Tisei said. “You would think a sitting member of Congress wouldn’t want to have anything to do with it.”
Bill Allison, editorial director with the Sunlight Foundation, one of three government watchdog groups that called for an Ethics Committee investigation of the allegations against Tierney, said the committee “could have tried harder to get to the bottom of that question” referring to the issue of whether the money Patrice Tierney received should have been considered income or a gift. “There are serious questions about this money,” he said.
Patrice Tierney served a month in federal prison in 2011 after admitting to “willful blindness” about the source of the money she received from her brother and pleading guilty to helping him file false tax returns.
In addition to a possible reprise of his battle with Tisei in the Sixth Congressional District, which stretches from Lynn to the New Hampshire border, Tierney is also facing challenges in next year’s Democratic primary from former Marine Seth Moulton and immigration lawyer Marisa DeFranco.
But even before the Ethics Committee announced its decision, Tierney had lined up backing from Democratic Party leaders including House minority leader Nancy Pelosi, who appeared with Tierney at a Beverly forum on women and the economy last month.
The Ethics Committee’s decision follows a June 13 referral by the Office of Congressional Ethics, an independent agency appointed by Congress that reviews ethics complaints and sends them to the committee when it finds there is “substantial reason to believe a violation may have occurred,” according to the agency’s website.
On Wednesday, the Ethics Committee released the office’s review of the allegations against Tierney, which noted that he declined to be interviewed and that Patrice Tierney, speaking through her lawyer, said she had been in a serious car accident shortly before last year’s election “with resulting memory loss.”
But the Ethics Committee’s report said Tierney subsequently discussed the allegations with members of the committee and that his brother-in-law, Eremian, had participated in a telephone interview in which he “further corroborated” assertions by John and Patrice Tierney that dozens of checks that Patrice wrote to herself were gifts from Eremian.
Patrice Tierney’s connection to the illegal gambling enterprise run by her brother, with the help of another brother, Daniel Eremian, took center stage in the 2012 campaign after Daniel Eremian was found guilty on illegal gambling charges and said Tierney “knew everything” about the Eremians’ multimillion-dollar gambling enterprise — an accusation echoed by Robert Eremian in a telephone interview with the Globe.
Neither brother ever produced evidence to back up the assertion and Tierney repeatedly denied the accusation, saying he was unaware of the scope of his wife’s involvement with Robert Eremian’s finances and never suspected Eremian was involved in illegal gambling.