Palazzo Used Campaign Funds To Fight Ethics Probe Into Campaign Spending

Representative Steven Palazzo sits at a desk in a House committee hearing
U.S. House Steven Palazzo spent $61,000 in campaign cash on legal fees to defend himself amid a probe into his campaign finances. Photo courtesy Rep. Steven Palazzo

U.S. House Rep. Steven Palazzo spent $61,000 in campaign cash to cover legal fees associated with an investigation into his prior use of campaign funds. Forbes first reported the payments this morning, noting that “doing so … does not appear to violate federal election law.”

In March, the U.S. House Office of Congressional Ethics unveiled a report from the non-partisan congressional ethics board that said it found “substantial evidence” Palazzo, a Mississippi Republican who represents the state’s 4th Congressional District, may have repeatedly violated federal law. The reported alleged he may have done so by misusing campaign funds, using his federal office for campaign purposes and using it to do favors for a family member.

The report cited “a concerning pattern of campaign expenditures on a large riverfront home which Rep. Palazzo owned and rented to Palazzo for Congress as an ostensible campaign headquarters.”

FEC Asks Palazzo For ‘Clarification’

The Federal Election Commission sent a letter to Palazzo and his campaign treasurer, Paul V. Breazeale, on June 6, asking him to clarify information in a campaign-finance report that listed $61,000 worth of payments to Watkins & Eager, PLLC as “Professional Fees.” 

Watkins & Eager is a law firm in Hattiesburg that includes Gregg Harper, Palazzo’s attorney. Harper served as the congressman for Mississippi’s 3rd Congressional District for a decade before stepping down in 2019. 


Forbes reported that Palazzo spokesman Justin Brassell, who works for the campaign consultancy company Triumph Campaigns, confirmed that the “professional fees” “are legal fees” that pertain to the ethics probe. 

Former U.S. House Rep. Gregg Harper, seen here with ex-President Trump in 2018, is Rep. Steven Palazzo’s attorney amid an ongoing ethics probe into his campaign spending. Photo courtesy former Rep. Gregg Harper

On its website, the Federal Election Commission notes that in “several advisory opinions” it has determined that “campaign funds may be used to pay for up to 100 percent of legal expenses related to campaign or officeholder activity, where such expenses would not have occurred had the individual not been a candidate or officeholder.”

“Using campaign funds for personal use is prohibited,” the FEC also notes at the top of its website.

Like Palazzo, former President Donald Trump drew from his campaign’s coffers to cover legal fees relating to numerous investigations—spending millions since 2017

Palazzo has not yet responded to the FEC’s request for clarification. The FEC gave him a July 12 deadline, noting that “failure to adequately respond by the response date noted could result in an audit or enforcement action.”

Palazzo Calls Allegations ‘False’

In a statement in March about the ethics probe, Palazzo said he would cooperate with the congressional committee that is now reviewing the allegations. His attorney, Harper, previously sat on the House Ethics Committee.

“Congressman Palazzo welcomes the opportunity to work through this process with the House Committee on Ethics and will fully cooperate with the Committee to show that he has complied with all relevant rules and standards,” said Palazzo’s statement, which also describes the allegations as “false.”

In its report, the OCE Board recommended that Congress issue subpoenas to a number of people and entities, including ones it said refused to fully participate in its investigation, including Rep. Palazzo and his treasurer, Paul Breazeale.

Rep. Steven Palazzo
Rep. Steven Palazzo, R-Miss., seen here in 2019, is under investigation for his handling of campaign finances and on allegations that he misused his office for “personal” or campaign-related purposes. AP Photo by J. Scott Applewhite

In a statement on March 1 as it released the report on Palazzo’s business dealings, the House Ethics Committee said its Democratic chairman, Rep. Theodore E. Deutch of Florida, and the Republican ranking member, Rep. Jackie Walorski of Indiana, had “jointly decided on December 17, 2020, to extend the committee’s review of the matter” and would work “to gather additional information to complete its review.”

“The Committee notes that the mere fact of conducting further review of a referral, and any mandatory disclosure of such further review, does not itself indicate that any violation has occurred, or reflect any judgment on behalf of the Committee,” the March 1 statement said.

“In order to comply with Committee Rule 7 regarding confidentiality, out of fairness to all respondents, and to assure the integrity of its work, the Committee will refrain from making further public statements on this matter pending completion of its initial review.”

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