APNewsBreak: Iowa congressman failed to disclose new company

IOWA CITY, Iowa — A congressman from Iowa violated House ethics rules by failing to disclose his ownership role in a new company, a mysterious outfit that featured his top federal staffer in a false testimonial promoting its services, an Associated Press review shows.

Rep. Rod Blum was one of two directors of the Tin Moon Corp. when the internet marketing company was incorporated in May 2016, as the Republican was serving his first term, a business filing shows. Among other services, Tin Moon promises to help companies cited for federal food and drug safety violations bury their Food and Drug Administration warning letters below positive internet search results.

Democratic candidates running to unseat Blum and the Democratic Congressional Campaign Committee seized on AP's findings to attack him for what they called serious ethical lapses and demanded a House investigation.

Blum said in a statement Wednesday evening that he made an "oversight" in failing to disclose his ties to the company on his personal financial disclosure covering calendar year 2016, which he submitted last August. He said he was amending the form to list his role as director of the company and Tin Moon as an asset, even while he downplayed the significance of the matter.

"This is a textbook case of making a mountain out of a molehill for political gain," Blum said. "While I regret this administrative oversight, I will not concede to the narrative that this is some sort of scandal."

Tin Moon's website on Tuesday removed an official photo of Blum wearing his congressional pin and changed his title from CEO to "majority shareholder" after AP raised questions about ethics rules. Tin Moon is based in the same Dubuque office as a construction software company Blum owns, Digital Canal.

Late Wednesday, the company also removed an online video testimonial showing "John Ferland representing Digital Canal" and claiming to be a satisfied customer. Ferland — who is actually chief of staff in Blum's congressional office and has never worked for Digital Canal — claimed that Tin Moon is "saving us thousands of dollars every month, keeping our traffic and leads higher," and implored: "From one business owner to another, I suggest you take a look at Tin Moon."

Blum didn't list his positions as director or CEO of Tin Moon on his personal financial disclosure for 2016, despite House rules that require members to identify all corporate positions they held during any part of the year even if they're unpaid.

Blum initially told AP he didn't consider the company an asset because it was "worth zero" and "not a functioning company in 2016." Ferland's testimonial was uploaded in September 2016; a YouTube user named "rodblum" uploaded a similar Tin Moon testimonial two weeks earlier.

Blum said he doesn't receive any income from Tin Moon, isn't involved in its operations and is "merely a shareholder." He said he wasn't aware the company used his official photo, had no idea why Ferland appeared in the testimonial and has no knowledge of the company's guarantee to help hide FDA warning letters.

"I have never seen the website," Blum said.

Ferland said he was asked to record the testimonial by "a friend of mine, Ed Graham," who is president of Tin Moon and Digital Canal and the treasurer of Blum's campaign committee.

Experts on House ethics rules said that, in addition to the lack of disclosure, Blum and Ferland potentially violated others, including those that bar members and staff from using official resources to promote private companies and bringing disrepute upon the institution.

"This is just wrong from A to Z," said lawyer Melanie Sloan , former executive director of the watchdog group Citizens for Responsibility and Ethics in Washington, one of four experts who told AP they saw multiple potential ethics violations. "There is no gray here. He just can't do what he's doing. We were just laughing about it because it's so ridiculous."

Blum, who chairs a House subcommittee on small business, has embraced President Donald Trump's call to "drain the swamp," pushing for congressional term limits and a lifetime ban on lobbying for former House members. Blum, 62, is facing a tough race for a third term representing Iowa's 1st District, which has trended Republican recently after long favoring Democrats. His seat is seen as one of many that Democrats need to capture to win control of the House.

Blum caught national attention last year when he had a heated town hall meeting with constituents and stormed out of a television interview. State Rep. Abby Finkenauer and former U.S. Department of Labor official Thomas Heckroth are among the candidates running for the Democratic nomination to challenge him.

Heckroth charged that Blum "has clearly violated House ethics rules, deliberately misled consumers, and abused government resources." Finkenauer called Blum's conduct "the swamp at its worst," and the Iowa Democratic Party called for an ethics investigation.

"Not only is Congressman Blum using his power and position to benefit his own bottom line, he's doing it at the expense of the health and safety of the people of Iowa's 1st District," said party Chairman Troy Price.

Experts said that Blum will likely face a House ethics review that could result in anything from no action to a reprimand. He could potentially draw scrutiny from the Justice Department because submitting false or materially incomplete disclosures is a crime if done "knowingly and intentionally," but prosecutions are rare and usually are tied to broader corruption cases.

"Either the member and his associates totally didn't know what they were doing, or you've got what could be serious violations of the ethics rules," said attorney Brian Svoboda, an expert on campaign and ethics law.

Tin Moon says it uses search engine optimization techniques to enhance corporations' reputations by ensuring only positive results come back on page one of search engines. It claims 11,000 satisfied clients.

Digital marketing expert Rand Fishkin said the company looks "very sketchy" because reputable firms do not guarantee rankings, which can be influenced but are ultimately controlled by search engines such as Google.

Tin Moon has solicited business by reaching out to companies that have received FDA warning letters that notify them of safety violations and order corrective action, promising: "We WILL remove the derogatory FDA letter from page one so it no longer damages your business and reputation!" Companies that have recently received such letters have been cited over misbranded dietary supplements, unapproved drugs and unsafe seafood imports.

Tin Moon urges recipients of warning letters to contact Monty Alexander, its "reputation management professional." Alexander is also a GOP activist who has supported Blum's campaigns.


Follow Ryan J. Foley at: http://www.twitter.com/rjfoley


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