The House Ethics Committee reviewed the allegations against Alan Grayson for 90 days but did not move forward with the creation of a special investigative subcommittee. | AP Photo Grayson avoids full Ethics Committee probe but case goes on

The House Ethics Committee will not conduct a full-scale probe into allegations that Democratic Rep. Alan Grayson improperly received compensation from a hedge fund and other entities he controlled while serving in Congress, despite several potential violations found by an independent ethics watchdog.

The Office of Congressional Ethics found "substantial reason to believe" that Grayson failed to properly disclose millions of dollars in assets and income, "maintained a contingent fee interest" in legal cases against the federal government even while in Congress, held membership stakes in limited partnerships that did business with federal agencies, used a congressional staffer to work on his hedge fund, and improperly used official House resources for campaign activities.


The Ethics Committee, though, reviewed the allegations against Grayson for 90 days but did not move forward with the creation of a special investigative subcommittee.

Under its rules, the Ethics Committee was required to publicly release the OCE report on Grayson. Ethics will continue to look into the Grayson allegations, according to Reps. Charlie Dent (R-Pa.) and Linda Sanchez (D-Calif.), the chairman and ranking member, but is under no requirement to take any further action.

Grayson — who is running for a Senate seat — denied any wrongdoing. Grayson voluntarily agreed to an interview by OCE investigators, and he also turned over a "virtual mountain" of documents. His Senate campaign hailed Tuesday's announcement as a victory for Grayson.

"The Ethics Committee decision against establishing an investigative subcommittee is highly significant, because in every single case where the Ethics Committee has issued a formal sanction (expulsion, censure or reprimand) against a Member of Congress based on an OCE referral, it has done so only after establishing an investigative subcommittee," said a statement from Grayson's campaign.

Grayson has accused his Democratic primary opponent, Rep. Patrick Murphy, of being behind the OCE probe. Grayson's rebuttal to OCE's investigation asserts that "Murphy’s official staff illegally obtained confidential OCE information, and then disseminated it to the media for the benefit of Murphy’s Senate campaign. Rep. Grayson has asked that the Ethics Committee 'initiate an investigation of the Office of Congressional Ethics and Congressional staff, and take appropriate action against all those employees who have violated House Resolution 895, the OCE Code of Conduct and the Rules of the House.'"

Grayson, a wealthy trial lawyer and former telecom executive who is worth at least $30 million, won a House seat in 2008 but was then defeated in 2010. He returned to Congress in 2012.

In 2011, Grayson created a hedge fund and several other investment entities — using his name — that included millions of dollars of the Florida Democrat's money, as well as investments from his family and at least two other individuals. After winning a House seat in 2012, Grayson continued to run the hedge fund and other entities and may have violated House rules and federal law in doing so, according to OCE. "The OCE found that Representative Grayson received compensation as management fees from the Grayson Hedge Fund while serving in Congress," the ethics watchdog states. After OCE began looking into the investment funds in 2015, Grayson changed their name.

Grayson also controlled several law firms that provided "thousands of hours of free legal services over the course of multiple years" as part of a legal case that the Florida Democrat was involved in, OCE said. Grayson dismissed the allegation as "ridiculous."

And OCE alleges that Grayson "agreed to receive compensation for representational services" in lawsuits brought by other parties against contractors accused of defrauding the federal government, despite being in Congress. Grayson said the claim was inaccurate.

As for his unreported assets, Grayson says "these omissions have been corrected," and he bashed OCE for trying to make an example out of him.

