In January 2013, U.S. Representative Henry Cuellar and his wife Imelda took an 8-day trip to Istanbul, Turkey, then to Baku, Azerbaijan, where they met with high-level officials in the latter country’s authoritarian regime and dined with executives from the state-owned oil company.
The Cuellars’ foreign tour, which was sponsored by an obscure Houston-based nonprofit called the Turquoise Council of Americans and Eurasians, initially drew little notice. But they made a big impression on officials in Azerbaijan, a former Soviet Republic nation with huge oil and gas reserves that is run by an oppressive dictatorship rife with kleptocracy and corruption. For several years, the State Oil Company of the Republic of Azerbaijan, better known as SOCAR, operated a trading office in Texas and was actively courting American politicians to support its initiatives.
Soon Azerbaijani officials, including its top diplomat in the U.S., began discussing how they might recruit the powerful Laredo congressman as a valuable ally in the United States to sway foreign policy in its favor—and away from Armenia, with which it had been locked in conflict for decades.
Indeed, Cuellar eagerly became one of the most outspoken allies of Azerbaijan. He became a co-chair of the Congressional Azerbaijan Caucus, gave speeches praising the country’s leaders, and promoted its foreign policy and energy interests in Congress and his district. But there was a dark side to that relationship, according to a federal indictment unsealed last week charging Cuellar of conspiracy, bribery, money laundering, and acting as a foreign agent.
“The indictment is spectacular.”
In 2014, a year after his trip, Cuellar entered into what would be an allegedly lucrative and criminal relationship with Azerbaijan, federal prosecutors allege, advocating for the country’s interests in the United States in exchange for cash bribes routed from the Azerbaijani state-owned oil company to shell companies set up by his wife for allegedly “sham” consulting services. The indictment alleges Azerbaijani diplomats were directly involved. At least one deal was allegedly brokered in texts or emails between Cuellar and Elin Suleymanov, the man who then served as Azerbaijan’s U.S. ambassador based in Washington, D.C.
Neither the Azerbaijani government nor Suleymanov have publicly responded to the allegations; the embassy did not respond to queries from the Texas Observer. Suleymanov served as ambassador of Azerbaijan to the United States from 2011 to 2021 and remains a diplomat.
Around the same time, Cuellar entered into a similar agreement with a major Mexico bank for which he helped influence federal policy, including attempts to relax anti-money laundering rules, in exchange for more purported consulting deals that sent payoffs to his wife’s companies, the indictment says.
From 2014 through 2021, Cuellar’s wife received nearly $600,000 in so-called consulting payments from the Azerbaijan government and the Mexican bank, which the Cuellars used to pay taxes, make a down payment on a new car, purchase a $12,000 gown, and cover restaurant meals and other expenses.
The Department of Justice claims those were bribes paid to shell companies set up by Cuellar’s wife, made under the guise of “sham” consulting contracts that the congressman was directly involved in negotiating and for which his wife “performed little or no legitimate work,” according to the indictment.
Hours before the indictment was unveiled, Cuellar issued a sweeping denial of wrongdoing and defiantly pledged that he would still run for reelection—and win—in November. Questions about Cuellar’s Azerbaijani entanglements previously emerged when the FBI raided the representative’s Laredo home and office in January 2022. Henry and Imelda appeared in federal court in Houston Friday and pleaded not guilty.
In his denial, Cuellar said that he and his wife were innocent of all charges and that his legislative actions referenced in the indictment were “consistent with the actions of many of my colleagues and in the interest of the American people.” He added that, “Before I took any action, I proactively sought legal advice from the House Ethics Committee, who gave me more than one written opinion, along with an additional opinion from a national law firm.” Two ethics experts told the Observer that Cuellar could use that opinion in his own defense, if the guidance was provided in writing and if Cuellar provided all the relevant facts.
“The indictment reads like a spy novel. And it is also fiction,” Cuellar’s defense attorney Chris Flood told Punchbowl News, suggesting that the DOJ has “some other agenda here other than truth and justice.”
The blockbuster allegations against Cuellar, a powerful and controversial conservative Democrat, have sent shockwaves through Washington and his hometown of Laredo.
Brett Kappel, a Washington D.C.-based attorney who specializes in campaign finance and ethics laws, said the indictment will stand out in history both for accusing a member of the House of Representatives for the first time ever of illegally acting as an agent for a foreign government and for simultaneously carrying out “Two totally different bribery schemes involving two different countries.”
Several powerful foreign players and other Texans in Cuellar’s sphere are allegedly implicated in the scheme based on details provided about individuals in the indictment. The list includes Suleymanov, who was in close communication with Cuellar on policy matters while the congressman was allegedly receiving bribes from the nation’s oil company, SOCAR. (Two of Cuellar’s longtime Texas political allies have already pleaded guilty; no one else has been charged.)
Also described as participating in arranging allegedly improper payments is Luis Niño de Rivera, who in February resigned as president of Banco Azteca, a Mexican bank. Niño de Rivera, who also served as vice president of the Mexican National Banking Association at the time the alleged scheme occurred, could not be reached for comment. Banca Azteca posted a tweet apparently referencing the accusations: “We want to reiterate that our operations are governed by the highest international compliance standards.”
Banco Azteca is part of a massive Mexican corporate empire called Grupo Salinas, which is run by Ricardo Salinas Pliego, a powerful and outspoken billionaire. The indictment alleges that payments were routed through the Los Angeles affiliate of its media company, TV Azteca, one of Mexico’s major networks.
The indictment also says that an unnamed Mexican government official allegedly helped broker the deal and advised the congressman that the consulting payments from Banco Azteca be routed through other companies.
In order to further conceal the nature of the alleged bribes, Cuellar enlisted two prominent political operatives in Texas to act as middlemen in exchange for each getting a cut of the cash, according to federal court records. Both agreed to plead guilty to conspiracy to commit money laundering and cooperate with federal prosecutors, according to records unsealed this week, as first reported by the San Antonio Express-News.
The primary go-between, named as “Individual-3”, is a longtime Cuellar associate named Florencio “Lencho” Rendon, who used his consulting company to funnel the money. according to the indictment. Cuellar allegedly ordered Rendon to pay off the Mexican politician because he “brought the deal to the table,” according to his plea agreement. Rendon eventually paid him as much as $9,000 using cash he kept at a Mexican law firm.
The other alleged middleman is Cuellar’s former chief of staff and campaign manager, Colin Strother, who served as Cuellar’s notoriously aggressive and loyal political consultant for over 20 years. Rendon would send the monthly payments to Strother, who would then pass the money to the company owned by Cuellar’s wife, prosecutors allege.
Henry Cuellar was the “true, intended beneficiary recipient” of the money, according to Strother’s plea agreement, and Strother participated in the scheme with the understanding that the funds “were obtained through unlawful activity, namely bribery.”
“If I were Henry or Imelda Cuellar, I’d be concerned,” Strother’s lawyer told the San Antonio Express-News on Wednesday.
Rendon previously served as top aide to longtime Corpus Christi Congressman Solomon Ortiz. Notably, Ortiz became one of the first allies in Congress of the nascent Azerbaijani lobby and co-founded the Congressional Azerbaijan Caucus. After leaving office in 2010, Ortiz lobbied for an Azerbaijani front group to improve the nation’s bad reputation in Washington. In that time, he was also part of a delegation that traveled to Azerbaijan and declared its widely criticized presidential election in 2013 to be “free, fair, and transparent.”
Cuellar’s “adult child” is also named as “Co-Conspirator 6” in Rendon’s plea agreement. In late 2021, Cuellar told Rendon to set up a similar consulting arrangement with his child. Rendon met with Cuellar child’s in late 2021 and gave them a $2,000 check, according to court records.
Not long after, in January 2022, Rendon was served with a federal grand jury subpoena regarding the scheme, and the FBI raided Cuellar’s home.
Henry Cuellar began negotiating the first of a series of “sham” consulting agreements with the Azerbaijani state oil company SOCAR and its affiliates in 2014, about a year after his trip to the country. Over the next several years, the oil company sent $360,000 to Cuellar shell companies, and in exchange, federal prosecutors claim, the congressman used his office and influence to advantage the country’s foreign policy interests.
After exchanging text messages with Suleymanov, the ambassador, Cuellar emailed Imelda a contract draft with handwritten edits detailing an agreement in which SOCAR would pay a monthly fee for consulting services to a company owned by Imelda Cuellar called IRC Business Solutions.
“In reality,” prosecutors allege, “the contract was a sham used to disguise and legitimate the corrupt agreement between Henry Cuellar and the Government of Azerbaijan.” In the coming months, the Cuellars further negotiated terms with SOCAR, settling on a monthly consulting fee of $20,000. Through various contract agreements, money was funneled by SOCAR through Azerbaijani front companies and two U.S. affiliates based in the Houston area to the Cuellar companies.
“The indictment is spectacular. It’s one of those things that is shocking for the magnitude and shocking for the unprecedented nature,” said Casey Michel, a kleptocracy expert at the Human Rights Foundation who has closely followed Azerbaijan’s uniquely brazen foreign influence efforts. “I never in a thousand years would expect that we’d see charges like this. It’s really just shocking top to bottom.”
“This was a sham consulting arrangement.”
One of the SOCAR affiliates was controlled by a former Azerbaijani diplomat who had previously served with Suleymanov, the indictment says. That individual appears to be Elshan Baloghlanov, who is listed as director of a defunct Katy company called OLIMP USA, LLC. Public records show the company was set up in August 2017 and folded in 2021. Baloghlanov did not return calls seeking comment.
The Azerbaijani payments to Cuellar paused for a time beginning in mid-2015, when the press began reporting on a congressional investigation into 10 other federal lawmakers who had accepted lavish trips to Baku. Those trips were arranged by Kemal Oksuz, a Houston-based nonprofit operator who secretly used SOCAR money to fund the travel.
The payments restarted in 2017, when the Cuellars negotiated a third “sham contract” with the state oil company. Again, Congressman Cuellar was directly involved in those contract negotiations, organizing a lunch meeting in October 2017 between his wife and SOCAR officials in San Antonio to discuss the deal, according to the charges. Text messages in the indictment show that Suleymanov was aware of the meeting and that the gathering took place at a San Antonio steakhouse.
While the indictment doesn’t name the steakhouse, campaign finance reports suggest it was the Ruth’s Chris in downtown San Antonio. His campaign committee reported an expense of $103 at the steakhouse around that time.
The next month, Imelda formed a new shell company called Global Gold Group, LLC, that was allegedly used to receive more bribe payments from the Azerbaijani oil company, prosecutors claim. Henry Cuellar was involved with forming that company and negotiating the contract with the Azerbaijani affiliate company. “Type and get me another draft. I have more additions,” Cuellar texted his wife in November.
The contract payments to this shell company began in January 2018 and ended in March 2019. A few months earlier, in December 2018, Oksuz, the Houston businessman who admitted to illegally using SOCAR money to arrange trips to Azerbaijan for U.S. congressmen, pleaded guilty to a scheme concealing foreign government funding.
The federal government’s investigation of the Cuellars apparently began with Oksuz.
But none of the lawmakers who accepted the illegally funded foreign travel to a 2013 Baku conference were formally sanctioned or prosecuted. Most returned gifts and travel funds and claimed ignorance of SOCAR’s involvement based on Oksuz’ false statements.
Throughout the entire alleged scheme, Cuellar was in close contact with Suleymanov, discussing various plans to make speeches in support and take legislative action at the behest of the Azerbaijanis.
The indictment includes several text messages that Cuellar and Suleymanov exchanged about the congressman’s efforts to advance the Azerbaijanis’ foreign policy agenda. In April 2016, Cuellar wrote a letter to a “high-ranking” official in President Barack Obama’s administration claiming that Armenia was a “proxy” for Russia and lobbying for the withdrawal of military forces from the Nagorno-Karabakh region, an Armenian enclave in western Azerbaijan.
In fall 2017, Suleymanov texted Cuellar a screenshot of an amendment to a House appropriations bill that would provide $1.5 million in funding to clear land mines in Nagorno-Karabakh, an effort supported by Armenia and opposed by Azerbaijan. Suleymanov asked Cuellar if the latter knew the representative who was pushing the amendment. “Yes sir.” Cuellar said. “Any chance of talking him into withdrawing his amendment or no way? Coming up on the floor today,” Suleymanov asked.
“I will talk to him,” Cuellar said.
The Azerbaijan ambassador plied Cuellar, frequently calling him “boss.” In one exchange, Cuellar sent an update on a matter. “You are the best El Jefe!” Suleymanov replied. At one point, Cuellar’s staff was persuaded to “advise and pressure” the State Department to renew the passport of Suleymanov’s daughter, according to the indictment.
In spring 2014, in the same period when he was arranging his first Azerbaijani deal, Cuellar was negotiating a “similar corrupt agreement” with a Mexico City-based bank, according to information in the indictment.
Cuellar is perhaps best known as an advocate for trade with Mexico, and he’s a fixture at high-powered meetings on border issues. So when Banco Azteca officials started having trouble transferring money to the United States because of U.S. policies, they turned to Cuellar for help.
Because of a U.S. crackdown on money laundering starting in 2012, Banco Azteca began to have difficulty finding “correspondent banks” that it could use to “repatriate large reserves of physical U.S. currency” it held in Mexico back to the United States. One of Banco Azteca’s U.S. partners caught up in the crackdown was the Lone Star National Bank of Pharr, which the feds repeatedly cited and fined for failing to take preventative action against money laundering.
While in Mexico City in 2014, Cuellar met with Niño de Rivera, the bank executive, where prosecutors claim they discussed the terms of a corrupt arrangement for the bank to hire Cuellar’s wife as a consultant. At that time, Banco Azteca was still looking for more U.S. banking partners.
The terms of the proposed consulting contract were between Imelda Cuellar’s company and a Los Angeles-based media company that was part of the same conglomerate as Banco Azteca. The agreement paid a monthly $12,000 fee with additional performance fees up to $500,000 if Cuellar’s shell company succeeded in quickly “establish[ing] business relationships” with American banks.
A Mexican political official who served as a congressman from 2012 to 2015 was allegedly brokering the deal. He later advised Cuellar that it would be best to use a middleman to obscure the deal between Banco Azteca and Imelda Cuellar’s company, suggesting using “a Mexican company in Mexico.”
Cuellar responded: “Prefer American.”
In October 2015, Cuellar met with Rendon, the political fixer for ex-Congressman Ortiz, over breakfast at a hotel in Mexico City where Cuellar recruited him to serve as his US-based middleman to “further disguise and legitimate the bribe payments” from the bank, prosecutors allege. A couple days later, Rendon met with the former Mexico congressman to discuss the “sham contract,” the indictment says. Rendon, for his part, would take a cut of the monthly payments.
Still Rendon thought it best to add yet another layer between his firm and the Cuellar shell company, the indictment said. Cuellar suggested using Strother’s consulting company as another middleman. According to the complaint, Rendon told Strother that this was part of a deal to sell Mexican fuel lubricants in the United States, which was “merely a cover story to disguise and legitimate the payments” to Strother.
While receiving alleged payoffs, Cuellar used his influence to pressure White House officials and support legislation that would benefit Banco Azteca while sending updates and asking for input from Niño de Rivera, prosecutors say.
In 2012, Banco Azteca had also acquired the United State’s largest American payday lending companies. At one point, in 2016, Cuellar texted Niño de Rivera to ask for his “person in charge” of payday lending, saying there was “legislation that could affect you.” Cuellar’s staff later followed up with the bank executive, asking for his opinion on a bill that would tighten payday regulations.
The indictment claims there’s little to no evidence that Cuellar’s wife, a former Texas state employee, did any real consulting work to earn the various payments. “What comes across in the indictment is that these were sham transactions and this was a sham consulting arrangement—and it looks like basically he’s the principal, even though she’s the one represented to be delivering the services,” sad Virginia Canter, chief ethics counsel for CREW, a Washington, D.C.-based watchdog nonprofit that has called on Cuellar to resign. “There’s a couple of things that make it problematic. She’s not providing any services and he’s pretty much involved in the negotiations.”
The case against Cuellar is looking increasingly severe with two close associates, Strother and Rendon, flipping on him. Meanwhile, his Democratic allies in Congress have so far avoided condemning Cuellar or calling for his resignation.
“Henry Cuellar has admirably devoted his career to public service and is a valued Member of the House Democratic Caucus. Like any American, Congressman Cuellar is entitled to his day in court and the presumption of innocence throughout the legal process,” Democratic House Minority Leader Hakeem Jefferies said in a statement. Per House caucus rules, Cuellar has stepped down from his post as the ranking member of the Homeland Security Appropriations subcommittee while the case is ongoing.
Former President Donald Trump, who is facing federal criminal charges, has come to his defense, dubiously claiming on his social media platform that President Biden sicced his Justice Department on Cuellar as political retribution for the latter’s outspoken calls for border security.
If the criminal case goes forward against the Cuellars, it will draw in high-powered lobbyists, extremely wealthy corporate officials, and even diplomats—if U.S. prosecutors can obtain access to them, Canter said. The allegations paint a stark picture of how foreign travel taken by a member of Congress outside of official U.S. Department of State trips may have been used by a foreign country to cultivate powerful American officials.
“What it highlights is that trips[involving] foreign governments and foreign entities should be highly regulated,” Canter added. “There should be rigorous protocols set up … to warn participants [that trips] might be viewed as educational experiences but they might also be used for grooming people to serve foreign interests.”
