The “unexpected family matter” cited by California Rep. Linda T. Sánchez in withdrawing from the race for House Democratic Caucus chair relates to her husband, who was indicted on theft and conspiracy charges related to spending corporate money on personal trips, including some allegedly spent on Sánchez.
“Earlier today I learned that my husband is facing charges in Connecticut,” Sánchez said in a statement Thursday. “After careful consideration of the time and energy being in leadership demands, I have decided that my focus now needs to be on my son, my family, and my constituents in California.”
Sánchez, the current vice chairwoman of the Democratic Caucus, was expected to face fellow California Rep. Barbara Lee for the caucus chair position. New York Rep. Hakeem T. Jeffries joined the race earlier Thursday.
Sánchez’s husband, James Sullivan, was one of five individuals associated with the Connecticut Municipal Electric Energy Corporation indicted by a federal grand jury for spending more than $800,000 of the corporation’s money on personal trips.
The CMEEC is a cooperative public corporation that has membership agreements with Connecticut municipalities that allows the towns’ electric utilities to work together to furnish power to the combined areas. The CMEEC membership agreement requires excess revenues to be returned to the member towns to help keep electricity costs stable.
The indictment against Sullivan and his CMEEC colleagues, all of whom hold or have held board or executive positions, spent corporate money on trips to the Kentucky Derby in 2015 and 2016 and to a luxury golf resort in West Virginia in 2015.
They directed the funds used to pay for the trips from the CMEEC Margin account, without a vote of the board and written consent of the member towns as required by the membership agreement.
The indictment says they spent more than $800,000 on travel expenses, private chartered airfare, first-class hotel accommodations, meals, tickets to sporting events, golf fees, souvenirs and gifts.
Sullivan and the other four defendants were charged with one count of conspiracy, which carries a maximum sentence of five years, and three counts of theft concerning a program receiving federal funds, which a maximum sentence of 10 years.
A second indictment doubling the charges for Sullivan and one of the other defendants, Drew Rankin, alleges that Sullivan submitted personal expenses on his corporate expense reports that Rankin approved.
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The personal expenses Sullivan charged to CMEEC include airfare for dozens of flights he took and trips for his family to attend the Kentucky Derby in 2013, 2014, and 2015.
The indictment also says he charged CMEEC for airfare for a flight Sánchez took to Key West, Florida, in December 2014.
It is unclear if Sánchez was aware of how the trips were funded.
“CMEEC has received millions of dollars in grants from the U.S. Department of Energy,” U.S. Attorney John H. Durham said in a statement. “Instead of protecting these funds and returning excess revenue to member towns and ratepayers, these defendants are alleged to have used the CMEEC Margin Account as a secret slush fund to pay for lavish junkets for themselves and their family and friends, as well as for other inappropriate expenses.
Sullivan and the other four defendants pleaded not guilty Thursday to the charges at a federal court in New Haven, Conn. They were each released on a $100,000 bond.