Cawthorn fined $15K for promoting cryptocurrency, cleared of other ethics allegations

U.S. Rep. Madison Cawthorn of North Carolina has been ordered by the House Committee on Ethics to pay more than $15,000 for his role in promoting a meme coin. He was also cleared of allegations of nepotism and allegations that he had an inappropriate relationship with a congressional staff member.

In a report released on Tuesday, the committee said it found substantial evidence that the outgoing representative of North Carolina’s westernmost district violated rules against conflicts of interest when he promoted a cryptocurrency that he had a financial interest in.

In December 2021, Cawthorn spent $150,000 on the “Let’s Go Brandon” coin — a reference to a phrase used by some conservatives to mock President Joe Biden. According to the committee, Cawthorn received 180 billion LGB Coin based on a two-week old valuation of the cryptocurrency. The favorable terms constituted an improper gift, according to the committee.

Shortly after the cryptocurrency transaction, Let’s Go Brandon Coin said it would sponsor NASCAR driver Brandon Brown, for whom the coin is named.

Cawthorn swiftly sold nearly all of his stake after the partnership was announced, doing so in the days before and after NASCAR withdrew its approval of the sponsorship. Cawthorn didn’t disclose the transactions in a timely manner, the report said, prompting the House Ethics Committee to levy a $1,000 fine against Cawthorn payable to the U.S. Treasury within two weeks. Investigators also ordered Cawthorn to pay $14,237.49 to an appropriate charitable organization by the end December for the beneficial terms he got in the transaction.

Micah Bock, Cawthorn’s communications director, said the congressman was pleased to have been cleared of allegations of an improper relationship with a staff member and plans to donate the more than $14,000 to a gun rights advocacy group and spinal research center. Cawthorn was partially paralyzed in a 2014 car wreck.

Bock said Cawthorn’s donation will be split between the Firearms Policy Coalition and the Shepherd Brain and Spinal Cord Center in Georgia.

“Rep. Cawthorn thanks the committee for their thorough investigation and is pleased to note that the committee fully exonerated him of the false, malicious, and stupendously idiotic allegations of an improper relationship with staff members,” Bock said in a statement.

Social media promotion

The committee didn’t reach an agreement on whether Cawthorn intended to personally profit from social media posts he made promoting the coin, but it said the congressman should have been sensitive to the appearance of impropriety.

“The [Investigative Subcommittee] intended that its report serve as an admonishment of Representative Cawthorn’s conduct,” the report said.

The report came in response to calls from Democrats and Republicans — including U.S. Sen. Thom Tillis of North Carolina and the American Muckrakers PAC — for an ethics investigation into Cawthorn’s personal and financial dealings.

Revelations of the cryptocurrency transaction and a video of Cawthorn simulating a sexual act with someone Cawthorn described as a friend emerged in the leadup to Cawthorn’s eventual defeat in the May primary.

Cawthorn acknowledged the video, which had been released by the American Muckrakers PAC, a political group that ran its Fire Madison Cawthorn website.

“A new hit against me just dropped,” Cawthorn said in a statement at the time. “Years ago, in this video, I was being crass with a friend, trying to be funny. We were acting foolish, and joking. That’s it. I’m NOT backing down. I told you there would be a drip, drip campaign. Blackmail won't win. We will.”

Cawthorn narrowly lost his reelection bid to Republican state Sen. Chuck Edwards, who went on to win the general election in November.

The report issued by the House Ethics Committee on Tuesday concluded that there was no evidence to support claims that Cawthorn had an inappropriate sexual relationship with a staff member.

Cleared of nepotism

The committee also cleared Cawthorn of alleged nepotism. A WRAL News report had found Cawthorn gave his second cousin, Stephen Smith, $141,000 at the expense of taxpayers and campaign donors since 2020, according to congressional and campaign payroll records.

According to the report, ethics investigators “found no evidence of an unprofessional office environment, and found that Representative Cawthorn did not violate House Rules or laws relating to nepotism, as the staffer was not a first cousin.”

In its report, the House Ethics Committee cited the need to take action before Cawthorn’s term ended.

“Representative Cawthorn did not win reelection to the House for the 118th Congress and, accordingly, the Committee will lose jurisdiction over him soon,” the report says. “The ISC hopes, however, that its findings will serve to educate all Members about the laws and rules designed to protect the integrity of the House against conflicts of interest, including as they apply to digital assets.”