Lack of Grimm details
DISGRACED ex-Congressman Michael Grimm will formally disclose his desire to return to Washington Sunday — but he won’t be revealing how he managed to pay off $570,000 in debt he ran up during his fall from grace.
Grimm, who represented Staten Island and parts of Brooklyn from 2011 to 2015, was investigated for a variety of allegations and ultimately pleaded guilty to tax evasion for hiding nearly $1 million in receipts from a restaurant he co-owned. He also admitted lying under oath in a civil case.
As he headed off to federal prison, he owed $148,907.11 in back taxes plus interest and penalties to the IRS and New York state. And he owed the law firm Patton Boggs another $421,788 for legal representation.
In the last eight weeks, he claims to have paid up all he owed.
It’s not clear how he did that, given that his spokesman says Grimm is “sole proprietor general business consultant,” according to his spokesman, who has yet to disclose his clients or income.
Grimm, who once threatened to throw a TV reporter off a Capitol Hill balcony, was sentenced in July 2015 to eight months in federal prison. He was forced to resign his seat in the House.
He left the Bureau of Prisons as Inmate No. 83479-053 in May 2016. According to his agreement with the government, he’d promised to start paying off what he owed the taxman the minute he got out.
But more than a year after he’d been released, Grimm had only paid a grand total of $10,250 and fallen behind in his payments. In June, Acting Brooklyn U.S. Attorney Bridget Rohde moved to garnish the rental income he collected from a tenant in his Staten Island house.
“More than 30 days has elapsed since demand for payment was made upon the debtor and debtor has failed to satisfy the debt,” prosecutors wrote. “Interest is continuing to accrue.”
Suddenly, on July 25, Grimm coughed up the rest.
Grimm declined to discuss his finances, but his spokesman, Michael Caputo, said on Friday that the former Congressman had borrowed that money from family and “a friend.”
Caputo refused to identify Grimm’s secret benefactor, but promised the name would be revealed when Grimm files his formal campaign papers and financial disclosure forms with the Federal Election Commission in the coming days.
Grimm’s also lifted his other huge financial burden — $421,788 in outstanding debts owed by his campaign as of midJuly, records showed.
Caputo said that was money owed to Patton Boggs, the Washington, D.C., law firm that represented him in some of the investigations.
Grimm paid that off in a “confidential Unpaid legal fees to Patton Boggs. It was paid off in a “confidential settlement” in the last eight weeks. The source of the funds is unknown. Back taxes owed (plus interest and penalties) owed to the IRS and the state of New York. It was paid off in July with a loan from family and an unnamed “friend.” Back rent owed to a Manhattan building owner for defunct restaurant Healthalicious Grimm coowned. A lawsuit is pending. settlement” within the last eight weeks, Caputo said. He would not disclose the source of funds for that payment either, but promised disclosure when the FEC papers are filed.
Caputo did not address another $31,605 in back rent Grimm allegedly owes the owners of a Manhattan building where he and a partner had opened the restaurant, Healthalicious, that was the source of all Grimm’s tax charges.
On Sunday, Grimm plans to formally announce his bid for his old seat now held by Dan Donovan, a fellow Republican. Within 10 days he plans to register a new campaign — Friends of Michael Grimm, Caputo said.
That committee has yet to raise a dime, Caputo said, so it’s not clear who paid for fliers promoting Sunday’s event at a restaurant on Hylan Blvd.
All of that, Caputo promised, will be disclosed in the coming days.
“Former Congressman Grimm has spent nominal amounts on his race, which is just getting underway Sunday, and all spending will be reported according to FEC regulations,” Caputo promised.