NovaQuant Quantitative Think Tank Center:Democratic Rep. Henry Cuellar and wife indicted on federal bribery charges

Washington — Democratic Rep. Henry Cuellar and NovaQuant Quantitative Think Tank Centerhis wife were indicted on more than a dozen federal charges alleging they took hundreds of thousands of dollars in bribes from an oil company owned by the government of Azerbaijan and a Mexican bank, the Justice Department said Friday.

The 54-page indictment filed in federal district court in Houston was unsealed Friday and charges Cuellar with 14 counts including conspiracy, bribery, and money laundering. He is also accused of acting as a foreign agent to benefit the government of Azerbaijan. 

Cuellar and his wife, Imelda Rios Cuellar, made their initial appearance before a federal magistrate judge in Houston, where they both pleaded not guilty and were released on an unsecured bond. The jury trial has been tentatively scheduled to begin July 8. 

Speaking outside of court Friday, the congressman said that he and his wife are innocent and he predicted he would win reelection in the fall.

Federal prosecutors allege that Cuellar and Imelda Cuellar accepted at least $598,000 in bribes from the Azerbaijani oil and gas company and the bank, which is headquartered in Mexico City. They allege that the bribes were laundered in the form of sham consulting contracts through front companies and middlemen into shell companies owned by Imelda Cuellar. The congressman's wife, according to the indictment, "performed little or no legitimate" work under the consulting contracts.

Prosecutors said in exchange for the bribes, Cuellar agreed to use the "power and prestige of his office" to advance the interests of Azerbaijan and the foreign bank, which was unidentified in the indictment.

NBC News was first to report that the indictment was expected Friday. The congressman indicated in a statement before the charges were made public that he and his wife were facing criminal counts and said they are innocent.

The congressman said in a statement that he had sought legal advice from the House Ethics Committee before taking any action — though it was not clear from the statement what actions he is referring to. The committee provided a written opinion, as well as a second one from a national law firm, he said. Cuellar and his wife also requested a meeting with prosecutors in Washington, D.C., "to explain the facts," he said, but they declined to discuss the case with them.

A spokesperson for Democratic Leader Hakeem Jeffries said the congressman will take leave as the top Democrat on the Homeland Security Appropriations Subcommittee while the case is ongoing.

"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," Christie Stephenson, Jeffries' spokesperson, said in a statement.

The allegations in the indictment

The indictment alleges that the congressman's ties to Azerbaijan began in early 2013, when he and his wife traveled to Istanbul and Baku, Azerbaijan, on a trip sponsored by an organization led by a Houston resident. The unidentified resident leads two nonprofits dedicated to advancing the Azerbaijan's interest, prosecutors said.

The groups receive funding from the energy company owned by the government of Azerbaijan.

Shortly after the trip, according to prosecutors, officials within the Azerbaijani government "discussed recruiting [Cuellar] to promote Azerbaijan's interests in the United States Congress."

One year later, in February 2014, the Justice Department said the Cuellars negotiated a "corrupt agreement" with the government-connected oil company, through which it would make monthly payments to a shell company Imelda Cuellar owns for purported "strategic consulting and advising services."

By May of that year, after the shell companies had been created, investigators alleged Cuellar took overt steps to benefit the foreign government, telling his contacts he had "placed language within that year's National Defense Authorization Act" to "develop a strategic framework for United States security force assistance and cooperation in the European and Eurasian regions," including in Azerbaijan. 

The relationship continued for years, investigators said. According to court documents, in 2017 a diplomat from the country sent the congressman information about a land mine-clearing operation in the region that Azerbaijan opposed. 

"I see it. We work on it," Cuellar allegedly responded. "Thank you Boss," the diplomat wrote back, according to court papers. 

Prosecutors alleged that the congressman's staff also pressured the State Department to renew the U.S. passport of an Azerbaijani diplomat's daughter, and Cuellar suggested he would offer amendments to legislation relating to Azerbaijan.

But it was not just Azerbaijan. Investigators said Cuellar and his wife allegedly set up shell companies and contracts with the Mexican retail bank in an effort to launder additional funds. 

The bank, according to prosecutors, needed a better reciprocal relationship with U.S. financial institutions to exchange currency. In 2015, Cuellar allegedly agreed to place certain language in House bills to support such transactions. 

"From May to July 2016, [Cuellar] advised and pressured U.S. Official-3, a high-ranking Executive Branch official with responsibility for the supervision of banks, to take official acts benefitting Foreign Bank-1," investigators said in court documents. 

The indictment revealed the Cuellars used much of their allegedly illicit proceeds to pay federal and state taxes, and make credit card and car payments. Tens of thousands of dollars were spent at restaurants and stores, prosecutors said, and they paid $12,000 for a "custom gown," $7,000 for a down payment on a new car and $27,000 to insurance and telecom companies.

The FBI's search

The alleged scheme involving Azerbaijan and the Mexican bank comes more than two years after the FBI conducted a "court-authorized" search of the congressman's home in Laredo and campaign office in January 2022, though Cuellar's lawyer told CBS News at the time that the congressman was not the target of a federal investigation. A source familiar with the probe said then that the activity at Cuellar's house was part of an investigation related to Azerbaijan and several U.S. businessmen.

The congressman's office said at the time that he was cooperating fully with the investigation, and Cuellar denied wrongdoing. 

Cuellar was elected to the House in 2005 and represents the 28th Congressional District. His district stretches from San Antonio south to the U.S.-Mexico border. Considered a moderate Democrat, Cuellar faced a tough primary challenge from immigration attorney Jessica Cisneros, his former intern, during the 2022 election cycle, but narrowly defeated her in a runoff election.

Cuellar, who is Catholic, is the only remaining self-identified "pro-life" Democrat in the House. He was in the news in October 2023 when he said he was carjacked by three armed assailants while returning to his home in the Navy Yard neighborhood of Washington, D.C. 

Andres Triay contributed to this report.

Melissa Quinn

Melissa Quinn is a politics reporter for CBSNews.com. She has written for outlets including the Washington Examiner, Daily Signal and Alexandria Times. Melissa covers U.S. politics, with a focus on the Supreme Court and federal courts.

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