California

California congressman took 2 years to pay wages he owed to Canadian workers

Who is TJ Cox?

TJ Cox defeated incumbent David Valadao for California's 21st district Congressional seat.
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TJ Cox defeated incumbent David Valadao for California's 21st district Congressional seat.

A freshman California congressman under pressure over his complicated business interests paid a four-year-old claim for wages owed to three Canadian workers just before he had to report the debt on a new financial disclosure form.

The settlement came to light in Rep. TJ Cox’s latest financial disclosure form, which was due on Aug. 13. He owed $58,000 to three employees dating back to 2015 at Constellation Mines, a company where he was a director until early this year.

After McClatchy obtained records from the Canadian government describing the debt, Cox released documents showing he paid the workers their wages. The employees signed documents confirming they received the money on Aug. 9, 12 and 13.

Cox declined to comment on the payments. Records from British Columbia show the mining employees made a complaint against Cox, D-Fresno, in 2015. He agreed to a settlement with the workers in 2017.

One employee was owed $11,000, another $20,000 and the last $27,000. But neither Cox nor the company paid the agreed upon amounts for years, prompting government officials to attempt to seize his property and take liens against the company’s mining assets in the Yukon territory of Canada, according to Julianne McCaffrey, a spokeswoman for the director of Employment Standards of British Columbia.

Cox is the chairman of the subcommittee on Oversight and Investigations for the House Committee on Natural Resources. The committee has jurisdiction over mining issues.

Cox was listed as the director of Constellation Mines on his financial disclosure and he said he resigned in February.

The documents showing receipt of payment to the three employees reflects about $44,000 in payments made by Cox and Constellation Mines. The documents stipulate that the employees agree to waive claims to any additional payments.

‘Errors’ in candidate disclosure

Cox also did not reveal the settlement on a previous financial disclosure he filed as a candidate, though the latest form says the costs were incurred in January 2017.

His office called that and other discrepancies between the two reports unintentional oversights and said those debts came to light during a more thorough review of Cox’s finances.

It’s not the first financial issue Cox has faced since he took office in January. He’s been under pressure from Republicans to divest from his dozens of business interests. He has either dissolved or resigned from all but seven of his 38 positions in 2018 and 2019, according to the report.

Republicans have tried to label Cox “shady” in political advertisements, and there have been multiple reports of his business debts and failures to publicly report holdings in certain companies, as is required of congressional candidates. He also had a personal lien against him and his wife, which he blamed on IRS incompetence.

Cox’s new disclosure shows that he had positions in 11 different companies that he did not report as a candidate in 2018.

Cox filed an amended disclosure this week to his original candidate financial disclosure submitted in May 2018, which reflects the additional positions.

The new form shows Cox took out two loans in January 2018 to buy a rental property in Fresno and outfit it with solar panels. That was not disclosed on his original candidate report filed in May 2018.

In a statement to McClatchy, Cox’s campaign attributed all issues to unintentional oversights.

“Congressman Cox is proud of his record creating many businesses and jobs in the Central Valley. Our team conducted a full review of the Congressman’s businesses and personal assets and corrected some unintentional omissions, as is commonplace for members of Congress with extensive business careers,” the campaign said.

Retaining investments

Delaney Marsco, legal counsel on ethics for the nonpartisan watchdog group Campaign Legal Center, said all of the above should have been disclosed on his initial candidate filing, but said inadvertent oversights and mistakes were plausible. She found the settlement issue more concerning.

“Especially for first-time filers, inadvertent errors and omissions happen – this is why amendments are permitted in the first place,” Marsco said. “When discovered, we want members to file amendments instead of keeping their assets/salaries/liabilities secret.”

Cox intends to keep a stake in five of his companies as a passive investor, his campaign said. One is an almond-processing company. Another, MJTJ LLC, is a holding company for Cox’s investments and he does not plan to dissolve it.

Cox’s former 2018 opponent and apparent challenger in 2020, former Rep. David Valadao, a Republican from Hanford, has financial issues of his own, including an apparent failure to disclose one of his companies.

Valadao’s family farm was seized in June 2018 after the dairy failed to pay back $8.3 million in loans. Rabobank sued Triple V Dairy in Fresno County Superior Court in November 2017, and the dairy was set to be auctioned off to repay the money.

Valadao and his wife filed for bankruptcy protection for their dairy and cattle businesses earlier this year, citing $13 million in business debts. Valadao listed a company called Triple V Cattle, LLC in that bankruptcy filing in February, but did not disclose that business in his most recent financial disclosure, which covered the year 2017.

Valadao has filed to run for the congressional seat in 2020 with the Federal Election Commission and has planned fundraisers for his campaign, but has not officially announced if he is running.

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Kate Irby is based in Washington, D.C. and reports on issues important to McClatchy’s California newspapers, including the Sacramento Bee, Fresno Bee and Modesto Bee. She previously reported on breaking news in D.C., politics in Florida for the Bradenton Herald and politics in Ohio for the Cleveland Plain Dealer.
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