The House Ethics Committee found that the outgoing North Carolina Congressman improperly benefited by purchasing 'Lets Go Brandon' cryptocurrency at a lower price than the average value.
The House Ethics Committee announced on Tuesday that Rep. Madison Cawthorn (R-N.C.) violated ethics rules by purchasing and promoting a cryptocurrency he had an undisclosed stake in.
The committee found that at the end of 2021, Cawthorn held more than $150,000 in “Lets Go Brandon” (LGB) Coin, a cryptocurrency and so-called "meme coin" named after a pejorative slogan used by some Republicans to criticize President Joe Biden. The 27-year-old Republican, who lost his primary reelection campaign in May and leaves office next month, was ordered by the committee to donate $14,237.49 to charity and pay $1,000 in late fees to the Treasury Department.
The committee first announced an investigation into Cawthorn this May, a week after the North Carolina congressman’s primary defeat, prompted by Cawthorn’s alleged promotion of LGB Coin and accusations he had an “improper” relationship with an employee on his congressional staff. According to the report, Cawthorn’s purchase and promotion of LGB Coin indeed qualified as a conflict of interest, but they found no evidence that he had engaged in a relationship with an employee.
The committee reported that Cawthorn first obtained his share in the cryptocurrency on Dec. 21, 2021, when he wrote a $150,000 check to an unnamed person in exchange for 180 billion LGB Coin.
At that time, LGB Coin was fluctuating at just under one-one-thousandth of a cent, putting the 180 billion he purchased at an average value of $164,237.49, according to the committee — more than a $14,000 difference than the amount he paid for it. The report says that Cawthorn was able to purchase the coin “on more generous terms than were available to the general public resulting in an improper gift” and “unanimously recommended that Representative Cawthorn be required to repay the value of the improper gift and pay all applicable fees for his late filing of disclosures for his cryptocurrency transactions.”
The committee found that Cawthorn then publicly promoted the currency in person, making “unambiguous comments about purchasing or supporting” LGB Coin “in contexts that he reasonably should have known would be used for public promotion.” Furthermore, Cawthorn commented on and shared social media posts promoting the token.
Cawthorn purchased the token nine days before LGB Coin announced plans to sponsor NASCAR driver Brandon Brown, whose victory at the Talladega Superspeedway last year gave rise to the popularity of the phrase “Let's Go Brandon!” among conservatives. After the announcement on Dec. 30 2021, the price of the cryptocurrency jumped more than 70%, a timeline that spurred allegations that Cawthorn had engaged in insider trading.
The next day, on Dec. 31, Cawthorn sold about a third of his share in the currency. Four days later, NASCAR announced it would revoke LGB Coin as one of Brown’s sponsors, at which point Cawthorn sold a further 19% of his holdings. On Jan. 17, 2022, by which point the committee noted the value of the currency had “dropped precipitously,” Cawthorn sold another third, leaving him with about 10% of his initial position. The committee found that none of those transactions were properly reported.
LGB Coin, along with Brown, NASCAR, and conservative commentator Candace Owens, are currently the subject of a class-action lawsuit for allegedly engaging in a “pump-and-dump” scheme.
Ultimately, the Ethics Committee found that while Cawthorn had “improperly promoted a cryptocurrency in which he had a financial interest,” it was unable to “reach a consensus on whether Representative Cawthorn intended to personally profit from his promotional activities.”
The committee noted that the report is intended to “serve as an admonishment of Representative Cawthorn’s conduct.”
Cawthorn, who was elected in 2020 as a vocal supporter of Donald Trump, is leaving office after a brief congressional career characterized by repeated political and personal blunders. He was twice caught trying to bring a loaded firearm through airport security and charged twice for driving on a revoked license. He also called Ukrainian President Volodymyr Zelensky a “thug” and the Ukrainian government “incredibly evil,” claimed that senior GOP leaders had invited him to orgies and ingested cocaine in front of him — which prompted a public rebuke from then-House Minority Leader Kevin McCarthy — and became the subject of a parade of leaked sexual and suggestive photos.
He ultimately endured a narrow primary loss against North Carolina state Sen. Chuck Edwards, who went on to win Cawthorn’s seat in the general election against Democratic candidate Jasmine Beach-Ferrara in November.
Published with permission of The American Independent Foundation.