MELISSA BLOCK, HOST:
New York City's lone Republican congressman pleaded not guilty today to federal fraud charges. This comes after a two-year investigation. Michael Grimm is accused of concealing more than $1 million in sales at a restaurant he owned and operated before serving in Congress.
Grimm has been a member of the House Financial Services Committee, but he announced today that he is stepping down from that position. As NPR's Joel Rose reports, Grimm says he's the victim of a political vendetta.
JOEL ROSE, BYLINE: Even before he went into politics, Michael Grimm had a colorful career. He was a Marine, an FBI agent, and for a few years in the mid-2000s, he was part owner and manager of a restaurant in Manhattan. Those are the years prosecutors focused on today.
LORETTA LYNCH: When it came to his restaurant, Michael Grimm never met a tax he didn't lie to his aide.
ROSE: U.S. Attorney Loretta Lynch announced the charges - 20 counts, including mail fraud, hiring undocumented workers and filing false tax returns. Lynch says Grimm simply removed $1 million in cash from his Upper East Side eatery called Healthalicious.
LYNCH: Grimm took the cash from the register, used part of it to pay the workers off the books, never reporting it to the taxing authorities. Grimm turned himself into the FBI this morning. Assistant director George Venizelos says the case is especially disappointing because Grimm worked at the bureau as an undercover agent investigating fraud.
GEORGE VENIZELOS: It's a sad day for the FBI. I mean, nobody's happy. Everybody's upset about it. He should've known better, so it makes it worse.
ROSE: The indictment stems from a two-year investigation that reportedly started with Grimm's campaign finances. His troubles made national news when a local TV reporter asked him about the investigation in January.
REPRESENTATIVE MICHAEL GRIMM: You ever do that to me again, I'll throw you in the (bleep).
ROSE: Grimm responded off mic with a profanity-laced threat to throw the reporter off a balcony in the Capitol. Now, Grimm is vowing to defend himself vigorously. Grimm pleaded not guilty. He was released on bond and immediately held a news conference outside the courthouse in Brooklyn.
GRIMM: We're going to fight tooth and nail. We're going to fight tooth and nail until I am fully exonerated.
ROSE: Grimm says the charges against him are trumped up and he shot back at prosecutors, accusing them of leaking information about the investigation to the press in order to discredit him.
GRIMM: Since day one, the press has been fed all types of innuendos and accusations to support - now let me be very clear - political witch hunt. And this political witch hunt was designed to do a couple of things, but first and foremost, assassinate my character and remove me from office.
ROSE: Grimm's supporters also question the timing of the announcement. It's too late for Republicans to remove Grimm's name from the ballot this fall. His seat, which includes Staten Island and parts of Brooklyn, is the only one in New York City currently held by the GOP, and maybe not for long, says Douglas Muzzio, who teaches public affairs at the City University of New York's Baruch College.
DOUGLAS MUZZIO: Basically, the last outpost is Staten Island. You know, it's sort of a swing seat anyway and with a 20-count indictment hanging over your head, that's real tough.
ROSE: Still, some of Grimm's constituents say they're willing to give him the benefit of the doubt. David Atkinson of Staten Island praised Grimm for breaking with the Republican Party leadership during the recent debate on food stamp benefits.
DAVID ATKINSON: Anytime your whole party says yes, and you say no, that's a hell of a man. The Congressman Grimm that I know, the congressman that stood up for the poor people in Staten Island, that's a man that stands up for his own.
ROSE: But Democrats around the country have been talking about Michael Grimm's seat as a prime pickup opportunity for the party this fall and that was before today's indictment.
Joel Rose, NPR News, New York. Transcript provided by NPR, Copyright NPR.
