By Kathleen Hunter, CQ Staff

A federal grand jury in Arizona has indicted Rep. Rick Renzi , R-Ariz., on conspiracy, fraud, extortion and money laundering charges after an investigation lasting more than a year.

A 35-count indictment unsealed Friday accuses Renzi of conspiring with James W. Sandlin in a land swap scheme and with Andrew Beardall to commit insurance fraud. Both are former Renzi business partners.

The indictment, which prompted House Minority Leader John A. Boehner to suggest Renzi consider resigning his seat, also says Renzi concealed illegal profits from Congress and the public.

“The charges contained in this indictment are completely unacceptable for a member of Congress, and I strongly urge Rep. Renzi to seriously consider whether he can continue to effectively represent his constituents under these circumstances, Boehner, R-Ohio, said in a statement.

Through his lawyers, Renzi maintained that he is innocent.

“Congressman Renzi did nothing wrong. We will fight these charges until he is vindicated,” his lawyers, Kelly B. Kramer and Reid H. Weingarten, said in a statement.

“We fear that the Department of Justice may have allowed the investigation to have been influenced by political considerations, which should never have a place in the administration of justice.”

Prosecutors said Renzi, as a member of the Natural Resources Committee in 2005 and 2006, conditioned his support for approval of a federal lands exchange on whether property Sandlin owned in Cochise County, Ariz. was included.

When a company seeking Renzi’s support failed to purchase Sandlin’s property, Renzi allegedly told them, “No Sandlin property, no bill.” Renzi later directed a second group of investors to purchase the property and include it in their land exchange proposal, resulting in a $733,000 payment to Renzi from Sandlin in 2005, according to the indictment.

Because Renzi, 49, was facing financial troubles in 2005, he needed a “substantial infusion of funds” to keep his insurance business afloat and “maintain his personal lifestyle,” according to the 26-page indictment.

The Justice Department also has charged that Renzi and Beardall embezzled more than $400,000 in insurance premiums from the trust account of the Patriot Insurance Agency, Inc., a Renzi family-owned business and said the money helped fund Renzi’s first congressional campaign.

Renzi has been summoned to appear at a March 6 arraignment in Tucson, Ariz.

The House ethics committee, known officially as the Committee on Standards of Official Conduct, also will review Renzi’s behavior. A House rules change adopted last year (H Res 451) gives the ethics committee 30 days after a member is charged with a crime to decide whether to empanel an investigative subcommittee. If they decide not to do so, the committee must tell the House why it decided not to establish an investigative panel.

An aide to panel Chairwoman Stephanie Tubbs Jones , D-Ohio, would not comment on when an investigative subcommittee might be formed.

Political Picture

The indictment provided an unhelpful reminder for Renzi’s fellow Republicans of the ethics controversies that dogged them in the 2006 election.

News reports of a federal investigation into whether Renzi used his office to help a former business partner make a sizable profit on a piece of land emerged in October 2006, a month before Renzi was re-elected to a third term in the 1st District. At the time, the U.S. Attorney’s Office in Phoenix said the probe was still in its initial stages.

Federal agents raided one of Renzi’s family businesses in Arizona in April 2007, and Renzi thereafter surrendered his committee assignments under pressure from House leaders. He announced Aug. 23 that he would not seek a fourth term.

Speaker Nancy Pelosi ’s office declined to comment on whether Renzi should resign before the end of his term or on the indictment.

Democrats have launched a strong bid to take over the seat in the sprawling northern Arizona district.

Democrat Ann Kirkpatrick, who resigned from her seat in the Arizona House last year to focus on her House bid, raised a solid $403,000 for her campaign through the end of 2007, giving her a big lead over all the other candidates in both parties. She faces serious opposition for the nomination, though, from former TV newswoman Mary Kim Titla, who shares American Indian heritage with many district residents, and lawyer Howard Marc Shanker.

The Republicans have a serious candidate in Sydney Hay, president of the Arizona Mining Association. She finished third in the 2002 open-seat GOP primary, four percentage points behind Renzi.

Other Republicans are mulling possible bids in advance of the state’s June 4 filing deadline for the Sept. 2 primary.

The Democrats tried to raise ethics issues against Renzi during the 2006 campaign, but he defeated Democrat Ellen Simon, a lawyer, 52 percent to 43 percent .

Marie Horrigan, Molly Hooper and Bob Benenson contributed to this story.