WASHINGTON — An eight-term congressman who serves on the House Financial Services Committee has quietly declared personal bankruptcy, blaming his family meat company for his problems.
Rep. Ruben Hinojosa, D-Texas, has $2.9 million in liabilities, according to his filing last Dec. 18 in federal bankruptcy court. Almost all of the owed money, $2.6 million, is a claim by Wells Fargo Bank, the nation's fourth-largest bank.
The Financial Services panel has jurisdiction over legislation affecting banks. House aides and outside experts said the House has no rules forbidding a lawmaker who owes large sums to a bank from serving on that committee.
In a written statement, Hinojosa, 70, blamed his bankruptcy on a loan he personally guaranteed for H&H Meat Products Co. of Mercedes, Texas, which he says was forced into its own bankruptcy because of the recent economic crisis. He said he has not managed the company for the past 14 years but remained obligated by a bank line of credit.
"I have done everything humanly possible to avoid filing for bankruptcy protection to no avail," Hinojosa said in the statement, provided by his lawyer, Eduardo V. Rodriguez. "The bank debt of H&H was more than I could handle financially."
The $2.6 million owed to Wells Fargo is described in the documents as an arbitration award that was made in March 2010 for a business debt. An attorney listed as representing Wells Fargo, Vicki M. Skaggs of McAllen, Texas, did not respond to an e-mail and phone message requesting comment.
The city of Mercedes, Hidalgo County and other local governments have $56,000 in tax liens against companies associated with Hinojosa, the bankruptcy court documents also show.
The congressman's latest personal financial disclosure form does not mention the Wells Fargo claim or any asset or liability as large as $2.6 million. His latest disclosure form covers 2009, and he updated it on Jan. 5 of this year.
Lawmakers are required to file the documents with Congress every year. Rodriguez and Hinojosa's congressional spokeswoman, Patricia Guillermo, did not respond to an e-mail inquiring why the line of credit did not appear in the disclosure documents.
Hinojosa, who had not announced his bankruptcy filing until asked about it Thursday by a reporter, has nearly $1.5 million in assets, according to papers filed in U.S. Bankruptcy Court in the Southern District of Texas in McAllen.
The most valuable assets he lists include a 401(k) retirement account valued at $611,000, a $208,000 interest in a company called Hinojosa Development, a $188,000 interest in Hinojosa Enterprises and a home in Mercedes valued at $189,000. He also lists dozens of other items, including $2,000 worth of oil paintings, $1,900 worth of suits and a $150 wedding ring.
He earns $174,000 a year as a House member.
On his congressional website, Hinojosa says he earned a bachelor's degree in business administration from the University of Texas in Austin and a master's in business administration from the University of Texas in Edinburg.
Hinojosa said bankruptcy will let him craft a plan for repaying his debts over time and said he hopes to emerge from bankruptcy protection as soon as possible. Court documents show he took a legally required credit counseling course, by telephone, the day before he filed for bankruptcy and has a hearing scheduled for May 25 in the bankruptcy court in McAllen.
The House does not consider its members to face a conflict of interest unless they vote on something that affects solely their own or their family's financial interests, said Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, which advocates open government. House rules also suggest that lawmakers avoid an appearance of impropriety, but it's loosely enforced, Sloan said.