Rep. TJ Cox (D-Calif.), whose failure to disclose company ties in 2018 has made him the subject of an ethics complaint and target of GOP attacks, has removed himself from the board of the Canadian gold mining company at issue, records show.
Cox, a freshman member of the House Natural Resources Committee, launched Constellation Mines Ltd., a Canadian gold mining company, in 2013.
On June 17, the company filed paperwork to formally remove Cox and another director from the company, according to Innovation, Science and Economic Development Canada documents.
Cox’s official departure was dated Feb. 3—days after he was named chairman of the Natural Resources subcommittee on oversight and investigations and more than four months before the company disclosed the information to Canada’s corporate regulator.
Natural Resources Chairman Raul Grijalva (D-Ariz.) is pushing to reform the nation’s 147-year-old hardrock mining law to require mining companies to pay royalty fees and be financially responsible for cleaning up abandoned mines.
Given the oversight role the committee has on mining, Cox should have recused himself from any Natural Resources Committee work on the issue, Scott Amey, general counsel with the watchdog group Project on Government Oversight, told Bloomberg Environment.
Cox should have made clear “that he was always operating in the interest of the public and not in the interests of a company or the mining industry,” Amey said.
Cox originally ran in California’s 10th District against former Rep. Jeff Denham (R), but switched to the 21st District after attorney Emilio Huerta dropped out.
Under federal law, House candidates must live in the state they seek to represent but can run in any of the state’s districts.
Cox eked out a victory against Republican incumbent Rep. David Valadao last fall, in one of the tightest races of the 2018 House elections.
Constellation Mines was listed in Cox’s financial disclosure when he ran in the 10th District, but not the 21st. Cox failed to disclose his ties to five different businesses during his campaign, including Constellation. according to an investigation published in April by The Fresno Bee.
That article sparked a complaint in May to the Office of Congressional Ethics from a group of residents, who said that Cox misled voters during his campaign. Cox’s divestment from the mining company hasn’t quelled their outrage.
“It’s all about appearances,” Cody Bradley, one of the authors of the complaint, told Bloomberg Environment.
Cox: Company Was ‘Empty’
Cox has denied that Constellation is an operational company.
In a brief interview, Cox said the company was “empty,” and had no assets or operations.
“It was an entity that was set up to look at some things,” he said. “And so it’s not really a company. A company that has no assets is not a company.”
In a subsequent statement through his spokesman, Cox attributed the lengthy divestment process to “a heck of a lot of red tape.”
“I’m updating my financial disclosures from when I was a candidate for Congress to reflect all of my business interests,” Cox said. “I’ve seen first-hand how red tape suffocates businesses in America.
“That’s why I ran for Congress—to continue tearing down the barriers that keep working families from succeeding and do what I can to champion economic development in underserved communities of the Central Valley.”
Cox has backed H.R. 1, the For the People Act, that would overhaul campaign finance and ethics rules. The House-passed bill, now before the Senate, would bar House members from serving on boards of for-profit entities.
“It is alarming that TJ Cox continues to lie about whether he has freed himself of financial interests that conflict with legislation he has supported,” NRCC spokeswoman Torunn Sinclair said in an email.
Cox’s Central California district is a top target for House Republicans in 2020, according to the NRCC, which works to elect GOP lawmakers to the House. The Cook Political Report listed it in June as “Lean Democratic.”
Canadian law states that changes to a corporate board must be reported to Corporations Canada within 15 days. The company’s four-month delay between Cox’s last day and filing the notice technically violates that rule, although attorneys say the 15-day rule is considered good practice—rather than a strict requirement—and that late filers rarely face consequences.
“Corporate lawyers regularly date documents to reflect the desired and intended date of a transaction, even if the documents are prepared after the fact,” Nicholas dePencier Wright, principal counsel with Wright Business Law, a corporate law firm in Toronto, told Bloomberg Environment.
Cox’s staff had told the committee May 20 that he had divested from the company, and that his continued association with Constellation had been an oversight, Grijalva said.
“I think the question that was put to Mr. Cox was, ‘Is there something that I need to worry about? Or leadership has to [worry about?]’ and he said, ‘No, no, I’m clearing it up,’” Grijalva said. “So the benefit of the doubt is the benefit of the doubt, and I have no other basis by which to make any assessment other than the fact that he said that ‘we’re taking care of it.’”
Canada’s Wild West
The mining regions of Northwest Canada are an enticing draw for gold miners.
Generous tax incentives in British Columbia and a “free entry” law that allows gold prospectors to quickly and easily stake a claim have attracted small-scale companies—often called junior miners—in droves.
As early as 2012, Cox, a self-described “serial entrepreneur,” began exploring the possibility of gold mining in Canada’s own Wild West: the rural reaches of British Columbia and Yukon provinces.
“What we have are some promising placer & mineral claims” in the Cassiar mining region in Northwest British Columbia, Cox wrote to an investor that year, hoping to secure an additional $250,000 to build his gold-mining operation.
The letter was first published in The San Joaquin Valley Sun, a website published by a former Valadao staffer.
Cox’s gold-mining operation at that time was Defot Creek Mining, whose last mining claims in British Columbia expired in February 2013, according to provincial mining records viewed by Bloomberg Environment.
A month later, Cox incorporated Constellation Mining.
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