U.S. Rep. Jim Hagedorn told his former chief of staff in a phone conversation last month that "I don't believe there's any problem" with taxpayer-funded mail to constituents that was produced by two companies with ties to his congressional office.

Peter Su, the former chief of staff, gave the Star Tribune an audio recording of the conversation, which he said occurred on Aug. 7. Hagedorn, in an interview, did not dispute that it was an authentic recording.

Hagedorn's First District re-election campaign released what it called an internal review over the weekend asserting that Su had directed contracts for the mail pieces, funded through a congressional process called franking, to two companies. One is owned by Su's brother and the other is owned by John Sample, another part-time employee in Hagedorn's professional office.

"[T]here is nothing in [the recording] to suggest that Congressman Hagedorn had knowledge of the hiring of the vendors, that he approved of them or that anyone other than Mr. Su was the one who selected them," said Elliot Berke, the attorney who produced the internal review.

Berke, who was hired by Hagedorn's re-election campaign, also called it a "potentially illegal recording" and said the matter would be turned over to Capitol Police and the Justice Department for further investigation. But Washington, Minnesota and Virginia, where Su lives, are all states that only require one party on a call to be aware of the recording.

The internal review paid for by the Hagedorn campaign states: "When congressman Hagedorn became concerned about potential excessive franking charges incurred by his office on June 18, 2020, he took swift action and took corrective action." Su was terminated the next day, according to the review.

But Su said the phone call he recorded — about six weeks after his departure from the office — shows that Hagedorn's concerns as depicted in the internal review are being inflated in retrospect as he faces a tough re-election battle.

In the recorded conversation, Hagedorn is describing when he became aware there were concerns about the spending on the mailers: "It was presented as if, that John shouldn't have done the work, that your brother shouldn't have been hired, because that was unethical. Which it's not," Hagedorn says in the recording.

Later in the conversation, back on the subject of the mailings, Hagedorn said: "If your brother was doing the work, and he and I did not have a personal relationship and all that stuff going in, I don't believe there's any problem there either."

Hagedorn said his attorney's analysis is that there is no House rule "that would preclude a chief of staff from hiring anyone they have a relationship to, but that doesn't mean I didn't have a problem with it, in fact quite the opposite," he said. "I took immediate action."

Hagedorn said he didn't know about the companies' connections to his staffers before concerns were raised.

Ethics experts say the U.S. House handbook prohibits members from using official office funds to financially benefit themselves or anyone with whom they have a personal or professional relationship.

In Berke's review, it says its findings have been turned over to the House Ethics Committee. That panel does not comment on potential investigations of members of the House. The review also says that Hagedorn, as an elected member of Congress, takes responsibility for decisions about franking "even when those actions are taken without his knowledge."

The Star Tribune previously reported on e-mails between Hagedorn and members of his congressional staff that show the congressman taking an active interest in the mailer program. And in Su's recording, Hagedorn at one point says that he wanted the mail pieces to go to "every damn household down there."

A spokesperson for Abernathy West, the company owned by Su's brother, said it sent out "a dozen unique mailings consisting of over 300,000 pieces of mail" to Hagedorn's constituents under "very tight time constraints" and that "Abernathy West stands behind the quality and value of its work."

In a statement provided to the Star Tribune, Su said he did not personally benefit from the contract to the firm owned by his brother.

"I acted in good faith at all times and did not personally profit or intend to bypass any established office procedures or potentially or technically violate any rule of the House. I never benefited, either directly or indirectly, from Jim Hagedorn's mailer program," Su said. "It's a shame that some politicians and their fixers will say and do anything just to win re-election."

Hagedorn, a Republican first elected in 2018, is in a tough race with DFL candidate Dan Feehan in the congressional district that covers southern Minnesota from the Wisconsin to South Dakota border. His spending on franking has become the subject of criticism by Feehan and DFL leaders, following reports that his office had spent more of its total yearly budget by the end of March than any other member of the House — most of it on constituent mail.

DFL Party Chairman Ken Martin said over the weekend that taxpayers have no reason to trust Hagedorn after he "spent months lying to Minnesotans and trying to cover up the corruption within his own office."

The internal review found much of that money was spent with two firms connected to the staffers at "significantly" higher rates than other companies charge. Abernathy West has received nearly $350,000 for constituent mailing since last year. Invocq Technologies, a Texas-based company Sample co-owned, has received more than $110,000 from Hagedorn's office.

Hagedorn temporarily suspended all constituent mail and Sample's employment during the review. Sample said his two-person company became a vendor after Su "expressed dissatisfaction with the vendor franking proposals."

Sample has agreed to reimburse the office $16,500 for "inadvertent" charges from the company and rejoined Hagedorn's staff on July 9. Hagedorn's office said it has re-established a policy that no contracts be awarded without preapproval from the proper House committees and authorities.

Briana Bierschbach • 651-925-5042

Patrick Condon • 612-673-4413