Money? Funny.

06.16.15 9:25 AM ET

Did This Congressional Powerhouse Write a Bill to Help His Donor ‘Make a Quick Buck’?

Rep. Ed Royce says it’s a misunderstanding. But government watchdogs are growling about his bill to set up a ‘Freedom News Network,’ when his friend has an outfit of the same name.

Ethics watchdogs and government officials are up in arms about a bill by House Foreign Affairs Committee Chairman Ed Royce that appears to benefit a longtime associate.

Robert Cristiano—a sports psychologist, real estate executive, and self-proclaimed “personal friend” of Royce’s—has emerged as the central player in an apparent plan to benefit from the congressman’s efforts to reform the U.S. government’s international broadcasters, including Voice of America and Radio Free Europe.

Royce’s legislation would replace the existing broadcasters with a new government-funded broadcasting corporation called the “Freedom News Network.” As it happens, Cristiano has created a corporation with the very same name. It’s a vehicle that could then vacuum up new contracts, new salaries, and new opportunities.

Royce denies that he’s involved in anything improper. He even shot down the idea that he and Cristiano are friends. But this bill is the latest example, watchdog groups say, of how relationships with players on Capitol Hill can be leveraged in unseemly ways.

Cristiano has purchased lobbying services, the Radio Free Europe building in Prague, and hosted a fundraiser for Royce. To observers inside the government and out, these are facts that suggest he is trying to manipulate U.S. international broadcasting for personal gain.

“It appears that certain people intend to profit from [Royce’s] bill. There should be an inquiry,” said a member of the Broadcasting Board of Governors, the agency that oversees U.S. international broadcasting. “It seems they’re playing with American foreign policy to make a quick buck.”

Government watchdogs make a similar point about the apparent conflict of interest—and the need for more scrutiny of Cristiano and Royce’s ties.

“A full investigation of the working relationship between Royce and Cristiano is warranted,” said Craig Holman, who works for the government watchdog group Public Citizen.

At the heart of the story is Royce’s effort to reform U.S. international broadcasting, which includes entities like Voice of America, Radio Free Europe, and Radio Liberty.

Radio Free Europe and Radio Liberty provide accurate news and information in societies without a free press. Voice of America exists both to help explain the policies and views of America to the world and to be an authoritative source of news. It is within these broadcasters that U.S. government interests are supposedly mixing with private interests.

Supporters of Royce’s efforts argue that international broadcasting’s current structure is illogical and inefficient, and in desperate need of structural reforms.

So Royce has proposed legislation that, if passed, would consolidate some of these groups into one organization called the “Freedom News Network.”

And last year, Cristiano formed his own organization: the “Freedom News Network.”

“I imagine its purpose will be to influence, for either financial or ideological reasons, what [U.S. international broadcasting] does,” said Bud Jacobs, a board member for the Public Diplomacy Council and a former senior State Department adviser on public broadcasting.

Cristiano said the Freedom News Network name was merely a “coincidence,” despite the fact that lobbyists for his real estate group have advocated for a bill that would create an entity with the same name.

Royce added that reforming U.S. public broadcasting was a longtime goal of his and that he had no idea he and Cristiano both had settled on the same “Freedom News” name.

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“I was unaware that the Freedom News Network name had been mimicked. I will see that this name is changed before the legislation becomes law…Improving U.S. international broadcasting has been a priority for me for more than 20 years,” Royce told The Daily Beast.

Noah Bookbinder, executive director for the government watchdog Citizens for Responsibility and Ethics in Washington, found the explanation tough to swallow.

“It’s hard for me to imagine that [Royce] and a longtime friend came up with the exact same name for a news network by accident,” he told The Daily Beast. “Whether the proposed legislation is good public policy I don’t know, but it does look like it may help people who are supporting Royce financially, and people who are friends. If that’s the case, that’s troubling, even if it’s not a violation of any laws or rules.”

Cristiano, who has no media background but says he’s been a friend of Royce’s for more than a decade, has taken steps in recent years to play an outsize role in American public broadcasting, seemingly out of nowhere.

In 2012 Cristiano’s real estate group L88 purchased the building that houses Radio Free Europe/Radio Liberty in Prague, with an eye toward acquiring State Department property in the future.

In the years since, L88 has spent hundreds of thousands of dollars in lobbying on issues relating to public broadcasting. In September 2014, Cristiano held a fundraiser at which L88 employees donated thousands to Royce’s campaign.

Cristiano says he’s never discussed international broadcasting legislation with Royce. But Royce said he had met with the Prague Freedom Foundation, where Cristiano is a director, while developing the legislation earlier this year.

“I’ve known Ed Royce for probably 15 years. I’ve lived in Southern California for 39 years,” Cristiano told The Daily Beast. “Of all of our projects, this reform bill is a miniscule part of our business. Miniscule…Anything that assists our tenants is of business to us…There are many people, including Chairman Royce, who think it will benefit Radio Free Europe, Radio Liberty, and make it healthy. I support Chairman Royce and his efforts to pass reform legislation.”

Royce told The Daily Beast that he was not friends with Cristiano, a man who had held a fundraiser for him. He said he was not aware of any plan to personally benefit from his legislation.

“I’m not personal friends with…Mr. Cristiano,” Royce said. “Like any congressional office, we meet with hundreds of people each year to discuss legislation.”

Danielle Brian, executive director of the Project on Government Oversight, one of Washington’s best known watchdog groups, called the apparent relationship “a great example of how, in Washington, something doesn’t need to be illegal to be unseemly.”

“The name of the game on Capitol Hill is about forging connections and relationships, and leveraging those to get information that can help make money,” Brian added.

Cristiano’s L88 outfit has spent more than a half a million dollars on lobbyists to influence the U.S. policy on public broadcasting over the last several years: more than $400,000 to BGR, and $180,000 to the DMA Group.

DMA Group lobbyist Paul Mica said DMA had lobbied for Royce’s bill in the last Congress but said that was limited to handful of meetings and emails.

BGR acknowledged having lobbied on public broadcasting issues but denied having advocated for Royce’s bill. “Nearly all of BGR’s work on behalf of L88 took place in 2014 and was related to policy and funding issues with respect to Radio Free Europe,” a BGR spokesperson told The Daily Beast.

L88 and Freedom News Network are only two of the many organizations Cristiano leads. A third is the Prague Freedom Foundation. All three list their Washington, D.C., address as the offices of the BGR group, which is headed by former Gov. Haley Barbour, where L88 subleases office space.

Cristiano and his L88 partner, John Todoroki, are raising red flags in Prague. The American Chamber of Commerce in the Czech Republic took the unprecedented step of warning its members about the firm last week. The chamber said it had received nine complaints stemming from non-payment of services relating to L88’s building in Prague, which houses Radio Free Europe/Radio Liberty.

The complaints alleged Todoroki urged those to whom he owned money not to press him for payment because he had connections with the Republican Party and the U.S. government.

“Many of the complainants have reported that Mr. Todoroki made assertions of political connections with the US government or with one of the main political parties,” wrote chamber executive director Weston Stacey. “There is no special treatment…the relationship between L88 and RFE is that of landlord and tenant, and nothing more.”

Responded Cristiano, “when you get into a business dispute with parties who are local, and we’re not local, it doesn’t surprise me that they’ve gone to the lengths of slander to dirty our name.” Todoroki did not respond to a request for comment.

The Prague Freedom Foundation, meanwhile, is supposed to be a group that promotes independent journalism. But its major players are the same as L88’s, and U.S. international broadcasting insiders suspect that it was set up as a front to increase L88’s credibility in its strategic goal to acquire State Department properties and influence public broadcasting.

L88 and the Prague Freedom Foundation are closely linked: PFF has sent out event invites with L88 email addresses; PFF is housed in the L88-owned building in Prague; and the lobbying activities done by the DMA Group are listed in public disclosures as for “L88 on behalf of Prague Freedom Foundation.”

“The Chamber of Commerce email and apparent links to pending legislation raise serious questions about the intentions of L88 and its alter ego Prague Freedom Foundation,” said a member of the Broadcasting Board of Governors.

Alexa Corse contributed to this report.