Democratic rep. files for bankruptcy

Companies affiliated with Hinojosa have thousands of dollars in state tax liens against them, these documents show. In the court filings, Hinojosa listed assets worth more than $1.4 million and debts in excess of $2.9 million, including the arbitration award.

Hinojosa’s annual financial-disclosure forms, on file with the House Clerk, detail a personal loan to a company called Hinojosa Development valued at $250,000 to $500,000. Hinojosa has declared this liability since he first won a seat in Congress in 1996.

But the arbitration award against Hinojosa was for a different company, H & H Foods, also known as H & H Meat Products. That company filed for bankruptcy in 2008, according to a local newspaper.

It is unclear why there was a discrepancy in Hinojosa’s financial disclosure reports over which company he had lent money and why his financial exposure was so much higher than the Texas Democrat had claimed. Ethics experts called the discrepancies troubling.

“It’s a huge gap,” said Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington. “”The disclosure reports are supposed to provide a clear financial picture of a member’s finances. That hasn’t happened here.”

In a statement given to POLITICO, Hinojosa indicated he would attempt to pay off his debts as soon as possible under federal bankruptcy rules. It will take several months for Hinojosa, his wife, Martha, and the couple’s creditors to reach an agreement on those payments.

“I have filed for bankruptcy protection under Title 11, Chapter 11 of the United States Code,” Hinojosa said. “My filing for bankruptcy was the result of the business loan I personally guaranteed for my family business, H & H Meat Products Company, Inc. (herein “H & H”) , when it was doing well financially. Although over the last 14 years I had no managerial responsibility or oversight of H & H, I remained financially obligated on a bank line of credit of H & H when it was forced into bankruptcy due to the recent economic downturn and financial market meltdown.”

Hinojosa added:” I have done everything humanly possible to avoid filing for bankruptcy protection to no avail. The bank debt of H & H was more than I could handle financially. It is my sincere desire to exit bankruptcy protection as soon as possible. In fact, chapter 11 bankruptcy will offer me an opportunity to propose a plan for the repayment of my debts over a period of time while under the guidance and protection of the U.S. Bankruptcy Court.”

Hinojosa’s bankruptcy filing states that the $2.6 million award to Wells Fargo was handed down in March 2010.

In May 2010, Wells Fargo sued Hinojosa in Hidalgo County, Texas, to confirm the award, documents from the Lone Star State show.

While that case was still ongoing, Hinojosa filed for bankruptcy on Dec. 18.

According to his bankruptcy filings, the 70-year-old Hinojosa has a 401(k) worth more than $610,000 and two homes valued at $263,000.

He also owns stakes in two companies – Hinojosa Development and Hinojosa Enterprises – worth roughly $395,000.

As part of the Chapter 11 bankruptcy process, Hinojosa and his wife were required to estimate the value of dozens of assets they own, down to furniture, cars, and personal items in great detail, such as “three watches” valued at $1,000.

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