Rep. Eric Swalwell abandoned his lawsuit against Federal Housing Finance Agency Director Bill Pulte on Friday, ending a legal fight the California Democrat launched in November after Pulte forwarded a criminal referral regarding Swalwell's mortgage to the Department of Justice.
The congressman had accused Pulte of abusing his authority by making the referral and asked the courts to demand that Pulte withdraw it. Now, without fanfare, the suit is gone.
The referral itself, however, is not.
Swalwell is not the only prominent Democrat to find himself on the wrong end of a mortgage fraud referral since Trump returned to office last year. Sen. Adam Schiff and New York Attorney General Letitia James have faced criminal referrals in connection with mortgage fraud as well. Pulte also sent a similar referral to the Justice Department last year for Federal Reserve Board of Governors member Lisa Cook, as The Hill reports.
Lawyers for Swalwell claimed that Pulte searched for "the private mortgage records of several prominent Democrats," framing the referrals as politically motivated. They described Swalwell as "one of the president's most vocal and visible critics in Congress."
That framing is instructive. The argument isn't that the underlying facts are wrong. The argument is that Swalwell shouldn't be scrutinized because he's a political opponent of the president. If a Republican were under a mortgage fraud referral, the question from every newsroom in America would be simple: Did you commit fraud? When it's a Democrat, the question somehow becomes: why are you being investigated?
The Government Accountability Office said in December that it was investigating Pulte over the mortgage referrals following a request from Senate Democrats. So the response to potential fraud isn't to examine the fraud. It's to investigate the person who flagged it.
Swalwell is running for governor of California, which raises a separate and equally interesting question: Does he actually live there?
Conservative filmmaker Joel Gilbert tried to have Swalwell removed from the November ballot in California over his residency, claiming the congressman does not live in the state and is therefore ineligible to run. Swalwell is listed, along with his wife, as a resident of Livermore, California. But Tom Steyer's general counsel put it more bluntly, stating that Swalwell "appears to live in California on paper only."
Steyer's campaign filed a petition to California Secretary of State Shirley Weber to enforce a dormant residency requirement in the race. A letter to Weber obtained by Politico warned that the issue could have consequences beyond the campaign trail:
"The Trump Administration could question Swalwell's legitimacy as Governor and, therefore, imperil California's receipt of federal funds, the state's ability to deploy the California National Guard, and act in emergencies."
When even a billionaire Democratic rival is raising the residency alarm, the "far-right conspiracy" defense starts to look thin. And yet that is precisely where Swalwell's campaign went, claiming Gilbert's challenge "has sunk to a new low, peddling far-right MAGA conspiracy theorist Joel Gilbert's tired talking points."
Note the tactic. Don't address whether you live in California. Attack the person asking the question. When Tom Steyer's own campaign raises the same concern, you simply pretend it isn't happening.
Swalwell filed this lawsuit with great public energy, positioning himself as a brave critic standing up to a weaponized federal agency. It was good campaign material for a gubernatorial run built on anti-Trump theatrics.
But lawsuits have discovery. Lawsuits have records. Lawsuits require you to open books you might prefer to stay closed. And now the lawsuit is gone.
The criminal referral to the Department of Justice remains. The residency questions remain. The pattern of several prominent Democrats facing mortgage fraud scrutiny remains. What doesn't remain is Swalwell's willingness to fight this out in a courtroom where the rules favor evidence over press releases.
If the referral was baseless and the lawsuit was righteous, dropping it makes no sense. If the referral touched something real and the lawsuit risked exposing more than it shielded, dropping it makes perfect sense.
Swalwell chose the exit. The question is what he's walking away from.
