Feds Investigating Rep. Alan Mullohan's Finances

Amy Ridenour reports that the DOJ is investigating Rep. Alan Mullohan (D-WV) after a nine month investigation by the National Legal and Policy Center:

NLPC’s investigation began when its review of the Financial Disclosure Reports of House Appropriations Committee members showed a sharp increase in Rep. Mollohan’s assets from 2000 to 2004. A closer examination revealed that Mollohan and his wife had more than $2,000,000 in real estate investments with a former staffer, Laura Kuhns, and her husband. Kuhns ran a nonprofit, Vandalia Heritage Foundation, which had received more than $28 million in appropriations earmarks with Mollohan’s help from 2000 through 2005. She was also on the board of other nonprofit groups which had received over $100 million in earmarks of federal funds during the same period with Mollohan’s help.

Mollohan’s 2000 Financial Disclosure Report listed his income-producing assets as being worth from $179,012 to $562,000 with liabilities of $170,000 to $465,000. Among the liabilities was Visa credit card debt listed as $45,003 to $150,000.

Just four years later, Mollohan’s 2004 Financial Disclosure Report showed him with assets worth $6,313,025 to $24,947,000 offset by liabilities in the $3,665,011 to $13,500,000 range. It also showed him owning an oceanfront beach house on Bald Head Island, NC which was valued at $1,000,000 to $5,000,000. NLPC found that Mollohan was renting the beach house during the summer of 2005 for $11,975 a week.

The NLPC effort began in May 2005. Over the ensuing months, NLPC staff filed Freedom of Information Act requests and examined thousands of pages of real estate, financial and legal documents. Slowly a picture of Mollohan’s finances emerged that was sharply different from the one being portrayed in the Financial Disclosure Reports which the Congressman was required to file by the Ethics in Government Act.

This is what the NLPC discovered:

For the period 1996 through 2004, NLPC found that the Financial Disclosure Reports:

• repeatedly failed to disclose real estate assets which public records showed were owned by Mollohan and his wife

• repeatedly failed to disclose financial assets which public records showed were owned by Mollohan and his wife

• repeatedly failed to disclose major loans which were used in the acquisition of financial assets which were not being disclosed

• failed to disclose interests in companies which owned major assets

• grossly undervalued assets, giving purported valuations which were a small fraction of the assets’ true value

The Wall Street Journal placed this story on page one of today’s edition:

A 12-term congressman, Mr. Mollohan sits on the House Appropriations Committee, a panel that disgraced lobbyist Jack Abramoff dubbed the “favor factory.” Working with fellow West Virginian Sen. Robert Byrd, Mr. Mollohan has steered at least $178 million to nonprofit groups in his district over the past five years using “earmarks” — special-interest provisions that are slipped into spending bills to direct money to pet projects.

The money has brought more than jobs and building projects to his district. It has formed and financed a tight-knit network of nonprofit institutions in West Virginia that are run by people who contribute regularly to Mr. Mollohan’s campaigns, political-action committee and a family foundation. One of these people also invests in real estate alongside Mr. Mollohan and his wife. The network of contributors also includes private companies that get contracts through these nonprofits.

Such a pattern raises questions about whether the donations or deals might be a way beneficiaries of earmarks could influence the legislator’s actions. Now, federal prosecutors have opened an investigation of Mr. Mollohan’s finances and whether they were properly disclosed, according to people contacted in the inquiry. Mr. Mollohan hasn’t been accused of wrongdoing. A spokesman for the U.S. attorney’s office in Washington, whose public-corruption unit is conducting the inquiry, declined to comment.

The Hotline at the National Journal is following the story and reports that pressure is mounting for Rep. Mullohan to step down from his ethics post.

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