An analysis of public records by the National Legal and Policy Center (NLPC) has found more than $20 million in federal stimulus funds benefitting real estate projects financially tied to Joseph Shepard, husband of Missouri Senator Claire McCaskill.
Earlier this month, the Associated Press published an analysis, stating, “businesses affiliated with the husband of Senator Claire McCaskill have received almost $40 million in federal subsidies for low-income housing developments during her first five years in office…”
The NLPC analysis released today showed more than $20 million in financial benefits from the federal stimulus law to real estate projects associated with McCaskill’s husband, with all of the $20 million benefitting projects different than those identified by the Associated Press story.
Missouri Tax Credit Fund: More Than $1 Million in Annual Income For the McCaskill Household in 2009, 2010 and 2012
While the AP study focused on federal subsidies going to entities listed on Financial Disclosure Reports filed by Senator McCaskill, NLPC reviewed voluminous public records involving the Missouri Tax Credit Fund, L.P. (MTCF), a business listed as an asset by Senator McCaskill on her reports.
None of the six real estate projects identified by NLPC as receiving over $20 million in federal stimulus funds were listed on McCaskill’s Financial Disclosure Reports or covered by the AP analysis.
According to McCaskill’s Financial Disclosure Reports, MTCF was listed as having an asset value of over $1 million in 2009, 2010, and 2011. Asset values are reported in broad ranges with “Over $1,000,000” being the highest category. Therefore, it is possible that the asset value of MTCF is much larger than $1,000,000.
In 2008, prior to the stimulus law, officially known as the American Recovery and Reinvestment Act, passed in 2009, MTCF was listed by McCaskill as having an asset value of “$500,000 to $1,000,000.”
The lucrative nature of this asset is underscored by McCaskill’s Financial Disclosure Reports showing “over $1,000,000” in income for each of the years 2009, 2010 and 2011.
Since this category is the highest listed in the Senate Financial Disclosure Reports, it is likely that the annual income from MTCF to Senator McCaskill’s husband’s business was higher than $1,000,000 in each of those years.
The current standard annual salary for a U.S. Senator is $174,000.
Follow the Money: How Stimulus Funds Came to Benefit McCaskill Household Income
There is no question that Senator McCaskill was deeply involved in the policies and politics of the stimulus bill signed into law by President Obama on February 17, 2009. The public record shows Senator McCaskill speaking in favor of it on the Senate floor, supporting amendments, voting for it, and issuing press statements about it.
One such McCaskill press statement issued April 20, 2009 proved very prophetic at least for one Missouri family:
U.S. Senator Claire McCaskill wants Missourians to know about all the ways the American Recovery and Reinvestment Act will help put a little extra cash in their pockets over the coming months and during next year’s tax season.
Buried in the massive legislation were several provisions designed to finance low-income housing. The first program, called the Tax Credit Assistance Program (TCAP), disbursed funds in the forms of grants or loans for capital investment to state-run entities to promote housing projects, especially those that were “shovel-ready.”
The second program, known as the Tax Credit Replacement Program (TCR) allowed state entities to exchange unused housing credits for a federal grant whose proceeds then would be available for construction or rehabilitation of qualified low-income housing.
NLPC’s chart below shows the stimulus funding for each of the two programs by project.
The Missouri recipient of these stimulus funds was the Missouri Housing Development Commission (MHDC).
The Executive Director of MHDC was a former developer, Pete Ramsel. He resigned without citing a reason following the awarding of most the Missouri funds.
Mr. Ramsel was a former business partner of Senator McCaskill’s husband, Joseph Shepard, according to a February 4, 2010 article in the Columbia Daily Tribune.
NLPC discovered the connection between Mr. Shepard’s Missouri Tax Credit Fund and six real estate projects which received more than $20 million in federal stimulus funds by examining public records from the Missouri Housing Development Commission, the web site maintained by the federal government for stimulus fund information and the Missouri web page which archives Uniform Commercial Code (UCC) financial statements.
The UCC filings document the key role played by Mr. Shepard’s Missouri Tax Credit Fund (MTCF) in financing the six projects.
The UCC filings show the MCTF filing as a secured party for financing involving each of the six real estate projects. Each project is indicated as a recipient of stimulus funds on both MHDC and federal lists.
Additional UCC filings show MTCF then using its position as a secured party to obtain bank financing. Both types of UCC filings tie MTCF to the financing of the projects.
The ties do not end there. A number of the UCC filings show the contact for the filing as being Sheri Barto, with the email address containing sugarcreekrealtyllc.com in the suffix.
Sugar Creek Realty LLC is described as providing “asset management, consulting, and state equity finance services” for a long list of projects, including five of the six projects benefitting from the stimulus funds.
Sugar Creek Realty, LLC appears on Senator McCaskill’s 2011 Financial Disclosure Report for the year 2011 as an income-producing asset with a value of $500,000 to $1,000,000, which produced income for the McCaskill household of $100,000 to $1,000,000. And Mr. Shepard’s LinkedIn Page lists him as “Owner at Sugar Creek Realty, LLC.”
Therefore, at least five of the six projects funded by stimulus funds produced income for two valuable assets belonging to Senator McCaskill’s husband: The Missouri Tax Credit Fund and Sugar Creek Realty, LLC.
The cozy arrangement does not end there.
Horizon Asset Management, LLC, which is listed as a debtor to the Missouri Tax Credit Fund on many of the UCC filings is hardly a stranger to Mr. Shepard’s complicated network of assets. According to the annual IRS Form 990 for Horizon Housing Foundation, the foundation owns 99.9% of Horizon Asset Management, LLC. Several incorporators of the foundation have lengthy business ties to Shepard interests.
Kathleen Rorris, one of the leaders of Horizon Housing Foundation listed her employer as Sugar Creek Realty when making major donations to the McCaskill for Missouri campaign in 2005 and 2006. In fact, Ms. Rorris was one of the initial directors of Horizon Housing Foundation according to the group’s original incorporation papers filed with the state of Kansas in 2000. She is currently the COO of Mr. Shepard’s Sugar Creek Realty.
Another Horizon Housing Foundation leader, Alice Duarte-Fletcher, was a member of the initial board of the group and an executive with two of Mr. Shepard’s companies.
NLPC, an ethics watchdog, has a long history of expertise in reviewing public documents to unravel complicated financial dealings by public officials in both parties. In 2007, Senator Lisa Murkowski (R-AK) sold back land to a developer a day after NLPC alleged in a Complaint to the Senate Ethics Committee that the original sale was a “sweetheart” deal.