Meeks Defends Secret Loans, Blames NLPC for Controversy
On Saturday, Congressman Gregory Meeks (D-NY) made the following statement:
Beginning at the height of the selection process for Aqueduct Racino development investors as I fought for local participation, and for the past several months, right-wing interest groups such as the National Legal and Policy Center and sensationalist media outlets have lodged unfounded attacks against me and other respectable members of the Queens community related to my family home and my involvement with New Direction Local Development Corporation.
While speaking out against these baseless allegations, I felt it was important to confirm that I have been in full compliance with the House of Representatives' financial disclosure requirements.
Accordingly, prior to the May 17, 2010 filing deadline, I requested a one month extension, until June 16, 2010, to file my 2009 House of Representatives financial disclosure statement so that I could undertake an extremely thorough review of my finances and previous disclosure statements. This review resulted in two important discoveries that have motivated my actions relevant to disclosures over the past month:
1. My previously filed financial disclosure statements omitted two personal loans-one from the Congressional Federal Credit Union in September 2008, and another from my friend, Ed Ahmad, in January 2007-and two board positions that I have held since 2004. I take full responsibility for and regret this oversight. I disclosed all of these items on my 2009 financial disclosure statement, I immediately filed amended statements for years 2004 through 2008, and I have implemented processes to guard against such oversights in the future. The two loans on the amended filings are the same two loans disclosed on my 2009 filings with adjustments for compounded interest.
2. When Ed Ahmad loaned me $40,000 in January 2007, interest rates were as high as they have been in nearly a decade. Today, interest rates are as low as they have been since the 1950s. When I saw this, there was no question that it made financial sense to pay back the loan from Ed Ahmad and replace it with a lower interest rate loan secured by my home, which is exactly what I did during the same week that I filed my current and amended financial disclosure statements.
At least one news outlet has concocted a timeline of these events that sacrifices truth for sales, but the actual timeline is quite simple: I was being subjected to completely baseless attacks, conducted a detailed financial review while continuing to respond to these allegations, discovered that I had made a legitimate, regrettable oversight with regard to my financial disclosure statements, immediately and voluntarily took action to bring myself into full compliance with House requirements regarding those statements, and made the financially prudent decision to replace a high interest loan with a lower interest loan. I addressed these issues as effectively as possible while in the middle of the conference committee process for the greatest Congressional financial reform undertaking in decades; I did this to ensure that I was in compliance and could remain focused on addressing the critical issues facing residents in my district and our nation.
Meeks states that he has been "in full compliance with the House of Representatives' financial disclosure requirements," and then proceeds to describe his noncompliance for which he takes "full responsibility."
Meeks' claims that his June repayment of the Ahmad loan was prompted by lower interest rates. Of course, the Federal Reserve slashed rates to near 0% in December 2008. If Meeks is such a savvy consumer, what took him so long? More likely, FBI questions about the loan spurred Meeks to action.
Prevailing interest rates would have no effect on an unsecured personal loan of the variety Ahmad apparently made to Meeks. According to two unnamed sources cited by the New York Daily News, "there was no discussion about interest rates, due dates or collateral requirements for the loan." Meeks paid back $59,000 on a $40,000, which would be consistent with an interest rate of 12.5%. Meeks refused a Daily News request to produce documents regarding the loan. If the rate was established at the time of repayment, Meeks story about falling interest rates is false.
Of course, none of this explains what Ahmad got, if anything, in return for the "loan." Ahmad told the New York Post that he has no relationship with Meeks. Presumabley, Ahmad doesn't make unsecured personal loans to anyone for no reason. Meeks statement raises more questions than answers.