Rep. Alan Mollohan (D-WV) has been under investigation for more than three years after NLPC exposed his cozy relationships with the recipients of earmarks that he sponsored. Yet, as chairman of an Appropriations subcommittee, he has jurisdiction over the budget of the Justice Department, which includes the FBI, the very entity that is investigating him.
Mollohan claims he recused himself in a January 2007 letter to the full Committee Chairman David Obey (D-WI) but he refuses to release the letter. Republicans say they have never seen it.
House Speaker Nancy Pelosi is AWOL on the issue, having said nothing since she forced Mollohan out as ranking member of the Ethics Committee in 2006. At the time, she blamed NLPC for Mollohan’s problems.
The controversy flared on June 17 during a debate on the $64 billion Commerce, Justice and Science appropriations bill. Rep. Louie Gohmert (R-TX) accused Mollohan of a continued conflict of interest.
As someone who served as a judge and a chief justice and had it constantly drubbed into my head during hours and hours and hours of ethics classes about the appearance and potential conflicts of interest…This is an elephant in the room…The Department of Justice budget is being dealt with here…So I’m hoping that the record can be clear because it does look funny, it smells bad, if someone’s under investigation and they’re managing the budget for those who are doing the investigation…It clearly is a conflict of interest.
The FBI initiated its investigation of Mollohan in March 2006 after NLPC filed a 500-page Complaint detailing more than nine years of omissions and misrepresentations on Mollohan’s Financial Disclosure Reports about his personal assets.
Gohmert is to be applauded for reminding his congressional colleagues – and especially Pelosi – that it is completely inappropriate for Mollohan to chair the Appropriations Subcommittee on Commerce, Justice, Science and Related Agencies that controls the budget of the law enforcement agency investigating him.
NLPC Chairman Ken Boehm, who conducted the nine-month investigation of Mollohan says, “It is not credible that a Congressman can chair a subcommittee that controls the budget of the Justice Department that is investigating him and not have a conflict of interest.”
Mollohan is ultimately in charge of determining Justice Department appropriations. In July 2007, Mollohan voted against an amendment that would have increased the budget of the FBI by $6 million.
Rep. Steve King (R-IA) said that such votes show that Mollohan’s recusal is a sham. “His pledge to recuse himself didn’t hold itself through the appropriations process,” said King. “I think he’s stayed out of nothing.”
Moreover, by setting the budget Mollohan has a great deal of influence in setting policy. A congressional staff source told Connie Hair for a column in Human Events:
Any cabinet secretary worth their salt and any other senior official in the department is a lot more worried about what the Appropriations Committee is asking for or insisting on than what their authorizing committees are asking for because the appropriators control the money.
Mollohan called the allegations made against him “rubbish” and insisted that “whatever financial success my wife and I have had is a result of my wife’s expertise and her years of experience in real estate.” Despite these protestations, it is suspicious how Mollohan became wealthy very quickly while earmarking huge sums of money to friends and business associates.
Mollohan appears to have violated House rules and the Ethics in Government Act by failing to properly disclose on his official financial disclosure forms many important details of this sudden influx of income which is what prompted the NLPC investigation in the first place.
NLPC’s Complaint cited 262 separate omissions and misrepresentations on Mollohan’s disclosure forms over nine years. Disclosure forms are signed under penalty of perjury and violations can have serious consequences. In 1984, Republican Congressman George Hansen of Idaho was sentenced to 15 months in prison for not reporting $200,000 in loans.
As an appropriator, Mollohan “earmarked” at least $178 million from 2000 to 2004 to a handful of nonprofit organizations in his district, which covers the north central part of West Virginia. Earmarking is the controversial practice whereby an individual Congressman can direct taxpayer funds to the purpose of his or her choice.
Although earmarking money for nonprofits is not uncommon, the amounts in Mollohan’s case are. Even more unusual is the fact that Mollohan set up the recipient groups himself. The Mollohan nonprofits then hired his political supporters, former staffers, and/or a business partner to run them. Officials of the nonprofits have contributed about $400,000 to Mollohan’s campaigns from 1997 to the present.
During this same period, Mollohan became rich.
His year 2000 disclosure report listed his income-producing assets as between $179,000 and $562,000 with liabilities as between $170,000 and $465,000. Among the liabilities was a high-interest credit card debt listed as between $45,000 and $150,000.
But four years later, Mollohan’s 2004 report showed him with assets worth between $6.3 million and $24.9 million, offset by liabilities of between $3.6 million and $13.5 million.
Mollohan claimed that the increase in his holdings was “easily explained” due to appreciation in the Washington, DC real estate market. Mollohan and his wife co-own 27 condo units in a Washington, DC building known as The Remington, along with a partner named Joseph Jarvis, Jr., his third cousin.
After media coverage of NLPC’s Complaint, Mollohan began disclosing more information related to the Remington. His 2008 disclosure form reports his share in the Remington to be worth between $1,000,000 and $5,000,000.
Mollohan and his wife also co-owned four parcels of property on Bald Head Island, North Carolina, with Don and Laura Kuhns, worth $2 million. In addition, the two couples owned side-by-side beach houses on the Island. Laura Kuhns is Mollohan’s former appropriations staffer and a key figure in the operation of several of the taxpayer-funded nonprofit organizations created by Mollohan.
Mollohan’s claim that the spike in his wealth can be explained by an appreciation in real estate values is simply not believable. For those figures on his disclosure forms to be accurate, the value of his real estate would have had to increase by at least 6,566%.
Mollohan’s resignation from the Ethics Committee in March 2006 prompted a fresh round of questions concerning his finances. On April 24, Brian Wilson of the Fox News Channel asked the Congressman if there were any other people with whom he had business dealings that also received government money. Mollohan replied “no.” The next day, the Wall Street Journal published a front-page story substantially based on information provided by NLPC. It reported that Mollohan purchased a farm in May 2005 on West Virginia’s Cheat River jointly with Dale McBride, the chief executive of FMW Composite Systems, a defense contractor. Mollohan added $2.1 million to a 2005 spending bill for FMW.
The tens of millions of federal dollars Mollohan has directed to his network of nonprofit groups have provided business opportunities for his political supporters.
For example, Laura Kuhns is President/CEO of Vandalia Heritage Foundation, which has received $28 million in Mollohan earmarks. Vandalia, whose purported mission is historic preservation, has longstanding ties to the McCabe-Henley real estate development firm. Laura Kuhns formerly served as a Managing Director of McCabe-Henley while her husband Don currently works for the company.
Laura Kuhns also served as executive director of the West Virginia High Technology Consortium Foundation in its early years and subsequently as a member of its Technical Advisory Board. This group has received at least $31 million in Mollohan earmarks. McCabe-Henley helped develop the group’s headquarters, the Alan B. Mollohan Innovation Center, and was involved in a major expansion of the surrounding office park.
NLPC’s investigation found numerous other instances of McCabe-Henley benefiting from transactions with the nonprofits.
When he resigned from the Ethics Committee, Mollohan claimed:
I have been subjected to a concerted, politically motivated attack on my ethics that has been fomented by an ultra-conservative organization in Washington.
Pelosi piled on by saying:
The allegations against Congressman Mollohan originate from the National Legal and Policy Center, which engages in highly partisan attacks on Democrats. These attacks are an attempt to deflect attention from the long list of Republican criminal investigations, indictments, plea agreements¸ and resignations that have resulted from the reported long-term and extensive criminal enterprise run out of House Republican leadership offices.
Mollohan was not the chairman of the appropriations subcommittee overseeing the Justice Department’s budget when it started its investigation in the spring of 2006. Pelosi should never have allowed Mollohan to assume the chairmanship in 2007 given the obvious conflict of interest. Mollohan’s chairmanship is just as much a conflict of interest today as it was then.
Republicans are out of power. Pelosi is now responsible for enforcing ethics in the House. She can’t claim an end to the “culture of corruption” as long as Mollohan retains his subcommittee chairmanship.
photo: Rep. Alan Mollohan (AP/Wide World)