April 9, 2006
WV’s Mollohan Subject of Federal Investigation; He’s Top Democrat on House Ethics Committee
By HNN Staff
Fairmont, WV (HNN) – The Wall Street Journal broke the story on the front page of the Friday, April 7, 2006 edition. The New York Times followed on Saturday, April 8, 2006. By today, everybody will have a story on the federal probe into the financial affairs of U.S. Rep. Alan Mollohan, D-WV, representing the Mountain State’s first congressional district.
Caught flat-footed by the Wall Street Journal scoop, The Washington Post on Saturday, April 8, reported with a second-day lede that Republican leaders called on Mollohan, 62, to step down from his ranking position of the House Ethics Committee because of allegations that he provided legislative “earmarks benefiting companies and individuals who helped make him a millionaire.”
The Post reported that “Mollohan called the charges ‘spurious’ and said both the accusations and the calls for him to step down are politically motivated.”
Mollohan, a native of Fairmont, was first elected to the 98th Congress in 1982 and has been re-elected ever since. The current salary for rank-and-file members of the House and Senate is $165,200 per year.
The Wall Street Journal reported on Friday, April 7 that federal prosecutors have opened an investigation of Mollohan's personal financial disclosures. The article also raised questions about earmarks – special provisions included in federal spending bills -- that he has steered to nonprofits in West Virginia in the past five years.
According to The Journal, Mollohan, a member of both the ethics and appropriations committees, has not been accused of any wrongdoing. He acknowledged in an interview making real estate investments with the head of a nonprofit company that received federal money from earmarks Mollohan backed. But, he contended, he is fully "at risk" in the investments and received no special favors in either financing or locating the investments. GOP House leaders, stung by the Tom DeLay and Duke Cunningham scandals, affecting a Texas and a California House member, respectively, called for action against the veteran West Virginia congressman.
"I believe it would be prudent at this point for Mr. Mollohan to resign from the ethics committee until this investigation is completed," said Rep. Thomas M. Reynolds (R-N.Y.), chairman of the National Republican Congressional Committee. House Speaker J. Dennis Hastert (R-Ill.) called on House Minority Leader Nancy Pelosi (D-Calif.) to press Mollohan to step down.
Pelosi, born Nancy D’Alesandro in Baltimore, the daughter of a mayor of Baltimore who later became a U.S. Congressman (Thomas D’Alesandro Jr.), shot back, according to the Post: "Speaker Hastert and his Republican cohorts are responsible for the most corrupt Congress in history, and the American people are paying the price at the gas pump, at the pharmacy and with record-high deficits. The speaker should join me in directing the ethics committee to get to work, and not cast aspersions on the independent and distinguished ranking member."
In addition to the Wall Street Journal article, a commentary in the National Journal and the lengthy New York Times story, the conservative National Legal and Policy Center announced it filed a complaint against Mollohan on Feb. 28, 2006 with the U.S. attorney in Washington, the Washington Post reported.
The National Journal, distinguishing between the Abramoff-DeLay nexus and the Cunningham bribery case, opined that “The danger for Dems in the Mollohan case is that they may not be able to make the argument …. that this is merely an isolated incident. The actions taken by Mollohan – and we must remind that he has not been charged with wrongdoing – have nothing to do with a ‘culture of corruption’ or a ‘K St. Project.’ Instead, they are representative of how some in Congress do business and how, in particular, those who sit on the Approps committee are, how shall we put it, uniquely situated to do that business. In other words, it says that the whole system is rotten and it ain't just one side of the aisle that milks it.”
The New York Times story, by Jodi Rudoren, reported that Mollohan has been accused of “exploiting his powerful perch on the House Appropriations Committee to funnel $250 million into five nonprofit organizations that he set up.”
The most ambitious effort by Mollohan, The Times reported, is a “glistening glass-and-steel structure in Fairmont … thanks to $103 million of taxpayer money he garnered through special spending allocations known as earmarks. The building is likely to sit largely empty because the Mollohan-created organization that it was built for, the Institute for Scientific Research, is in disarray, its chief having resigned under criticism about his $500,000 annual compensation, also paid for with earmarked federal money.”
Rudoren wrote that “Mollohan has recruited many of the nonprofits' top employees and board members, including longtime friends or former aides, who in turn provide him with steady campaign contributions.”
In addition to the Institute for Scientific Research in Fairmont, the Wall Street Journal cited:
* $31 million for the West Virginia High Technology Consortium Foundation;
* $28 million for the Vandalia Heritage Foundation;
* $6 million for the MountainMade Foundation. The Thomas, WV (Tucker County) facility is housed in buildings restored with funds from the Vandalia Heritage Foundation, according to the MountainMade web site.
Among the real estate holdings of Mollohan and his wife Barbara are a half interest in a 52-unit condo project in Washington called The Remington. Barbara Mollohan manages rentals in the project and the couple have a half-interest in 27 of the units, The Journal reported. They co-own them with a relative, Joseph L. Jarvis, a retired businessman who received subcontracts from an Energy Department facility in Mollohan’s district. The Journal also reported that the Mollohans own – in partnership with a former staffer, Laura Kuhns, who heads the Vandalia Heritage Foundation, five properties on exclusive Bald Head Island, N.C., valued in local real estate records at $2 million, but undoubtedly worth much more in today’s superheated real estate market.
The Journal article, by John R. Wilke, added that the Mollohans recently purchased a $1.45 million oceanfront house on Bald Head Island, next door to a house owned by Laura Kuhns and her husband. The weekly rental on the Mollohan house: $8,555.