West Virginia Congressman Under Investigation

Discussion in 'Politics and Religion' started by jyris, May 16, 2006.

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  1. jyris


    From today's Washington Post:

    "Starting in the 1990s, Rep. Alan B. Mollohan (D-W.Va.) chose an unusual way to funnel federal funds into his poverty-ridden district. He set up a network of nonprofit organizations to administer the millions of dollars he directed to such public endeavors as high-tech research and historic preservation.

    Over the same period, Mollohan's personal fortunes soared. From 2000 to 2004, his assets grew from no more than $565,000 to at least $6.3 million. The partners in his rapidly expanding real estate empire included the head of one of these nonprofit groups and the owner of a local company for which he arranged substantial federal aid...

    In an interview, Mollohan said he is unapologetic and proud of the thousands of jobs he has brought to West Virginia and that, legally speaking, everything he has done to secure them is "squeaky clean." But he acknowledged that his actions might look incriminating and that he may have had an ethical "blind spot" that prevented him from questioning whether he, as a government official and vice chairman of the ethics panel, should have invested with such close associates.

    "I would have done things differently," he said as he drove through West Virginia's northern panhandle. "It puts you in a position where people could say there's something untoward going on."...

    Mollohan calls the charges against him inaccurate and partisan. He says NLPC is part of an orchestrated effort by Republicans to undermine the Democrats' anti-corruption message -- a charge NLPC denies -- and to transform West Virginia's congressional delegation from majority Democratic to majority Republican. He also asserts that he is being punished for leading the ethics committee when it sanctioned former House majority leader Tom DeLay (R-Tex.) three times in a single year...

    From his perch on the Appropriations Committee, Mollohan has directed hundreds of millions of dollars into his district for that purpose. His colleague, Sen. Robert C. Byrd (D-W.Va.), a master of such "earmarking," was responsible for relocating to the state large facilities of NASA and the FBI, among other agencies. But Mollohan was a major player, too. His projects have made him, in effect, one of the region's leading industries.

    In his home town of Fairmont, near Morgantown, for example, federal funds allocated at Mollohan's behest have purchased 500 acres for an office park that includes the Alan B. Mollohan Innovation Center, an office building for high-tech firms; a taxpayer-financed, $136 million building (complete with swimming pool and spa) that its manager hopes will house a federal agency; and other offices filled primarily with companies with federal contracts.

    The congressman brought in so many taxpayer dollars that he decided to create a special set of organizations to oversee them. These nonprofit groups include the West Virginia High Technology Consortium Foundation, which manages the office park, and the Vandalia Heritage Foundation, which focuses on refurbishing real estate.

    The practice of setting up such entities is rare and has been widely criticized as a mutual back-scratching exercise. "These types of organizations permit lawmakers to reward their own people, and themselves, without having to pay federal taxes," said Thomas A. Schatz, president of Citizens Against Government Waste, a watchdog group.

    Mollohan defends the groups as the best way to control the appropriations he sends back home. He also said they were needed because it was hard to find people he could trust to run the projects. "There is a limited pool of people who are committed to a service mission," he said...

    Mollohan denies that he raked off any of the federal funds that went to his state while his personal portfolio ballooned. Rather, he said, his newfound wealth is due primarily to the run-up in value of his family's ownership of 27 condos in a Foggy Bottom high-rise. By leveraging that asset, he said, he has been able to buy other properties, usually with the help of loans, in North Carolina and West Virginia.

    One of those properties is a $900,000, 300-acre farm along West Virginia's Cheat River that Mollohan purchased last year with a childhood friend and business associate, Dale R. McBride. A donor to Mollohan's campaigns, McBride is active in the high-tech consortium, a director of the Robert H. Mollohan Family Charitable Foundation (located in the Fairmont office park) and a pleader for taxpayer financing.

    McBride asked Mollohan to earmark money for the U.S. space program to buy a special lightweight pallet that McBride's FMW Composite Systems Inc. had the expertise to produce. Mollohan complied, and FMW got a $1.5 million contract in 2005. That same year Mollohan and McBride became 50-50 partners in the farm.

    The federal contract and the farm acquisition "were completely independent," McBride said. But he does understand with "regret" that the two are being examined together.

    Mollohan promises a report soon that will explain how he so quickly became a multimillionaire."

    Probably by being so committed to a "service mission," don't you think?