West Virginia Democrat is Scrutinized

By Jeffrey H. Birnbaum
Washington Post Staff Writer
Monday, May 15, 2006

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.

Mollohan used his seat on the House Appropriations Committee to secure more than $150 million for five nonprofit groups. One of the groups is headed by a former aide with whom Mollohan bought $2 million worth of property on Bald Head Island, N.C.

Controversy over this blending of commerce and legislation has triggered a federal probe, cost Mollohan his position on the House ethics committee and undermined the Democrats' effort to portray the GOP as the party of corruption because of the Jack Abramoff scandal. As early as today, the 12-term congressman will admit that he misstated some transactions in his congressional filings, according to Mollohan staffers.

"Mollohan has earmarked tens of millions of dollars to groups associated with his own business partners. That immediately raises the question whether these funds were allocated to promote the public good or to promote his interests and the interests of his partners," said Ken Boehm, chairman of the National Legal and Policy Center, a conservative watchdog group. "He also got very rich very quick, and that suggests a relationship that is suspect if not corrupt."

Mollohan is now engaged in the most arduous election of his career. Republicans have recruited Chris Wakim, a state legislator and Persian Gulf War veteran, to run against him, and have sent President Bush and House Speaker J. Dennis Hastert (R-Ill.) into the district to campaign. To fight back, Mollohan is raising much more money than ever, is visiting the district more often, and has hired a nationally known media consultant to help craft his commercials.

During a trip home last week to northern West Virginia, Mollohan was questioned at length by a radio interviewer from Weirton about his business connections. But everywhere else, Mollohan -- the son of a longtime congressman and a cousin of a former senator -- was welcomed as a patron of the state. At a huge police training event in Moundsville, a federal employee thanked him for providing the money for "everything you see today." In Morgantown, at a meeting about a missing-child alert system that his legislation had underwritten, he received a standing ovation.

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."

The House ethics committee warns lawmakers to avoid exactly those kinds of situations. Its Web site admonishes federal officials not to accept favors or benefits "in circumstances that might create the appearance of influencing the performance of official duties."

Mollohan's transactions -- first reported last month by the Wall Street Journal -- were uncovered by the National Legal and Policy Center, a small research institute in Virginia that gets some of its funding from the politically conservative Scaife family of Pittsburgh. In March, NLPC turned over 500 pages of documents to the FBI alleging that Mollohan engaged in nine years of false reporting and the appearance of impropriety in his business contacts with contractors.

As a result, Mollohan, 63, faces a widening federal investigation. The FBI has notified his nonprofit organizations that they will be subpoenaed soon and, according to Mollohan, a subpoena has already been served on a D.C. real estate company in which he has invested. In addition, Mollohan plans to divulge that he misstated on House financial disclosure forms the amount of loans and income from some of his real estate holdings.

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