Rep. Mollohan Admits Errors in Disclosure
Wednesday, June 14, 2006
Rep. Alan B. Mollohan (D-W.Va.), under federal investigation for blending his commercial investments with his duties as a congressional appropriator, acknowledged yesterday that he misstated more than a dozen transactions on his financial disclosure forms.
The 12-term lawmaker said he recently discovered "a limited number of inadvertent errors" in his public reports from 1999 through 2004. He said he has amended those forms "to correct any inaccurate impressions about my finances." He also released a chronology to explain how his assets grew from no more than $565,000 in 2000 to at least $6.3 million in 2004, primarily through heavily leveraged real estate transactions.
Mollohan resigned earlier this year as the ranking Democrat on the House ethics committee after a federal probe was begun into his personal finances. The investigation started soon after the National Legal and Policy Center, a small, conservative research institute in Virginia, turned over 500 pages of documents to the FBI in March. The NLPC alleged that the documents showed that Mollohan engaged in nine years of false reporting and the appearance of impropriety in his business contacts with federal contractors.
Mollohan strongly denied any wrongdoing. "NLPC is dead wrong in implying that I have improperly benefited from my office," Mollohan said yesterday.
"The group also has ignored that we received a sizable inheritance, took on considerable financial risks and had the good fortune to be investing in a rising real estate market," Mollohan said. "It is those factors that are responsible for the increase of our assets."
The NLPC noted that one recent change in Mollohan's filing that the congressman did not highlight yesterday was a $35,000 loan in 2004 from Laura K. Kuhns and her husband. Kuhns, a former Mollohan aide, has invested in real estate with Mollohan and also heads a West Virginia foundation that benefits from appropriations targeted to the group by the lawmaker. The congressman's filing in 2005 indicates that he repaid the loan in full.
Mollohan's review of his reports, sparked by the federal probe, found many other errors as well.
He and his wife together have a 50 percent stake in a company that owns condominiums in a Foggy Bottom building. For 2000 to 2002, Mollohan said he understated his income from that company twice and overstated the income once -- in each case by several thousand dollars -- and amended his reports accordingly.
He also failed to report $2.3 million in loans that he took out to benefit the business, Remington Inc., from 1999 to 20002. Mollohan said that he did not have to disclose the loan under a strict interpretation of House rules but that "in an abundance of caution" he decided to do so. He also amended his public record to include a note receivable from Remington in 2003 of between $1 million and $5 million.
Mollohan added to his 2001 report his wife's purchase for $37,461 of a one-third interest in a company that owns the Ramada Inn in Morgantown, W.Va. She bought the share from Mollohan's brother. Mollohan and his sister own the other two-thirds of the firm, which had been owned by their now-deceased father, former congressman Robert H. Mollohan.
In 2003, Mollohan said he understated the size of a $1.5 million construction loan from Central Carolina Bank as "up to $1 million." The next year he said he misstated several dates on which he took out loans to buy property in North Carolina, and he also incorrectly listed the amounts of some of those loans.
In North Carolina, the Mollohans invested in four lots on Bald Head Island with Kuhns and her husband and also built neighboring beachfront houses there. Kuhns heads the Vandalia Heritage Foundation, which focuses on refurbishing real estate in Mollohan's district and uses money that Mollohan has earmarked for the purpose.
One of the lots was sold in January and the three others have been contracted for sale, Mollohan said in a statement. Mollohan has also said that he is selling his beachfront home in order to reduce his debts.
In his latest financial disclosure report, Mollohan said he values 12 separate properties at about $6.6 million and he added that they have mortgages of more than $4.4 million.