Investigation of Mollohan a tangle of politics

By Paul J. Nyden
Staff writer

CHARLESTON, W.Va. - The Justice Department announced late last month that it was ending its investigation into the personal finances of Rep. Alan B. Mollohan, D-W.Va., and his support for nonprofit organizations.

The Jan. 26 statement, which closed an investigation that began in early 2006, said no charges are being considered against Mollohan.

Reports about that investigation surfaced after the National Legal and Policy Center -- a Falls Church, Va.-based organization with ties to right-wing groups -- filed a formal complaint against Mollohan with the U.S. Attorney for the District of Columbia on Feb. 28, 2006.

The NLPC launched a public campaign against Mollohan in April 2006, shortly before West Virginia's May 9 primary elections.

Over the years, the group has targeted other political leaders including House Speaker Nancy Pelosi, D-Calif., former Sen. Hillary Clinton, D-N.Y., and billionaire author and activist George Soros.

The group routinely criticizes labor unions and also attacked AARP for opposing Social Security privatization.

Founded in 1991, the NLPC received $1.43 million in foundation grants between 1995 and 2005. Three foundations affiliated with the conservative Scaife family in Pittsburgh gave NLPC $1.18 million of that total.

Mollohan became the ranking Democrat on the House Ethics Committee in January 2003.

Mollohan believes NLPC filed its 2006 complaint against him because of the major role he played in preventing Republican leaders from weakening House Ethics Committee rules.

Republican leaders formally abandoned their efforts to weaken committee rules on April 27, 2005.

The DeLay investigation

In 2004, Mollohan and Ethics Committee Chairman Joel Hefley, R-Colo., led a bipartisan investigation into complaints filed against Democrats and Republicans, including powerful House Majority Leader Tom DeLay, R-Texas, who was forced to resign.

On Oct. 6, 2004, Hefley and Mollohan sent DeLay a six-page letter detailing ethics charges against him, including misusing "resources of ... the Federal Aviation Administration" during a "partisan conflict in the Texas House of Representatives."

The Hefley-Mollohan letter also criticized DeLay for helping energy companies organize a golf fundraiser at the exclusive Homestead Resort in Hot Springs, Va., in June 2002 to raise hundreds of thousands of dollars for their political action committees.

At the time, many energy companies were fighting state and federal government efforts to enact tougher regulations.

On Feb. 2, 2005, House Republicans replaced Hefley as chairman of the Ethics Committee. They also removed from the committee Hefley and two other Republicans who had supported the ongoing investigations.

In 2005, DeLay pleaded not guilty to criminal charges in Texas that he violated state campaign finance laws and laundered money. But the charges against him never went to trial.

Republicans on the weakened House Ethics Committee voted against taking any action against DeLay on March 30, 2006.

Earlier that month, on March 7, DeLay won his Republican primary in Texas, with 62 percent of the vote.

But on April 3, three days after one of his former senior aides pleaded guilty to charges of corruption in the Jack Abramoff scandal, DeLay announced he would withdraw from the November election.

DeLay stepped down from his position as House Majority Leader, but always claimed all charges against him were politically motivated and came from people like Mollohan.

Two of DeLay's top aides were later convicted in the scandal surrounding Abramoff, a top congressional lobbyist and closely associated with DeLay.

Abramoff began serving time in a Cumberland, Md., federal prison after pleading guilty in January 2006, in two different federal courts, to five felony counts of defrauding American Indian tribes of tens of millions of dollars and paying off public officials with costly meals, sports trips and other gifts.

Abramoff is scheduled to be released later this year, on Dec. 1.

NLPC charges against Mollohan

The 500-page NLPC report, released in the midst of these controversies, alleged Mollohan committed "over 250 misrepresentations and omissions" on financial disclosure forms he filed during the previous nine years.

The NLPC repeatedly refused all requests to release its report to the public. In May 2006, NLPC Chairman Ken Boehm told The Charleston Gazette, "No, we're not going to release the report."

After NLPC sent its report to federal prosecutors, and leaked selected portions to some newspapers, Mollohan immediately reviewed his financial reporting forms.

Mollohan said he found fewer than 20 "unintentional and immaterial mistakes." He quickly corrected those mistakes and released all of his financial filings to the public.

But Mollohan never knew all the specific allegations NLPC made against him.

The group's report alleged Mollohan improperly directed federal funds to a variety of nonprofit groups in West Virginia's 1st Congressional District.

Those groups, some led by people who were Mollohan's friends, promoted tourism, community development, ecological management and high tech industries.

Boehm first disclosed his group's formal complaint against Mollohan in a press release on April 7, 2006.

Among the charges was one that Mollohan and his wife "had more than $2 million in real estate investments with a former staffer, Laura Kuhns, and her husband. Kuhns ran a nonprofit, Vandalia Heritage Foundation, which has received more than $28 million in appropriations earmarks with Mollohan's help from 2000 through 2005."

But the Justice Department exonerated him of any wrongdoing.

Last month, Mollohan said, "These nonprofits are all about building West Virginia's economy and making our state a better place to live. I am very happy that they will be able to put this behind them."

Mollohan's 2006 campaign

These controversies were a major factor in Mollohan's 2006 re-election campaign.

State Delegate Chris Wakim, R-Ohio, a Wheeling businessman, was "reportedly recruited for the race by White House political operative Karl Rove," according to Mollohan's Jan. 26 press release.

Wakim's own financial disclosure forms reported assets worth between $2.06 million and $7.63 million in real estate, IRA and other investment funds.

On March 10, 2006, a few days after the NLPC gave its report to the U.S. attorney's office, House Speaker Dennis Hastert, R-Ill., appeared at a campaign rally for Chris Wakim.

Later that year, the Economic Freedom Fund funded negative advertisements attacking Mollohan and other Democratic congressional candidates in Georgia, Iowa and Oregon.

Created on Aug. 1, 2006, the Economic Freedom Fund was financed with $5 million from its sole contributor, Houston housing developer Robert J. Perry.

During the 2004 presidential election, Perry had given $4.5 million to finance the negative "Swift Boat" ads attacking the military service of Democratic candidate Sen. John Kerry, D-Mass., during the Vietnam War.

Based in Sacramento, Calif., the Economic Freedom Fund paid for negative television ads, radio ads and mailings attacking Mollohan. The group also funded automated telephone calls criticizing him and urging people to vote for Wakim.

In the Nov. 7 general election, Mollohan defeated Wakim, 64 percent to 36 percent.

Reach Paul J. Nyden at pjnyden@wvgazette.com or 304-348-5164.


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