Mollohan Scandal Property Goes to Foreclosure

Media reports indicated that a vacant lot on Bald Head Island, North Carolina co-owned by Rep. Alan Mollohan (D-WV) and his former aide Laura Kuhns, and their spouses, is going to a foreclosure auction.

The lot was one of five properties co-owned by the Mollohans and Kuhnses that have been part of a controversy that prompted an on-going Justice Department investigation, and Mollohan’s resignation as Ranking Member on the House Ethics Committee in 2006.

Kuhns is President and CEO of Vandalia Heritage Foundation, one of five nonprofits to which Mollohan has earmarked well over $100 million. The cozy relationships between Mollohan and his earmark recipients, against the backdrop of a rapid increase in Mollohan’s net worth, created the appearance that Mollohan is benefitting personally from the earmarks.

This appearance was enhanced by an amendment (actually a letter) Mollohan filed with the House Clerk on December 23, 2005 regarding the Mollohan/Kuhns partnership that owned the lots. In the letter, Mollohan claimed that he had “inadvertently” failed led to report a $35,000 loan from the Kuhnses. Mollohan stated:

The loan was used principally to make payments on the partnership borrowings, and related expenses.

In other words, the joint expenses of the partnership were being paid by the Kuhnses.

Why Multi-Millionaire Mollohan is defaulting on the Bald Head Island lot is not known. Maybe he wants to experience what it is like for thousands of other less well-heeled West Virginians who are facing foreclosure. More likely, he is just walking away from a bad investment in the face of soft real estate values.

All other appearances are that the Mollohan-Kuhns relationship is as close and lucrative as ever. Steven Allen Adams of West Virginia Watchdog has been chronicling some recent developments:

A circle of earmarks to and campaign donations from a W.Va. non-profit organization continue even while Rep. Alan Mollohan, D-W.Va., is still under investigation for earmarks to this group.

Board members, executives, and family members associated with the Vandalia Heritage Foundation gave nearly $10,000 between 2006 and 2008, benefiting both of Mollohan’s re-election campaigns.

In a separate posting, Adams reports:

A real estate venture with high hopes of bringing a new W.Va. Army National Guard facility to Parkersburg has brought Democrat Rep. Alan Mollohan back together with a group he has funneled earmarks to for years.

For over a year officials with the City of Parkersburg and the Wood County Development Authority have been working with Mollohan to replace the current National Guard Armory, located in South Parkersburg, with a brand-new facility that can double as a civic center. The current armory is too small for the needs of the local National Guard.

To prepare and plan for a new facility, Mollohan included $2 million for the design of a new National Guard facility in his 2010 appropriations request. He had originally requested $39 million for a training facility and a field maintenance shop.

Of course, the project is to be managed by Vandalia Heritage Foundation. And that’s not all. According to a third Watchdog posting:

A Vandalia Heritage Foundation theater restoration project in Tucker County continues to enjoy earmarks from Rep. Alan Mollohan, D-W.Va.

Mollohan earmarked $150,000 for the Cottrill’s Opera House restoration project, located in Thomas, W.Va.

Mollohans troubles began in 2006. Following a nine-month investigation, NLPC filed a 500-page Complaint on February 28, 2006 with the U.S. Attorney for the District of Columbia detailing more than 250 misrepresentations and omissions on Mollohan’s disclosure reports.

The Complaint prompted a front-page Wall Street Journal story by the late John Wilke on April 7, 2006 titled “Appropriations, Local Ties And Now a Probe of a Legislator,” touching off a firestorm that resulted in Mollohan’s resignation from the House Ethics Committee on April 21, 2006.

Mollohan blamed NLPC:

…I have been subjected to a concerted, politically motivated attack on my ethics that has been fomented by an ultra-conservative organization in Washington.

As did House Speaker Nancy Pelosi:

The allegations against Congressman Mollohan originate from the National Legal and Policy Center, which engages in highly partisan attacks on Democrats.

Like House Ways and Means Chairman Charles Rangel (D-NY), Mollohan attempted to hide a dramatic increase in wealth. Every Financial Disclosure Report filed by Mollohan from 1996 through 2004 had major errors. Most of the errors had the effect of understating the value of his holdings – sometimes the assets he did not disclose exceeded the ones he did.

Mollohan’s 2000 disclosure report listed his income-producing assets as being worth from $179,012 to $562,000 with liabilities of $170,000 to $465,000. Among the liabilities was Visa credit card debt listed as $45,003 to $150,000.

Just four years later, Mollohan’s 2004 disclosure report showed him with assets worth $6,313,025 to $24,947,000 offset by liabilities in the $3,665,011 to $13,500,000 range.

Mollohan’s 2000 disclosure report listed his income-producing assets as being worth from $179,012 to $562,000 with liabilities of $170,000 to $465,000. Among the liabilities was Visa credit card debt listed as $45,003 to $150,000.

Just four years later, Mollohan’s 2004 disclosure report showed him with assets worth $6,313,025 to $24,947,000 offset by liabilities in the $3,665,011 to $13,500,000 range.