Congressional land grabs for fun and profit

Peter Schweizer, author of the provocative new book, Throw Them All Out, already made some waves talking about insider stock trading deals by members of congress and their staffers. But over the weekend, he continued his tour promoting the book and expanded his allegations into other types of secretive profiteering. He sat down on the Fox News show, Justice with Judge Jeannie Pirro, and broke out some allegations about manipulation of real estate by elected officials who use their legislative powers and inside knowledge to reap big profits.

Demonstrating that such problems are pervasive in both parties, he begins by talking about former Republican Speaker of the House, Dennis Hastert. A transcript follows the video below, with the pertinent portion starting right around the two minute mark.

Justice Jeannie: Dennis Hastert as well. Now here’s a guy who was a high school wrestling coach. When he retires as Speaker of the House, he’s worth eleven million dollars?

Peter Schweizer: Yeah. I’d say it’s pretty remarkable. If you don’t have a taste for the stock market, and Dennis Hastert didn’t, Dennis Hastert liked buying land. So he legally bought 160 acres of farmland in rural Illinois, which is the state he was representing. A few months after he bought that land he legally put a $220M earmark into the federal highway bill to build a highway. And you know where that highway went? It went right by that land he’d just bought. And when it became public knowledge that this highway was being built with our money he was able to turn around and sell that land – and the total time here is a year – he was able to more than double his money. And that was courtesy of our taxpayer money. And this goes on all the time as well.

JJ: You know, Peter, I don’t remember there even being an issue about that at the time.

Peter: There’s not.

The author then turns his attention away from Hastert and toward an old favorite on the Democrats’ side of the aisle who will probably be familiar to Hot Air readers: Maurice Hinchey. (D-NY22)

JJ: Alright, let’s talk about the other side of the aisle. We’re talking about Democrats and Republicans here. We’ve got Maurice Hinchey from New York. This guy comes into Congress in 2004, net assets 74 thousand dollars. Four years later he’s worth $727K because.. why?

Peter: Well, because of land deals. There was land that he owns in his district. He put in an earmark to upgrade the sewer system and everything else, it spiked the value of the land and he saw the benefits from it. And it’s very common that this goes on…

What’s scary about this is that it’s all legal. So long as you can demonstrate that at least one other person profits from it, you can get away with it.

The story that Schweizer is referring to will not actually come as “news” to long time readers of these pages, since Ed Morrissey was reporting on it repeatedly during the 2010 election cycle. The deal in question was the Partition Street Project, located in the village of Saugerties, New York. Hinchey and a couple of his business partners profited handsomely from the development of a new conference center and other construction projects on land where Hinchey was a part owner after he earmarked money to improve the property. Reporters frequently asked Hinchey about it to his great consternation. In fact, as Ed reported at the time, the congressman pretty much assaulted one journalist who dared to press him on the question.

There are a couple of problems with the information in this interview, however, which are worth noting. First, Hinchey didn’t “arrive in Congress” in 2004. He was elected to Congress in 1992. Also, while he has certainly made a lot of money during his tenure from various deals, it didn’t all come from the Partition Street Project, so that portion is a bit misleading. He’s been involved in all sorts of odd transactions, including selling one of his houses to one of his wives – who was lobbying on an issue Hinchey was writing legislation about – for one dollar. The list goes on.

Second, the author’s contention that these deals are “all legal” and you can “get away with it” if anyone else profits are also partially misleading. It is true that members can be involved in such deals, but if they request an earmark which may directly result in their seeing a profit, they are required by law to file specific forms detailing the circumstances, amounts, etc. Hinchey never filed those forms in relation to Partition Street and I know for a fact that several residents of the district submitted requests to the House ethics committee that he be investigated for it, but it never went anywhere.

In any event, these deals are apparently far more common that we’d like to think. I really need to pick up a copy of that book and go through it for more tidbits.

DISCLOSURE STATEMENT: Though I think most regular readers already know it, we may as well make sure we’ve got full disclosure. My background in knowing about the Partition Street Project and other strange deals involving Congressman Hinchey stems from the fact that I ran the communications shop for the Republican challenger for Hinchey’s seat in the 2010 election. It was a spirited run to give the boot to an 18 year incumbent in a D+7 district, but we came up three points short in the end. I dealt with reporters on a regular basis over these scandals, but it simply never caught the national media’s attention.