A government watchdog group filed an ethics complaint Wednesday against U.S. Sen. Lisa Murkowski, charging that her 2006 purchase of an exclusive Kenai riverfront lot was a “sweetheart deal” from Anchorage businessman Bob Penney.
The complaint, brought by Ken Boehm, chairman of the conservative-leaning National Law and Policy Center of Falls Church, Va., also charged that Murkowski filed false information about the land deal on her annual financial disclosure and obtained special treatment on a mortgage from the Ketchikan bank where her sister serves as a director.
Murkowski spokesman Kevin Sweeney said the senator would have no comment Wednesday. Penney said from his summer home on the Kenai River outside Soldotna that he wouldn’t comment, either.
Murkowski, 50, an Alaska Republican in her first full term in the Senate, bought the 1¼-acre, undeveloped lot on the famed river from Penney, 75, a real estate developer and sportfishing advocate. Penney’s own home is next door.
Murkowski failed to report the Dec. 22, 2006, transaction on her 2006 financial disclosure, but in recent interviews acknowledged she and husband, Verne Martell, paid $179,400 - the 2006 value assessed for tax purposes by the Kenai Peninsula Borough.
Just weeks after the purchase, the borough issued its 2007 assessed value for the lot - and it showed a rise to $214,900. While that represented an instant paper profit of $35,500, local real estate experts said the land was worth even more and will continue to rapidly appreciate.
'COMIC OPERA OVERTONES'
In his complaint to the Senate Ethics Committee, Boehm asserted that Murkowski was offered the deal because she was a senator. And Boehm ridiculed an assertion by Penney that he thought the land was worth far less.
“The denial of knowledge of the value of a prime piece of real estate by a multimillionaire developer who lived next to the property and an attorney/real estate investor turned U.S. Senator took on comic opera overtones when Penney told the press: ‘Word of honor, I did not know what the assessed value was … I thought it was still $120,000,’ ” Boehm wrote.
“It doesn’t pass the straight-face test or the laugh test,” Boehm said in an interview. “On what planet is that an excuse?”
Boehm said the difference between the price paid and the true value amounted to an illegal gift to Murkowski of between $70,000 and $170,000, based on the estimates of the real estate agents.
And Murkowski knew at the time that the deal was trouble, Boehm said. Last week, Martell called talk show host Rick Rydell of KENI-AM to defend the transaction. But he said that Murkowski herself was raising questions about the deal from the beginning.
“When we signed the loan, Lisa signed on it and said, ‘This might come back to bite us,’ ” Martell said on the program. “I said, ‘Well, we’ll deal with that when it comes.’ ”
Boehm’s 15-page complaint says, “The facts in this case are so strong that it is hard to imagine a more compelling case for violation of the Senate Gift Rule.”
FAMILY TIES
Murkowski’s office had said the purchase didn’t have to be disclosed on her 2006 financial report because it was exempt personal or recreational property. Boehm said Murkowski might be correct that she didn’t have to list the land as an asset, but she still had to disclose the transaction separately, yet failed to do so.
The mortgage for the property is yet another issue, Boehm said.
Murkowski and Martell took out a loan for 80 percent of the purchase - $136,561 - from First Bank in Ketchikan. The Murkowski family has long been associated with that bank. Lisa once sat on the board, and her sister, Eileen Van Whye, is a shareholder and director.
A deed of trust filed with the Alaska recorder’s office securing the note doesn’t expire until Jan. 1, 2046 - a 39-year term. When Murkowski listed the mortgage in her 2006 disclosure, she described it as a 15-year note. The president of the bank, Bill Moran, said in an interview Wednesday that it was actually a two-year note. Citing privacy, he declined to provide the document.
Quoting from media reports, Boehm said the bank would normally write a mortgage of a maximum seven years for that kind of transaction.
“It appears that Sen. Murkowski received loan terms not available to the general public,” Boehm charged.
In an interview, Boehm acknowledged that the Senate Ethics Committee could bury his complaint but said he hoped that, under the current climate in Washington and Alaska, it would give it a full hearing.
Alaska’s other two delegates to Washington, Sen. Ted Stevens and Rep. Don Young, both Republicans, are under investigation in the FBI’s broad corruption probe in Alaska. Penney has acknowledged testifying before a federal grand jury about his knowledge of Stevens’ activities. In 2004, the Daily News reported that Penney invited Stevens into a land venture in Utah that turned a $15,000 investment by Stevens into more than $100,000.
The National Law and Policy Center was founded in 1991 and generally follows a free-market philosophy, Boehm said. It has brought ethics cases and criminal complaints against both Republicans and Democrats, he said, and monitors companies and labor unions as well. According to press reports, the group worked with the government to uncover wrongdoing between Boeing and the Air Force officials involving refueling tanker plane leases that led to jail terms for two executives.
Boehm, an attorney, is an ex-aide to a Republican congressman, former talk show host in Philadelphia and was legislative director of the American Tax Reduction Network, according to his biography on his organization’s Web site.
Find Richard Mauer online at adn.com/contact/rmauer or call 257-4345. Find Daily News Soldotna bureau reporter Brandon Loomis online at adn.com/contact/bloomis or call 1-907-260-5215.
