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Rep. Mollohan Corrects 6 Years of Financial Reports Following Complaint by National Legal and Policy Center
(Comtex Business Via Thomson Dialog NewsEdge) WASHINGTON, Jun 14, 2006 (U.S. Newswire via COMTEX) --Yesterday Rep. Mollohan (D-WV-1) filed a letter with the Clerk of the House of Representatives correcting 6 years' worth of previously filed financial disclosure reports. The Mollohan amendments came following two months of denying that his reports contained errors and claiming that such allegations were "entirely and demonstrably false." The letter amended filings for the years 1999 through 2004 while an accompanying letter from Rep. Mollohan's accountant admitted omissions and misrepresentations for the years 1996 through 1998. In all, several dozen corrections involving millions of dollars in assets were disclosed.
Mollohan's Financial Disclosure Report covering 2005 was also released, revealing that he had repaid a $35,000 loan from his business partners Don and Laura Kuhns. Laura Kuhns is a former Mollohan staff member who heads Vandalia Heritage Foundation, a non-profit which received more than $28 million in federal earmarks with Mollohan's help. Mr. and Mrs. Kuhns jointly invested with Rep. Mollohan and his wife in more than two million dollars worth of property on North Carolina's Bald Head Island where the two couples have adjoining ocean front beach houses. The loan was made by the federal grantee and her husband to Rep. Mollohan in 2004. The Ethics in Government Act required Rep. Mollohan to disclose any liabilities to a single creditor over $10,000 during the year yet Mollohan's 2004 report failed to disclose the loan.
Mollohan's amendments filed with the Clerk show that he misstated investment income, failed to disclose an asset worth more than $2 million for five consecutive years, misidentified assets, failed to disclose liabilities exceeding $2 million associated with a secretly held asset and misstated a loan liability amount. During 2000, Mollohan reported income producing assets of $179,012 to $562,000 yet failed to disclose his 50 percent interest in a $2.3 asset -- meaning that he failed to disclose more of his assets than he disclosed.
NLPC Chairman Ken Boehm stated, "Mollohan's claim that he failed to disclose the asset for five years because it was somehow "in substance a liability of a business" is flatly contradicted by the public record documents showing that Mollohan and his business partner were the secured parties and their company Remington, Inc. was the debtor. Five years' worth of Mollohan's own documents contradict Mollohan's claim as does the fact that he later disclosed the Note but failed to amend to earlier filings until yesterday."
While Mollohan did not correct his reports prior to 1999, he did release a letter from his accountant revealing additional misrepresentations and omissions in financial disclosure reports filed prior to 1999. The largest problem dealt with Mollohan's repeated failure to disclose the 50 percent interest he and his wife held in a company called Remington Group, LLC. The accountant reveals that Mollohan and Jarvis and their spouses set up Remington Group in 1996, used it to purchase Remington, Inc., the owner of 17 condo units in the Foggy Bottom area of Washington. Remington Group, LLC borrowed $1.5 million to finance the acquisition and later purchased three individual condo units from Mollohan and his wife before merging with Remington, Inc. effective January 1, 1999.
Among the problems cited by the accountant are failures to disclose income from both Remington Group and Remington, Inc., misrepresenting the interest in Remington Group as being in Remington, Inc. and the failure to disclose the interest in Remington Group for the years 1996, 1997 and 1998.
Finally, Mollohan's own accountant stated regarding Mollohan's failure to disclose his 50 percent interest in the Remington, Inc. Note in 2003:
"You did include on your 2003 FDS a payable to United Bank in the range of 1,000,001 ??- 5,000,000 but should also have included an equal note receivable from INC (Remington, Inc) in the range of 1,000,001 ??- 5,000,000."
In other words, Mollohan's accountant is advising him that the $2.3 million Remington Note from 1999 -- which had grown to be an asset worth over $4 million in 2003 -?? should have been disclosed. The accountant is also correctly describing the nature of the arrangement as a payable to United Bank as well as a note receivable from Remington which contradicts Mollohan's weak attempt to argue that somehow he did not need to disclose the Remington note because it was "in substance a liability of the business."
Boehm concluded, "Mollohan cannot have it both ways. If NLPC's allegations were all false, why is he amending six years worth of financial disclosure reports involving millions of dollars worth of assets?"
Founded in 1991, NLPC promotes ethics in public life and sponsors the Government Integrity Project. NLPC has been successful in exposing major federal conflict of interest and corruption cases.
http://www.usnewswire.com
Ken Boehm of the National Legal and Policy Center,
703-237-1970, Website: http://www.nlpc.or
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