September 9, 2012; Source: Tampa Bay Times
In fairness to Vern Buchanan, the Republican congressman from Sarasota, Fla., the Department of Justice recently announced that it has ended all of its criminal probes into allegations of campaign irregularities by Buchanan, including charges that he had improperly reimbursed former employees for their contributions to his campaign committee. His former Hyundai dealership business partner had made the allegations, though despite the DOJ action, he and Buchanan are suing each other in civil court. There is still a congressional ethics investigation into Buchanan regarding charges of jury tampering, but where and when that investigation will go, given the murky functionality of the Congressional Ethics Committee, is anyone’s guess.
As the Tampa Bay Times put it, “So many allegations and investigations have swirled around Buchanan in recent years it’s hard to keep up to speed.” Buchanan seems to step into murky situations regularly. Just as the DOJ investigation was shutting down, the Tampa Bay Times reported on Buchanan’s unusual business dealings with the local chapter of Habitat for Humanity.
Here’s what the Tampa Bay Times reported as the particulars in this other case: By 2009, work had long come to a halt on a Bradenton, Fla. real estate project called Cortez Landings being developed by the congressman’s brother, Ed. Other than a few homes, the property was mostly “weedy vacant lots.” Somehow, the Manatee County Habitat for Humanity decided to purchase the Cortez Landing development for $1.4 million at the height of the real estate recession that particularly slammed Florida. In hindsight, it seems the land wasn’t worth $1.4 million or even half the purchase price. At best, the property is worth $500,000 so, as an appraiser who recently joined Habitat’s board noted, Habitat clearly overpaid for the property. Though Ed Buchanan lost money on the deal (he originally paid $2.3 million for the site), he didn’t lose nearly as much as he would have had the property sold for its real market price.
How does the congressman fit into this? The Tampa Bay Times reports:
“Rep. Buchanan benefited from the deal, as well.
Habitat still owes $1 million to a company owned by Buchanan's wife and one of his top executives. And unbeknownst to Habitat until Thursday, Buchanan has been using the Habitat mortgage as collateral for a multimillion dollar loan he got from Bank of America.
If he defaults, Bank of America would own the Habitat mortgage and could require the nonprofit to pay the full $1 million it owes when the final payment comes due less than two years from now.”
Habitat says it has the money to pay off the loan if need be, but at the moment it is paying a flat $50,000 a year in interest to Sandra Buchanan’s firm. At the same time, Habitat says that fundraising is slow, which has caused a delay in its ability to develop the site.
By assigning the Habitat mortgage to the Bank of America as collateral, and by not telling Habitat he was doing so, Congressman Buchanan hasn’t treated the Manatee Habitat very well, as the organization’s executive director has noted. Habitat deserved to be told that its mortgage was potentially going to be in the hands of the nation’s largest bank. That’s a material change in Habitat’s fiscal situation. The congressman should have treated the nonprofit with the kind of respect and transparency that he might have shown his business partners and associates, especially considering that this nonprofit is a vital housing provider for very low income households in Bradenton/Sarasota.—Rick Cohen