Fla. Rep. Buchanan Criticized for Habitat for Humanity Deal

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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

  • duane overholt

    when are you people in Florida going to open your eyes and see Buchanan for what he is. A person who using others to benefit himself.
    Yet, the bigger question is where are the state and federal authorities who are suppose to defend the voters and consumers. Where are those government agencies that claimed that if you vote for us, let us put into play tort reform, pass laws that protect business such as madatory arbritration, we will protect you.
    It is like the CFO of that airline that said if the public is dumb enough to let us get away with these additional fees so be it. Buchanan and his staffs must be sitting back and saying the same thing behind closed doors.

    If you want to see facts-hard documents-internaL files and folders then access my new web site

    http://www.autofraudexpert.com (Press and Pass to access).

    Read and then make up your own mind. Is all of this true or false. Is all this hype political crap or are people trying to protect you from bad people —-even though you do not know it.

  • OscarZA

    So, it turns out that the Habitat board member who was initially interviewed says she was completely misquoted, and that Buchanan never misled them about anything.

    “I never said Vern Buchanan misled Habitat for Humanity. Nor do I believe so. In fact, he has been very helpful to the board. Claims that Buchanan misled Habitat are false, untrue, and dishonest.”

    In fact, she denounces the Fitzgerald campaign and the first reporter who “broke” this so-called “story” for taking her comments out of context, and then further twisting them for their own gain.

    Article that sets the record straight:


  • rick cohen

    Dear Oscar: Thanks for the information about the Staebler quote. As you clearly saw, we are dependent on the information we see in source articles for newswires, which sometimes, as in the case of the Staebler quote, can be wrong. However, Staebler’s (and other Habitat board members’) clarification that Ed Buchanan didn’t mislead them about the 2008 purchase still leaves a couple of questions. Yes, it’s true that land values were fluctuating wildly at the time, and maybe Habitat was attracted to a purchase price almost $1 million less than Ed Buchanan originally paid for it, it’s still a very risky purchase for Habitat to have made at the time. Why did Habitat buy the 53 lots when Buchanan was sitting on the property unable to sell to other buyers at that price and not able to move more than a develop more than a couple of the lots? A second question really involves Vern Buchanan regarding the use of the Habitat mortgage as collateral on one of his other deals. Assigning a mortgage as collateral is a major transaction. The quotes on this in the Tampa Bay Times were attributed not to the board members, but to the Habitat CEO. Is the information in the Times article still true, or was that also wrong? Finally, what is disturbing is a lot of Buchanans in the story. The property is sold by Ed Buchanan. Habitat gets the money from Sandra Buchanan as mortgagee. The mortgage is then used as collateral by Vern Buchanan. Isn’t that a lot of transactional activity between a nonprofit and a lawmaker plus his family members? In any case, Oscar, thanks for the update on the Staebler misquote.

  • Randy

    If Oscarza re-reads the original story, he will see that the appraiser did NOT say Vern Buchanan misled Habitat, only that Habitat had overpaid for the land. The original Tampa Bay Times story was accurate and there were no requests for corrections or clarifications made by anyone. The Sunshine State News is widely considered to be a pro-Republican, partisan service.