Norm Coleman’s Sweetheart Deal May Violate Senate Ethics
06/30/2008
DFL Party calls on Coleman to come clean about all-too-cozy living arrangement with political-services operativeSt. Paul (June 30, 2008) — Minnesota DFL Chair Brian Melendez, at a press conference at the Minnesota State Capitol, today asked Senator Norm Coleman to answer a range of questions raised by National Journal’s report late last week that describes Senator Norm Coleman’s cozy living situation in Washington. [National Journal, 6/28/08]
The Journal reported that Coleman rents a room in a million-dollar Capitol Hill townhome owned by Jeff Larson — a well-connected Republican campaign and corporate consultant and the principal architect of Coleman’s political career — for only $600 per month. For four out of the eleven months that Coleman has rented from Larson, Coleman did not pay the rent, paid the rent late, paid the rent with a check that Larson didn’t cash until the Journal asked about it, and once didn’t pay at all but instead bartered used furniture for rent. And for the last two years, Coleman has employed Larson’s wife in his St. Paul Senate office under her unmarried name.
Melendez presented evidence contradicting the understated description that Coleman and Larson gave the Journal of the space that Coleman rents, as well as evidence that Coleman is paying far less than market value — which may violate the Senate’s gift ban. According to Melendez,
“I have said that Senator Coleman is in bed with special interests. But now we know that he literally sleeps under the same roof that they do.
“Senator Coleman’s deal may violate the Senate’s clear ethics rules — and it definitely doesn’t pass the smell test.
“This cozy relationship between a United States senator and one of the most high-powered, well-connected operatives in Washington raises serious questions, not only about Norm Coleman’s ethics, but about his independence as an elected official and a legislator.
“Senator Coleman owes Minnesotans a full accounting of his sweetheart deal and at a minimum must provide a copy of his lease and any other written agreements he has made with Jeff Larson about this peculiar living situation. Minnesotans deserve nothing less.”
Melendez asked that Senator Coleman answer these questions:
· Just how did Coleman and Larson arrive at the 600-dollar monthly rent for the huge English basement?
· Did they check comparable listings in the area?
· Larson said that he was “merely trying to meet my mortgage” — but how much is that mortgage payment? A mere $600 a month can’t go very far to meet a nearly $700,000 mortgage in Washington, D.C.
· Did Larson require that Coleman pay any late fees, as is standard practice, when he paid his rent late?
· Who pays for the utilities?
· Is Coleman paying his share?
· If he isn’t, then who is paying for his share?
· How much of a security deposit did Coleman put down?
· The standard practice in Washington is at least one month’s rent.
· Can Coleman itemize the used furniture that he bartered for rent?
· Larson said that he and Coleman took pains not to overvalue the furniture.
· But evidently they didn’t take the same pains to determine the market value of the rent.
· Does Coleman use any other part of the house? How often?
· Finally, how extensively do employees of Larson’s company FLS-Connect use the living space for corporate business?
· What business do they conduct there, and how much contact does Coleman have with them?
Norm Coleman’s Sweetheart Deal with Well-Connected Washington Insider:
Coleman Lives in Million-Dollar Townhome at 140 North Carolina Ave., S.E. Owned by Jeff Larson
Assessment Record For DISTRICT OF COLUMBIA County
Owner Information
Name:
JEFF LARSON
DORENE KAINZ
Address:
PO BOX 1324
HUDSON, WI 54016-5324
ST. CROIX COUNTY
Property Information
Property Address:
140 N CAROLINA AVE SE
WASHINGTON, DC 20003-1841
D.C. COUNTY
Land Use:
MULTI-FAMILY DWELLINGS (2+ UNITS)
Legal Information
Assessor's Parcel Number:
0734 0085
Recording Date:
03/20/2007
Brief Description:
SQUARE 0734 LOT 0085 NBHD: CAPITOL HILL
Legal Description:
CITY/MUNI/TWNSP: WARD 006
Sale Information
Recording Date:
03/20/2007
Sale Price:
$989,900 - FULL AMOUNT
Document Number:
38551
Assessment Information
Market Value Year:
2007
Market Land Value:
$400,270
Market Improvement Value:
$458,730
Total Market Value:
$859,000
Assessment Year:
2007
Total Assessed Value:
$859,000
Tax Information
Tax Amount:
$6,358.4
Tax Year:
2007
Property Characteristics
Year Built:
1909
Bedrooms:
4
Baths:
3
Partial Baths:
1
Total Rooms:
7
Fireplace:
1
Roof:
METAL
Building Area:
1,568 L LIVING
Air Conditioning:
YES
Heating:
YES
Exterior Walls:
BRICK/STONE
Square Footage:
2069 SF
Copyright© 2008 LexisNexis, a division of Reed Elsevier Inc. All rights reserved.
Real-Estate Vitals:
Address: 140 North Carolina Avenue S.E., Washington DC 20003
Building Type: Row Inside
Building Style: 2 Story
Living Area: 1,568
Year Built: 1909
Bed Rooms: 4
Bath Rooms: 3
1/2 Bath Rooms: 1
Total Rooms: 7
Wall: Common Brick
Floor: Hardwood
Heat: Warm Cool
Air Conditioning: Yes
Fireplace(s): 1
Real Estate Website Listed “Simply Divine” 140 North Carolina Ave. S.E. as Having “Huge English Basement.” In February 2007, 140 North Carolina Ave. S.E. was placed on the market and listed on the website of Phyllis Jane Young Realty. Included in the listing is “a huge English basement with a media center, office space, gorgeous custom marble and oak bar plus an airy guest bedroom and bath…Simply Divine!” [Phyllis Jane Young Realty]
Tax Information:
Larson Purchased Property in March 2007 for Slightly Less Than $1 Million. On March 20, 2007 Larson purchased the property at 140 North Carolina Avenue, S.E. for $989,900. Larson purchased the home from Julia Jones and Jason Pugh. [District of Columbia Public Records]
Property Valued at $895,490. According to DC tax records Larson’s property at 140 North Carolina Avenue was valued at $895,490 in its preliminary 2009 tax year assessment. [District of Columbia Public Records]
LARSON SAID HE BOUGHT HOME SO “PEOPLE WHO WORK FOR US WILL HAVE A PLACE TO STAY.”
Larson Said He Bought Home So “People Who Work For Us Will Have A Place To Stay.” Larson said he intended to use the town house as a place for him and other FLS-Connect employees to stay when they were in Washington. In the past, he said, he had found it difficult to book a hotel room when he visited Washington to consult with his Republican clients, including the RNC. “‘After I looked at what our company paid for hotel rooms, how hard it is to get a room in D.C.,’ Larson said, ‘I said, “I ought to just buy a place--people who work for us will have a place to stay.”’” [National Journal, 6/28/08]
LARSON TOOK OUT NEARLY $700,000 MORTGAGE ON HOME
Larson Took Out A Nearly $700,000 Mortgage On His Washington Home. According to the June 2008 National Journal article, “Although they don't stay in Washington often, Larson and his wife bought the town house on Capitol Hill in March 2007 for $989,900--a decision that turned out to be a fortunate one for Coleman and a senior official at the Republican National Committee. Property records show that Larson and Kainz took out a $692,000 mortgage from Wells Fargo Bank.” [National Journal, 6/28/08]
COLEMAN SPORADICALLY PAID $600 TO LIVE IN “SIMPLY DIVINE” ENGLISH BASEMENT SINCE JULY 2007
Coleman Has Lived In Larson’s Apartment Since July 2007. According to the June 2008 National Journal article, “In July 2007, Coleman began paying Larson $600 a month in rent for a portion of a one-bedroom basement apartment in a Capitol Hill town house that Larson owns.” [National Journal, 6/28/08]
FACT: Coleman Has Been Late, Missed, or Bartered for Rent for at Least Four of the 11 Months He Has Lived There.
Coleman Paid Several Months’ Rent Late. According to the June 2008 National Journal article, “Coleman and Larson have had a rather loose arrangement when it comes to the senator's monthly $600 rent payments. Copies of the checks they provided to National Journal showed that the checks were often written nine or more days after the first of the month. Larson didn't cash a check written on March 10 until June 17--after NJ questioned Coleman and Larson about their arrangement.” [National Journal, 6/28/08]
Coleman Missed Two Months’ Rent. According to the June 2008 National Journal article, “Earlier this month, after National Journal questioned Coleman and Larson about the living arrangement, the senator said he discovered that his rent for last November and January had not been paid. In mid-June, Coleman covered the back rent with a personal check for $1,200 made out to Larson and signed by the senator's wife.” [National Journal, 6/28/08]
Coleman Sold His Own Furniture to Larson to Cover One Month’s Rent. According to the June 2008 National Journal article, “To cover one month's rent, Coleman sold Larson a couch, a table and chairs, and a desk from his old apartment. How did they determine that the furniture was worth $600? Larson: ‘We just looked at it, estimated it was $600 and one month's rent. We were always conflicted--if it was too high, somebody would say it's not worth that much. We erred on the side of taking one month's rent, valued at $600.’” [National Journal, 6/28/08]
Ø Coleman’s Living Space Includes His Old Furniture. According to the June 2008 National Journal Article Coleman still has use of the furniture he used to barter one of twelve months rent: “Coleman has a bedroom and a bathroom in Larson's town house and shares the remaining living space, which includes his old couch, table, and chairs, with FLS Connect. A company employee uses a portion of the apartment to work and take calls on some days, according to Larson. ‘There's no kitchen. There's a sink,’ Coleman said, in describing the apartment. ‘And there's a little refrigerator that I keep water in. There's no cooking, no nothing.’” [National Journal, 6/28/08]
Coleman Implied He Lives in Cramped Bedroom. According to the June 2008 National Journal article, “The way Coleman explained the arrangement, the apartment serves as a crash pad. The 58-year-old senator sleeps in a bed shoehorned into a 10-by-10 bedroom, and he said he spends perhaps only ‘three waking hours a night’ in the place…Larson also described Coleman's living arrangements: ‘He has one bedroom in the back. I was actually surprised [the bed] fits into it. Somehow, he jumps into it at night and has just a bathroom, sink, and small refrigerator.’ He said that the apartment does not even have a stove.” [National Journal, 6/28/08]
COLEMAN PAYS WELL BELOW MARKET VALUE FOR RENTAL OF CAPITOL HILL ENGLISH BASEMENT
CLAIM: Coleman Claimed He Was Not Given a Special Deal On Rent; Claimed Other Members of Congress Also Pay $600 a Month to Rent Rooms.
Coleman Claimed Other Members of Congress Also Pay $600 a Month in Rent for Rooms. According to the June 2008 National Journal article, Coleman “insisted that Larson hadn't given him a special deal. Coleman said that before taking the place, he had consulted colleagues in Congress who rent rooms, and they, too, paid ‘600 bucks’ a month in rent.” [National Journal, 6/28/08]
FACT: $600 A Month Is Well Below Market Value for an English Basement on Capitol Hill.
Search For “$600 Capitol Hill English Basement” Produced 0 Results. A search for a Capitol Hill English basement with $600 monthly rent on two major housing outlets (Craigslist.org, Washington Post-Apartments.com) produced 0 results. [craigslist.org , apartments.com, accessed 6/27/08]
“Cozy One Bedroom” Two Blocks From Coleman’s Apartment Listed At $1450/Month. On Craigslist, a one bedroom apartment just two blocks from Coleman’s apartment was listed as “$1450 / 1br - Cozy One Bedroom- Captiol Hill (326 North Carolina Ave SE), “Beautiful one bdrm on Capitol Hill w/ washer and dryer; dishwasher. The apartment is just 5 minutes walk either Captiol [sic] South or Eastern Market Metros. Near resturants, [sic] pubs, Eastern Farmers Martket, [sic] banks and US Postal Office. The apartment building is located on a quite street and in a quite building. 326 North Carolina Ave, SE at Pennsylvania Ave SE.” [craigslist.org, accessed 6/27/08]
$1325 A Month For A “Beautiful Studio” In An Apartment Building 2 Blocks From Coleman’s Million Dollar Crash Pad. According to craigslist, a “beautiful studio” just two blocks from Coleman’s apartment was listed at $1325 “Beautiful Studio Apartment located in the heart of Capitol Hill just minutes walk from Eastern Market or Captiol [sic] South Metro. The unit in located near many bank, pubs, resturants[sic] and US Post Office. The unit has w/w carpet. w/d, d/w. All utilities included except electric and cable 326 North Carolina Avenue SE at Pennsylvania Ave SE” [http://washingtondc.craigslist.org/doc/apa/730017292.html, accessed 6/28/08]
English Basement Studio At 716 North Carolina Listed At $1100/Month.
Rent: $1,100
Neighborhood: Capitol Hill
Building Type: House
Bedrooms: Studio
Bathrooms: 1 bath
Pets: No pets allowed
Parking: No
Map: 716 N. Carolina Ave. SE, 20003
Capitol Hill Studio
posted 06/04/2008
English Basement efficiency unit located in the heart of Capitol Hill across from Eastern Market. Kitchen, bath, carpeting, and a/c. Available July. $1,100 + electric call 571-242-7983
[http://classifieds.washingtoncitypaper.com/washington/ViewAd?oid=oid%3A555839, accessed 6/29/08]
$950 To Share Capitol Hill English Basement With Roommate Whose Boyfriend Sleeps Over Once Or Twice A Week:
Roommate needed to share English basement apartment, move in Aug 1(negotiable). About the apartment: $950 per month includes all utilities except for electric. Apartment includes shared living space, bathroom and kitchen and small patio. For an English basement, lots of light. I have furniture (couch, etc.) but additions welcome, depending on space. Comes with dishwasher and brand new washer/dryer. Location: Apartment is exactly 3 blocks from Capitol South metro and House office buildings, 15-20 minute walk to Senate, 3-4 blocks from bars/restaurants on Pennsylvania Ave, and 5 blocks from Eastern Market. Plenty of street parking (although must get zone 6 sticker). Surrounded by two parks, so tends to be a family environment. Three blocks to 395. What I'm looking for: early to mid twenties professional female, non-smoker, no pets, no drugs. Someone friendly, courteous, easygoing, clean, responsible, respectful, sociable. Friendly, relaxed living environment is important, so I'd love to find someone with whom I can be friendly /share occasional meal. Don't mind a boyfriend/friends, but don't want a third roommate, either. Must be able to sign 8 mo to 1 yr lease and pass credit check. About me: 24 year old female who works downtown, non-smoker, liberal, from Boston, went to college around here and just stayed after. I enjoy happy hour/glasses of wine and going out on weekends, although I'm not a huge partier and would prefer my future roommate not to be, either. I have a boyfriend who sleeps over once or twice a week, so roommate would have to be OK with that. If interested, please email me and tell me about yourself and provide, if possible, a link to Facebook.” [http://washingtondc.craigslist.org/doc/roo/732489783.html, accessed 6/28/08]
DID COLEMAN VIOLATE THE SENATE GIFT BAN?
Senators May Not Accept Gift over $50 From any One Source in One Calendar Year. Under ethics rule 35 from the U.S. Senate Committee on Ethics, “Under Rule 35, a Member, officer, or employee of the Senate may generally not accept any one gift valued at $50 or more, or gifts with an aggregate value of $100 or more, from any one source in a calendar year.” “[T]he term ‘‘gift’’ means any gratuity, favor, discount, entertainment, hospitality, loan, forbearance, or other item having monetary value. The term includes gifts of services, training, transportation, lodging, and meals, whether provided in kind, by purchase of a ticket, payment in advance, or reimbursement after the expense has been incurred.” [U.S. Senate Committee on Ethics, emphasis added]
Senators May Not Accept Gifts from Personal Friends Valued at More Than $250. Under Rule 35.1(e), “ … [G]ifts motivated solely by personal friendship between the giver and the Member, officers, or employee are permissible. However, such gifts may not be of a value greater than $250, unless the recipient receives approval from the [Senate Ethics] Committee.” [U.S. Senate Committee on Ethics, emphasis added]
COLEMAN’S CAMPAIGN AND PAC HAVE PAID LARSON’S FLS-CONNECT MORE THAN $1.5 MILLION
Coleman Campaign Has Paid More Than $1.3 Million To FLS-Connect for Consulting Services. According to FEC expenditure reports, Coleman's campaign has paid FLS Connect $1,341,773.70 for consulting services, with $469,395.64 in 2007 and $176,274.40 in the first quarter of 2008 alone. In 2006, FLS took in $109,019.04 from Coleman; 2005: $193,751.61; 2004: $144,139.63; 2003: $80,135.29; 2002: $139,738.62 and in 2001: $29,319.65. [FEC Disclosure Reports, Accessed 5/14/08]
Ø Coleman’s Campaign Has Paid FLS More Than $35,000 in Rent. According to FEC Reports, Coleman’s campaign has paid $35,274.90 in rent to FLC Connect, FLS-DCI, FLS LLC or Feather, Larson & Synhorst between November 3, 2003 and August 16, 2007. [Coleman for Senate FEC Reports, 2003-2007] Note: 4 of those rent payments are estimated from larger payments from the campaign to FLS that included rent (i.e. rent and Blackberries)
Coleman's PAC Has Paid FLS-Connect More Than $193,000 for Services. Coleman's Northstar Leadership PAC has paid FLS-Connect $193,214 for services. In the first quarter of 2008, Coleman's PAC paid FLS-Connect $49,849; 2006: $52,903 and during the 2004 cycle, FLS was paid $91,462. [Center for Responsive Politics]
WHILE COLEMAN FAILS TO PAY RENT, 27,000 MINNESOTA HOMES IN FORECLOSURE
FY 08 Q1: Over 27,000 Homes in Minnesota in Foreclosure; Prime Mortgage Foreclosures in Minnesota up 118.8% in One Year. According to the U.S. Congress Joint Economic Committee, at the end of FY2008 Q1, 11,965 homes in Minnesota were in prime mortgage foreclosure, up 118.8% from FY2007 Q1. 15,270 homes in Minnesota are in subprime foreclosures, up 67.8% from FY2007 Q1. [U.S. Congress Joint Economic Committee, State by State Breakdown of MBA Report]