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U.S. Senators, Just Like You and Me
Sen. Lisa Murkowski (R-AK) and Bob Penney don't get what the big deal is. If two people reach a property deal, what's the problem? (Even if the price is possibly $120,000 below market value, the seller is a major campaign contributor tied to the federal probe in the state and the buyer is a U.S. senator.)
In an interview with the Anchorage Daily News, Penney couldn't wrap his head around it.
"I really can't understand why a U.S. senator can't buy something they want just like anybody else can," he said.
A few weeks ago, Murkwoski's spokeswoman shared a similar sentiment when explaining why the transaction was no where to be seen on her Senate disclosure forms. "She bought this for personal use just like millions of other people," Danielle Holland said.
Here's the difference: unlike the rest of us, U.S. Senators cannot accept gifts worth more than $250. Based on the $179,400 Murkowski paid for the wooded lot versus the $300,000 locals and real estate agents say the land is worth, she received a gift of at least $120,000. An editorial in the Anchorage Daily News today said she could have only paid a third of what Penney could have fetched had he listed it.
Penney, a major real estate and land developer denied that this was a campaign contribution or a gift, both when I spoke with him and in his statements to Alaska press. He also claims he had no idea that when he sold the land to Murkowski it was assessed by the local government at $179,400. Giving him the benefit of the doubt, I called the Kenai Assessor's Office today to see when owners are notified of their land's new value. Penney would have received a notice March 1, 2006, nine months before the sale went through.
Other members of Congress can attest to the legal headache of accepting illegal gifts, like Rep. Randy "Duke" Cunningham (R-CA). One of Cunningham's most famous bribes was a property deal where he sold his house for well above market value to a defense contractor, Mitchell Wade, who dumped it for $700,000 soon after.
Rep. Rick Renzi (R-AZ) has also gotten into hot water over questionable land deals. So has Rep. Alan Mollohan (D-WV). Mollohan is under federal investigation because of his appetite for land deals with sellers who benefited from his many earmarks.
Comments (12)
ifthethunderdontgetya wrote on July 19, 2007 5:13 PM:Ah, It's OK If You're A Republican.
Anonymous wrote on July 19, 2007 5:19 PM:Good work tracking down that date. It's all very clear and straightforward corruption.
If Bob Penney has any more land that he would like to sell below market value, I would appreciate it if he would give me a call.
(If she only paid 1/3 of the value according to the Anchorage Daily News, that puts the land value at $540k, meaning she got a $360k gift! That's nothing to sneeze at.)
Ferruge wrote on July 19, 2007 5:20 PM:""I really can't understand why a U.S. senator can't buy something they want just like anybody else can," he said."
Does that include "escorts"?
Nerka wrote on July 19, 2007 5:39 PM:This was posted on the other comment section, but it may be useful here for some real background on real estate valuations on the peninsula that everyone seems to be an expert on.
Salamatof Native Association had a bunch of native land subdivided into one acre lots for sale on East Redoubt Road in Soldotna (where this land transaction took place). Their asking price was $50K per acre, and most people thought this was an outrageous asking price, as land had been selling for $30K elsewhere. They sold all the lots at $50K, and then regretted they didn't ask more for them in hindsight.
Land on the Kenai River has been rising fast, and what seems to be a high price one day looks like a bargain the next. In 2002 in the neighborhood one lot sold for $70k for two acres, while in 2007 the lot right next door is being offered at $600K. Some people with lots on the Kenai will tell you their for sale price per acre is now $500,000, while others are waiting till it is $800,000. What is amazing around here is that they will likely get that asking price at some point in the upcoming years. It is becoming not uncommon to have people come in from California or elsewhere and say it really doesn't matter what the cost is, and that is driving the speculation in land pricing. And of course real estate agents want to push up the asking prices cause it helps their bottom line.
So what is a fair market value - when a bank looks at a loan on a property, the borough assessment carries a lot of weight on how much can be loaned out against the property. People tend to forget risk assessments, and in the 80's Alaska land prices tanked when the oil industry tanked for a few years - lots of speculative rising prices in the early 80's, then the banks were left with a bunch of properties in foreclosure and no buyers.
But of course that will never happen again - bubbles are a thing of the past in real estate and the stock market. Especially in Alaska, where the resource development prospects for opening up ANWR look so good and the new Alaska Gas Line is just a lock to be built.
Herb wrote on July 19, 2007 6:57 PM:WHOA!
"...it was assessed by
the local government
at $179,400...."
Assessed-value is ABSOLUTELY NOT the same thing as market-value...
The govt. sends you an "assessed-valuation" that is used as a base value in determining how much you will be charged in PROPERTY TAXES...
"Market-value" is what the house should SELL for...
EXPERIENCE:
Anonymous wrote on July 19, 2007 9:43 PM:(My last house sold for TWICE the "assessed value" which I had received the previous year from the County Assessor.)
ryan wrote on July 20, 2007 4:03 AM:the next thing to check out is
whether Murkowski also got a sweetheart
deal on a boat named the Murk-Stir,
and/or collects gaudy antiques paid for
by her friends
this is fishy but being realistic, Lisa won't suffer any political price for this. When people are elected up here they're elected for life because the only thing we have is the seniority of our congress delegation and their pride in exploiting it. If you've ever seen Don "I'm the king of pork" Young or Ted "Screaming" Stevens in action there is no doubt that they're Alaskans first and Americans second. To be honest, most people up here feel the same way.
Also everything that Nerka said about the history of the housing market up here is true, but I've never heard of a seller worried about the buyer getting forclosed on. Plus, people get financed for housing here all the time despite the history of the housing market. I doubt that a US senator would have any trouble getting financing for a 300K-500K loan.
Ozzinny wrote on July 20, 2007 10:35 AM:So let's get this straight - Penny the "developer" doesn't know the assessed value of the parcel of land sitting right next door to his summer residence in a fast rising property market, he sells the land at a price significantly below market price to a senator who also happens to be the daughter of the retiring governor and somehow the sale is completed just days before a new assessment which would serve to further feed the speculative market. Then there's the other senator's discounted "renovation" and his now disgraced corrupt son. The corruption is so endemic among the barons of Alaska that they don't even bother to cover their tracks. Looks like investigating Alaskan public officials is about to become our biggest state's next growth industry.
alambernakis wrote on July 20, 2007 12:53 PM:Bob Penney is way more than a developer and real estate magnate. He is an extraordinarily controversial figure who is active in fish politics in Alaska and has consistently argued against the interests of the commercial and sports fishing industries. Good connections in Congress are invaluable to Penney's ability to effectively advocate his positions (keep in mind that the federal government controls much of the fishing industry in Alaska since the feds control the waters surrounding the state).
Thomas W. Rodd wrote on July 20, 2007 4:55 PM:The reference to Alan Mollohan (my congressman, whom i admire) may be misleading, as I don't think he was involved in sales to or from constituents -- he invested with some friends. Also, the link is to an article more than a year old, and no charges have been brought. Mollohan reported all of his stuff, as I recall. This "biparyiosan" tail-end-of-the-story stuff about other congresspeople looks pretty cheesy on an otherwise top-notch website.
Thomas W. Rodd wrote on July 20, 2007 4:57 PM:The reference to Alan Mollohan (my congressman, whom i admire) may be misleading, as I don't think he was involved in sales to or from constituents -- he invested with some friends who work for entities that have gotten earmarks. Also, the link is to an article more than a year old, and no charges have been brought. Mollohan reported all of his stuff, as I recall. This "bipartisan" tail-end-of-the-story stuff about other congresspeople looks pretty cheesy on an otherwise top-notch website.
trailfollower wrote on July 21, 2007 2:16 AM:golly, gee whiz. Everyone in the whole state of alaska knows that assessed value is less than appraised value. Sen.Murky is a lawyer; she should know what both the letter and the spirit of the law is.