Drudge misrepresented as "sweetheart land deal" a business transaction by Sen. Reid, described in an article by AP's Solomon
SUMMARY: A Drudge Report headline, which linked to an Associated Press article by John Solomon and Kathleen Hennessey, misrepresented a business transaction involving Sen. Harry Reid as a "sweetheart land deal." Rush Limbaugh read the AP report on his radio program, praising Solomon as "an AP writer that I have trusted. John Solomon's stuff is good." However, as Media Matters for America has documented, Solomon has a history of misleading reporting on Senate Democrats.
In an October 11 headline on the Drudge Report, Internet gossip Matt Drudge misrepresented as a "sweetheart land deal" a business transaction involving Senate Democratic Leader Harry Reid (NV), as described in a report that day by Associated Press writers John Solomon and Kathleen Hennessey. In fact, far from establishing that Reid benefited from a "sweetheart" deal, the article charges Reid with "complex dealings" and improper reporting of a land transaction in Clark County, Nevada, but acknowledges that Reid paid market value for the land in question in 1998 and sold it to developers in 2004. Additionally, nationally syndicated radio host Rush Limbaugh read portions of the AP article on the October 11 broadcast of The Rush Limbaugh Show, pointing to it as evidence of a "culture of corruption."
Limbaugh's identification of Solomon as "an AP writer that I have trusted" notwithstanding, Media Matters for America has previously identified misleading reports by Solomon about Senate Democrats:
- In a May 29 article, Solomon suggested that Reid had acted improperly by attending Las Vegas boxing matches as the guest of the Nevada Athletic Commission "while that state agency was trying to influence him on federal regulation of boxing." But Solomon left out important details, as Media Matters noted here and here.
- In February, Solomon wrote an article alleging ties between Reid and disgraced former GOP lobbyist Jack Abramoff that similarly came under fire, from Media Matters and others, for omitting crucial facts regarding the actions in question. Shortly thereafter, more details came to light undermining Solomon's allegations. But rather than acknowledge the flaws in his article, Solomon wrote a follow-up piece that misleadingly offered the new information as support for his original case.
- In November 2005, Solomon similarly alleged connections between Abramoff and Sen. Byron Dorgan (D-ND), but ignored evidence undermining his claim that the lobbyist had directed contributions to Dorgan after the senator aided his clients. When Dorgan later returned the contributions he had received from Abramoff's clients, Solomon wrote an article in which he took credit for this development, but ignored the evidence undermining the purported ties between Abramoff and Dorgan that Solomon pushed in his first article.
From the October 11 broadcast of Premiere Radio Networks' The Rush Limbaugh Show:
LIMBAUGH: An Associated Press story by John Solomon -- he is an AP writer that I have trusted. John Solomon's stuff is good. At the Associated Press: "Senate Democratic Leader Harry Reid collected a $1.1 million windfall on a Las Vegas land sale even though he hadn't personally owned the property for three years" -- this according to property deeds. Culture of corruption, anybody?
"In the process," Dingy Harry "did not disclose to Congress an earlier sale in which he transferred his land to a company created by a friend and took a financial stake in that company, according to records and interviews. Dingy Harry's [sic] deal was engineered by Jay Brown, a longtime friend and former casino lawyer, whose name surfaced in a major political bribery trial this summer and in other prior organized crime investigations. He's never been charged with wrongdoing -- except for a 1981 federal securities complaint that was settled out of court.
"Land deeds obtained by the Associated Press during a review of Reid's business dealings show" that the deal began in '98, when Dingy Harry "bought undeveloped residential property on Las Vegas' booming outskirts" for about 400 Gs. "Reid bought one lot outright ... a second parcel jointly with Brown. One of the sellers was a developer ... benefiting from a government land swap that Dingy Harry [sic] had supported." The seller never even talked to Harry Reid.
In 2001, Dingy Harry "sold the land for the same price to a limited liability corporation created by Brown. The senator didn't disclose the sale on his annual public ethics report or tell Congress that he had any stake in Brown's company. He continued to report to Congress he personally owned the land" even after he sold it. After getting local officials to rezone the property for a shopping center, Brown's company sold the land in 2004 to other developers" -- Dingy Harry took $1.1 million of the proceeds, "nearly tripling" his investment of $400,000.
"Reid reported it to Congress as a personal land sale. The complex dealings allowed Dingy Harry [sic] to transfer ownership, legal liability and some tax consequences to Brown's company without public knowledge, but still collect a seven-figure payoff nearly three years later. Dingy Harry [sic] hung up the phone when questioned about the deal during an AP interview last week."
Well. Well, well, well, well, well, well. I can imagine it has not been easy to gather this information, ladies and gentlemen. Dingy Harry, let's -- well, this is the AP. Let's see how far this goes.
Where is the "misinformation"?
Reid bought the land for $400K in 1998, and in 2004 he took in $1.1 million in a deal related to the land. That sounds "sweetheart" to a lot of people!
Uh-oh ...
(link)
MMFA fails to clearly identify any problem with the AP's or Drudge's reporting. It just seems that MMFA does not like any reporting that is unflattering to Democrats.
My 2 cents. Thank you.
Drudge saying this was a "sweetheart land deal" implies that Reid used illegal means to purchase the land at lower than it's market value. He didn't. He purchased the property at market value.
The only possible wrong-doing was in how Reid reported the later transfer of the land with his original partner to a company owned by that partner, in exchange for an ownership stake in that business partner's company.
There was no "sweetheart land deal". Drudge is purposefully trying to mislead his readers, as usual.
This is as big of a "scandal" as the news that George Allen did not report stock options, which received very little media attention.
[link to news.yahoo.com]
He made money by putting himself on boards, and getting paid in stock options for no work. And he cleared more than Reid, without risking dime one of his own money. That's a 'sweetheart deal.'
Dirtbag Drudge is doing what he does best, or perhaps worst. This is like a smaller version of Whitewater--a whole bunch of nothing that wastes time and resources. The writer of this is someone who has written hit pieces on Harry Reid before. This is sad, really, and Drudge is even more sad.
THANK YOU. njguy93@yahoo.com
I read in a book a couple of years ago that David Brock, who is openly gay, claims that Matt Drudge sent him an e-mail asking if he and Brock could be "f--- buddies." At least Drudge didn't go after any 16-year-old boys, or any that we know of at least. I wouldn't be surprised at all if he did. But he did cover up and try to excuse someone who did, with his bogus story about how some "sources" said that the boy was "egging on" Mark Foley to send him sexually explicit e-mails. Looks like Drudge is the one with the "egging", he has it all over his face, and it's not the first time, either--he put up that discredited Kerry story during the 2004 primaries--the one about John Kerry supposedly having an affair with a tall blonde who left for Africa so the story wouldn't leak into the press. This guy is a fool and a charlatan and has been exposed many times over by people like David Brock.
THANK YOU. njguy93@yahoo.com
on his face.
Might have Bush dna, though.
Shoes89, can you do an ID?
In San Diego area, Hunter has lied to county tax officials about his home..... (tax dodger)..... and may have used insider information from the Resolution Trust Corporation to buy it in 1994......
Check it out at www.signupsandiego.com
Same Hunter who spent months talking about Orange Chicken on the Gitmo menu...
..... and getting thousands of bucks from the same defense contractors as Cunningham...
You can't be serious. For instance, Solomon uses every way possible to make the partner, Brown, look like a mob-connected, evil man. The very last sentence, however, is that "he has never been found guilty of anything" -- and he makes even that sound evil. "His name has surfaced." What crap. This same guy, Solomon, wrote a story about Abramoff's guys contacting Reid to get him to back off the law Reid was trying to get through that would have imposed U.S. labor law on the Marianas. But Reid stayed by the bill! He never changed his position, but the bill was defeated by the Abramoff axis of evil, including Tom Delay.
After he gets through being a politically-connected AP guy, he has a great career ahead of him writing dialogue for military commissions in Guantanamo.
Forget about the facts here. This is pure and simple slander. Read each paragraph, see how sinister he makes everything sound, and then figure out what he's talking about.
He bought a piece of land outside Las Vegas. It's growing, see? That land will be worth something. I'd say his reason for turning it into a partnership was that Brown decided to try to turn it into a shopping center. Reid always reported he owned the land, which he did, through a partnership. Did the buyers know that the Senator was involved? Maybe not. Isn't that better that way? Was Reid able to hide benefits to himself in legislation, as Hastert did? No. Hastert hid his ownership of a plot, inserted a little rider in a highway bill, and poof! Big profit!
Was the price Reid was paid out of the usual for land that will be used for shopping? No. Gee, somebody in the West made money by buying land outside a rapidly-growing city. Call the cops.
Nothing riles Republicans up up more than a Democrat doing a land deal. I think they're still pissed about the Louisiana Purchase.
If Reid is guilty of something, then he should be taken into a court of law, prosecuted, judged by a jury of his peers, and then sentenced if found to have done something wrong, and illegal...
But if this is just mud throwing to see what sticks, then it could be a waste of time and money in investigating it, but alas, it should be looked at, and it shouldn't take very long if things are all in order as Reid says that they are.
Republicans are getting desperate, really desperate, and are resorting to old attacking methods.
Nowhere. Nobody understands that damned story anyway, even if it was true. Compare this farfetched insinuations to, say, writing "naughty emails" to minors...
I bet Limbaugh and co. will try to keep it up a little. But their listeners won't remember anything else than "Rats are corrupt" – which is no news to them. And thankfully the MSM has about the same attention span as your average freeper.
As a tax-geek, I can only laugh my ass off that Solomon thinks he has a story here.
My understanding is that Reid disclosed the original land purchase, and continued to report it as his land even after the LLC had been set up. He since sold the land at a sizeable profit, and disclosed this sale as well.
Few things about LLCs:
- They are set up almost entirely for tax purposes, though they are sometimes (mis)used to disguise true ownership of an asset. The fact Reid continued to disclose his ownership of this land is actually a very good indication this transaction was done in good faith. If he violated some technical Senate reporting provision, he did so as a result of erring on the right side of the law.
- The description of a "sale" of the land to the LLC is in need of an explanation. If Solomon had have called any half-competent lawyer, he'd have learned that the process is in fact an exchange - of shares in the LLC in return for the asset, and legally it is not recognized as a sale. Just ask Enron and their accountants - they'll tell you that reporting a "sale" when it isn't really a sale can land you in hot water.
- Because the transfer in 2001 was not a true sale, Reid couldn't have realized a profit or loss. That makes the quoted FEC guy Solomon's useless idiot. Heckuva job.
Believe me, these are very basic points that a tax or accounting novice could have cleared up in a matter of minutes. If there's anything material that Reid did not disclose, it is perhaps his relationship with this Mr Brown. Should Solomon wants to plow this furrow, fair enough, but if he reckons he's got a blatant ethics violation on his hands, he's a twit.
I'm no real estate expert nor a lawyer so please correct me if I'm wrong, but isn't it true that Reid is not listed as a partner in the LLC?
Why would he not? His property consisted of 75% of the land.
You mentioned "they are sometimes (mis)used to disguise true ownership of an asset. " Would this deal of not listing one's name not fall into the (mis)use category?
So Reid uses his influence to engineer a land swap with federal lands and then after it is completed goes in and buys some of the land. He then sells the land to a legal entity. The owner then uses Reid's influence to have the land rezoned where it is sold netting Reid hundreds of thousands of dollars of profit.
Is that not a sweetheart deal?
I think what the ap article said is that Reid did not disclose his interest in the LLC, not that he had no interest in the LLC. Typically this kind of transaction involves the land being transferred to the LLC in exchange for shares in the LLC. I would be very surprised if that was not how this transaction was structured.
If that is the case, then the profit from the sale was not a "windfall," since whether title to the land was in Reid's name, or in the name of a corporation in which he held shares, Reid is legally entitled to share in the profit of the sale. This part of the AP article is very clearly misinformation in my view.
The allegation as I understand it is that Reid should have reported the transfer of title to the LLC instead of continuing to describe himself as the owner. This is pretty questionable in my opinion. Regardless of the state of title, Reid clearly maintained control, or de facto ownership of the land. For the purposes of public disclosure regulations, which are to provide a public record of the property held by elected officials and the circumstances under which that property may be disposed of, Reid was correct to continue to describe himself as the owner. In fact if Reid publically claimed to no longer own the land, when he continued to maintain control of it, THAT would be misleading and unethical.
Of course if there are other facts I am not yet aware of, my opinion could change, but right now it looks to me like Reid is on pretty solid ground here and that Solomon is either a Republican operative or someone with very little understanding of the issues he is writing about.
I did not notice whether Reid did get shares in the LLC. That would be good to find out. I'm sure someone will.
The part that I found hypocritical is that Reid, as Senate Majority Leader, appears to have not followed the Senate ethics rules. Now he seems to be a big part of the 'culture of corruption' he so vigorously attacks.
He made a heck of a lot of money with his inside knowledge. It can be argued that he used his influence to facilitate the land swap and then profited from it while at the same time looking like he was hiding something. Very suspicious in my book.
That and the fact that he has a history of relatives gaining financially because of his position in the Senate does not speak well for him.
In other words, I believe he's as corrupt as any of the rest of them.
He's desperately looking for something...anything...to distract the public from the scumminess of the Republican party. Last night, Pox News was hammering the Sandy Berger story again. Their basic defense for the corruption, lying and ineptitude within their own ranks is to point their fingers at the Democrats and shout "Look! Look! They're doing it too!"
How sad. The party that vowed to "restore honor" to the White House has turned out to be even bigger crooks than the Democrats. If you want to dig up shady old land deals, lets go back and look at how Bush used his office to condemn private property for a new Texas Rangers stadium, and later sold his share of the team for a HUGE profit.
I could not find a single source which defines the term “sweetheart deal” as this publication or it’s fellow travelers have. “Sweetheart deal” is best defined as “an abnormally favorable contractual arrangement.” Let’s face it there are good and bad politicians in the Republican party and in the Democrat party. It seems however that the rank and file Democrat is devoid of any moral compass. The lemmings of this publication make references to violation of a “technical Senate reporting provision.”(The purpose of which is to let the Senators’ boss–the voter, know what he is doing.) In truth Drudge wrote only the headline which was “technically” accurate. The story originated with AP, hardly a member of the vast right wing conspiracy.
There are morons in each party but the Rank and file Republicans seem to not only have no functioning heart they have no functioning brain either. Pin up posters of Ebeneezer Scrooge and talking points from Hannity and Limbaugh take the place of each
Eloquent retort Einstein!
Solon,
Why do you continually lower yourself by these types of posts?
If I really wanted to sink, I would have pointed out that you spelled Ebenezer wrong.
We can use your definition: “an abnormally favorable contractual arrangement.”
What was "abnormally favorable" about this particular "contractual arrangement"? Is making money in real estate so odd? What is especially odd at that?
"The story originated with AP, hardly a member of the vast right wing conspiracy." --ghanchulak9144
What does it matter where conservative misiformation comes from? I would think the effect of conservative misinformation is likely more damaging the more liberal the source is perceived. No doubt some will say "Even the AP says it's true and their a bunch of birkenstock-wearing, pointy-headed, bed-wetting lib'rals over there".
Misinformation is always wrong and it is simply a form of ad hominem argument to challenge whether AP is conservative or not. Who cares? They are apparently spreading conservative misinformation regardless.
Demcrats shall never turn a profit.
until all the facts are out. The Democratic Party has been pushing real hard to publicize stuff like Hastert's Prairie Parkway earmarked federal dollars ([link to www.sunlightfoundation.com] while using the phrase "culture of corruption" as a campaign device. The hugely disproportionate number of examples of corrupt dealings that surfaced in the past six years has had little impact on the public, and assuming a holier than thou attitude on an area inevitably invites AP and other powerful media interests to dig into the financial dealings of leading democrats until they find the almost equally inevitable reporting screwups or real dirt. Much of the public will be unable or unwilling to differentiate between a reporting mistake (if that's all it is with Reid, and it could get worse) and steering tax dollars in a direction to get fat off a land deal. I've seen this coming and here it is.
Looking around I found this....
It turns out that while more than a few congressional relatives derive financial benefit from their proximity to power, Harry Reid, the Times said, "is in a class by himself."
In the last four years alone, firms with Reid family ties have collected more than $2 million in lobbying fees.
"So pervasive are the ties among Reid, members of his family and Nevada's leading industries and institutions that it's difficult to find a significant field in which such a relationship does not exist," the paper said.
For instance, the Nevada Democrat once sponsored an environmental bill that he touted as a bipartisan measure to protect the ecosystem and help the economy in America's fastest-growing state.
But as the Times reported: "What Reid did not explain was that the bill promised a cavalcade of benefits to real estate developers, corporations and local institutions that were paying hundreds of thousands of dollars in lobbying fees to his sons' and son-in-law's firms, federal lobbyist reports show."
The Howard Hughes Corp. alone paid $300,000 to attorney and son-in-law Steven Barringer to push a provision allowing the company to acquire 998 acres of federal land near booming Las Vegas. According to the Times, other provisions of Reid's legislation were intended to benefit a real estate development headed by a senior partner in the Nevada law firm that employs all four of the Senate minority leader's sons.
Seldom have so many close relatives directly profited off their familial connection to a powerful politician.
But as the Times noted, there's more: "The governments of three of Nevada's biggest cities — Las Vegas, North Las Vegas and Henderson — also gained from the legislation, which freed up tens of thousands of acres of federal land for development and annexation. All three were represented by Reid's family members who contacted his staff on their clients' behalf."
Reid's response to the obvious conflicts of interest?
"Lots of people have children, wives and stuff that work back here," he insisted. "It is not as if a lot of cash is changing hands."
Hundreds of thousands of dollars - not a lot of cash?
One wonders how journalists would have reacted had Tom DeLay said that.
[link to www.newsmax.com]
"Largely ignored by both the House and the Senate is the increasingly common practice of companies and interest groups making payments to relatives of influential legislators. As reported by The Times earlier this year, for instance, Karen Weldon, the lobbyist daughter of U.S. Rep. Curt Weldon (R-Pa.), has earned about $1 million in fees from foreign clients her father has helped. The House ethics committee panel currently is considering the Weldon case. In another case reported by The Times, the sister of U.S. Rep. Nick J. Rahall, (D-W.Va.) is earning $15,000 a month lobbying members of Congress, including her brother, for the tiny Persian Gulf country of Qatar. The Rahall and Weldon cases were two among several reported by The Times in which relatives of members of Congress engaged in lobbying activities. Others include Sens. John B. Breaux (D-La.), Orrin Hatch (R-Utah), Ted Stevens (R-Alaska) and Reid. The Senate is scrutinizing business dealings involving members of Stevens' family and business partners whom, as The Times has reported, he helped." ---- This is why I have trouble with newsmax (incidently Lying Limbaugh is quoted liberally throughout your link) and drudge and most right wing sites. A big lie of omission. Why no mention of Curt Weldon and his daughter and the 1 million dollars she collected in one year? Investigate the dems and replublicans and prosecute both.
I agree.. No need to be picky... I think it is part of the corruption in Congress and it falls on both sides of the aisle. I don't go to the site except as a result of google searches.
I have the same beef here with MMFA. I wish they weren't so blatantly one sided.
But I doubt if my criticism means much to them...
Anyway, thanks for filling in "the rest of the story".