Home > Cande = Conjecture & Exaggeration, Fande = Fact & Evidence, The Economy > $Darrell Issa$ — Republican Congressman from Vista, CA and chairman of the House Oversight and Government Reform Committee–has got $Conflicts of Interests$

$Darrell Issa$ — Republican Congressman from Vista, CA and chairman of the House Oversight and Government Reform Committee–has got $Conflicts of Interests$

sources:

http://www.nytimes.com/2011/08/15/us/politics/15issa.html?pagewanted=1&hp

EXCERPTS:

* words inside brackets are mine.

“After the forced sale of Merrill Lynch in 2008, for instance, [Republican Congressman Darrell Issa] publicly attacked the Treasury Department’s handling of the deal without mentioning that Merrill had handled hundreds of millions of dollars in investments for him and lent him many millions more….

Senator John D. Rockfeller IV, Democrat of West Virginia, for one, has much of his money in blind trusts, run by outside trustees. And Senator John Kerry, Democrat of Massachusetts, has a number of family and marital trusts for money generated largely through the fortune of his wife, Teresa Heinz Kerry.

Mr. Issa, who grew up in a hardscrabble neighborhood near Cleveland and now owns homes north of San Diego and in Washington, has assets totaling as much as $725 million, outstripping by some measures even Mr. Rockefeller and Mr. Kerry. (Because lawmakers must disclose their assets only within broad dollar ranges, public reports do not allow for precise figures.)

According to his filings, Mr. Issa’s minimum wealth doubled in the last year, and he appears flush with cash: he bought dozens of mutual funds in 2010 worth as much as $80 million, managed by Wall Street powerhouses, without selling off any securities.

Mr. Issa’s transactions cover many pages in his annual disclosure reports, as he has traded huge volumes of stock funds and municipal bonds on a weekly or even daily basis. In 2008 alone, he traded some 360 securities totaling between $650 million and $2 billion.

Those investments have often produced sharp profits.

In one 2008 sale, months before the stock market crashed, his family foundation earned $357,000 on an initial investment of less than $19,000 — a return of nearly 1,900 percent in just seven months, the foundation reported to the Internal Revenue Service. It reported acquiring the security, then known as AIM International Small Company Fund, at a cost basis representing a tiny fraction of the market value.

In addition, Mr. Issa sold at least $1 million in personal holdings in the same fund that year but was not required to report what he paid….

In nearby Carlsbad, a new office complex he owns advertises for prospective tenants. A few miles away, a Hooters restaurant rents space in another building he owns. Nearby, his medical complex bustles with doctors and patients and has few vacancies.

‘Issa’s a smart businessman,’ said Dean Tilton, a local real estate broker. ‘We haven’t seen real estate prices this low in 20 years, and he’s taking advantage of that.’

The hard-hit San Diego area has also benefited from federal money Mr. Issa brought through earmarks, which allow lawmakers to award money for their own pet projects. Indeed, more than two dozen of Mr. Issa’s properties are within five miles of projects he has personally earmarked for road work, sanitation and other improvements, an analysis by The Times shows.

His medical complex, for instance, sits directly along West Vista Way, a busy corridor scheduled for widening with $815,000 in funds Mr. Issa earmarked. The congressman bought the complex in 2008, soon after securing the first of two earmarks for the two-mile project and unsuccessfully seeking millions more. The assessor’s office now values the complex at $16 million, a 60 percent appreciation.

Mr. Issa owns a number of commercial properties near the planned $171 million expansion of State Route 76. The project, intended to ease traffic for tens of thousands of commuters, was helped by $245,000 in his earmarks.

A regional transportation official said the earmarks supplemented state financing to move the projects along.

Local leaders say they are just grateful for the money, regardless of any suggestions locally in San Diego that Mr. Issa stands to benefit.

‘I don’t really blame the guy,’ said John Aguilera, a Vista city councilman. ‘As a politician, that’s his job to bring a slice of the pie back home, and as a businessman, he’s going to invest in the areas that he champions.’

Some ethics experts wonder, however, whether Mr. Issa’s business interests invite problems.

‘The idea is you’re supposed to be a full-time congressman,’ said Robert M. Stern, who runs the nonprofit Center for Governmental Studies in California. ‘There may not be a direct conflict of interest, but it creates an appearance that he is trying to influence a policy on issues where he has an investment.’

In 2009, as earmarks became a damaging symbol of Congressional abuse, Mr. Issa joined other lawmakers in pledging to discontinue them. And in recent weeks, he has attacked ‘the culture of government overspending’ in pushing for deep cuts in the national debt.

Mr. Issa’s dual roles reach beyond earmarks.

At a House hearing in 2008 on a much-debated proposal to merge the satellite radio companies Sirius and XM, despite objections on competitive grounds, Mr. Issa praised the ‘viable combined market’ the deal would create as he questioned Sirius’s chief executive and talked of opportunities for expansion.

What Mr. Issa did not mention was that his electronics firm was then in a lucrative partnership with Sirius to distribute its audio products.

While Mr. Issa sold off his controlling interest in DEI soon after he was elected, he remains a board member with a half-million shares in the firm held by his family trust. His management firm also receives $2 million a year for leasing DEI its Vista plant.

DEI’s partnership with Sirius, which continued after the merger, caused friction with competitors. In a lawsuit settled out of court, U.S. Electronics accused Sirius and DEI of freezing it out of the market through anticompetitive practices that relied on ‘a web of deception, threats and lies” aimed at “the enrichment of certain of its officers and directors.’

When a watchdog group, the Center for Public Integrity, asked Mr. Issa about his role in the merger, his office said the congressman’s participation in the House hearing posed no conflict because his founding of DEI was ‘public knowledge.’ But after advice from House ethics lawyers, Mr. Issa avoided any votes on the issue afterward….

Ties to Merrill Lynch

The lines between Mr. Issa’s many interests have also become entangled in his frequent criticism of regulators and his frequent defense of Wall Street. At a series of hearings in 2009, Mr. Issa accused Treasury officials of a ‘cover-up’ of their role in Bank of America’s $50 billion purchase of Merrill Lynch months earlier. Most pointedly, he accused Ben S. Bernanke, chairman of the Federal Reserve, of bullying Bank of America ‘behind closed doors’ into buying Merrill Lynch at bargain rates and then lying about it.

‘I for one,’ Mr. Issa told the Fed chairman, ‘am looking at Main Street America, the stockholders who in some cases got less than they would have gotten through other means. This includes Chrysler, General Motors and, of course, Bank of America and Merrill Lynch.’

Mr. Issa did not mention his own extensive links to Merrill Lynch.

In a television interview days later, however, he said: ‘I bank at Merrill Lynch. I’m very well aware that every broker there, all the people who were stockholders, were furious that they were in fact being fire-saled to them.’

And Mr. Issa is no ordinary Merrill customer.

His transactions there have totaled more than a billion dollars in the last decade, records show. In the aftermath of the firm’s acquisition in September 2008, in fact, he bought and sold at least $206 million in Merrill Lynch mutual funds in the next 15 days, records show.

His ties to the bank deepened last year, records show, as Merrill Lynch gave him two ‘personal notes’ for lines of credit worth at least $75 million.

Likewise, Mr. Issa has aggressively defended Goldman Sachs, another Wall Street giant.

When the Securities and Exchange Commission brought a major lawsuit charging Goldman with fraud last year, Mr. Issa fired back by opening an investigation. The timing of the lawsuit, he said, smacked of a ‘partisan political agenda’ meant to help President Obama and bolster a bill overhauling financial regulations.

His charge drew nationwide attention, putting regulators on the defensive, but the S.E.C. inspector general later found ‘no evidence’ of political meddling.

Mr. Issa came to Goldman’s defense again last month in a letter to regulators complaining about restrictions on financial firms. Broker dealers ‘such as Goldman Sachs’ faced ‘a substantial reduction in leverage’ because of excessive capital requirements, he wrote.

As with Merrill Lynch, Mr. Issa is keenly interested in Goldman’s performance.

A few weeks before opening his inquiry into the Goldman lawsuit, in fact, he bought another large batch of shares in one of the firm’s high-yield mutual funds, records show. By the end of the year, his stake in Goldman’s fund was worth as much as $25 million.”

http://issa.house.gov/index.php?option=com_content&view=article&id=113&Itemid=38

EXCERPT:

* words inside brackets are mine.

“Congressman Darrell Issa represents the people of California’s 49th Congressional District in the United States House of Representatives, a seat he has held since 2001 [the beginning of George W. Bush’s presidency].”

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