Already under investigation for suspiciously favorable mortgage terms received from Countrywide Financial, Connecticut Sen. Christopher Dodd is also being called to task for a series of real estate deals and disclosures related to a cottage he owns on Galway Bay, Ireland.
“Mr. Dodd is busy these days blaming everyone else for the real-estate bubble and financial meltdown,” a Wall Street Journal editorial declared Thursday. “But he owes constituents and the Senate an honest accounting of his Galway property over the past 15 years.”
Christopher Healy, chairman of the Connecticut GOP, told the Hartford Courant on Tuesday: “There’s a body of activity here that raises questions about Dodd that so far he hasn’t really given reasonable answers to.”
One reason the cottage is drawing attention: The man who witnessed the transfer of the property, Edward R. Downe Jr., was convicted of insider trading in 1993. Downe pleaded guilty to securities fraud and insider trading, and agreed to a $11 million SEC civil settlement.
The Dodd-Downe relationship dates back at least to 1986, when they purchased a Washington condominium together for $159,800. The Courant reports Dodd later bought out Downe’s share, and in 1999 sold the condominium for $310,000.
On former President Bill Clinton’s final day in office he issued, at Dodd’s request, a last-minute pardon of Downe’s felony convictions -- without going through the normal Justice Department vetting process.
None of which stopped Dodd from teaming up with Downe’s business partner, Missouri businessman William Kessinger, to purchase the Irish cottage. According to Hartford Courant columnist Kevin Rennie, the saga of Dodd’s mysterious Irish land dealings date back to 1994.
That’s the year Kessinger bought two thirds of the $160,000 cottage, which has a lot of nearly 9 acres and overlooks Galway Bay near trendy Roundstone Village. Dodd purchased one-third of the property, making him and Kessinger partners.
In 2002, Dodd bought Kessinger out of his two-thirds share in 2002 for just $122,351, Rennie reports. While that represented a 19 percent profit for Kessinger over the eight years, the Wall Street Journal reports that similar properties in the area were quadrupling in value during that period.
“Perhaps Mr. Kessinger is a lousy businessman,” the Wall Street Journal comments.
Dodd is already the subject of a Senate Ethics Committee probe into possible conflicts of interest stemming from his Countrywide mortgages. Recent polls suggest Dodd is in for a tough re-election battle in 2010, and his representatives are trying to limit any further damage.
“It seems that launching these petty attacks is a lot easier for the Republicans than explaining their support for George Bush's failed policies or offering any real solutions to the serious problems facing the people of this state," Dodd spokesman Bryan DeAngelis tells the Hartford Courant.
Another issue: Dodd’s Senate financial disclosure statements set the property’s value at between $100,001 and $250,000. In 2006 and 2007, Dodd footnoted his disclosure to add that this amount is “based on appraisal at time of purchase.”
Senate ethics rules require valuations to be current. Smaller properties in the Galway area reportedly sold last year for $700,000 and up. But Dodd’s office told Rennie an appraisal is not required for purposes of disclosure.
Dodd, meanwhile, continues to serve as chairman of the Senate Committee on Banking, Housing, and Urban Affairs. The purview of that committee reads like a “Who’s Who” of sectors devastated by the economic downturn.
The committee’s Web site states: “These areas of jurisdiction include, but are not limited to: banking, insurance, financial markets, securities, housing, urban development and mass transit, international trade and finance, and economic policy.”
Noting Dodd’s habit of blaming others for the collapse of Fannie Mae, Freddie Mac, and the financial sector, The Wall Street Journal’s editors write: “Connecticut voters might want to know why their senior senator has hung around for years with Mr. Downe, the kind of financial scoundrel Mr. Dodd spends so much time denouncing.”
And Rennie is calling on Senate Ethics officials to expand their review of Dodd’s dealings to include the Irish cottage.
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