Donor had role in lawmaker's deal; ethics panel sends letter

AP News
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Posted: Mar 16, 2015 10:13 PM
Donor had role in lawmaker's deal; ethics panel sends letter

WASHINGTON (AP) — Details emerged Monday of another business deal between embattled Illinois Rep. Aaron Schock and one of his political donors, as a congressional ethics investigation appeared to get underway.

A shell company linked to Schock paid a political donor $750,000 last year for a warehouse in Peoria, then took out a $600,000 mortgage for the property from a local bank run by other donors, a combination of Illinois land records and private business documents shows.

The price of the deal falls within a range identified as reasonable by a bank-hired appraiser. But the transaction follows similar Schock real estate deals detailed by a recent Associated Press investigation into the Illinois Republican's business transactions involving political contributors over the past decade.

Schock has come under heavy scrutiny following revelations of lavish spending, payments to donors for flights on private jets and improperly categorized expenses. On Monday, the AP confirmed that the Office of Congressional Ethics has reached out to Schock's associates as it apparently begins an investigation. The office is an outside panel that reviews ethics complaints against House members and makes recommendations to the House Ethics Committee.

A person who received a letter said the OCE was interested in conducting an interview and reviewing any relevant documents. At least two other Schock associates received similar letters, the person said. The Schock associate asked not to be identified because the ethics panel's actions are confidential.

The 2014 warehouse deal, which occurred after the congressman's most recent financial report, adds to questions about Schock's pattern of reliance on campaign contributors. Political donors built, sold and financed a house owned by Schock in suburban Peoria. Donors also were involved in the sale and financing of a Peoria apartment complex in which Schock invests.

Regarding Schock's 2014 warehouse deal, county land records obtained by the Peoria Journal Star and reviewed by the AP show that a company managed by Schock paid $300,000 last May to buy a commercial property owned by Jeff Green, a Peoria car dealer who has contributed at least $12,000 to the Illinois Republican's congressional campaigns and who still owns a larger land tract next to Schock's.

In addition to the price of the property itself, Schock's company paid another $450,000 for the rights to existing warehouse tenants' lease payments. The total price fell within a bank-commissioned appraisal of the property, which Schock borrowed $600,000 from Heritage Bank to finance. Several senior officials at the bank previously contributed at least $1,000 each to Shock's campaign, according to federal records.

Before Green sold the warehouse property to Schock, he had attempted to sell it for $895,000, the bank's appraisal notes. But the $750,000 that Schock paid fell within the range of fair values identified by the appraiser.

A spokesman for Schock declined to comment about the 2014 deal. A spokesman at Heritage Bank in Peoria, which approved the $600,000 commercial mortgage, did not immediately respond to a telephone message left with a spokesman.

In the immediate months after buying the land parcel in May, according to campaign expenditure records, Schock's re-election campaign paid Green and two of his auto dealerships more than $112,000 in unspecified transportation expenses.

Those expenses included a $73,000 payment for the purchase of a Chevrolet Tahoe, according to a report Monday in the Chicago Sun-Times. The newspaper said the campaign expense for the Tahoe purchase is allowed under federal rules but questioned Schock's self-reimbursement of $1,218 for mileage. Green also owns a private plane, which repeatedly flew to sites where Schock appeared for campaign and other appearances, according to Instagram data reviewed by AP.

Reached by telephone at his Peoria office, Green said, "Ninety percent of the stuff out there is just a lie."

Schock has built much of his personal wealth over a decade of real estate investments with political donors, an AP review found. Schock, 33, who was named to a midlevel Republican leadership post in the House last year, has disclosed personal wealth in a range centered on $1.4 million. He's made his precocious business acumen a key part of his appeal since his election to Congress in 2009 and sometimes describes himself as a real estate developer.

Schock has created several shell companies as vehicles for his real estate moves, but it was unclear why he used the name "Menard" in his purchase of the Peoria property from Green.

Menard Inc. is a Wisconsin-based home improvement firm with franchise stores across the Midwest. A Menard franchise once operated on the land owned by Schock and Green, but a separate store now operates in another Peoria location. A Menard spokesman, Jeff Abbott, said he was looking into Schock's use of the company name.

In a separate report Monday, the website Buzzfeed reported that Schock spent more than $5,000 from his House account for a portable podium that looks a lot like a presidential podium used by President Barack Obama. A public watchdog group has filed a federal ethics complaint against the lawmaker for using congressional money to redesign his office in the style of the TV show "Downton Abbey" and for billing taxpayers or his campaigns tens of thousands of dollars in private air travel on donor-owned planes.

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Associated Press writer Matthew Daly contributed to this report.