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Lawmakers’ profits come under scrutiny

House Speaker J. Dennis Hastert (R-Ill.) made a $2 million profit last year on the sale of land 5 1/2 miles from a highway project that he helped to finance with targeted federal funds.
/ Source: a href="" linktype="External" resizable="true" status="true" scrollbars="true">The Washington Post</a

House Speaker J. Dennis Hastert (R-Ill.) made a $2 million profit last year on the sale of land 5 1/2 miles from a highway project that he helped to finance with targeted federal funds.

A Republican House member from California, meanwhile, received nearly double what he paid for a four-acre parcel near an Air Force base after securing $8 million for a planned freeway interchange 16 miles away. And another California GOP congressman obtained funding in last year's highway bill for street improvements near a planned residential and commercial development that he co-owns.

In all three cases, Hastert and Reps. Ken Calvert and Gary Miller say that they were securing funds their home districts wanted badly, and that in no way did the earmarks have any impact on the land values of their investments. But for watchdog groups, the cases have opened a fresh avenue for investigation and a new wrinkle in the ongoing controversy over earmarks -- home-district projects funded through narrowly written legislative language.

For more than a year, the congressional corruption scandal triggered by former lobbyist Jack Abramoff has focused attention on earmarks secured by lawmakers on lobbyists' and government contractors' behalf. Now watchdog groups are combing through lawmakers' land holdings and legislative activities, searching for earmarks that may have boosted the value of those investments.

"The sound bites from politicians have always been that they're doing what's best for their districts, but we're starting to see a pattern that looks like they might be doing what's best for their pocketbooks," said Keith Ashdown, vice president of the group Taxpayers for Common Sense.

Demand for retraction
The allegation that Hastert used a home-district "earmark" for his personal enrichment is now at the center of a tussle between the most powerful man in Congress and a new watchdog organization that uncovered the land deal this month. Hastert has strongly denied any wrongdoing and has demanded a retraction from the Sunlight Foundation, a new group that first made the allegation in a detailed report on its Web site last week.

At issue is a series of events that left Hastert $2 million richer and his district well on its way to securing a highway that has been the subject of a dispute between pro-growth and slow-growth forces for years. The controversy has been extensively reported by the Illinois news media.

In 2002, Hastert was driving to a parade in Sycamore, Ill., when he saw a post-and-beam house he fell in love with, according to Dallas C. Ingemunson, a longtime friend and ally of Hastert's who made the land deals for the speaker. Hastert struck a deal with the owner on the spot, purchasing the house near Plano, Ill., and 195 acres for $2.1 million.

In February 2004, Ingemunson, treasurer of Hastert's campaign committee and chairman of the Kendall County Republican Party, established Little Rock Trust #225. A week later, through the trust, Hastert and his business partners purchased a 69-acre parcel for $340,000, providing road access to part of Hastert's farm that had been landlocked. Hastert owned a quarter of that parcel.

In May 2005, Hastert transferred the 69 acres of previously hemmed-in land from his farm to the land trust. That summer, Hastert personally intervened during House and Senate negotiations over a huge transportation and infrastructure bill to secure two separate earmarks, $152 million to help build the Prairie Parkway through Kendall County and $55 million for an interchange 5 1/2 miles from his property. President Bush signed the bill into law on Aug. 10.

Then, on Dec. 7, Little Rock Trust #225 sold the Hastert parcels to a subsidiary of the Robert Arthur Land Co. for nearly $5 million. The deal netted Hastert a $2 million profit.

Arthur C. Zwemke, a Robert Arthur partner whose company plans to build a 1,635-home residential and commercial development on the site, scoffed at assertions that the Prairie Parkway had boosted the value of Hastert's land. The price for the land had been locked up in 2004 by land speculator Ron March, who then ceded the project to Robert Arthur Land, he said. The price, he added, could not have risen with the news of the Prairie Parkway funding. Besides, the parkway is still years from construction, he noted, and land prices are soaring as Chicago's sprawl moves ever westward.

Hastert's attorney, J. Randolph Evans, fired off a letter to the Sunlight Foundation last week, demanding "that the false, libelous and defamatory matter be immediately withdrawn and corrected." In his letter, Evans said that asserting that a new road project would have an impact on land values more than 5 1/2 miles away "would be like complaining about a purchase in Alexandria, Virginia, based on renovations at the Capitol."

Bill Allison, who uncovered the matter for the Sunlight Foundation, has stood by his findings. And Jan Strasma, chairman of Citizens Against the Sprawlway, which has been fighting the Prairie Parkway, disputes Evans's argument. Home buyers are not looking to live next to a highway, he said. They just want easy access to a nearby transportation corridor.

Series of charges
Ashdown, of Taxpapers for Common Sense, who has chronicled Hastert's efforts to secure the parkway funding, also remains suspicious.

"The facts are the facts," he said, "and the facts are, he made a lot of money off this deal, and he was the one who got this earmark."

The foundation's allegation is only the latest in a series of charges. Last year, Calvert, the California Republican congressman, and a business partner bought a four-acre parcel near the March Air Reserve Base in Riverside County, Calif., for $550,000. He then secured $8 million for a planned freeway interchange 16 miles away, an additional $1.5 million to support commercial development around the airfield, and sold the property less than a year later for almost $1 million.

Calvert spokesman Bob Carretta pointed to the findings of a Los Angeles-based watchdog group that concluded that Calvert's profit was in line with the rise in market values in the area.

Miller, the other California Republican, helped secure $1.28 million in last year's highway bill for street improvements near a planned residential and commercial development in Diamond Bar, Calif., that he co-owns with a top campaign contributor.

Kevin McKee, a Miller spokesman, said the road improvement was a mile away from the development and had been designated by Diamond Bar officials as their top priority.