Tag Archive for: financial disclosure

 

Jerry Weller, the 11th District representative who’s up for reelection in November, has some explaining to do. As I wrote in an August 25 cover story, “The Congressman and the Dictator’s Daughter,” he’s already raised questions about whether he has a conflict of interest because he’s refused to step down from the House of Representative’s influential Subcommittee on the Western Hemisphere even though he’s married to Zury Rios Sosa, a third-term legislator in Guatemala. Since then, I’ve discovered that the congressman, a Republican whose district encompasses parts of the south suburbs, hasn’t revealed the value of any of the wedding gifts he and Sosa received when they were married two years ago in Guatemala. Such gifts are supposed to be listed on the publicly-available financial disclosure forms congressmen file every year, but the House Ethics Committee routinely grants waivers, and Weller got one. Still, his request raises questions, because Sosa is the daughter of former dictator Efrain Rios Montt and the second most powerful person in the party he heads, so lots of people may have wanted to give the couple something very nice.

More troubling, I’ve also learned that Weller owns several pieces of property in Nicaragua, some of which he’s disclosed to Congress as required by its rules—and some of which he apparently hasn’t.

Weller seems to have bought his first Nicaraguan lot four years ago, somewhere in the coastal township of San Juan del Sur, a two-and-a-half-hour drive from Managua. Then a fifth-term congressman, he went to Nicaragua in January 2002 with other members of the House Ways and Means Committee to attend a presidential inauguration, and he seems to have bought the property sometime afterward. At the time land was still relatively cheap—Nicaragua’s the poorest nation in the hemisphere after Haiti. But cruise ships were already docking nearby, and investors had started buying up beachfront property. It’s not clear how much Weller paid for the undeveloped lot, but on his financial disclosure form, which congressmen are required to file by the Ethics in Government Act, he listed it in the assets section and checked the box indicating that it was worth $50,000 to $100,000.

Within a year, Weller had joined the House International Relations Committee and its western hemisphere subcommittee, whose main focus is Latin America. In August 2003, he and other committee members went to Guatemala to discuss issues such as expanding trade relations and curbing drug trafficking and money laundering, and that’s when he met Sosa. Eleven months later, they announced their engagement.

In the months before the announcement, Weller began shuffling his assets. According to his financial disclosure form for 2004, that January he bought a Chicago high-rise condo at 1335 S. Prairie worth $500,000 to $1 million, and in April, he sold a Capitol Hill rental property worth $250,000 to $500,000. Three days after that he bought a second undeveloped lot in Nicaragua’s San Juan del Sur township, this one on Coco Beach, a stunning stretch of white sand and surf. On the disclosure form he listed it as being worth $50,000 to $100,000.

Weller married Sosa that November, making him the first member of Congress ever to have a spouse serving in a foreign government. A month later, he wrote a letter to the House Ethics Committee asking for a waiver of the “financial rules for the reporting of gifts given in celebration of my November 20, 2004, wedding.” The Ethics in Government Act states that all gifts above a “minimal value” ($305 in 2005) must be reported. As the 1977 commission recommending the act’s rules wrote, “The objectives of financial disclosure are to inform the public . . . in order to increase public confidence in the integrity of government and to deter potential conflicts of interest.” The rules allow congressmen to ask for a waiver for wedding (and baby) gifts, though it’s not clear why, since if there’s ever a good time to butter up a congressman it’s his wedding day.

At any rate, waivers are usually requested before an event, and the rules note that requests made after an event “should include, at a minimum, a description of each gift for which a waiver is requested, including its market value, and the identity of the donor,” though this information isn’t made public. “Obviously if there is an extravagant gift of a large amount of money, the ethics committee should look at it and then decide whether it should be disclosed,” says Meredith McGehee, policy director of the nonpartisan watchdog group the Campaign Legal Center. Weller’s letter, which is public, doesn’t describe any gift, its value, or its donor. He could have provided a separate list of gifts, though current and former congressional staffers familiar with the workings of the ethics committee say the people who routinely review such lists never saw one from him.

In March 2005, the committee’s chairman, Republican Doc Hastings, and the ranking Democrat, Alan Mollohan, formally granted Weller a waiver. Spokesmen for both congressmen declined to comment. Written in the section of Weller’s 2004 disclosure form where gifts are to be listed is “none.”

According to his disclosure forms, in September 2005 Weller, by then vice chairman of the western hemisphere subcommittee, sold his Chicago condo and the next day bought a new home in Morris, his official residence in his district. And that December he bought another undeveloped lot on Coco Beach, which he listed on the forms as worth $50,000 to $100,000.

I couldn’t obtain any Nicaraguan records for the 2002 lot Weller bought, so it’s not clear how big it is or what exactly he paid, though on the disclosure form for 2004 he checked the box indicating that the property had gone up in value, to between $100,000 and $250,000. I did obtain records—all publicly available—for other Nicaraguan properties that bear his full name, Gerald Craig Weller, and passport number and list him as a U.S. citizen; one also states that his “legal residence is in the state of Illinois.”

According to the notarized bill of sale, the second lot Weller bought, in April 2004, was 13,029 square meters, for which he paid roughly $3,150 (or 24 cents a square meter). He listed it on his 2004 disclosure form as worth $50,000 to $100,000, and on the form he filed in May 2006 for 2005, he listed it as still worth the same amount. The notarized bill of sale and property title for the third lot—19,884 square meters bought in December 2005—show that he owns only a 50 percent interest in the land, having bought it with two partners. They paid $174,044 for the lot, or $8.75 a square meter, and Weller listed his share’s value as $50,000 to $100,000 on his disclosure form for the year.

Other documents, all from 2005, show that Weller bought two more lots in Nicaragua—neither of which is listed on his disclosure form for that year. A notarized bill of sale shows that Gerald Craig Weller—with the same passport number listed on documents for property he’s disclosed to Congress—bought a fourth lot, again on Coco Beach, in March 2005, a little over three months after his wedding.

Earlier this month I called the municipal office where property documents are held in San Juan del Sur and spoke to a man who works with expatriates and other foreigners buying land in the area. He said undeveloped land on Coco Beach was going for between $50 and $70 a square meter. I asked if the properties owned by Congressman Jerry Weller were worth the same, and he replied, “Yeah, more or less about that.” Local real estate agents told me undeveloped property on Coco Beach goes for up to $80 a square meter.

Using the low-end figure of $50 a square meter, the fourth lot, which is 7,960 square meters, would be worth $398,000 today. Another notarized property title shows Gerald Craig Weller buying a fifth lot in April 2005, another undeveloped parcel on Coco Beach totaling 1,200 square meters; at $50 a square meter it would be worth $60,000.

Yet another notarized property title shows that in February 2005 Gerald Craig Weller sold a sixth lot somewhere in the township of San Juan del Sur—there’s no indication of when it was bought or what he paid. It’s 1,699 square meters, so today it would be worth at least $85,000. No income from such a sale appears on the disclosure form Weller filed for that year or in the amended form he filed in August 2006, though the forms do note the sale of the parking spot that went with his Chicago condo.

Not disclosing information that’s required by the Ethics in Government Act isn’t wise. You can get hit with civil penalties of up to $11,000 and with further fines and up to five years in prison under the False Statements Accountability Act of 1996. Plenty of congressmen report the money they make buying and selling expensive pieces of property on their disclosure forms, so it’s hard to understand why Weller would have reported some of his purchases and sales but not others. He wouldn’t have had to report the three undisclosed properties if they were covered by a blind trust, but he checked the box saying he had no blind trusts in 2005. He wouldn’t necessarily have had to report them if they were owned by his wife, but the titles for the properties don’t mention her. And even if the lots had in some way been part of a wedding gift, they wouldn’t be covered by the waiver he got. As the ethics rules note, “The grant of a gift rule waiver by the Committee does not waive the requirement for reporting certain gifts on Schedule VI of one’s annual Financial Disclosure Statement.” Ken Gross, former associate general counsel of the Federal Election Commission and an expert on the Ethics in Government Act and Senate and House ethics rules, says, “There’s a schedule for reporting of gifts, and then there’s an asset schedule—and those are two different things.”

There may be a good reason three of Weller’s Nicaraguan lots don’t appear on his disclosure forms, but the only person who can say is Weller. I called his office last week to ask him to comment and wound up with his campaign manager, Steven Shearer. I explained I had reason to believe Weller owned more property in Nicaragua than he’d disclosed, and Shearer said he’d get me the number for Weller’s lawyer.

Having heard nothing, I called Shearer back on Monday and asked if Weller had any comment. “He has three properties down there and has filed three properties,” Shearer said, after again promising to get me the lawyer’s name and number. “But that’s it.”

“So beyond those properties, he’s denying that he owns any others?” I asked.

“That’s correct,” he replied.

I called Shearer back later that afternoon and said I wanted to be sure it was clear I had documents showing that Weller owned six properties, only three of which were listed on the disclosure forms.

“I wouldn’t know about that,” Shearer said. “His attorneys help him file his disclosure forms, and they’ll have to answer those questions.” He said he’d get me a name and number.

On Tuesday at 5:30 PM eastern time Shearer finally called and gave me the number of Jan Baran, of Wiley Rein & Fielding in Washington, D.C. Baran was still in his office. When I asked about Weller’s undisclosed properties he said he couldn’t comment because of the attorney-client privilege, adding, “I don’t know why Mr. Shearer would have referred you to me.”