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July 26, 2007

What's Alaska's Congressional Delegation Been Up To?

Things they probably shouldn't have been.  We have two Senators and one Congressman.  They're all in trouble:

Senator Lisa Murkowski:

Senator Murkowski bought a prime piece of real estate from Alaska businessman Bob Penny for a fraction of its cost - essentially a gift worth over $100,000.  Joshua Micah Marshall reports from Talking Points Memo (draws heavily on the reporting of Laura McGann):

TPMtv: July 26, 2007

  • Watch the Full-Size Video
  • Scratch that - this one did get away.

    • "This one did get away": On the 26th Murkowski announced that she would sell the property.  Former Alaska Commissioner of Fish and Game McKie Campbell came to the Senator's defense in the Juneau Empire on August 3: My Turn: Don't rush to judge Murkowski .  Campbell served in a Republican administration, and is a friend of buyer and seller:

    The heart of the issue has been the allegation that the senator and her husband, Verne Martell, purchased a lot on Kenai River for less than its value. Many years ago, I worked as an appraiser. I don't claim expertise, but was curious enough to make a few phone calls.

    Murkowski and her family wanted to purchase land on the Kenai River to build a home. Bob Penney, who is a lifelong friend of the senator's and is not involved in any matters before Congress, owned a parcel of land next to his home. Penney is fortunate that he doesn't have to sell the land, but was interested in guaranteeing that he could pick his neighbors.

    The sale imposed conditions through an memorandum of understanding signed by all parties on December 14. If Martell and Murkowski sold the property within five years, Penney would have both first right of refusal as well as 50 percent of any appreciation over the original sale price. When a sale carries restrictions such as first right of refusal or ceding a portion of profits from a future sale back to the seller, the full and true value can be significantly less.

    The senator, Martell and Penney knew that because of the senator's position they would have to establish a fair selling price. They agreed upon the property's assessed value. Alaska statute requires that "the assessor shall assess property at its full and true value as of Jan. 1 of the assessment year" and "the full and true value is the estimated price that the property would bring in an open market and under the then-prevailing market conditions in a sale between a willing seller and a willing buyer both conversant with the property and with prevailing general price levels." The local government assessment is the only government-established, valuation of property in Alaska.

    Unfortunately, based on allegations on a Web site calledTPMMuckracker and several generalized quotes from Realtors about asking prices, theAnchorage Daily News adopted the position that assessments represent artificially low values. It did so without any consideration of deed restrictions or analysis of comparable properties, and without talking to Shane Horan, the Kenai Borough property assessor. (I had no trouble reaching him), or any appraisers working in the area.

    Other newspapers in the state picked up the story without questioning this. For the 2006 tax year, 311 Kenai property owners appealed their assessments; none because their assessment was too low. Full and true value for both appraisals and assessments is properly established through comparisons of actual sales, adjusted for differences, not by comparisons to asking prices...

    This is the core of his op-ed.  Campbell stops short of drawing on his research to make the case that in this instance the appraised price  was actually about equal to the market price.  That seems strange to me, because the rebuttal would have been much more forceful if he had.

    Senator Ted Stevens:

    TPMuckraker reporting on Stevens centers on the connection of oil services company VECO to work done on Stevens' house, and on the ways his son, former Alaska state legislator Ben Stevens, may have benefitted from his father's U.S. Senate service and/or his own position in the Alaska Legislature:

    Congressman Don Young:

    Congressman Don Young is now under Federal criminal investigation: Don Young Under Federal Criminal Investigation (TMPmuckraker, Laura McGann, July 24, 2007).  Here's some TPMuckraker coverage:

    Modifed August 3 to incorporate Campbell's rebuttal on Murkowski's behalf.

    July 26, 2007 in Alaska |

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