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Article raises questions about Patrick McHenry's (R-NC) finances

by Michael Rogers and Leslie Bland

Roll Call, Capitol Hill's best-known daily, has reported that Congressman Patrick McHenry's (R-NC) personal financial disclosures are at odds with his public positions on financial openness. The article, penned by reporter Matthew Murray, delineates a series of unusually profitable real estate dealings, leaving unanswered questions the financial disclosure laws were designed to expose. McHenry is a second term Congressman from Hickory, NC.

In an article available only by subscription, Roll Call reports that McHenry's high short-term profits took place during a serious downturn in the local region's economy, while McHenry earned $21,000 as state legislator:

Rep. Patrick McHenry (R-N.C.) took to the House floor late last spring and ripped into Democrats for blocking his proposal requiring Members to disclose the existence and value of their personal residences.

"We've seen in recent Washington scandals the results of this loophole that allows Members to hide ownership of properties," McHenry said.

But according to a Roll Call analysis of public records, McHenry has taken considerable liberty himself with the House's personal property exemption, not disclosing at least three pieces of North Carolina property that he owns worth more than $300,000 combined.

In addition, since he was first elected in 2004, McHenry's financial statements overall offer only vague hints into myriad land deals that are transforming Congress' youngest Member from a college student, who is a licensed real estate agent, into a prosperous man in less than a decade

McHenry owns two homes in the district whose ownership and financing he is not required to disclose publicly. In addition, the paper reports that McHenry inherited a $40,000 share of lakefront property in Lincoln County he has also never reported.

As first reported at PageOneQ, McHenry's first foray into real estate was the purchase of a Capitol Hill home in 2001 with another man, Scott Stewart. Stewart, whose relationship to the Congressman is unclear, is a well-known Republican operative with a widely reported history of deceptive fund-raising practices, particularly among elderly Republicans.

One particular deal Roll Call investigated involved a home McHenry purchased in October 2006, which was appraised within months to be worth 30% more. Within days of the sale, the person from whom McHenry had purchased the home, Gaston County Commissioner Allen Fraley, donated $500 to McHenry's Congressional campaign.

While McHenry made several lucrative purchases and sales in North Carolina region he represents in Congress, Roll Call described the area as "hemorrhaging manufacturing jobs." In Gaston County, where roughly half of McHenry's real estate lucrative properties have been located, the residential foreclosure rate doubled, thousands of textile jobs have been lost. A real estate agent told the paper that the local housing market was "terrible" at the time.

McHenry sits on the House Committee on Financial Services, whose legislation directly affects companies in the real estate financing business.






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Originally published on Monday October 22, 2007.


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