Say Anything Blog

From the WSJ:

Sen. Kent Conrad, a North Dakota Democrat, said in an interview… that he became a customer of Countrywide in 2002 after telling Mr.  Johnson (former Fannie Mae CEO and Obama advisor Jim Johnson), a long-standing friend, that he was in the market for a loan for a vacation home in Bethany Beach, Del. Mr. Johnson recommended calling directly to Angelo Mozilo, Countrywide’s chairman and chief executive officer.

Conrad said… that he had placed a personal call to Mozilo in 2002 seeking a mortgage for the Delaware home. But he said Countrywide’s rates were competitive with another offer he received…

Then why has Conrad been hiding that million dollar beach house and the two Countrywide VIP mortgage loans he used to finance it?

None of Senator Kent Conrad’s Financial Disclosure Reports, from 2002 to the present, lists the Bethany Beach, DE vacation home, nor do Conrad’s Disclosure Reports list any mortgages at all for that property.  As far as Conrad’s required Disclosure reports are concerned, there is no Delaware beach house, and no million dollar mortgages with Countrywide Financial.

None!

Conrad’s 2003 Senate Financial Disclosure report (calendar year 2002) lists the apartment building (owned with his brothers through RDK Partnership and later refinanced with Countrywide) as having a mortgage through First Bank of Bismark.  That mortgage is the only one dated 2002, and lists a 6 year term and a rate of 5.7%.  Perhaps Senator Conrad was merely confused in his letter to the North Dakota voting public?

Also listed are a small mortgage loan with the First District Bank of Washington, DC (at 13%) covering an undeveloped tract of land in Dubuque, Iowa purchased in 1981, and a private note with one Mr. John Jones (??) (at 10%) for Conrad’s home in Washington, DC, a 1972 square foot 2-story Row House, built in 1908, and valued by the District at $890,010 according to tax records.

Strangely, Conrad’s 2004 Financial Disclosure for calendar year 2003 is missing the page which lists obligations owed, including mortgages, nor does it show any refinance transactions in the Transactions section (Part IV).  Curiously, the pages for this report have been re-numbered by hand.

The 2005 Report (for calendar year 2004) does include the Liabilities page, which shows that the Bismark apartment property was refinanced with Countrywide on a 30 year mortgage when Conrad bought the property from his brothers.  The rate is listed at 5.75%.  The First District Bank mortgage on the undeveloped Iowa property and the private note on the Conrads’ Washington, DC row house remain the same, at 13% and 10% respectively.  There is no refinance listed on the Transaction page of this report.  And there is no mention of the million dollar beach house property, on either the Transaction page or the Assets page.  The only real properties listed are the Bismark apartments, now owned by an entity called GKC, the undeveloped Iowa property, and the jointly owned “Personal Residence” in Washington, DC.

The 2006, 2007, and 2008 Financial Disclosure reports (for calendar years 2005, 2006, and 2007) list the same three real estate properties, with the same three mortgage liabilities.  Again, no refinancing is listed nor is there any mention among the assets of the Delaware beach house.

For the 2009 disclosure report, which was due May 15, 2009, Conrad filed a request with the Ethics Committee for a 60 day extension.  The request was granted.  The report was due no later than July14, 2009.

While the million dollar beach house is missing from Conrad’s Financial Disclosure Reports, the property itself is very real.  Bethany Beach, Delaware is located in Sussex Country, and country tax records show that the property on Oakwood Street, Lot 14, Block 123, was purchased in November of 2002 by Kent and Lucy Calautti Conrad for $1,450,000.  Bethany Beach is an exclusive community.  While beachfront property values are startlingly high, taxes on those properties are low.  Really low.  While the millage rate has increased every year since Conrad bought the property, his current 2009 property tax bill is a mere $1710.41.  On a property with a purchase price of nearly $1.5 million!!!  As of last week, those taxes had not been paid.

So, there is little question that Senator and Mrs. Conrad own the million dollar beach home at Bethany Beach.  The question is, why that property does not appear on any of the Senator’s Financial Disclosure Reports from 2002 forward.  And neither the original Countrywide mortgage on that beach house, nor the 2004 refinance mortgage is listed on the Disclosure Reports either.

It’s a little hard to imagine that one would simply overlook a property for which one paid a million and a half dollars.  Nor is it believable that the Senator simply forgot about refinancing that million dollar Countrywide mortgage.  After all, as a VIP “Friend of Angelo” the service on that refinance must have been extraordinary… even if there really were no frequent flyer miles thrown in.

Kent Conrad owes his constituents a detailed, fully-documented explanation for the manner in which he has conducted his own personal finances.  Americans require financial disclosure of our representatives and political leaders so that the people they represent can be assured of their integrity… assured that they are not using their high office for personal gain.  By hiding his million dollar real estate investment and the corrupt manner in which it was financed… twice… from the public, Kent Conrad invites the speculation that there is eve more he is hiding.  The voters deserve to know what it is he’s hiding… and why.

The only way for Conrad to clear the air is to release ALL the documents from both his purchase of the million-dollar Bethany Beach house and the subsequent refinance.  At a minimum, that should include the loan applications (form 1003), the closing statements (HUD-1), and the two Notes listing the structure of the mortgages and the interest rate paid.  Conrad also needs to explain why he systematically hid the purchase and the refinance transactions from the voters by keeping them off his Senate Financial Disclosure reports for nearly 8 years!

Anything less would be an insult to the people he represents.