Reading Brian Faughnan’s piece about Rep Alan Mollohan’s (D, WV-01) steering earmarks to his landlord while receiving free rent reminded me, of course, of Obama Chief of Staff Rahm Emanuel’s (D, formerly IL-05) steering lucrative polling contracts to his landlord while receiving free rent. And now I’ve been reminded by fellow RS Contributor Mark I that Senator Bob Menendez (D, NJ) notoriously steered earmarks the way of – and greased the path of federal funding for – a tenant of his when he was both a landlord and a Congressman. There’s apparently money in real estate shenanigans: I’m starting to wonder whether the House orientation session for freshmen Democrats includes a quick rundown on the topic.
The problem here – and I speak with a little authority on the subject; I did real estate research / lease administration / accounts receivable work for about a decade or so – is that it’s actually very easy to hide a payoff in a lease deal, particularly in the middle of a real estate bubble. Rent concessions, delays in escalations, modifications of inflationary increases*, even a generous per-foot for moving and/or veneration expenses; all of this can be used in place of a messy and inconveniently documented bribe. In fact, determining when any of the above is a bribe, and when it’s just good business, is an exercise in itself. When the expectation is that you’re going to flip a building anyway before your tenants’ current leases expire, there’s a certain incentive there to load said building up with high-level tenants whose later, overly-generous terms will not affect you in the slightest. Mind that all of this is just the non-political end. As the above examples show, there’s a plethora of ways that you can turn having an elected official as a tenant or landlord into a profitable situation for all involved. And what’s ‘legal’ becomes an interesting question when one of the parties is involved with the lawmaking process.
‘Ethical,’ however, does not. It is not ethical to – like Menendez – use your position to pay off a tenant so that it will have no opportunity to break its lease. It is not ethical to – like Emanuel – trade free rent to a landlord in exchange for fat polling contracts for both himself and his Congressional committee. It is not ethical to – like Mollohan – trade free rent for millions of dollars in earmarks. If you or I did these things, it would earn us a quick visit from the IRS, and at best a permanent place on their yearly audit list. But because these men are from the Other America, they assume that they may do as they please.
I humbly suggest that it is in our best interest to let them know that their actions really do have consequences. Ones that they do not dictate themselves.
*By the way, if the CPI takes a nosedive, a lot of landlords are going to be very unhappy.
Crossposted to Moe Lane.