McHenry and Pittenger?

From Greg Flynn at BlueNC?

How does Patrick McHenry manage to stand tall financially? His personal accumulation of assets through property deals has been a wonder. I’ve always been curious how a paper entry on a form turns into a cash windfall later. Now it seems he has a business partner in Republican State Senator and Lt Governor candidate Robert Pittenger, Lord of the LLC land deals, to help him along.

In Patrick McHenry’s financial disclosure forms filed 5/15/2007 for 2006 there was a new entry for a purchase: Locust-Highway 200 LLC (Real estate/ raw land) a “.00294%” share valued at $15-50,000. The date of the transaction was 2/2/2006. The NC Secretary of States records indicate that the LLC was formed just two days earlier 1/31/2006. The documents show that William R Culp Jr was the registered agent and Christopher E Hannum was the organizer. An annual report filed with the NC Secretary of State 3/7/2007 shows the registered agent and managing member to be Robert Pittenger.

A deed recorded 3/15/2006 in Cabarrus County, Book 6606, Page 86, shows that Locust-Highway 200 LLC purchased a 90.851% share of a parcel of land described as 379.551 acres, Highway 200, Locust. The date is more than a month after McHenry claims he acquired his interest. The stamp tax of $12,759 puts the sale price at around $6,379,500. McHenry’s share of 0.00294% comes to $188 which makes his claim of a $15-50,000 acquisition seem odd. It is possible that he made a mistake on his disclosure form and meant to state either .00294 or 0.294% but the share is very specific.

A listing on Pittenger’s website, which has since been removed, states that the land was annexed and rezoned by the City of Locust in neighboring Stanly County. The rezoning allows 2.4 lots per acre for a total of 960 lots. The other owners of the property besides Locust-Highway 200 LLC are listed in deeds as Paul A Stroup III (3.2675%) and College Street LLC (5.8815%). Annexation and rezoning is apparently a specialty of Pittenger in adding value to land. This development, just northwest of Locust, will be yet another bedroom community for Charlotte, adding to transportation needs in neighboring counties.

Since McHenry’s recorded investment in the LLC, Robert Pittenger and his wife have made $9,000 in contributions to McHenry’s campaign. One contribution of $1,000 was made 3/10/2006 just a few days before the deed was recorded. In the current election cycle Pittenger has maxed out his contribution for both the primary and general having given a total of $4,600 in Nov/Dec 2007. His wife is up to $2,400 for the current cycle.

I still haven’t put my finger on it. I have been suspicious when undocumented personal loans to a campaign get paid off as with McHenry but it’s not unusual for campaigns. To me it’s an untraceable way to siphon off money for personal use. Making property deals with campaign contributors is not unusual for McHenry but this deal is odd. It is less transparent than a deed transfer.

When the “consideration” for a transaction is unknown the asset value can be anything you or your partners claim it to be. The acquisition cost can be and sale cost are malleable. Without an audit there is no way to know how much was actually invested by a partner, how much value is arbitrarily added to the investment or if values are manipulated to avoid capital gains tax.

In this case, McHenry’s participation seems to be inconsequential to the LLC though it seems very important to Robert Pittenger. In this case McHenry could cash out big without ever having invested a penny of his own money.

More on Pittenger via praha at BlueNC:

This stuff comes from Village Scribe Online, which is apparently a really good local Charlotte blog. Charlotte is extremely far out of my orbit, so I'm just discovering these things as an outsider:

The good senator has been a very active land speculator in western Union County. One of the most lucrative was the satellite annexation into Waxhaw arranged by NC Legislature, so Senator Pittenger’s property would enjoy much higher home density than county zoning. That resulting ’school busting’ development is known as Lawson. There are others...

Anyway, Pittenger’s pet bill, his personal multi-million-dollar moneymaking machine, was House Bill 705 from the 2003 session: http://www.ncga.state.nc.us/gascripts/BillLookUp/BillLookUp.pl?Session=2...

A brief recap of the calendar is:

3/26/03 Bill was introduced by Jim Black, legislatively annexing some remaining parcels into the Town of Matthews
5/22/03 Bill received favorable report by house finance committee
5/28/03 Bill passed house; there was still no mention of Pittenger’s Get Rich Quicker scheme
5/29/03 PASSED house bill went to senate finance committee; I don’t know if Pittenger sat on that committe during that session, but he is listed as a member of the senate finance committee now: http://www.ncga.state.nc.us/gascripts/Committees/Committees.asp?sAction=... Standing_77
6/18/03 Senate finance committee amends passed house bill, adds language ANNEXING PITTENGER’S PROPERTY INTO WAXHAW, reports favorable…Surprise, Surprise!
6/24/03 Senate votes to pass H705 with the Pittenger annexation added…vote was 47-1 followed by 49-1 with Pittenger voting “AYE” both times on the bill that would net him millions of dollars; only “NAY” vote was by Sen. Katie Dorsett (D-Guilford)…man, we need more senators like her and fewer like Pittenger and Shubert
6/26/03 Re-voted in house on concurrence after senate passage; 3 “NAY” votes including Rep. Pryor Gibson (D-Anson,Union)

Johnson raises $120,000

At least, that's what his campaign manager Lauren Moore told CharO. Why he puts them ahead of us, I have no idea. Since we all know how much they love the McHorny one.

But, there's no accounting for taste. And $120,000 is about ten times more than the 2004 Democratic candidate raised in her entire campaign and five times what the last candidate raised. So mazel tov, Daniel.

We'll confirm that once we see the FEC filing . . .

Hey, Lauren, don't forget to notify all the small newspapers in the district. There's two in Newland and then there's Spruce Pine and Morganton, Hickory, Lincoln, Shelby, Gastonia, Lenoir. (I've got links for LTEs along the left column) Most of them never ran his announcement so I wonder if anyone told them. But those are the places you need to contact if you want to reach your potential swing voters.

Not that many people read the Charlotte Observer compared to the local papers. And McHenry always gets his stuff in those little ones. They'll print pretty much anything you send them. If you send it and call them to confirm.

Don't expect the CharO to do you any favors. Lisa Z drinks McHenry's kool-aid. Just look her up. Every time he has a scandal, she writes a puff piece. When things get rough, she's going to screw you. Don't say you weren't warned.

Roll Call blasts McHenry

Thank God someone in the traditional media (with far more resources than yours truly) finally started asking Pat McHenry the financial questions we've been picking at for months.

In a subscription-only article Roll Call not only questions McHenry's new-found wealth, but also has the reportorial balls to highlight his appalling hypocrisy about openness.

Particularly of note, Roll Call uncovered a third unreported property. We'd already told you that McHenry owns two homes in the district whose ownership and financing he is not required to disclose publicly. However, he inherited a $40,000 share of lakefront property in Lincoln County he has also never reported.

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

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.

Roll Call went on to say that McHenry has "taken considerable liberty himself with the House’s personal property exemption" not disclosing two homes and that third lake front property they say adds up to over $300,000.

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.

Check out my article at PageOneQ.com.

Here are a few more tidbits:

For example, on this year’s forms McHenry disclosed his October 2006 purchase of a house in central North Carolina. Public records show McHenry paid $87,500 for the property, which he bought from a local politician. Within months of the sale, tax assessors determined the house was worth 30 percent more.

UPDATE: The local pol: Gaston County Commissioner Allen Fraley who within a week donated $500 to McHenry's campaign.

And last summer McHenry, his four siblings and a business partner sold a 40-acre plot to a local developer for $1.5 million. The developer, Charlotte-based E.C. Griffith Co., plans to soon break ground on a 1,000-plus-unit suburban housing development. McHenry made a short-term profit of at least 200 percent on the deal.

It's particularly amazing to me how much he won't even respond to their questions.

What do you have to hide, Pat? Or, perhaps I should be asking, is there anything you aren't hiding?

Fellow Republican Benfield Questions McHenry's Finances

Forgive me if this information has already been posted here. McHenry generates such a wide variety of scandal and misconduct that I honestly can't keep up. This Letter was submitted to news@norman -Jerimee

[Jerimee-this ran in the Hickory Record several weeks ago and we posted it here but the questions Benfield raise bear repeating. Anyone who wants to look closely at McHenry's finances can start by going to open secrets dot org and click on his personal finances reports.

The original filings as a candidate are only available onlinehere. Be sure to scroll down to the bottom of the post --DQ]

Dear Editor:

I’ve been looking at Patrick McHenry’s recent U.S. House of Representatives Financial Disclosure Statement on the internet. It’s a form that he’s required to file each year by May 15, and he signed and filed this year’s document on May 7.

The Center for Responsive Politics (opensecrets.org) posts these disclosures, which cover the previous year. One form really isn’t so revealing by itself, because it reports income, net worth, assets, etc. in so-called “brackets.” You know, “at least” as much as one number, but “less than” a second, higher figure.

If you look at two or three of these reports, you get a rather disturbing picture. Our representative has done real well since entering Congress.
McHenry’s financial reports show, for instance, that he went from owning virtually nothing—he said—when he ran for Congress in 2004 to having a net worth in the bracket of “$720,000-$1.2 million.”

Wow! Where did that kind of net worth come from in just three years? If any other 30-year-old had done that, he’d be on the cover of Fortune Magazine, The Wall Street Journal, etc.—or there would be a federal investigation. Maybe there should be one here, too!

Who is the financial advisor for this brilliant young public servant? McHenry has a degree from Belmont Abby College and a real estate license, but nothing in his background that would bolt him to a million dollars so fast!

When McHenry first entered Congress, according to his filing, the Gastonia whiz kid reported “$68,009-$281,000” in net worth. That ranked 337th out of 435 members of Congress; in other words, only 98 members of Congress actually were “poorer” than he was.

But in the reports since, the august representative of the 10th District has seen his net worth skyrocket to the “$301,018-$877,000” bracket—on its way to “$720,000-$1.2 million.” By any measure, on paper, he’s become a wealthy young man very quickly.

Not just wealthy, but every young adult’s financial dream—having a net worth of over a million dollars by your early 30s!

Would it be too much to ask the enterprising and wildly successful congressman to address publicly what has gone so terribly right in his financial life since he first ran for Congress in 2004 as “the only small businessman in this race”?

That year, the owner of McHenry Real Estate of Cherryville listed zero assets in his business—same as he does now. Could it be that “McHenry Real Estate” never really was a serious “business” three years ago, as his opponents claimed?

But the disclosure forms apparently, don’t tell the whole McHenry financial story.

According to the Catawba County Geospatial Information Services (GIS) system, there’s a condo on Lake Hickory at 2200 6th St. NW (#2), Hickory, for which McHenry is listed as the owner since April 27, 2005. If you know the area, it’s located between the former sites of the old Rock House and the old Moose Club on “the lake road.”

This residence is not listed among his apparent real estate rental properties in Gastonia, Cherryville and Charlotte on Schedule III—Assets and “Unearned” Income that he reported on May 7. And yet, there it is, big as day in Deed Book 2658, Page 496, Parcel ID 3704170122320002, showing Patrick T. McHenry as the owner.

Is it barely possible that this young public servant, who likes to have his friends register and vote illegally in places where they don’t actually live, is hiding some of his assets from the public? Maybe he thinks we might object to his amassing too much of a fortune too fast?

So, for sure, something is amiss. Both the deed for 2200 6th St. NW (#2) and the House ethics reports bear McHenry’s signature. What gives here, Congressman? Can he explain this?

Am I the only one around who actually watches him closely enough to know that he will say or write whatever he wants, even on official ethics reports, depending on whether it helps him or hurts him at the time? Why is no one else paying attention?

If my name were Patrick Timothy McHenry, a law degree would be nice to have. I think I would finally try to get used to telling “the truth, the whole truth and nothing but the truth.”

Dennis A. Benfield
Hudson, NC

[As to the Hickory condo, McHenry's spokesman Aaron Latham has told the Gaston Gazette that he lives in Cherryville AND Hickory. Therefore the condo is a residence and by House rules, members do not have to report the existence of or transactions to do with residence(s) that do not bring in any rental income. Of course, he's never admitted to living in Hickory before. And hiding a large banking transaction when your largest donors are banks and you sit on the Finances Committee certainly violates the spirit and reasons for financial disclosures. --DQ]

Big Week for Pat Go Bye Bye!

Monday you learned that Pat might not live where he votes. Gee, that's what? The four cases of voter fraud he's been tied to. Either that or he's got an unreported asset and that begs the question, what is he hiding? How he acquired his Hickory condo or just the financing thereof?

Tuesday we posted and discussed McHenry's original financial disclosures from February, 2004. He has previously unreported ties to a local businessman and blogger. It reads like a trashy romance!

Wednesday was a break in things. No, it wasn't. This was the story. What IS with Republicans and their repressed sex drives?

Thursday it was all about dirty tricks and corruption. We had already learned on Friday that was Pat involved with recent murder victim Ralph Gonzalez of Florida and Georgia ethics issues (including ties to Jack Abramoff and vote manipulation. But the North Carolina Conservative told us that not only McHenry was also tied to Jason Drake, who police say was the shooter.

Drake has also been tied to accused murderer Harlow Cuadra, apparently works or runs an escort service or porn business out of Virginia Beach. It's all over the tubes that there exist lists of republican clients for a call-boy service and that Drake was threatening to expose them if Gonzalez didn't give him money to help pay for Cuadra's defense for a Pennsylvania murder.

The unconfirmed allegations make for interesting speculation. What we do know is that Ralph Gonzalez is tied to several scandals with loads of documentation and McHenry has buried his political past, white washing his ties to all kinds of nasty political operations. Wonder what we'll learn this coming week?

Stay tuned, folks.

McHenry's original financial disclosure

The documents below were filed by Pat McHenry in February 11, 2004 as a candidate. To see them I had to go to the Cannon House Office building on Capitol Hill, write my name, address, occupation and employer into the computer that, of course, could keep track of what I viewed.

They're not available with the campaign finance reports at opensecrets dot org. The House Clerk's office publishes them in a four-set book that you can request for free. I've been told you can request these documents in some way but the woman in charge of these requests, Janice Glosson, has not returned my phone calls.See below for update.

So, just in case my car gets run off the road some dark and foggy eve, I decided to post the documents right here for everyone to see.

One thing I noted immediately on Page 5. See where McHenry lists Tech5 Corporation and writes "Former Partner."

Well, that's very interesting because the president of Tech5 corporation is none other than the publisher of the Lincoln Tribune. Why should we care, you ask? Well, I'll give you a couple of examples of the kind of unbaised hard-ball reporting on McHenry that comes out of that Lincoln Tribune:

Audience member William Hal Schronce took McHenry to task on the amount of communications McHenry’s office sends out in the mail.

“This is a waste of my tax dollars,” said Schronce. “There are a lot of people who feel the way I do.”’

The audience vehemently disagreed with Schronce, with many of them telling McHenry they like getting mailings from the Congressman’s office. McHenry said it’s just one of the ways his office keeps in touch with his constituents.

Yeah, of course. Everyone loves getting a bunch of expensive pr crap from their Congressman. That's believable. And another:

Several times during the night, McHenry drew applause for his stance on the hot-button issue of the war in Iraq.

Resident Judy Gilbert asked McHenry why he voted against a house bill that called for U.S. soldiers to spend equal time between combat and home. McHenry’s answer was swift, decisive and garnered a thunderous round of applause from the audience.

Of course, there's no mention that Publisher Jason Saine was and is the President of Tech5, a company that McHenry was a partner in months before he ran for Congress.

Here's the Tech 5 Corporation archived website files. They mysteriously disappeared from the intertubes the same month McHenry ex-staffer Aaron Lay was indicted on voter fraud charges but it's still listed by the NC Secretary of State as an active corporation.

We need to know these business ties so we can know who is writing the stories (pr puff pieces) in these local newspapers. Why should they write about him as if they are being objective when clearly they are not?

Citizens have the right to these documents by law. If you don't like that they only available at the House Clerk's office, let your congressman know. Oops, your congressman wants it this way! I guess you're shit out of luck.

UPDATE: According to the Clerk's office's Janice Glosson, "the clerk has done everything required by law." They send the copies to every state. In North Carolina, it's the State Board of Elections. What they do with it is up to each individual state, Glosson told me. And as to being available to the public in the district, again, "the clerk has done everything required by law. As to having them posted on line. Again, "The clerk has done everything required by law." And as to people in the actual district wanting to view or have copies. "That's up tot he individual states. As to the young gentleman who told me I could get request copies or that they published a book of these available for free? "I'm not going to go there." So your government at work. At least she returned my phone call, eh?



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Hey, Pat, where do you live?

So, Patrick, let's say just for argument's sake, that you didn't declare on your federal disclosure forms that Hickory condo (bought in 2005 and not reported then or since) because it is your personal residence.

(Not having to report a residence purchase or sale somewhat neuters the concept that taxpayers have the right to know if you got a sweetheart deal but I'll let that go for now).

Problem with that? According to the North Carolina State Board of Elections you've been voting from Cherryville the last three elections since you bought that property (and chose to exclude it from your disclosures.)



So, now we've got that pesky ol' voter fraud problem rearing it's ugly head. Which is worse? Voter fraud or lying in financial disclosures? Both are federal legal violations, right? But, the thing is you have other inconsistencies on your financial disclosures (I won't got into it now but does the address 4211 Pete Brown Rd. Ring any bells?)

McHenry's unreported asset confirmed

A Caldwell County Republican reported it last week. A 70-year old lady asked Pat about it in Lincoln County this week. Pat denied it publicly. "Not a word of truth in that article."

But public documents tell another story.

Last week Republican Dennis Benfield of Caldwell County wrote in the Hickory Daily Record that McHenry owned property which he did not list on his legally required financial disclosure statements.

And at the Lincoln County town hall, a 70-something woman named Farrie Blackburn politely asked McHenry about it. After a long stunned moment, McHenry said there wasn't a "word of truth in that article." She said she was sure that the figures were accurate, that she knew the author. Pat then required that all questions be submitted first in writing.

Below you'll see a segment of the Catawba County assessment for the property, linked here. Also below you can see the page of assets from his 2006 report linked here. It's owned by McHenry and it just ain't listed in his report.



And in blue map above you can see land layout (it's a condo so he owns only a fraction of this parcel of property.

In the assessment from January 1, 2007 there are other assessments going back to 1997. Even if they were under a previous owner, I'm going to go ahead and assume he owned it December 31, 2006, which makes it omitted from the 2006 financial disclosure documents filed May 15, 2007.

UPDATE: Thanks to Greg Flynn at BlueNC whose computer obviously is more patient with the Catawba County Register of Deeds, here are the facts from their website:

The condo was put up for sale Monday February 28th 2005 "at public auction at the Catawba County Courthouse door, when and where Patrick T. McHenry became the last and highest bidder for the said land at the price of $139,949.25". The deed is dated April 27th, 2005. The "mail to":" address listed for Patrick T. McHenry is C/O Williams Law Firm, Hickory. The related Deed of Trust was not signed by McHenry personally but by Jason J. Deans with Power of Attorney. However the POA on record does bear his signature with the characteristic flourish. The borrowed amount is $132,950. The current tax value is $143,300

On a more amusing note, in 2006, McHenry bought the house where he lived with convicted illegal voter Michael Aaron Lay in 2004. It's the Cherryville property on the form. He lists it as rental property.

I have to say it sure makes me wonder if he didn't acquire it as the Lay investigation heated up! I've seen those CSI shows where trace evidence of who knows what shows up years after the alleged misconduct . . .


But back to the numbers, you know, hard facts.

For the year 2006, McHenry reported these figures: from $342,000 to 930,000 in assets, from $160,000 to 365,000 in debts, and from $33,300 to 100,000 in income outside his Congressional salary. So, his self-reported net worth was $177,000 to 565,000. That makes the $140,000 condo somewhat of a significant oversight.

For 2004, he reported assets from 250,000 to 755,000, debts from $50,000 to 100,000 with income from assets of $206 to $16,200 and his former state legislator income of $20, 658. Don't trust my addition. Here are the documents.

Posted at BlueNC and Scru Hoo.