Opulence abounds at The Greenbrier, where amenities include a casino, a cosmetic surgery center, five lush golf courses and posh hotel rooms costing upwards of $400 a night.
Undeveloped home sites at the luxury resort in southern West Virginia sell for up to $900,000. Finished dwellings — typically getaways for residents from other states — start around $1 million and can top out at $5 million or more.
So, by comparison, the half-acre, vacant wooded lot with a $202,000 price tag in the Traveller’s Hill neighborhood seemed downright nondescript.
But if Lot 26 was ordinary, its buyers most definitely were not. Queuing up for the purchase in late 2002 were Kentucky Congressman Edward Whitfield, his wife, Connie Harriman-Whitfield, and a nationally known lobbyist named Juanita Duggan.
They could well afford it. Whitfield was a millionaire when the trio went property-shopping. And Duggan, with a net worth of nearly $600,000, was drawing an annual salary of more than $344,000 as president and CEO of the Wine & Spirits Wholesalers of America, Inc.
With some exceptions, House ethics rules prohibit gifts to members from anyone, including lobbyists. But in West Virginia, Duggan’s and Whitfield’s fortunes were linked in a six-figure land deal, a financial partnership that lasted more than a decade.
For 20-plus years, Duggan’s high-powered clients and the associations where she worked have had frequent legislative business before the House Energy and Commerce Committee, where Whitfield is a senior member, and its Energy and Power subcommittee, which he chairs.
Their jurisdiction over issues including telecommunications, consumer protection, food, drug and chemical safety, public health and the environment sometimes makes them forums for pitched legislative battles and intense lobbying.
Whitfield often has cast votes favorable to Duggan’s clients and employers, whose interests included tobacco, fast food, drugs, health care, environmental regulation, chemicals and paper, as well as alcohol.
While Duggan was involved directly with these clients and associations, they and related industry groups were generous contributors to Whitfield and his Thoroughbred PAC, donating more than $320,000 to his political campaigns since the mid-1990s.
On Feb. 24, 2003, after together obtaining a $266,800 bank loan, Whitfield, his wife and Duggan acquired Lot 26.
Whitfield, a Republican from Hopkinsville, never revealed his joint ownership with Duggan in the annual financial statements he was required to file with the clerk of the House of Representatives; ethics rules require no such disclosure.
Thus, the propriety of Whitfield’s business relationship with a registered lobbyist and their mutual legislative agendas never surfaced publicly until the Kentucky Center for Investigative Reporting sought recently to question him about it.
(Read the sidebar: Kentucky Congressman Ed Whitfield’s Ethics Under Scrutiny Before)
The 71-year-old Whitfield had no interest in talking. His press secretary, Marty Irby, did not respond to 10 phone and e-mail messages from KyCIR before finally saying: “We do not have a comment on the matter.”
AN ‘APPEARANCE PROBLEM’
Authorities on congressional ethics said the shared property ownership — though not barred by the rules — raises significant questions about the commingling of Whitfield’s and Duggan’s legislative and personal business.
“A member of Congress having a business relationship with a federally registered lobbyist is, by definition, problematic,” said Meredith McGehee, policy director at the Campaign Legal Center, a nonprofit organization in Washington that studies issues including political financing and government ethics.
“I think there’s a tremendous appearance problem. This is not simply about your constituents trusting you. This is about the integrity of an institution.”
The joint ownership arrangement further suggests potentially problematic legal issues, depending on how initial financing and subsequent expenses related to the property were apportioned among Whitfield, his wife and Duggan, according to McGehee and other authorities on ethics.
Connie Harriman-Whitfield also is a registered lobbyist, with the Humane Society of the United States’ Legislative Fund, which has championed at least one controversial bill that Whitfield actively supports. The fund has donated at least $8,000 to Whitfield since 2011, when his wife began lobbying for it.
Harriman-Whitfield exploded in anger when asked recently by KyCIR to discuss the Greenbrier property deal and the legislative interests that her husband and the Humane Society share.
“I’m so, so fed up,” she shouted in a brief telephone conversation. “Why don’t you spend your time on something people actually care about? You’re wasting your time. You’re wasting my time.” Then she hung up.
Duggan, in two telephone interviews, readily acknowledged that she owned Lot 26 with Whitfield and his wife from 2003 until last December. But she insisted that there was nothing improper about the arrangement. And she denied ever personally lobbying Whitfield on behalf of any of her clients or the trade associations where she has worked.
Harriman-Whitfield and Duggan have been close since both served in the administration of President George H.W. Bush in 1989. Duggan said she and Whitfield also share a longtime personal friendship.
“I went to their wedding on my birthday in 1990,” Duggan said.
Brownstein Hyatt Farber Schreck, Duggan’s employer from late 2010 until July 1, is a prominent law and lobbying firm. There, she worked as policy director and a member of the Washington, D.C., office’s government relations department.
The notable corporate interests she represented including McDonald’s, Abbott Laboratories, the National Cable & Telecommunications Association and Momentive, a leading producer of specialty chemicals and materials. (Click to see the lobbying reports)
Duggan denied that any of her former clients’ and employers’ campaign contributions to Whitfield, or his voting record, had anything to do with their friendship.
“Ed wouldn’t vote with somebody because of personal relationships,” she said. “He votes for things because of Kentucky. People could talk to him until they’re blue in the face, and if he didn’t agree with them, he wouldn’t do it.”
She added: “If there was a need for somebody to talk to him (about legislative matters), I did not do it, and I was not involved in whether that was necessary.
“We talk about politics generally, (but) nothing specific to my issues.”
(See the connections on this interactive map)
GIVING AND GETTING
But even if their discussions were limited to such matters as benign speculation about possible candidates for House speaker, or a committee chair, as Duggan asserted, her clients’ and associations’ campaign donations still flowed to Whitfield — and, occasionally, at curious if coincidental times.
For example, Duggan ran the Wine and Spirits Wholesalers association from 1998 to 2006. On Jan. 28, 2003, less than a month after she applied for the bank loan that she and the Whitfields used to purchase Lot 26, the association gave Whitfield $1,000.
Four months after the property purchase, Duggan and the association agreed in writing that she would have no lobbying dealings with Whitfield, to “avoid any appearance of impropriety.”
The purchase had first been discussed during a “holiday dinner” at the Whitfields’ home in 2002, where they solicited Duggan’s advice about making the investment, according to the two-page document. And when they bought Lot 26 the following February, Duggan supplied half the funding with the Whitfields contributing the rest, according to the agreement, a copy of which Duggan provided to KyCIR.
On Sept. 26, 2003, barely two months after Duggan agreed to have no professional interaction with Whitfield, however, the Wine and Spirits Wholesalers of America donated another $1,000 to Whitfield. And from then through 2006, when Duggan left the association, it contributed $18,000 more to his campaigns.
Duggan became head of the American Forest & Paper Association for a period of about six months beginning in October 2006.
From then through 2013, the association donated at least $10,000 to Whitfield’s political campaigns, more than twice the amount it contributed during the previous eight years. The increased donations equaled those by International Paper, an association member company.
Of those contributions, $4,000 came in June 2011, less than three months before Whitfield spoke in favor of two association-supported bills, claiming they would provide “regulatory relief.” In October 2011, he voted for both of them.
Duggan denied playing a role in the association’s donations to Whitfield: “I did not direct them.”
One of her clients at Brownstein Hyatt, Momentive Performance Materials Holdings, Inc., is headed by Craig Morrison, who also is a board member at the American Chemistry Council, an industry trade association.
Since 2011, the ACC has donated at least $12,000 to Whitfield — more than it gave him in the previous decade. And in the same three-year period, while Duggan represented Momentive, other ACC member companies contributed at least $150,000 to Whitfield.
During Whitfield’s 2012 reelection campaign, the American Chemistry Council ran a 30-second television spot on his behalf. Citing “gridlock” in Washington, the ad proclaimed: “Fortunately, western Kentucky has Ed Whitfield working to protect and create jobs” and to “cut government regulation.”
The chemistry council and Whitfield both have been harsh critics of the U.S. Environmental Protection Agency’s efforts to combat climate change through increased regulation.
Duggan, who on July 1 became president and chief executive officer of the American Apparel and Footwear Association, denied to KyCIR that she ever lobbied Whitfield for Momentive or any other of her Brownstein Hyatt clients.
She said she did not “really have any business that would have been relevant to his office. I had no clients that I needed to talk to him about, or his office, where it would have come up, ever.”
Several years before she and Whitfield became business partners, however, they had a lobbying connection in the tobacco industry, according to archived documents at the University of California, San Francisco.
Those records show that Duggan was assigned to Whitfield as a lobbyist for Philip Morris in the mid-1990s. That was a turbulent time for tobacco. In 1998, a landmark agreement would be reached, imposing new restrictions on the industry and requiring it to pay more than $200 billion to 46 states to help defray tobacco-related health care costs.
One document in the archive, dated April 13, 1996, states in part: “brief key tobacco members” and lists “Whitfield (Duggan).” And another document, dated the following month, again links the lobbyist and the congressman.
On March 15, 1996, Philip Morris gave Whitfield $1,000. A few months after that, $1,500 more. Over the course of the year, the company donated more than $8,000 to him.
A third document, dated June 1, 1998, states that Duggan “received a 10 p.m. phone call on Sunday evening from Rep. Ed Whitfield,” who expressed concern about advertisements running in Kentucky.
Nineteen days later, the company gave Whitfield $1,000. In September, $3,000 more. In all, Philip Morris and its officials donated at least $17,000 to Whitfield’s campaigns from 1996 to 1998, while Duggan worked for the company.
Asked by KyCIR about her interactions with Whitfield on tobacco-related matters, Duggan said she didn’t remember them. “But it wouldn’t have been unusual for Ed to call me at some point, because we were friends.”
‘IT DOESN’T SMELL RIGHT’
Although Duggan vigorously denied any impropriety in her personal or professional relationships with Whitfield, McGehee and other experts on congressional ethics say the property deal never should have happened.
Jack Abramoff — who knows a thing or two about questionable transactions involving lobbyists and politicians — said “it doesn’t smell right.”
“One cannot possibly conceive of a situation where a congressman in business with a lobbyist is somehow going to take the side of that lobbyist’s opponent in virtually any issue,” Abramoff said in a telephone interview. “The playing field is tilted in a way that it becomes very difficult, if not impossible, for a fair decision to be achieved.”
Abramoff, once one of the most powerful and visible lobbyists of his generation, pleaded guilty in 2006 to charges of fraud, corruption and conspiracy. He emerged from prison in 2010, a repentant and zealous reformer, committed to changing the rules he had broken with impunity.
“The problem is, this kind of stuff is not illegal,” he said. “This should be illegal. It doesn’t look right and it actually is a major reason why Americans are losing faith in their institutions.”
Abramoff also said he also thought it was inappropriate for Whitfield to involve himself in issues pertaining to his wife and the Humane Society.
“I would stay 100 miles away from anything my wife was doing,” Abramoff said. “There’s absolutely no reason he needs to be in the middle of it.”
The 456-page House Ethics Manual contains more than 200 references to lobbyists, 20 pertaining to “conflict of interest,” nearly a dozen citations regarding “appearance of impropriety,” and five about a member not using public office for “private gain.”
The rules permit gifts from lobbyists to House members on the basis of “personal friendship” But if the gift exceeds $250, it must be approved in writing by the House Committee on Ethics.
And although there is no prohibition on members and lobbyists being in business together, the half-dozen ethics experts interviewed by the Kentucky Center for Investigative Reporting all said the Whitfield-Duggan property deal could be problematic if all costs associated with it were not shared equally.
“If the lobbyist ends up contributing more of that money than the congressman, you in effect have a gift from the lobbyist to the congressman,” said Richard Painter, a law professor at the University of Minnesota who served as chief ethics lawyer for President George W. Bush and others in the White House from 2005-07.
“The danger of these arrangements is that these entities could be vehicles for such payments to be made to circumvent the prohibition on gifts from lobbyists,” Painter said. “If I were a member of the House or Senate, I wouldn’t get involved in a business relationship with a lobbyist. I think it’s ill-advised.”
TRANSPARENCY ‘UP FOR DEBATE’
Duggan insisted that all costs were shared in “a 50-50 split at all times,” with loan payments, property taxes and various other expenses including fees apportioned equally between her and the Whitfields.
Whitfield did not respond to KyCIR’s request that he release documents spelling out the financial arrangements. And Duggan refused to do so.
“I don’t see why I need to do that. I’m telling you the truth,” she said. “Why would I give you my personal financial information? I don’t think there’s an issue here.”
Painter disagreed. “When you have a situation like this, you’d think the congressman would want his constituents to be reassured that this was not a gift from the lobbyist,” he said. “The only way to do that is to…open up the books and records, and describe who paid what and who got what out of it.”
Duggan also argued that the business arrangement “was completely transparent” and “did not have any bearing whatsoever on (Whitfield’s) position as a member of Congress.”
Asked how the business arrangement could be “completely transparent” since neither she nor Whitfield publicly disclosed it, Duggan replied:
“I guess that’s up for debate. Certainly nobody tried to hide it. I mean, you know, all somebody had to do was ask.”
Controversy, the limelight and Wayne Edward Whitfield are relatively strange bedfellows.
An attorney who received his undergraduate and law degrees from the University of Kentucky, Whitfield practiced law in Hopkinsville, ran an oil distributorship and served a term in the state House of Representatives in the mid-1970s before spending a decade working for two railroad companies.
A Democrat while in the state legislature, he ran as a Republican for the far western Kentucky congressional seat in 1994, winning by fewer than 2,500 votes. Ever since, without vigorous campaigning — but with $12 million in fundraising, according to the Center for Responsive Politics — he has routinely mauled generally weak Democratic opponents.
Whitfield has largely flown under the radar. He has sponsored relatively few pieces of major legislation. He rarely makes waves, essentially hewing to a consistently conservative Republican line, which includes bashing the Obama administration in general and the federal Environmental Protection Agency in particular.
He is neither a regular, visible presence in the sprawling district, nor an eager gladhander, seemingly mingling out of obligation rather than by choice. And he eschews confrontation.
So, for these and perhaps other reasons, it is not surprising that when the Whitfields and Duggan bought Lot 26 in February 2003 from the Greenbrier Sporting Club, the congressman maintained a low profile on that matter as well.
Whitfield’s annual required federal disclosure statements from 2002 through 2013 list a loan from BB&T Bank in Charleston, W.Va., for the shared property, for an amount between $100,000 and $250,000. No owner or borrower other than Whitfield is named on the documents.
THE PROPERTY DEAL
Records obtained by KyCIR offer a somewhat more detailed picture of Whitfield’s and Duggan’s financial transactions involving Lot 26. But many details of their respective roles and responsibilities remain unknown.
For example, the BB&T loan of $266,800 significantly exceeded the $202,000 purchase price for Lot 26. Banking experts and others said it is uncommon for a loan to be granted for more than the value of the property or other collateral securing it.
What became of that extra money is unclear. Duggan said it might have been used to pay Greenbrier’s initiation fee. She could not recall the precise amount, but said “it was not chump change.” (The fee for 2014 is $100,000.) In addition, there are annual dues at Greenbrier, which this year are $14,550, plus a “community association fee” of an additional $2,450.
Norman Ornstein, resident scholar at the American Enterprise Institute, a nonpartisan, nonprofit research organization in Washington, said the amount of the loan above the purchase price of the property “raised big questions to me in and of itself.”
“Among other things, it’s not normal to get a mortgage loan for the full purchase price of a piece of property,” much less for more than that price, Ornstein said. “I’d want to know what the relationship between the bank and the lobbyist and the member was, or what they were doing giving a loan that on the surface doesn’t seem to meet the normal standards.”
Citing client confidentiality, officials at BB&T headquarters in Winston-Salem, North Carolina, declined to discuss any aspect of the loan, or even confirm that one was granted.
Asked if BB&T routinely grants loans in excess of the value of the property being purchased, bank spokesman David R. White said in a statement:
“BB&T underwrites each individual loan applicant based on the merits and creditworthiness of the borrower. This is comprised of many factors including income, credit history and collateral, among others.”
Property-tax records in West Virginia raise other questions about who assumed what financial responsibility for Lot 26. Annual taxes on the property averaged about $2,450. In five of the years he was a co-owner, Whitfield paid by check for the full amount, according to records of the Greenbrier County tax office.
One year, however, Duggan paid all but $28 of the $2,304 tax bill. Another year, Whitfield paid slightly more than she did. Records for one year do not indicate who paid. In the other two years, local attorneys paid part or all of the taxes, including in late 2013, when the property was sold.
BB&T’s lien on the property was released in May 2011, the records show, after Whitfield, his wife and Duggan borrowed $204,000 from United Bank Inc., in Charleston. Again, the amount of that loan exceeded — though this time only by $2,000 — the value of the property when the three purchased it in 2003.
United Bank’s lien was released in January, about two months after Whitfield, his wife and Duggan sold Lot 26 to a Bethesda, Md., couple for $130,000.
Why they parted with the property for such a reduced price is unclear. It was $72,000 less than the Whitfields and Duggan paid for it, and $74,000 less than the United Bank loan that was not yet three years old.
The sale price also was significantly less than the going rate for several other nearby properties, and barely a third of the $355,000 for which Lot 26 had been advertised for sale in mid-2011.
Duggan said she and the Whitfields bought the property because they hoped to build a vacation getaway there, a plan that eventually was derailed by her son’s serious illness several years ago, and by economic issues.
Ornstein, of the American Enterprise Institute, said the fact that Duggan and the Whitfields sold the property at a substantial loss “takes you back to another very substantial set of questions,” including how the parties allocated the loss among themselves.
John Weber, associate broker and sales executive at Greenbrier, said he could only speculate about why the property sold so low, but that the most plausible explanation is that the sellers “just wanted to get rid of it.”
Lot 26 is emerging from anonymity now, with construction recently initiated by its new owners. But the former ones, Congressman Ed Whitfield, his wife, and a powerful lobbyist — despite their muddle of personal and professional interests — seem to think there is still nothing associated with Lot 26 that merits anyone’s attention, much less concern.
Reporter R.G. Dunlop can be reached at firstname.lastname@example.org or (502) 814.6533.
Listen to KyCIR’s investigative piece on 89.3 WFPL News: