Buck McKeon Says He's Not As Corrupt As Everyone Asserts He Is-- Let's Look Into His Specious Claim

No one dares to take on the biggest McKeon scandal-- how his insatiable gambling habit and huge losses at the Venetian Casino have put him in the clutches of Organized Crime boss Sheldon Adelson, an agent of China, not something even many Republican congressmen are happy to see when it comes to the chairmen of the House Armed Services Committee (who gets very sensitive briefings from the CIA that Adelson's Chinese partners would give anything to get). So let's talk about the scandals that are routinely kicked around Washington and Santa Clarita-- his bribes from Angelo Mozilo and Countrywide and a series of nepotism scandals that have involved him funneling campaign money-- hundreds of thousands of dollars to feed his gambling addiction-- into his household by paying his wife and other relatives for, at best, very dubious services.

Today ace investigative reporter, Lee Fang, published a report at The Nation that exposes McKeon's scam and asserts that his reelection "is suddenly in doubt."

McKeon’s troubles date back to the late nineties, when, as Newt Gingrich’s star faded, McKeon weighed a bid for Majority Leader, but gave up that idea to make room for Representative Dick Armey (R-TX).

Shortly thereafter, the family cowboy fashion store, which had made McKeon a millionaire when he was first sworn into office, would file for bankruptcy and liquidate every ostrich skin boot and ten gallon hat. The Los Angeles Times reported that in 1996, Howard & Phil Enterprises Inc. had “assets of $10.2 million and debts of $16.7 million.” Ethics disclosures forms filed with the House Clerk show that McKeon stopped earning an outside salary from the store by 1998; by 1999, his store was forced to sell off all assets.

Ironically for the congressman who worked to outlaw bankruptcy protection for millions of students (a law he helped pass in 1998 made it nearly impossible to discharge student loan debt), Chapter 11 helped keep hundreds of creditors at bay for the cowboy store.

In recent years McKeon has faced more personal financial troubles. In March and April of 2008, McKeon sold off almost every asset he owned, from index funds and other financial investments. His latest financial disclosure states that his personal debt is between $1,010,003 and $2,015,000 (ethics disclosure forms show a range, rather than a specific number). It’s a mystery why McKeon, who earns a $174,000 a year salary as a member of Congress, incurred so much debt.

Whatever the explanation for McKeon’s debt, it was long before his recent struggles that he began to use his political position for personal financial benefit.

E-mails from Countrywide from September 1998 indicate that a Mortgage Bankers Association lobbyist named Mike Ferrell recommended that McKeon receive a VIP mortgage. “Per [Countrywide CEO] Angelo [Mozilo]-- take off 1 point, no garbage fees, approve the loan and make it a no doc,” read the message within Countrywide.

A call sheet recovered from a Countrywide employee summarizes some of the contact between McKeon and the mortgage company, which at the time was working Congress to increase the maximum amount for government-backed single-family home loans-- a legislative change that Congressman McKeon supported. “You may call the borrower at his Washington office [number redacted] and get the Sons phone number for the appraiser contact,” it noted. “The borrower is a bit difficult to deal with. He seems on the edgy side.”

When the revelation was made earlier this year that McKeon-- a “Friend of Angelo” like Senators Chris Dodd (D-CT) and Kent Conrad (D-ND), who were identified back in 2008-- was a recipient of VIP Countrywide loan that saved him thousands of dollars, he vigorously denied it. A spokesperson for McKeon’s office told the press that the congressman was “shocked and angry to hear this, as he had no knowledge of the Friends of Angelo designation.”

A letter revealed in a report published in July paints a different story. A little more than a week after mortgage industry lobbyists conspired to offer McKeon a discounted mortgage for his home, an overnight letter arrived at the McKeon household that opened, “Thank you for allowing Countrywide’s VIP team to assist you with your financing needs.” At the bottom of the page, bold lettering indicated that the mortgage document came from the company’s “VIP TEAM.” A Countrywide VIP loan underwriter confirmed to government investigators that all of the deals were made with explicit communication to the recipients about the special nature of the VIP mortgage unit.

The Countrywide VIP refinance deal helped McKeon pay down a loan on a ranch he owned, while providing him with $46,894 in cash. The lowered interest rate saved McKeon about $3,000, and he was able to avoid an undisclosed amount of “garbage fees” associated with the loan.

Why the Countrywide loan scandal still has not resulted in any federal indictments is a mystery. A recent report from the House Oversight Committee found that the special mortgages were designed to influence policy and were personally tailored to suit McKeon, but so far the mounting evidence has not led to any conviction for wrongdoing.

In any case, McKeon is the last incumbent lawmaker seeking reelection with a clear paper trail showing that he received special favors from the company best known for inflating the housing bubble and crashing the financial system.

The McKeon family must have needed cash, because it wasn’t just Countrywide that came knocking. The year after McKeon accepted the discounted mortgage, his wife Patricia began working as a lobbyist.

Disclosures show that Patricia, employed by a firm called Tongour & Scott, worked on a 1999 contract for CSX Corp., the railroad company. Records indicate that the lobbyists were hired primarily to influence CSX’s proposed buyout of the Consolidated Rail Corporation, a government-backed network of aging Northeastern railways. That year, the firm also counted among its clients the city of Lancaster, California, the U.S. Telecom Association, an electronics company called Trimble Navigation, and twelve other clients.

Although she lacked any experience in policy, Patricia’s connections to her husband appeared to be a boon to her company. A year after her firm was hired to lobby on federal appropriations for the city of Lancaster, Patricia’s husband helped secure over $102 million for highway funds, part of which was used to connect Antelope Valley, where Lancaster is located, to Santa Clarita.

The Nation reviewed ethics disclosures from the time period, and McKeon failed to disclose that his wife earned income as a lobbyist in 1999.

Two years after her stint as a federal lobbyist, McKeon began paying Patricia handsomely as his campaign treasurer. A review of records shows that Patricia McKeon has received $588,284 since 2002 from her husband’s campaign committee.

"My wife, Patricia, has been an essential component of my campaign," said McKeon in a statement this year defending the practice of paying his wife with his campaign funds.

McKeon has been almost as cozy with the for-profit college industry as he has with the weapons industry-- and it turned out he had a personal financial interest in the very education companies his policymaking affected.

In 2006, McKeon and Boehner slipped only eight lines of legislation into a budget bill that helped create a new industry of predatory school companies. The pair helped eliminate the so-called 50 Percent Rule, which limited federal assistance to students enrolling in for-profit online universities. The law instantly propelled companies like the University of Phoenix into Wall Street cash cows. Once they qualified for virtually unlimited taxpayer assistance, many universities in the for-profit industry set tuition at exactly the amount a student could expect in federal aid, using programs like Pell grants and Stafford loans.

In less than four years after the 50 Percent Rule was abolished, enrollment for online for profits grew from 1.2 million students to nearly 2.5 million students in fall 2010, according to Eduventures, a research and consulting firm. The school companies, which spend far more in marketing than on education services, are plagued by allegations of fraud.

While enabling their skyrocketing growth through legislation, McKeon speculated in the industry. As the Huffington Post’s Chris Kirkham reported, McKeon “held and sold stock for Corinthian Colleges Inc., a for-profit college corporation, during the time he was crafting policies for the industry on the House Education committee.”

McKeon’s latest policy crusade has nothing to do with education, but fits his pattern of funneling billions of taxpayer dollars to unworthy private interests.

In 2011, McKeon ascended to the rank of chairman of the House Armed Services Committee. In that role, protecting military contractors from budget cuts, McKeon has violated nearly every principle supposedly held by the modern GOP. Only months after his party set up rules banning the practice of earmarks last year, McKeon established a $1 billion fund for member-directed pet projects-- a clear violation of the Republican Party’s celebrated rules. Notwithstanding his party’s mantra that government spending doesn’t create jobs, McKeon argued last November that any cuts to the military budget would increase the unemployment rate.

Name a weapons program the Pentagon doesn’t want, and its likely McKeon has gone to bat for it. Earlier this year, McKeon produced language in the defense budget that included a new missile defense shield for the east coast-- a multi-million dollar program derided by General Martin Dempsey as unnecessary. McKeon led a campaign to demand that the government fund a second engine program for the F-35-- at a cost of $450 million a year-- over protests from the Pentagon that the program had no use it all. McKeon is also pressing for additional purchases of F-35’s, against the wishes of the Obama administration, despite the fact that the fighter jet is shaping up to be the most expensive weapon in human history with a lifetime cost of $1.45 trillion.

His other military lobbyist-backed ventures have riled those concerned with civil liberties. In 2009, McKeon helped establish the Unmanned Systems Caucus in Congress, better known simply as the “Drone Caucus.” A trade association that largely represents lobbyists for military drone manufacturers later confirmed that it helped set up and direct the activities of the caucus.

In February, Congress adopted language from drone lobbyists “word-for-word” to allow domestic drones in the United States for law enforcement and commercial use. An FAA official estimates that the change could mean 30,000 drones flying through the sky over the next eight years. McKeon’s hand could be seen in the shift. As chair of the drone caucus, he was there for a celebratory event with drone lobbyists shortly after the bill passed. “I want to thank you all for what you’re doing,” McKeon told the attendees.

While many Republicans have voiced concerns about the potential for domestic drone spying, McKeon has continued to champion the industry with little regard for civil liberties. Senator Rand Paul (R-KY) grumbled that lobbyists who are “making money selling this drone technology” are seducing his pro-drone colleagues.

Now, McKeon is leading the effort to stave off $492 billion in automatic cuts to the Defense Department as part of the sequestration planned over the next decade. The cuts are part of the debt limit deal negotiated by House Republicans last year. Budget Chairman and Republican Vice Presidential nominee Paul Ryan has reneged on the deal, and worked alongside McKeon to take the Defense cuts off the table.

As McKeon has promoted Pentagon pork, he has been rewarded with enormous amounts of campaign cash. He is now the top recipient in Congress in funds from Lockheed Martin, Northrop Grumman, General Dynamics, General Atomics, and Boeing.

But the defense contractors’ and drone-makers’s largesse doesn’t even stop there. Earlier this year, Patricia McKeon made an ill-fated bid for California State Assembly. She ran on two issues: repealing the 10-cent bag tax in Los Angeles County and fighting “special interests” in Sacramento. But a review of campaign finance records reveals that much of her money came from defense contractors and lobbyists with ties to her husband.

Dr. Lee Rogers, the independent-minded progressive surgeon who is challenging McKeon-- with no help whatsoever from the DCCC or DNC or any other corrupt Inside the Beltway outfits-- wasn't surprised by Fang's report. In fact, he announced today that, if elected, he plans to introduce the Enhance The Honesty and Integrity in Congress and Staff (ETHICS) Act. "The ETHICS Act will ban payments to family members working on campaigns and prohibit Members of Congress and staff from receiving preferential treatment from entities like banks, auto dealerships, and jewelry stores as recommended by Rep. Darrell Issa’s Countrywide Report. It would also require that Congress and staff notify parties of significant financial transactions that they must not receive discounts under penalty of law."

During the Rogers-McKeon debate on October 10, 2012, Rogers accused McKeon of “funneling more than $600,000 into the pockets of his family members,” including his wife. Research shows the Congressman’s wife, who acts as his treasurer, has received $617,956 over the past 10 years. His son David O. McKeon has received $60,951 since 2009 through three different shell corporations based in Las Vegas, bringing the 10-year family total to $678,907.

The McKeon family has pushed the Mormon Church into an antigay jihad and helped finance the war between Mormons and other Californians over the Prop 8 debacle, during which McKeon spent money freely from his own campaign accounts, probably illegally. Now his son seems to be mixed up in scams in Massachusetts and Maryland also targeting the LGBT community. Take a look:



Keep in mind that Savanna Communications, a new company supposedly incorporated in DC with a DC PO Box-- though not legitimately listed as a DC corporation-- was founded and is run by one of McKeon's cronies, Tony Marsh. Their non-descript website looks just like McKeon's son David O. McKeon's website for his TLS shell corp in Las Vegas that McKeon is using to funnel campaign cash to him through. Meanwhile, McKeon paid Savanna Communications $30,000 for "website development" and $18,000 in March 2012. The only other Congressmember we could find that also paid Savanna is Eric Cantor. Cantor's campaign paid Savanna Communications $30,000 for a supposed "video shoot" on 3/16/2012. All we can find hat Savanna is actually doing is hiring subcontractors and scam artists-- watch the video above-- to trick people in Massachusetts into signing anti-LGBT petitions. So the question remains, is Savanna really a corporation or just a front to funnel money into fraudulent petition drives for antigay marriage initiatives?

The non-partisan good government group, Citizens for Responsibility and Ethics in Washington (CREW) recently published their 2012 “All in the Family” report on campaign nepotism finding that over the 2008 and 2010 election cycles McKeon’s payments to his wife earned him number five in all of Congress on the list of largest payments. They also named McKeon one of the 20 Most Corrupt Members of Congress for 2012. As Rogers told the press today, "Current law bans nepotism in the Congressional office. But, campaigns can hire family members if they are providing a bona fide service to the campaign and are paid fair market value. Patricia McKeon’s salary is far above the average for a sample of Members of Congress who would be McKeon’s equivalents. She made nearly double over the same period to what House Speaker John Boehner paid his treasurer and three different compliance firms.

"Patricia McKeon’s work as treasurer appears not to meet the standard of the other treasurers. She was recently found to have violated campaign finance law and fined $4,600 for filing a late report. Also Patricia McKeon has filed many more amendments to her reports than the sample of other treasurers. The average treasurer filed 4.7 amendments for 17 quarterly reports from 2009-2012. McKeon had to amend every report at least once, filing a total of 24 amendments for 17 reports."

Several private polls (Republican polls) show this is a tight, single digit race. If you'd like to see a less corrupt Congress, and a Congress more independent of the two crooked party establishments, please consider helping Lee Rogers replace Buck McKeon a week from Tuesday.