One of the frustrations common among Americans across the political spectrum is the perception that far too many of our elected officials are taking improper advantage of the system to personally enrich themselves. New details emerging about a sweetheart condo rental deal provided for Environmental Protection Agency (EPA) Administrator Scott Pruitt seem to be a perfect example of this problem.
Pruitt rented a condo in the Capitol Hill area of Washington, D.C. last year that was owned by the wife of an energy lobbyist, according to Buzzfeed. His daughter used the condo as well during an internship with the White House Counsel’s office. The condo is held by a limited liability company co-owned by Vicki Hart, a health care lobbyist and the wife of J. Steven Hart, the chairman of a well-connected D.C. lobbying firm who is a registered lobbyist for multiple top environmental and energy concerns.
ABC News has more on the details of the rental arrangement, which reportedly had Pruitt paying $50 for every night that he stayed in the condo, instead of the typical monthly rental rate charged under most leases.
Had Pruitt stayed in the condo every night during a month, that would have totaled $1,500. Cancelled checks reviewed by Bloomberg News show Pruitt paid $6,100 from March 18 through September 1 of last year: $450 on March 18, $900 on April 26, $850 on May 15, $700 on June 4, $1,500 on July 22 and $1,700 on Sept 1.
In response to an inquiry from Buzzfeed’s Zahra Hirji, the EPA Ethics Office furnished a memo they had prepared today reviewing Pruitt’s lease. According to the memo, “if a federal employee pays market value for something, it is by definition not a gift under those regulations.” The memo states further that the terms of Pruitt’s lease were “a reasonable market value.” EPA spokesman Jahan Wilcox further defended the lease, sending Buzzfeed a statement that referred to the memo and stated, “Administrator Pruitt’s housing arrangement for both himself and family was not a gift and the lease was consistent with federal ethics regulations.”
— Zahra Hirji (@Zhirji28) March 30, 2018
Fifty bucks a night for a two bedroom condo is reasonable market value? Where exactly? A condemned building on the outskirts of Detroit? It sure as heck isn’t in the DC metropolitan area, especially in a neighborhood like Capitol Hill. This particular building is less than a block from the U.S. Capitol complex and similar adjacent units have rented for as much as $5,000 per month, according to ABC News.
Moreover, it’s an odd arrangement that he was only charged for the nights that he actually spent at the condo. Apartment and condo leases are rarely structured this way since, unlike a hotel, the owner cannot easily rent the space to someone else in the regular tenant’s absence.
It’s also standard practice to charge more for a short term lease, often hundreds of dollars more per month for leases less than a year, to compensate the landlord for the lack of security that would be present with a longer term commitment from a tenant.
All in all, the end result was that Pruitt was able to have the use of a very nice two-bedroom condo, in a very convenient location, in one of the most expensive real estate markets in the country, for a daily charge that was less than you’d pay for some no-tell motel alongside the highway where even the bedbugs have bedbugs.
And the EPA Ethics Office says it was “reasonable market value.”
ABC News interviewed an ethics attorney, Bryson Morgan, who previously served as Investigative Counsel at the U.S. House of Representatives Office of Congressional Ethics, about the situation, and he told them he thought the rental terms raised red flags.
“I think it certainly creates a perception problem,” said Morgan, “especially if Mr. Hart [the condo owner’s husband] was seeking to influence the agency.”
Morgan also questioned the terms of the lease beyond just the rental rate, noting that short term leases are often expensive. “Is this an arrangement any other person could get on the open market? My assumption would be this situation does not involve the hallmarks of a specific fair market transaction,” he said.
Overly strict regulations on gifts to government officials can be oppressive and counterproductive. I once received a baby shower invitation from a friend I had known over a decade that instructed no gifts, because her husband was seeking a judicial office. If I had continued to practice law and he had been assigned to a case of mine, he would have had to recuse himself anyway because of our friendship. The risk of corruption from real life friends giving each other baby shower gifts is so minor as to be laughable.
But this matter regarding Pruitt’s lease just doesn’t pass the smell test. Paying only $50 a night should barely get you one room that you’d never want to see under a blacklight (shudder), not a stylish two-bedroom condo. It might be hard to prove that the arrangement was illegal, but it sure as heck wasn’t proper.
Pruitt’s financial disclosures show that he can’t compete with the multimillionaires elsewhere in the Trump administration, but he did have a $265,650 salary as Oklahoma Attorney General, a good retirement account, and a variety of investment accounts held in his wife’s name valued at at least around two hundred thousand dollars (the disclosure has them listed in valuations of “$15,001 – $50,000” and “$50,001 – $100,000”) that provided an additional income.
He could certainly have afforded a lease in the area that was actually market rate. Again, it’s not clear that the arrangement was illegal, but it is definitely unhelpful. The Trump administration has been beleaguered from the beginning with accusations of corruption, and the revolving door of staff leaving due to resigning or being fired seems to never stop spinning. Taking advantage of a sweetheart deal for a few months last year may have saved him several thousand dollars, but could end up costing him his job.
Drain that swamp!
Follow Sarah Rumpf on Twitter: @rumpfshaker.