By Nick Diamantides
(Part three in a three-part series)
About two weeks after the Signal Tribune interviewed Congresswoman Laura Richardson (D–37th CA District), the Washington, D.C.-based Citizens for Responsibility and Ethics in Washington (CREW) put her on its annual list of “Most Corrupt Members of Congress.” This is the second consecutive year that CREW has placed Richardson on the list.
According to the CREW report, Richardson’s recent financial problems and an Office of Congressional Ethics (OCE) investigation show that she is dishonest.
Of concern to CREW was Richardson’s failure to make mortgage payments for almost a year on a home she owned in Sacramento. In early 2008, Washington Mutual, the holder of the mortgage, sold the home in foreclosure to James York, who then proceeded to invest money into the cleanup and repair of the house.
According to media reports, Richardson claimed she did not know about the foreclosure sale and she insisted that, before the sale, she had already reached an agreement with the bank to restructure the loan. The bank rescinded the foreclosure sale in June 2008. Soon afterwards, York sued Richardson and Washington Mutual, claiming that the bank had given Richardson preferential treatment because she is a government official.
A month later, York dropped the lawsuit and Richardson retook possession of the property.
In July 2009, OCE initiated its investigation to determine how it was that Richardson was able to regain possession of the home after it had been sold in foreclosure. OCE is also looking into whether the House of Representatives Gift Rule was violated when residents in the neighborhood of Richardson’s Sacramento home spent their money for landscape maintenance on her property.
That issue had begun with complaints made by residents who told city officials and news reporters that she had neglected maintenance and cleanup of the property– located in an upscale neighborhood– since she had purchased it. The City of Sacramento declared the property a “public nuisance” in 2008 and “blighted” in 2009. Soon thereafter, some of the neighbors pooled their money to hire gardeners to clean and maintain the yard.
When Richardson came to the offices of the Signal Tribune three weeks ago, she insisted that she had made an honest effort to maintain the property. “The news reports were partisan, political and hateful to some degree,” she said. “There was peeling paint due to a heavy winter and other problems, but nothing was excessive or a real detriment to the community.” She also showed photos of properties in the same neighborhood with overgrown vegetation and mentioned that nobody was complaining about those homes.
According to CREW, there was another problem pertaining to the house– Richardson failed to include the Sacramento property mortgage in her personal financial disclosure statements, as required by election law. Furthermore, the news media reported that Richardson had not paid $9,000 in property taxes on the house and had defaulted on other loans for houses she owned in Long Beach and San Pedro. The news media also reported that while falling behind on her Sacramento mortgage, Richardson had loaned $77,500 to her campaign fund that helped her get elected to Congress.
Richardson said her financial woes had their roots in her divorce, which took years to settle. “The settlement was not done until 2006,” she said. “That entire period, I paid for all joint financial obligations and, at that same period, I had several elections in two years.” Richardson was reelected to the Long Beach City Council in 2004, elected to the State Assembly in 2006, and elected to the U.S. House of Representatives in 2007.
“I ran very short on my finances, and I gambled,” she explained. “Oftentimes, when you gamble, you fall short.”
Richardson noted that when Governor Arnold Schwarzenegger called a special election to replace her predecessor, Congresswoman Juanita Millender-McDonald, who died while in office, candidates had 58 days to persuade the electorate to vote for them. “I put every dime that I had into that because it was a once-in-a-lifetime opportunity, and I was not going to let it pass by,” Richardson said. She admitted that putting all of her financial resources into the campaign was a huge risk and she is still dealing with the repercussions.
“I was sworn in on September 4, 2007, and, because I wanted my constituents to know they were fully represented, I immersed myself 200 percent in my work,” she said, explaining that because of devoting so much time and energy to her position as a member of Congress, she did not give as much attention as she should have to her personal finances.
In December of that year she started getting default notices and knew she had to address them. “I got loan modifications for all of my properties,” she said, adding that the huge amount of Washington Mutual mortgage foreclosures slowed the process, and the loan-modification papers did not make it to the foreclosure department in time to stop the sale. “I had signed the papers and was making the payments, but they improperly sold the home, and that’s why they had to give it back,” she said.
Brushing all of Richardson’s explanations aside, in a recent statement, Melanie Sloan, CREW’s executive director said, “With the economy in a freefall, unemployment rates at record highs, and healthcare solutions still nowhere in sight, members should be spending their time looking for answers to the nation’s problems– not finding new ways to enrich themselves.” Sloan added, “The members of Congress profiled in CREW’s ‘most corrupt’ report have betrayed those who voted them into office. This report holds them accountable for their bad choices.”
Richardson insisted that the media and CREW have not treated her fairly and that if anyone were to take all the circumstances of her life and her election into account, they would realize that she is not a corrupt politician. She also insisted that she is not letting the bad publicity keep her from doing her job. “Bad circumstances happen to everyone, and they have to decide what they will do with them,” she said. “I choose to grow from my experiences.”
To see the CREW report on Richardson, visit www.crewsmostcorrupt.org.