Senator Dodd's Dodgy Connemara cottage in the spotlight...



"The Senator Sure Knows How to Pick an Investment." say his enemies at the Wall Street Journal

Editorial

Irish property prices have plummeted since 2002. But a "cottage" in County Galway owned by Connecticut Senator Chris Dodd has tripled in value during the same period, according to a financial disclosure form filed by the Senator this month.

There are two possible explanations for this remarkable turn of fortune. Maybe Mr. Dodd is luckier than a leprechaun. Or could it be that he paid well below the market price when he bought out a co-owner in 2002 and had undervalued the property accordingly? If it's the latter, then Mr. Dodd received a "gift," in IRS parlance, and should have declared it on his financial disclosure form that year. He did not. Oh, and by the way, the seller at that low, low price has been the business partner of a man for whom Mr. Dodd lobbied to receive a Presidential pardon.

It's also been nearly a year since a former loan officer at Countrywide Financial charged that the mortgage lender had classified Mr. Dodd as a "very important person" (a.k.a., a "friend of Angelo" Mozilo, Countrywide's then-CEO). As such, Robert Feinberg said, Mr. Dodd received -- and knew he'd received -- preferential rates and fees on two mortgages he and his wife refinanced in 2003. As a power on the Senate Banking Committee, he also knew this was a conflict of interest. This was the era when Countrywide originated and then sold to Fannie Mae high volumes of subprime loans.

The SEC charged Mr. Mozilo with fraud and insider trading earlier this month, and the Los Angeles Times reported in May that there is an FBI investigation which "includes a probe of [Countrywide's] role in an influence-peddling scandal involving" Mr. Dodd. The Senate Ethics Committee won't comment on its own investigation of almost a year.

Mr. Dodd denies receiving any special treatment, and nearly a year ago he promised to release the Countrywide mortgage documents and clear up the matter. We are still waiting, though he did attempt to placate the Connecticut press with a peek-a-boo release of a few select documents and a review by his own lawyers in February.

Now the Irish cottage on 10 scenic acres is bringing more trouble. At the start of the Irish real estate boom in 1994, Mr. Dodd bought the property with William Kessinger for $160,000. Mr. Kessinger has been a business partner of Edward Downe, who is a longtime friend of Mr. Dodd's. In 1986 Messrs. Dodd and Downe owned a condominium together in Washington. In 1993 Mr. Downe pleaded guilty to insider trading and securities fraud and in 2001, as Bill Clinton was preparing to leave the White House, Mr. Dodd successfully lobbied to get his friend a pardon.

The following year, 2002, Mr. Dodd bought out Mr. Kessinger's two-thirds share in the house and became the full owner. Mr. Dodd reported to the Irish government that he paid Mr. Kessinger $122,351, and Mr. Dodd says that a bank appraisal that same year valued the property at $190,000. From 2002 to 2007 Mr. Dodd reported its worth at between $100,001 and $250,000 on his annual Senate financial disclosure form.

But Hartford Courant columnist Kevin Rennie began digging this year into the mismatch between what Mr. Dodd paid to Mr. Downe's business partner to become a full owner and what the property in Ireland was likely worth in 2002 amid the Irish land boom. Last week, when Mr. Dodd filed his annual financial disclosure form, it included a new appraisal from the same appraiser putting the current value of the house at $658,000.

In an effort to explain the gain despite the fact that the Irish housing market has since gone south, a spokesman for the Senator said that "The value of the cottage, or of Irish real estate generally, isn't something that the Dodds have thought much about." However, according to Galway County records, Mr. Dodd was so uninterested in the value of those 10 acres that he tried to subdivide the property in 1998 and put up another house. No doubt because he had no idea what it was, or would be, worth.

The Senate's financial disclosure forms are supposed to be a tool of honest government, and former Senator Ted Stevens was indicted for allegedly false disclosures. Mr. Dodd's miraculous property reappraisal is further grist for Senate and Justice investigators -- and especially for voters in 2010.

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