In 2004, two business partners of Sen. Ted Stevens (R-Alaska) sold an empty lot in Anchorage to the National Archives and Records Administration for just over $3.5 million, more than doubling their year-old investment in the property.
Stevens earmarked the appropriation for NARA to purchase a site, although there is no indication he received any direct benefit from the deal and his spokesman said the Senator had nothing to do with the selection of the specific property.
But the project is one of several valuable contracts that the developers, Leonard Hyde and Jonathan Rubini, entered into with federal agencies while Stevens was either the ranking member or chairman of the Senate Appropriations Committee — and had significant investments in several Rubini/Hyde companies.
Stevens’ investments with the two real estate magnates over a seven-year period turned him from one of the Senate’s least wealthy Members into a millionaire, according to his financial records and statements by Stevens over the years.
That relationship has prompted questions from watchdogs who say, at the least, it raises the potential for an appearance of a conflict of interest.
“It absolutely raises flags when you have a Member having a business relationship with someone who may benefit from the Member’s official actions,” even in an indirect way, said Bill Allison, a senior fellow at the Sunlight Foundation, a watchdog group that pushes for greater disclosure by lawmakers. “The way [disclosure is] being handled now is just completely inadequate,” Allison added.
Allison and other watchdogs argue the lack of adequate disclosure rules in the Senate makes it extremely difficult for the public to make an informed judgment on whether Stevens, for example, is acting appropriately, and they have called for more stringent rules.
Stevens’ relationship with the two men is rare for a Senate appropriator.
Of the 19 Senate Appropriations Committee members whose offices responded to requests for comment, out of 29 on the committee, Stevens was one of only two members who disclosed a direct business relationship between themselves or their spouses and an entity that receives federal funds — and was the only member of the powerful committee who has such a relationship himself.
The vast majority of the lawmakers said they either never had business dealings with companies that receive federal funding or broke their ties with business entities before entering the Senate.
For instance, “Sen. [Lamar] Alexander [R-Tenn.] resigned from all boards and commissions on which he served when he was elected to the U.S. Senate,” Alexander spokesman Lee Pitts said.
Aside from Stevens, Sen. Dianne Feinstein (D-Calif.) is the only panel member who responded who disclosed such a relationship. Feinstein’s husband, Richard Blum, is chairman of Blum Capital Partners, which has invested in companies, including defense contractors, that have received federal funding. Gerber, however, noted that the company has never received a specific earmark from Congress.
Unlike Stevens, Feinstein was wealthy well before entering the Senate.
A Profitable Relationship
According to published reports, Stevens’ relationship with the two real estate magnates dates back to 1997, when at the urging of his brother-in-law, lobbyist Bill Bittner, Stevens invested $50,000 with Hyde and Rubini in a new venture dubbed JLS Properties LLC.