July 31, 2014 SIGN IN | REGISTER

Ethics Committee Clears Shuler in Tenn. Land Deal

The House ethics committee declared in a letter issued late Wednesday that Rep. Heath Shuler (D-N.C.) did not violate the chamber’s rules through his involvement in a Tennessee land-swap deal in 2007.

“The Standards Committee, after thorough review, has determined that your actions in these matters were not improper in any way and did not violate House Rules,” the letter addressed to Shuler states. The letter notes the investigation is now closed.

The Committee on Standards of Official Conduct, commonly known as the ethics panel, also noted in the letter that the FBI had reviewed the land swap “and also concluded that there was no evidence that criminal statutes were violated.”

The ethics committee’s review focused on the Cove at Blackberry Ridge LLC, a real estate development company in Loudon, Tenn., in which Shuler is an investor.

The Cove at Blackberry Ridge faced scrutiny in recent months from the Tennessee Valley Authority, after the TVA’s inspector general initiated an investigation into a land-swap program operated by the agency.

According to reports in the Knoxville News Sentinel, the real estate company applied to the TVA land-swap program in mid-2007 — seeking waterfront access in exchange for waterfront property at a different location and a payment to a shoreline bank stabilization project — at the same time Shuler served on the House Transportation and Infrastructure Subcommittee on Water Resources and Environment, which has oversight of the TVA.

In its report on the TVA program, the inspector general found that Shuler did not use his status on the committee to pressure the TVA for the land swap but concluded that Shuler’s role in the real estate project did contribute to the appearance of preferential treatment.

“The appearance of preferential treatment was exacerbated by Shuler’s representatives dropping Shuler’s name with TVA employees,” the report stated.

A supplemental IG report obtained by the News Sentinel in mid-September through a Freedom of Information Act request indicated, however, that a then-TVA employee provided false information during the investigation about whether he knew of Shuler’s involvement in the real estate company.

The Cove at Blackberry Ridge was Shuler’s largest asset in 2007, according to his financial disclosure form. At that time, it was valued at $5 million to $25 million, and it produced $15,000 to $50,000 in income.

In his most recent financial report, Shuler eliminated the asset. His office explained in September that the LLC and two others were consolidated into a single entity, the Highlands Property Group LLC, which the House lawmaker had listed in 2007 at a minimum value of $1,000. In his most recent report, that asset jumped to a value of at least $1 million but reported no income.

Shuler, who had denied wrongdoing in the incident, praised the committee’s decision in a statement Thursday.

“Throughout my personal and professional life I have always held myself to the highest possible ethical standard,” Shuler said. “I maintained that standard through all my interactions with the TVA relating to Blackberry Cove. I have never and will never attempt to use my office for personal gain and look forward to continuing to work on behalf of the people of Western North Carolina.”

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