Report: Shuler Investigated Over Land Swap

Posted October 30, 2009 at 11:05am

Rep. Heath Shuler (D-N.C.) is the subject of a House ethics committee investigation for his role in a Tennessee land-swap deal, the Washington Post reported Friday.

According to a confidential ethics committee document obtained by the Post, the Committee on Standards of Official Conduct — commonly known as the ethics committee — was “preparing recommendations— in July, the date of the memorandum.

The current status of the investigation is not known. The ethics committee does not comment on its work.

The Post reported the ethics review is 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 a report issued in May, the IG inspector determined 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 spokesman Doug Abrams declined to discuss the ethics inquiry, but he referred to the TVA investigation of the land-swap program.

“The TVA inspector general found no evidence that either Congressman Shuler or his representatives used Shuler’s position as U.S. Congressman to pressure the TVA,— Abrams told Roll Call on Friday.

The Post reported Thursday night that it had received a confidential committee report detailing ongoing investigations into more than 30 Members by both the Committee on Standards of Official Conduct and the Office of Congressional Ethics. The report was inadvertently leaked by a junior committee aide, using file-sharing software.