Campaign finance is about sunlight and transparency. Apparently that’s not a universe Terry McAuliffe or his donors like operating in.
This story has been simmering for a while, but Ryan Nobles at Decision Virginia got there first, doing some digging into a donor to Terry McAuliffe who lists a Virginia address despite limited connections to the Commonwealth:
In 2009, McAuliffe took considerable heat because much of his funding came from his vast connections outside of Virginia. In 2013, his campaign is working to change that perception. Despite several of those out of town high dollar fundraisers, McAuliffe claims that 3,600 of his donors are from Virginia, making up 72% of the contributors to his campaign.
But one donor from his last 2012 report is registered as a Virginian, but it is unclear just how deep much business they are actually doing in Virginia. It is important to point out that the McAuliffe campaign did not make the same claims about it’s Virginia based contributions in the 2012 report as they did in the 2013 report.
McAuliffe’s 4th quarter report in 2012 lists a $100,000 donation from “Sungate Real Estate”. Sungate’s address is listed as 805 Country Club Lane in Manakin Sabot, VA 23103.
Sungate Real Estate doesn’t appear to have a very significant prescence in Manikan Sabot or anywhere in Virginia for that matter. 805 Country Club Lane is a property adjecent to Richmond Country Club near the intersection of Rt. 288 and Patterson Road. It is actually not a property at all and the McAuliffe campaign confirmed to NBC12 that it was a typo inserted into the report incorrectly.
The typo was not corrected in 2008 when Edward Haddock contributed to the McAuliffe for Governor campaign under his own name for $100,000. The same typo would be repeated in three subsequent contributions from Haddock. At the time, Haddock listed Full Sail, Inc as his employer.
Haddock has made many federal contributions listing Full Sail, Inc or Attorney as his employer. At no time has he listed Sungate Real Estate or any address other than Winter Park, Florida for any of his federal contributions.
Again, from Decision Virginia:
Sungate officials through the McAuliffe campaign tell NBC12 tonight that they do indeed do business in Virginia and because this is a Virginia race they wanted the report to reflect their interest in the commonwealth.
“Sungate, a US-based entity, and its affiliates own property at the 850 Country Club Lane address,” said Stephanie Murphy, a company spokesperson in a statement “We chose to list the contribution to the McAuliffe campaign from a geographically relevant Virginia entity.”
Edward Haddock had no problem listing his Florida address for any of his Federal contributions. But for some reason a 2013 contribution has a completely different name at the same (albiet, incorrect) Virginia address as 2009. In 2009, Edward Haddock used his own name and listed his employer as Full Sail, Inc.
Full Sail, Inc
Full Sail, Inc. is a for-profit university based in Winter Park, Florida. During the 2012 presidential campaign it was lambasted after Mitt Romney cited it as a model to address the soaring cost of education. But Full Sail has a less than stellar graduation rate and tuition that can run to $80,000 for a 21-month program. Full Sail is also the third largest for-profit education donor to federal candidates – down from second last June. As of last year, Ed Haddock had personally given over $60,000 to the DNC and Obama’s super PAC.
Blue Virginia, a leading Progressive Democratic blog, took issue with Mitt Romney and Full Sail, Inc in January, 2012, but especially with then Executive Director of the Democratic Party of Virignia Brian Moran’s heading up of the Association of Private Sector Colleges and Universities (APSCU):
By day, he heads up a scam industry that rips off veterans and poor kids, engages in predatory recruiting practices, scams the taxpayer out of tens of billions of dollars (while rewarding its “university” presidents – not to mention the head of its chief lobbying organization – lavishly). As one of my Virginia progressive friends wrote:
DPVA, heal thyself! When our Chair and Mitt Romney have the same sleazy friends, something is very, very wrong.
“I always felt that he could be the candidate or the key person for the candidate,” said former business partner Edward E. Haddock Jr., a lawyer-developer and Richmond native whose father was the city’s racially progressive mayor in the early 1950s. “Suddenly, the idea of being there for Hillary was off the table. It made sense that he would take that desire to serve somewhere.”
At no point in 2009 was Haddock and McAuliffe’s working relationship discussed. But their history goes back more than twenty years and has its roots in the Savings and Loan Crisis of the 80s and 90s – which leads to a lot more questions about McAuliffe’s past business dealings.
American Pioneer Savings Bank and The Boland Group
In May of 1990, American Pioneer, owned by Richard Swann (McAuliffe’s future father-in-law) was siezed by federal regulators. The Resolution Trust Corp took over the failed S&L at a cost to taxpayers of $500 million. McAuliffe was an investor in American Pioneer, losing $800,000.
“The more important you are, the more reason there is to be discredited,” said Haddock, who lost $17 million as co-owner with Swann of American Pioneer Savings Bank in Orlando.
Swann said his family and close friends lost $55 million in cash. He hunkered down for about five years, trying to rebuild his law practice, and stayed away from politics.
“It was a very bleak story in my life,” he said.
Everyone who was involved with a savings and loan had to lay low for a while because they were tainted just by their association with the industry, said Edward Haddock, Swann’s former partner.
“I don’t think Richard ever gave up his interest or willingness to help candidates he believed in,” Haddock said. “But he was distracted substantially for a period of time.”
But McAuliffe would end up on top after American Pioneer’s siezure. And Richard Swann would be along for the ride.
From the New York Times:
There was also opportunity in the thrift’s demise. In 1991, Mr. McAuliffe, guided by Mr. Swann, bought some American Pioneer real estate — once valued by the thrift at $50 million — from the Resolution Trust Corporation for $39 million, records show.
Mr. McAuliffe’s equal partner in the deal was a pension fund controlled by the International Brotherhood of Electrical Workers and the National Electrical Contractors Association. Mr. McAuliffe put up $100. The pension fund put up $39 million, but enjoyed a preferred position on any profits.
From Business Week:
In 1991, McAuliffe formed a partnership with a pension fund jointly operated by the IBEW and the National Electrical Contractors Assn., a management trade group. Such funds are regulated under the Taft-Hartley Act, and contributions come from both unionized electrical workers and from their employers, electrical contractors. The fund has co-chairmen–one from the union and one from management–and both labor and management employees are beneficiaries. The IBEW fund currently has $6 billion invested in stocks, bonds, and real estate.
In the 1991 deal that McAuliffe packaged and brought to the fund, the fund put up $38.7 million in cash for five apartment complexes and a rundown shopping center near St. Petersburg. McAuliffe got a 50% equity stake, even though the fund put up all the money.
No investment adviser was involved, says John M. Grau, co-chairman of the fund and executive vice-president of the National Electrical Contractors Assn., because McAuliffe’s plan seemed like a slam-dunk: The pension plan was acquiring the properties at $10 million below their appraised price.
CLOSE CONTACT. Why such a deal? Because the seller was the Resolution Trust Corp., which had taken control of the properties from Orlando-based American Pioneer Savings Bank. The RTC had rescued the s&l and placed it in receivership a year earlier–costing taxpayers $500 million. American Pioneer had been owned by Richard A. Swann, father of Dorothy Swann, McAuliffe’s wife. The elder Swann once presided over a $2 billion commercial empire. But it crashed when regulators declared the s&l insolvent. Swann filed for personal bankruptcy on Nov. 21, 1990.
Since then, Swann says, he acts as McAuliffe’s attorney in business ventures and is paid fees for managing McAuliffe companies. McAuliffe says Swann is not a partner but is paid to “help with the management.” Three such deals involved the IBEW and its pension funds.
In June of 1991, McAuliffe, Tony Coelho and John Boland organized a commercial real estate company named the “The Boland Group, Inc.” McAuliffe responsibilities included business development.
Between 1991 and 1994, The Boland Group brokered at least two deals between American Capital Group and the Resolution Trust Corporation. A notable principle at American Capital Group was Dorothy (Swann) McAuliffe, daughter of Richard Swann. Specifically, Dorothy McAuliffe’s presence raised eyebrows because the property her company purchased was held by her father’s failed bank, American Pioneer Savings and Loan before turned its assets over to the taxpayer funded Resolution Trust Corporation.
McAuliffe’s Millions (At Taxpayers’ Expense)
Edward Haddock has contributed over $200,000 to Terry McAuliffe’s two campaigns for Governor of Virginia. In 2009 he listed the contributions under his own name and his employer as Full Sail, Inc while using the wrong address of 805 Country Club Lane – an address only used for his contributions to Terry McAuliffe. This year a $100,000 contribution from the exact same wrong address was made in the name of Sungate Real Estate, a company Haddock runs but has never listed on any contributions, state or federal.
Why is Edward Haddock’s contribution suddenly being (poorly) hidden from public scrutiny?
McAuliffe and Haddock’s history appears to begin in investing in Richard Swann’s failed savings and loan. Richard Swann (McAuliffe’s father-in-law and a $100,000 donor to Terry’s 2009 bid) helped advise Terry McAuliffe’s Boland Group in assisting his daughter Dorothy Swann McAuliffe’s American Capital Group in the purchase of American Pioneer property for millions less than what it was worth from the Resolution Trust Corportation, which was established at the expense of taxpayers to the tune of $500 million.
McAuliffe had a 50% equity stake in the $39 million deal after having put up only $100 of the funds.
Less than a decade later, McAuliffe would make $18 million off of a $100,000 investment in Global Crossing – shortly before it became the seventh largest bankruptcy in American history.
When Terry McAuliffe proudly calls himself a hustler, he has a history to prove himself right.