BREAKING: Iowa Sen. Kent Sorenson resigns after report finds he received money from Bachmann campaign | Des Moines Register Staff Blogs
JohnButts@JBMedia - Reports:
Kent Sorenson, the Iowa state senator embattled over accusations that he inappropriately received pay from at least one presidential campaign in the lead up to the 2012 Iowa caucuses, has resigned from office, according to a Senate leader.
The Milo Republican stepped down just hours after an independent investigator delivered a damning report to the Senate Ethics Committee, which has been investigating his conduct for several months.
The report found “probable cause” that Sorenson broke ethics rules by accepting payments from a political action committee associated with U.S. Rep. Michele Bachmann, and that his denials of taking such payment may represent a felony under Iowa law.
See the 566-page report: Volume 1 | Volume 2
The resignation was announced by Senate Republican Leader Bill Dix in a statement released shortly after 5 p.m.
“Today, I called for Senator Sorenson’s resignation, and he agreed to do so effective immediately,” Dix said in the statement.
In an interview after the statement was released, Sorenson told the Des Moines Register he decided to quit fighting the charges for the sake of his family. It has already cost him thousands of dollars, he said. In an earlier interview, he said he never made any false statements and maintained he violated no ethics rule.
In a 566-page report filed with the Iowa Senate on Wednesday, Mark E. Weinhardt, a specially appointed independent counsel to the Iowa Senate Ethics Committee, reports that Sorenson received money from Bachmann-controlled political action committees by filtering the funds through two separate consulting firms.
Sorenson served as the Iowa campaign chairman of Bachman’s presidential campaign until a dramatic defection to the U.S. Rep. Ron Paul’s campaign just days before the Jan. 3, 2012, caucuses.
Senate ethics rules prohibit legislators from receiving payment – either directly or indirectly – from political action committees.
The report also finds that Sorenson received a $25,000 check from a senior official in former Paul’s presidential campaign. He also received $73,000 in wire transfers that Weinhardt called “deeply suspicious.”
Sorenson told the Register he spoke to the special investigator for 2 1/2 hours, then could tell from Weinhardt’s line of questioning that he’d already drawn his own conclusions. At that point, Sorenson said he declined to answer further questions.
Taking money from two corporations is much different from taking money directly from a presidential campaign, he argued. “I don’t believe I lied,” he said. “If you’re a subcontractor, who do you work for? I was never an employee of Bachmann for President.”
His lawyer, Theodore Sporer, said the investigator is taking quite a bit of latitude in his interpretation of the Senate rules.
“(Sorenson) didn’t say anything that wasn’t true and if that broad reading is accurate, it will present a host of problems for the Senate – there would be senators from both sides of the aisle that would have violated this rule,” Sporer said. “I’m going to guess the report skirts around that direct versus indirect issue.”
Sporer added that their comments are about the allegations connected to the Bachmann campaign not the Paul campaign money, which is a separate matter.
Sorenson told the Register that one of his fellow senators knew that presidential candidate Rick Perry was renting building space from him because Perry wanted the senator’s endorsement. Another senator who owns a restaurant catered food for campaign workers, he said.
“So cooking a hamburger for a campaign isn’t working but giving advice is?” Sorenson said.
The report says that in Sorenson’s cases, money from the presidential campaigns was received by a company called Grassroots Strategies, Inc., which was wholly owned by Sorenson. In the case of the payments from the Bachmann-associated PACs, Sorenson took money from Grassroots Strategies as income for himself, Wienhardt found.
For his work on Bachmann’s presidential campaign, Sorenson received payment from the Bachmann For President campaign committee and MichelePAC, a leadership PAC set up by Bachmann to raise money for other candidates, Weinhardt found.
“We believe it was a plain violation of Senate Ethics Rule 6 for Senator Sorenson to accept compensation from MichelePAC to work on Representative Bachmann’s behalf,” Weinhardt writes in the report.
Sorenson’s payments from Bachmann for President, meanwhile, present “a question of interpretation” of the Senate rule – and indicate a need for the Senate to rewrite the rule to clarify its intent.
The report also notes two instances in which Sorenson denied being compensated by the Bachmann campaign in written statements to the Senate Ethics Committee. There is probable cause to believe, Weinhardt found, that those statements are false and that Sorenson knew them to be false when he made them.
Such false statements would constitute felonious misconduct in office, which is a class D felony.
The investigation originated with a complaint from Peter Waldron, a political consultant from Florida who worked on Bachmann’s campaign in Iowa throughout 2011.
In a statement to the Register on Wednesday, Waldron said he was “vindicated” by the report but regretful that Iowa’s first-in-the-nation status had been “soiled” by its findings.
“The people of Iowa must now change the ethics rules by which they control the behavior of their senators in both parties,” he said in the statement. “No payments of any kind, directly or indirectly, can flow to senators if Iowa wishes to preserve it unique role in the presidential nominating system in America.”
Senate Ethics Committee Chairman Wally Horn, D-Cedar Rapids, said he hoped to call a meeting of the committee for early next week to discuss the matter. In an interview before Sorenson’s resignation was announced, he declined to even guess, however, at how the committee might respond to the report.
With Sorenson’s resignation, the issue may now be moot.
The Ethics Committee is made up of three Democrats and three Republicans. It could do anything from dropping the matter entirely to rendering judgment on Sorenson’s guilt or innocence.
Horn also noted that the committee is anticipating another report from Weinhardt, looking at a second set of allegations against Sorenson relating to whether he took money from the Paul campaign.
As of Wednesday afternoon, most senators had not even seen Weinhardt’s report, which was delivered to the Secretary of the Senate’s office in the Capitol. Lawmakers adjourned in May, and are back in the Statehouse infrequently during the interim period.
Sen. Jeff Danielson, D-Cedar Falls, called on his fellow senators to withhold judgment on Sorenson, noting that potential sanctions could end up before the whole Senate at some point. But he did say the situation points to the need for tougher ethics rules and laws in Iowa.
“We need to protect the integrity of Iowa’s politics,” he said.
That means writing a clearer prohibition on lawmakers receiving compensation from political campaigns and writing such a ban into state law rather than legislative ethics rules, he said. As chairman of the State Government Committee, Danielson has led campaign finance and ethics reform issues before.
Sen. Jerry Behn, R-Boone and a member of the Ethics Committee, said Wednesday afternoon he’d spent the day out in his soybean fields and was unaware the report had been released.
“My position from the first initial report is that a guy is innocent until proven guilty,” Behn said. “I really want to see the report and find out what’s going on. … I don’t think it’s appropriate for me to say anything yet.”
Sorenson, 41, is a first-term senator representing a district just south of Des Moines. He previously served one term in the House.
In the other major issue Weinhardt reviewed, he found no evidence that Sorenson personally took a list containing the contact information for home-school families from the computer of another Bachmann campaign worker. He find evidence, however, suggesting Sorenson was involved in a conspiracy to obtain the list for use by the campaign.
The list was stored on a computer owned by campaign worker Barb Heki in connection with her work for the Network of Iowa Christian Home Educators. Heki sued Sorenson and the Bachmann campaign for obtaining the list and sending emails to the names it contained. The issue also has been the subject of an Urbandale police investigation.
Weinhardt’s report notes that a third campaign worker, Chris Dorr, took responsibility for taking list, although there is evidence of a conspiracy involving Sorenson.
“The objects of the conspiracy were to remove the list from Ms. Heki’s computer without her knowledge and to make use of the list to [Bachmann for President’s] and Senator Sorenson’s own advantage while knowing that the list had been stolen,” Weinhardt writes.
http://blogs.desmoinesregister.com/dmr/index.php/2013/10/02/senate-investigator-kent-sorenson-received-payment-from-bachmann-campaign-his-denials-may-constitute-a-felony/article
Outsiders come to buy liens
Liens are generally sold the year after a homeowner fails to pay a tax bill, for the same amount as the debt. Homeowners receive several warnings before their liens are put up at annual auctions.
Once a lien is sold, owners have six months to repay the investor with interest. If that does not happen, the investor can move to foreclose.
For years, the auctions came and went with little fanfare, drawing local investors who would plunk down a few hundred dollars to buy up liens in neighborhoods they knew well. Most were looking to earn the interest, and if there was a foreclosure, it was handled by the tax office.
But the work overwhelmed the agency, and in 2001, city leaders made a critical change: They told investors to head directly to court to file a foreclosure case.
The move empowered investors to start charging legal fees and court costs — a game changer that allowed them to turn minor delinquencies into insurmountable debts.
Companies from Florida, Illinois, Maryland and New York came to town, prepared to spend millions.
In 2007, more than 150 purchasers spent five days competing for 2,000 liens, first on properties downtown near the Capitol, then Georgetown, followed by Dupont Circle, Chinatown and finally the neighborhoods near the Anacostia River, long stricken by poverty.
Once a lien is sold, owners have six months to repay the investor with interest. If that does not happen, the investor can move to foreclose.
For years, the auctions came and went with little fanfare, drawing local investors who would plunk down a few hundred dollars to buy up liens in neighborhoods they knew well. Most were looking to earn the interest, and if there was a foreclosure, it was handled by the tax office.
But the work overwhelmed the agency, and in 2001, city leaders made a critical change: They told investors to head directly to court to file a foreclosure case.
The move empowered investors to start charging legal fees and court costs — a game changer that allowed them to turn minor delinquencies into insurmountable debts.
Companies from Florida, Illinois, Maryland and New York came to town, prepared to spend millions.
In 2007, more than 150 purchasers spent five days competing for 2,000 liens, first on properties downtown near the Capitol, then Georgetown, followed by Dupont Circle, Chinatown and finally the neighborhoods near the Anacostia River, long stricken by poverty.
Where tax lien foreclosures occur in the District
Dots on the map show foreclosures that followed tax liens since 2005, and the shading represents number of pending foreclosure cases.
Minorities are hit the hardest
72%
of pending foreclosures are in neighborhoods where less than 20% of the population is white.
Areas with the most pending foreclosures
149
Deanwood, Burrville, Grant Park, Lincoln Heights, Fairmont Heights
141
Congress Heights, Bellevue, Washington Highlands
Foreclosures since 2005
- Residential
- Vacant
- Commercial and other
Pending foreclosures
4 20 50 100+
In the District of Columbia:
509
foreclosures since 2005
1,598
open cases in court
Source: Post analysis of data from D.C. Superior Court, D.C. Recorder of Deeds, U.S. Census.
When it was over, just six companies had swept the bidding, snaring two-thirds of the liens, which totaled $5 million, on properties worth more than $666 million.
One of those purchasers was under federal investigation at the time for rigging tax auctions in Maryland, where he was suspected of scheming to win liens — then demanding excessive fees from homeowners. Lawyers for a second firm would also come under investigation in the same case.
Their companies and others bought into every ward of the District in 2007, including Deanwood, one of the city’s oldest predominantly African American neighborhoods. On long stretches of Dix Street, where the recession hit hard and lingered, 33 liens were sold between 2005 and 2008, on properties scattered amid food banks and “Cash 4 Gold” signs.
Across the city, the rate of foreclosure cases has nearly doubled in the past five years — in a single week in January, tax lien companies filed more than 180 cases. Of the 13,000 liens sold since 2005, more than half have ended up in court.
One of those purchasers was under federal investigation at the time for rigging tax auctions in Maryland, where he was suspected of scheming to win liens — then demanding excessive fees from homeowners. Lawyers for a second firm would also come under investigation in the same case.
Their companies and others bought into every ward of the District in 2007, including Deanwood, one of the city’s oldest predominantly African American neighborhoods. On long stretches of Dix Street, where the recession hit hard and lingered, 33 liens were sold between 2005 and 2008, on properties scattered amid food banks and “Cash 4 Gold” signs.
Across the city, the rate of foreclosure cases has nearly doubled in the past five years — in a single week in January, tax lien companies filed more than 180 cases. Of the 13,000 liens sold since 2005, more than half have ended up in court.
With no caps on fees, families have paid a steep price, facing bills for legal fees and court costs often more than triple their original tax debts, The Post found. Rates for the attorneys hired by the tax lien companies have reached $450 an hour.
Even the smallest expenses have been passed on — including the paper that ordered property owners to court at 25 cents per page. One attorney billed for preparing the bill itself — $25.
Time and again, the bills came without receipts or breakdowns justifying the costs.
“I just don’t know what he’s trying to charge me for,” said longtime community activist Barbara Morgan, 80, standing outside the courtroom earlier this year with a $2,700 legal bill that doubled the tax debt on her home of 50 years. “It’s ridiculous.”
Local judges have taken purchasers to task. One was so critical of the fees charged by Aeon Financial of Chicago, he slashed them in half last year. Aeon wanted $6,300 in fees for a $1,680 tax lien.
A senior attorney billed at $450 an hour. A junior attorney charged $325. Legal assistants tacked on $110 an hour. Plus, there was $800 in expenses, including $27.60 for “dismissal costs.”
“Unreasonable,” Judge Joseph E. Beshouri said in his ruling.
In 2009, D.C. Attorney General Peter J. Nickles also stepped in, seeking an injunction against Aeon over fees that he called “unlawful” and “predatory.”
“Aeon’s excessive attorney’s fee demands are likely to result in at least some homeowners not being able to redeem homes,” according to the motion.
In one case, Steve Segears, who lives in the house his father bought after World War II, was charged $5,500 in fees by Aeon, nearly double his $2,900 tax bill.
Even the smallest expenses have been passed on — including the paper that ordered property owners to court at 25 cents per page. One attorney billed for preparing the bill itself — $25.
Time and again, the bills came without receipts or breakdowns justifying the costs.
“I just don’t know what he’s trying to charge me for,” said longtime community activist Barbara Morgan, 80, standing outside the courtroom earlier this year with a $2,700 legal bill that doubled the tax debt on her home of 50 years. “It’s ridiculous.”
Local judges have taken purchasers to task. One was so critical of the fees charged by Aeon Financial of Chicago, he slashed them in half last year. Aeon wanted $6,300 in fees for a $1,680 tax lien.
A senior attorney billed at $450 an hour. A junior attorney charged $325. Legal assistants tacked on $110 an hour. Plus, there was $800 in expenses, including $27.60 for “dismissal costs.”
“Unreasonable,” Judge Joseph E. Beshouri said in his ruling.
In 2009, D.C. Attorney General Peter J. Nickles also stepped in, seeking an injunction against Aeon over fees that he called “unlawful” and “predatory.”
“Aeon’s excessive attorney’s fee demands are likely to result in at least some homeowners not being able to redeem homes,” according to the motion.
In one case, Steve Segears, who lives in the house his father bought after World War II, was charged $5,500 in fees by Aeon, nearly double his $2,900 tax bill.
“Enough is enough,” Michael J. Wilson, Segears’s attorney, wrote to the court. “The Aeon juggernaut keeps rolling along by demanding payment of unreasonable and extortionate attorneys’ fees and other alleged expenses, including those which have not actually been ‘incurred.’ ”
Aeon did not respond to repeated calls and letters seeking comment.
Other places acknowledged abuses years ago and took steps to guard against them. New York City won’t allow tax liens to be sold on homes owned by low-income seniors and the disabled, as well as veterans. Some counties in Michigan have scrapped tax lien sales altogether and collect the money themselves. Maryland, fearing that taxpayers were being gouged, limits the legal fees to $1,500.
Most homeowners are in no position to fight and rely on the government to protect them from unfair practices, said Howard Liggett, former director of the National Tax Lien Association, who has spoken out nationally against excessive fees.
But D.C. leaders have not provided key protections, including caps on fees.
“It’s embarrassing,” said Liggett, who is familiar with the District’s tax auctions and bidders. “You’re always going to have unscrupulous [investors]. You’ve got to self-police.”
Aeon did not respond to repeated calls and letters seeking comment.
Other places acknowledged abuses years ago and took steps to guard against them. New York City won’t allow tax liens to be sold on homes owned by low-income seniors and the disabled, as well as veterans. Some counties in Michigan have scrapped tax lien sales altogether and collect the money themselves. Maryland, fearing that taxpayers were being gouged, limits the legal fees to $1,500.
Most homeowners are in no position to fight and rely on the government to protect them from unfair practices, said Howard Liggett, former director of the National Tax Lien Association, who has spoken out nationally against excessive fees.
But D.C. leaders have not provided key protections, including caps on fees.
“It’s embarrassing,” said Liggett, who is familiar with the District’s tax auctions and bidders. “You’re always going to have unscrupulous [investors]. You’ve got to self-police.”
Threatened with mounting fees, some families simply gave up. In court files and interviews, they described large bills and long battles with lawyers while interest grew on their tax debts.
“We just didn’t have the money to fight these people,” said Michael McRae, who tried unsuccessfully to save his brother’s house from a tax-lien firm from Florida.
In the past eight years, investors have foreclosed on a condominium just a few blocks from the U.S. Capitol and another just down the street from the Embassy of Peru, a single-family home near Rock Creek Park and dozens of houses in poor neighborhoods along the Anacostia River.
The Post found investors have taken nearly 200 homes since 2005, assessed at $39 million. They sold most of them, sometimes within weeks, after paying off any back taxes or city fines.
“We just didn’t have the money to fight these people,” said Michael McRae, who tried unsuccessfully to save his brother’s house from a tax-lien firm from Florida.
In the past eight years, investors have foreclosed on a condominium just a few blocks from the U.S. Capitol and another just down the street from the Embassy of Peru, a single-family home near Rock Creek Park and dozens of houses in poor neighborhoods along the Anacostia River.
The Post found investors have taken nearly 200 homes since 2005, assessed at $39 million. They sold most of them, sometimes within weeks, after paying off any back taxes or city fines.
One of the most aggressive investors was Heartwood, whose lawyers were investigated and disbarred as a result of Maryland’s criminal bid-rigging case. Formerly a subsidiary of Florida’s BankAtlantic Bancorp, Heartwood has taken more than 20 houses through foreclosure and sold them all, including a brick duplex in Northeast Washington with a $535 lien for $169,610.
One of the houses was owned by Michael McRae’s brother, Thomas, a flower-shop owner, who was in and out of a coma and under hospice care while Heartwood was pressing to take his house over what began as a $1,025 tax debt. Thomas McRae died in June 2006 — three months after a judge approved the foreclosure.
Family members found out and fought back, saying no one told them about the lien or foreclosure.
Heartwood eventually paid the family $80,000 to settle the case and quickly sold the brick house on a bustling corner of Sherman Avenue NW for $175,000. Longtime neighbors still recall how Thomas McRae had filled the sidewalk with flowers.
“We’re just regular people, and we don’t have $200,000 to fight a big organization from Florida,” his brother said.
In a written statement, the tax office said the $1,025 tax bill was “not a small debt.” A spokesperson for Heartwood declined to discuss the foreclosure cases but said the company is no longer buying tax liens in the District and Maryland.
One of the houses was owned by Michael McRae’s brother, Thomas, a flower-shop owner, who was in and out of a coma and under hospice care while Heartwood was pressing to take his house over what began as a $1,025 tax debt. Thomas McRae died in June 2006 — three months after a judge approved the foreclosure.
Family members found out and fought back, saying no one told them about the lien or foreclosure.
Heartwood eventually paid the family $80,000 to settle the case and quickly sold the brick house on a bustling corner of Sherman Avenue NW for $175,000. Longtime neighbors still recall how Thomas McRae had filled the sidewalk with flowers.
“We’re just regular people, and we don’t have $200,000 to fight a big organization from Florida,” his brother said.
In a written statement, the tax office said the $1,025 tax bill was “not a small debt.” A spokesperson for Heartwood declined to discuss the foreclosure cases but said the company is no longer buying tax liens in the District and Maryland.
Bennie Coleman was ousted from his house two years ago in a flurry of foreclosures that swept the poor neighborhoods of Ward 7.
The retired Vietnam veteran bought the tidy brick duplex in Northeast for $57,500 with life insurance money that he received when his wife died of breast cancer in 1988.
Known in his working-class neighborhood as “Tops,” he spent two decades in the house without a mortgage. But in recent years, Coleman began showing signs of dementia — he would forget to pay bills or buy food. His next-door neighbor would often bring him plates of chicken and carrots.
In 2006, he forgot to pay a $134 tax bill, prompting the city to place a lien on the home and add $183 in interest and penalties. His son paid the $317 bill in 2009, records show, but that wasn’t enough.
The Maryland company that had bought the lien had already gone to court to put a foreclosure in motion. To lift the lien, the company’s lawyer was demanding steep legal fees and expenses— $4,999.
The retired Vietnam veteran bought the tidy brick duplex in Northeast for $57,500 with life insurance money that he received when his wife died of breast cancer in 1988.
Known in his working-class neighborhood as “Tops,” he spent two decades in the house without a mortgage. But in recent years, Coleman began showing signs of dementia — he would forget to pay bills or buy food. His next-door neighbor would often bring him plates of chicken and carrots.
In 2006, he forgot to pay a $134 tax bill, prompting the city to place a lien on the home and add $183 in interest and penalties. His son paid the $317 bill in 2009, records show, but that wasn’t enough.
The Maryland company that had bought the lien had already gone to court to put a foreclosure in motion. To lift the lien, the company’s lawyer was demanding steep legal fees and expenses— $4,999.
Coleman’s son couldn’t pay and wrote to the court for help: “I would hate for him at his age to lose his home.” One payment was made for $700 in 2009, but when no additional payments followed, the court approved the foreclosure in June 2010.
His son couldn’t be reached for comment. In the summer of 2011, federal marshals showed up at the door when Coleman refused to leave.
“He had no clue what was going on,” said neighbor Patricia Johnson. “I went over and told my mom, ‘Looks like they are going to get Tops out.’ ”
That night, he slept in a chair on the front porch.
The court later appointed a conservator, who told The Post that Coleman was incapable of responding to the emergency unfolding in his life, including showing up in court to fight for his house.
“He had no chance,” said attorney Robert Bunn. “He has dementia. He did not understand the ramifications of what was going to happen to him.”
The Maryland company that took Coleman’s house sold it for $71,000 two months after evicting him. The company was owned by Steven Berman, who was convicted in 2008 in the Maryland bid-rigging case. He declined to comment. The law firm for Berman’s company said it was willing to reduce Coleman’s bill to $3,500 but could not reach him.
The tax office would not comment on the case, saying only that the lien would “not have been sold if the tax sale were today” because it was less than $1,000, the agency’s current threshold.
Coleman said he thought he would stay in his house for many more years, sipping cold drinks on the porch and talking to neighbors over the fence. Now, he’s in a group home one mile from the home that is no longer his.
On an overcast morning earlier this year, he walked past the old house, now boarded up, on the way to the corner store to buy margarine and a bag of sugar. He looked back briefly, then turned away.
“I have nothing,” he said.
http://www.washingtonpost.com/sf/investigative/2013/09/08/left-with-nothing/
His son couldn’t be reached for comment. In the summer of 2011, federal marshals showed up at the door when Coleman refused to leave.
“He had no clue what was going on,” said neighbor Patricia Johnson. “I went over and told my mom, ‘Looks like they are going to get Tops out.’ ”
That night, he slept in a chair on the front porch.
The court later appointed a conservator, who told The Post that Coleman was incapable of responding to the emergency unfolding in his life, including showing up in court to fight for his house.
“He had no chance,” said attorney Robert Bunn. “He has dementia. He did not understand the ramifications of what was going to happen to him.”
The Maryland company that took Coleman’s house sold it for $71,000 two months after evicting him. The company was owned by Steven Berman, who was convicted in 2008 in the Maryland bid-rigging case. He declined to comment. The law firm for Berman’s company said it was willing to reduce Coleman’s bill to $3,500 but could not reach him.
The tax office would not comment on the case, saying only that the lien would “not have been sold if the tax sale were today” because it was less than $1,000, the agency’s current threshold.
Coleman said he thought he would stay in his house for many more years, sipping cold drinks on the porch and talking to neighbors over the fence. Now, he’s in a group home one mile from the home that is no longer his.
On an overcast morning earlier this year, he walked past the old house, now boarded up, on the way to the corner store to buy margarine and a bag of sugar. He looked back briefly, then turned away.
“I have nothing,” he said.
http://www.washingtonpost.com/sf/investigative/2013/09/08/left-with-nothing/
