'Akin to a bribe': GOP Senator Richard Burr sold DC townhouse to lobbyists who had business before his committees

The chairman of the Senate Intelligence Committee, Richard Burr, has come under fire in recent weeks for unloading stock holdings right before the market crashed on fears of coronavirus and for a timely sale of shares in an obscure Dutch fertilizer company.

Now the North Carolina Republican’s 2017 sale of his Washington, D.C., home to a group led by a donor and powerful lobbyist who had business before Burr’s committee is raising additional ethical questions.

Burr sold the small townhouse, in the Capitol Hill neighborhood, for what, by some estimates, was an above market price — $900,000 — to a team led by lobbyist John Green. That is tens of thousands of dollars above some estimates of the property’s value by tax assessors, a real estate website and a local real estate agent. The sale was done off-market, without the home being listed for sale publicly.

Green is a longtime donor to Burr’s political campaigns and has co-hosted at least one fundraiser for him. In 2017, the year of the sale, Green lobbied on behalf of a stream of clients with business before Burr’s committees.

Ethics experts are generally troubled when politicians enter into business transactions with donors or lobbyists with matters before them. The legality of this sale hinges on whether the home was purchased for fair market value. If it was purchased for more than that, it would be considered a gift. Gifts of significant value from lobbyists are generally banned by Senate ethics rules, and those that aren’t are typically required to be publicly disclosed. Neither Burr nor Green disclosed any such gifts. Gifts that are intended to influence official actions are illegal.

“This appears to be extremely problematic,” said Kedric Payne, general counsel for the Campaign Legal Center and former deputy chief counsel of the Office of Congressional Ethics.

Other ethics experts agreed. “This has every appearance of being a violation of the gift ban,” said Craig Holman, a lobbyist for the watchdog group Public Citizen. “The gift ban is one of the most basic legal frameworks for preventing corruption. Lobbyist gifts to lawmakers is akin to a bribe.”

Holman, however, said proving such transactions went for above market value is difficult. He compared the scenario to former EPA Administrator Scott Pruitt renting a Capitol Hill condo for a discounted rate from the wife of a lobbyist who sought to influence the agency’s decisions. EPA officials initially defended the rent as market rate, and the case did not result in any sanction or prosecution against Pruitt.

In a statement, a Burr spokesperson said the price was the fair market value, “directly in line with comparable properties recently sold in the area.”

“The sale was finalized in February 2017 after a months-long process, which included an independent appraisal confirming the building’s market value and legal review of the title and contract,” the spokesperson said. “The Senate Ethics Committee was notified before the sale and the Committee’s guidance was followed on all relevant public financial disclosures.”

The ethics committee is not known for its aggressive scrutiny of members. “The Senate Ethics Committee is an insider’s club — it is members overseeing each other,” Holman said. “The committee is more widely known for providing cover to colleagues, and it would appear that is what happened in this case.”

In a short statement, Green said, “I have not lobbied the Senator or worked on an issue with his office personally since 2016.”

Tax assessors valued the Washington, D.C., home for $796,720 in 2017, more than $100,000 less than Green and his business partner paid for it. But tax assessment values in the city often come in under market prices. Burr paid $525,000 for the place in 2003.

Redfin, the real estate website, estimated the home’s value to be $813,973 in the month the house was sold, though the company’s valuations are far from exact.

Bob Williams, a Coldwell Banker real estate agent who helps buy and sell homes in the Capitol Hill neighborhood, reviewed the listing for ProPublica and said that he would estimate that in early 2017 Burr’s home would have sold on the market for around $850,000, possibly more if there were multiple competing offers.

Dare Johnson Wenzler, another Washington real estate agent, said it’s difficult to come up with a precise value estimate without knowing more details about the home, but that the price seemed about right.

“Sometimes a buyer will pay more just so they don’t have to compete,” she said. “And it saves the seller from staging the house and putting it on the market. It’s a huge hassle.”

Green’s spokesman provided ProPublica with an analysis that the purchasing entity, a limited liability company, commissioned from a real estate firm to value the property. The analysis is dated December 2018, almost two years after the sale was completed. Asked why it was done well after the sale was done, the spokesman said “one of the LLC members wanted to review the transaction after the fact to document it.”

The analysis found that comparable properties in the immediate vicinity sold in the year preceding for between $725,000 and $989,000, with an average sale price of about $855,000. But the analysis found that Burr’s home included a one-bedroom rental unit and is within walking distance of the House of Representatives, making it more attractive. The analysis found two similar homes, which sold for $898,000 and $989,000.

“The subject Property was sold off-market, which some would consider a lucky break and will often pay more than market value to secure, due to the pressures of supply and demand,” the report states.

Green lobbied the Senate on behalf of Merck on the Right to Try Act, legislation that passed and allows terminally ill patients to get experimental drugs and limits the liability of health care companies. Burr, who sits on the Senate health committee, co-sponsored the legislation on Feb. 7, 2017, the same month that the sale of the house was being worked out.

Green also lobbied on behalf of the pharmaceutical industry on legislation that renewed the Food and Drug Administration’s ability to collect fees from drug and medical device companies to fund a fast approval process, which had bipartisan support. In hearings on the issue, Burr stood out for his pro-industry stances.

And Green worked on behalf of the National Rifle Association on the Hearing Protection Act of 2017, legislation that went before the finance committee, which Burr sits on. The bill would have restricted the ability of states and cities to regulate the sales of firearm silencers. It did not pass.

Green’s other clients include Google’s parent company, Alphabet; AT&T Bristol-Myers Squibb; Koch companies; Northrop Grumman and the Pharmaceutical Research and Manufacturers of America, the trade group for drugmakers. Green has also represented Altria, the tobacco company. Burr has long resisted some government regulation of tobacco. In 2018, the year after the home sale, Burr blasted the FDA’s attempt to ban menthol cigarettes.

There is no evidence that Green tried to influence Burr’s actions as a senator or discussed any legislation with him specifically.

The townhouse transaction was made through a limited liability corporation named after the property address: 450 New Jersey Ave SE Associates. Business records connect the LLC to Green, the lobbyist; two partners at his lobbying firm Crossroads Strategies, Mathew Lapinski and Hunter Moorhead; Gerrit Lansing, who at the time was chief digital officer at the White House; and Lee Dunn, a lobbyist for Google. None of them responded to requests for comment.

Green’s team intended to use Burr’s home — a half mile away the Capitol Building — as a lobbying office, a venue for political fundraisers and a place for clients and associates to sleep overnight instead of a hotel, a person familiar with the transaction told ProPublica.

Burr appears to have used the proceeds from the sale to buy a house in Nags Head, a beach town on North Carolina’s Outer Banks.

Records show that the professional lives of Burr and Green have intersected for years.

Green has donated at least $13,300 to Burr’s political committees going back to at least 2001. He served as Burr’s Washington steering committee chairman back when Burr, then a member of the House, was first running for Senate in 2005. In 2010, he co-hosted an evening fundraiser for him.

After beginning his career in Washington in the mid-1990s as a Republican Senate staffer, Green became a lobbyist and has founded two major lobbying firms, most recently Crossroads Strategies.

Last month, ProPublica reported that Burr unloaded a significant portion of his total portfolio — between $628,000 and $1.72 million of stock — a week before the market crash triggered by the coronavirus outbreak. The sales came soon after he offered public assurances that the government was ready to battle the virus.

Federal authorities are now reportedly scrutinizing those trades, and the FBI has contacted him. Burr has denied allegations of insider trading, saying that he based his decisions solely on public information, including CNBC reports, and not on information he obtained as chair of the Senate Intelligence Committee or as a member of the Senate Health, Education, Labor and Pensions Committee.