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Moran’s Rental Issue

During a time that he was mired in deep financial debt, Rep. Jim Moran (D-Va.) lived for two years in an Arlington townhouse owned by Virginia lawyer Robert Nealon, a registered lobbyist who has represented clients with legislative business before a key subcommittee on which Moran sits.

Federal Election Commission records show that Nealon, who shares an Alexandria, Va., law practice with Moran’s brother Brian, teamed up with one of those clients last year and formed a political action committee that gave the majority of its funds to the Congressman’s reelection campaign.

“My relationship with Bob Nealon was completely professional and appropriate,” Moran said Friday in a written statement provided to Roll Call.

In the written statement, Moran defended his prior living arrangement and blasted “these constant attempts by the press to raise unfounded allegations about my relationships with various individuals, which are later rejected by the pertinent authority.”

In a written statement of his own, Nealon defended the housing arrangement. “Mr. Moran was a good tenant,” he said. “He paid the rent on time and sometimes early.”

While Moran has come under a barrage of criticism for recently suggesting that the Jewish community was driving the war in Iraq, the embattled Congressman’s ties to various lobbyists have indeed been a source of scrutiny and controversy in recent years.

In December 2000, government watchdog groups demanded a Justice Department investigation into Moran’s activities after The Washington Post reported that Moran had in 1999 accepted a $25,000 unsecured loan from his friend, Schering-Plough lobbyist Terry Lierman.

At the time, Moran — who was having financial difficulties — was co-sponsoring legislation that benefited the drug manufacturer.

The Justice Department closed an inquiry into the matter in mid-2001 and the House ethics committee also eventually dropped the matter.

Recent inquiries by Roll Call reveal that Lierman is not the only lobbyist friend with interests on Capitol Hill whom Moran has turned to in the aftermath of his 1999 divorce — a messy legal battle that publicly exposed his financial problems.

By August of that year, Moran had left his marital home in Alexandria and had begun renting a home owned by another friend and longtime supporter, Northern Virginia developer Daniel R. Abramson, according to the Post.

Moran did not stay there long, however. Within a month, he had moved to the tidy and secluded Windgate community in Arlington, and was living in a two-bedroom condo that is owned as a rental property by Nealon and his wife.

In campaign filings, Moran listed the condo at 2426-B South Walter Reed Drive for reimbursements he received from the committee, with the last such campaign disbursement recorded as recently as Oct. 16, 2002.

However, a source familiar with Moran’s campaign accounting and FEC filings said that Moran had actually moved out of Nealon’s property in August 2001, and that campaign finance reporting software simply was not updated to reflect his change in address.

During the period when Moran rented Nealon’s home — from September 1999 until August 2001 — the Virginia Congressman was trying to dig out of severe financial debt. He had lost more than $100,000 in risky stock and futures transactions in the mid-1990s, according to press reports. He was also dealing with a mound of credit card debts and paying large mortgage payments on his home, which he had refinanced twice and eventually sold.

Gary Ruskin, of the Congressional Accountability Project, said that in light of Moran’s previous behavior, the rental agreement between Moran and Nealon raises several questions.

“Did Moran pay fair market value for the lease and did he actually pay money for the lease?” Ruskin asked. “Was there an exchange of favors and benefits between Moran and Nealon?”

The question of lobbyists providing housing to lawmakers raised ethical questions for then-House Transportation and Infrastructure Chairman Bud Shuster (R-Pa.), who was a frequent overnight guest at the home of transportation lobbyist Ann Eppard. Watchdog groups filed an ethics complaint alleging that the lodging amounted to an improper gift and was a conflict of interest. After a long ethics probe, the committee determined that Shuster had paid rent to Eppard, but the investigation found numerous other violations of House rules.

According to a person close to Moran, he did not seek advice from the House Committee on Standards of Official Conduct regarding the rental arrangement with Nealon.

But in his written statement, the Congressman said that the lease was a standard legal contract and the agreed-to amount of rent reflected the fair-market value.

“I entered into a written one-year lease for $1,200 per month and I agreed to take the property as is,” Moran explained in his written statement. “When the lease expired I continued to rent month to month through August 2001. I paid the monthly rent in full and on time. It was my understanding that the previous tenants were paying $1,100 a month.”

Moran’s office also provided Roll Call with a copy of the lease, but Ruskin called on the Congressman to provide copies of canceled checks showing he paid his rent each month on a timely basis.

“For a Member of Congress who has a pattern and practice of closely intertwining and questionable relationships with lobbyists, the burden shifts to Moran,” said Ruskin, who has previously filed complaints against Moran with the Justice Department and the House ethics committee.

Moran and his aides insisted that the Virginia Congressman abided by the terms of his lease and said that cancelled checks would be impossible to produce in short order.

Nealon, meanwhile, said that the arrangement was completely above board.

“He signed a one-year lease, paying fair market value,” said Nealon. “He also took the property in the condition the previous tenants left it, which saved me a considerable sum of money in not having to paint or make other improvements. The previous tenants paid $1,100 a month.”

Lobbying records show that Moran’s rental of Nealon’s property from 1999-2001 coincided with the lawyer signing up several clients with business before the powerful Defense Appropriations subcommittee.

In February 1999, one month after Moran was appointed to the defense subcommittee, Nealon registered to lobby on behalf of a consulting company called International Technology Resources Inc.

According to Nealon’s disclosure forms with the Clerk of the House, he was lobbying on a “U.S. House of Representatives Appropriation Guidelines” for a governmental initiative known as the “Next Generation Internet.”

The forms state, however, that the actual lobbying activities were being financed by a Dallas-based company called Media Fusion, which was attempting to develop power line communications technology.

Neither Moran nor Nealon would address direct questions about whether or not Nealon had ever lobbied his friend and tenant on behalf of his clients, but it is clear that the Congressman was working on some of the very issues that Nealon’s clients had hired Nealon to handle.

As Moran later boasted in a review of his 1999 legislative activities on his House Web site, in his new slot aboard the Appropriations Defense subcommittee he had been personally “instrumental in securing funds for several important defense initiatives that are based locally.”

Among the specific programs Moran touted on his Web page was securing $36 million in funding “toward a multi-agency program to develop the next-generation Internet.”

Other lobbying records show that Nealon later began lobbying for a small high-tech company, Critical Response Engineering Inc., which has benefited from lucrative federal research grants from the Defense Department and other government agencies.

In April 2002, Nealon registered as a lobbyist for the company, which is a small firm in Alexandria that specializes in developing “biological weapons detection services.”

According to the lobbying records, Nealon was representing CRE on “any and all legislation regarding the regulation of biological weapon detection and technology.”

Earlier in 2002, before he had officially registered as a lobbyist for CRE, Nealon and Andrew Bucholz teamed up to create a political action committee — Nuclear Bio Chem PAC — with Bucholz serving as the PAC’s treasurer, and Nealon serving as the “agent” and “assistant treasurer.” Bucholz works for an entity called G2 Tactics that has the same address and phone number as CRE.

The PAC gave 52 percent of the candidate donations it made last election year to Moran. It raised a total of $10,056 in 2002 — with most of those funds coming from two CRE employees who also gave individual contributions to Moran.

According to the Pentagon’s Web site, CRE Inc. has received two grants through DOD’s Small Business Innovation Research program — $98,362 in 2000 and another $190,908 in 2001 — to develop special technology. Bucholz and G2 Tactics, meanwhile, received a $156,773 federal grant last year to build a “Grand Larceny Auto Video Detection System.”

In his written statement, Moran did not address whether or not he has ever been lobbied by Nealon. But his official House Web site touts the role he has played in helping to secure funds for defense contractors and research and development.

“Through my work on the Defense Appropriations Subcommittee, I have worked very hard to help steer billions of federal dollars to defense facilities and contractors in Northern Virginia,” Moran’s Web site states. “With many companies dependent on the federal government for business, critical R&D funding from the Department of Defense spurs many new technologies for use by our nation’s military that will ultimately reap returns for the private sector.”

In August of 1999, one month before Moran began renting the property, another Nealon client — the Washington Flyer Taxi Drivers Association — was protesting the high rates they were forced to pay to the owner of the cab concession at Dulles International Airport. Brian Moran also represented the association.

According to a Washington Post story at the time, Rep. Frank Wolf (R-Va.) called for an investigation into the taxi service after a new contract was awarded. But Moran told the paper that he preferred more immediate action and that “a good case could be made for doing it right away.”

Currently, both Moran and Nealon are supporting efforts to bring a Major League Baseball team to Northern Virginia.

Nealon is serving on the Board of Directors of Virginians for Baseball, an organization that has been trying to bring baseball to Virginia since 1995.

Moran was one of several Northern Virginia lawmakers who wrote to Major League Baseball Commissioner Bud Selig in 2001, asking him to act quickly to “locate a team permanently in Northern Virginia” to help the region’s morale and stimulate the economy.

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