Since 2003, Rep. Joe Knollenberg (R-Mich.) has underreported the value of his Capitol Hill townhouse by hundreds of thousands of dollars each year in his personal financial disclosure forms, an apparent violation of House rules.

On the most recent disclosure forms, Knollenberg reported the value of the property at $50,000 to $100,000, down from the $100,000 to $250,000 range he reported the year before, despite the fact that District of Columbia tax records indicate a current assessed value of $781,840.

“The Congressman has always striven to go above and beyond the required financial disclosure requirements,” Knollenberg spokesman Nate Bailey said. “He has nothing to hide. It appears that his accountant has made a clerical error, and that inadvertent mistake will be corrected immediately.”

Members of Congress do not have to report their personal residences or the mortgages for those properties on their annual financial disclosures unless those properties generate rental income. Many Members have second homes in Washington, D.C., that are not reported on their disclosure forms, and at least two dozen Members report Washington properties that are generating rental income, according to a review of financial disclosure forms by Roll Call.

The instruction manual provided by the House Committee on Standards of Official Conduct for filling out financial disclosure forms requires that when a property provides rental income, “the gross value of the entire property should be reported even if only part of the property (e.g. the basement of a residence) is used for rental purposes.”

But Knollenberg has consistently reported his Capitol Hill townhouse at far below its value. Bailey said the Member thought he only had to report the value of the rental unit. He could not explain why that reported value decreased last year.

D.C. property records indicate that Knollenberg bought the home about four blocks from the Capitol for $490,000 in the summer of 2001. Knollenberg, in accordance with the rules, did not report the home on his financial disclosure form until it started generating rent in 2003, apparently from rental of the basement apartment. His disclosure form for that year reported a “lower level rental” valued from $100,000 to $250,000, generating $5,000 to $15,000 in rent. Knollenberg also reported a mortgage on the property of $100,000 to $250,000.

For the next several years, as D.C. property values soared, Knollenberg’s reporting on the property went unchanged, except that in 2005 and 2006, he reported that the rental income increased to the $15,000 to $50,000 range.

But on his 2007 disclosure form, filed in May, Knollenberg reported the value of the property at between $50,000 and $100,000, claimed income of $5,000-$15,000 on the rental and no longer listed the mortgage on the property at all. By comparison, one local developer said an indoor parking space in a Capitol Hill condo building would sell for about $40,000.

In the wake of the subprime mortgage debacle, Members in both chambers have proposed amending financial reporting rules to require Members of Congress to disclose all mortgages they hold, regardless of whether the properties produce any rental income.

As part of the housing bill passed by Congress last week, Senate Ethics Chairman Barbara Boxer (D-Calif.) and Vice Chairman John Cornyn (R-Texas) offered an amendment on behalf of the full committee membership to require Members to report all mortgages they hold, including the name of the lender, the balance and the interest rate. The amendment was ruled nongermane, and it was not clear at press time whether Cornyn and Boxer plan to offer a stand-alone bill. Rep. Mark Souder (R-Ind.) has introduced a stand-alone measure in the House that would require the same disclosure.