MASS GOP CHAIRMAN MAGINN TO ELIZABETH WARREN: TIME TO COME CLEAN ON OKLAHOMA HOUSE FLIPPING
BOSTON - Today, Bob Maginn, Chairman of the Massachusetts Republican Party, sent the following letter to Elizabeth Warren urging her to “practice the same standards you preach about to others” and provide a full accounting of her Oklahoma real estate transactions. Earlier this month, the Boston Herald reported that Warren took part in about a dozen Oklahoma real estate deals that netted hefty profits through maneuvers such as flipping properties – including foreclosed properties. Any income earned from these deals is not listed on her personal financial disclosure forms, nor is the $1.32 million home equity line of credit on her Cambridge home that Warren may have used to finance these or other financial dealings.
The text of the letter is as follows:
Dear Professor Warren:
I write regarding your personal financial disclosure forms, and your failure to list multiple real estate deals on those forms.
Records reveal that you regularly act as a mortgagee to your brother, who in return buys homes and resells them – or “flips” them – for profit. Records also show that the interest rate you charge on these mortgages is typically at least a point over the standard borrowing rate at the time the loan was made. Copies of these records are enclosed for your convenience.
In total, you are, or have been, the mortgagee on twenty properties. The profit made by you for collecting interest payments on one property which information is publicly available for instance amounts to $9,200 for the period you have filed financial disclosures between 2008 and the release of the mortgage in May 2011. Assuming all these mortgages have been or will be repaid, you will have made a substantial personal profit off the interest charges alone.
Furthermore, it appears that you have an open home equity line of credit extended to you on your Cambridge home for $1,320,000 which is not included on your personal financial disclosure.
It is no surprise that you decided not to list these financial transactions on your personal financial disclosure reports. Your long, and apparently rewarding, history of real estate speculation stands in stark contrast to your carefully constructed political image of a “warrior” for the middle class. Your actions also contradict your words of advice for the middle class in your book “All Your Worth” that it is a myth that “you can make big money buying houses and flipping them quickly.”
Indeed, it would be fair for Commonwealth residents to continue to question your authenticity – particularly when they learn that one of the very houses you bought and flipped had been foreclosed upon – after the owners owed $7,778 on the home and were paying a 17% interest rate. Perhaps, as you say, they did not “read the fine print.”
Personal financial disclosure reports exist in order to reveal a candidates’ financial interests to the public. As the Office of Government Ethics notes:
The purpose of public financial disclosure is to promote public confidence in the integrity of Government officials. The law has the dual purpose of avoiding conflicts of interest through reviewer analysis of disclosures, and ensuring public confidence in Government through disclosure as an end in itself.
You have spoken about the need for accountability and transparency, but have thus far failed to practice the same standards you preach about to others. It appears that you failed to include multiple financial transactions in order to conceal business practices that seem to contradict the public image you seek to portray. In order to rectify this situation, I call on you to amend your reports and provide a full accounting of these transactions and any other reportable financial interests you may have sought to obscure.