Scandal: When Politics and Real Estate Collide
Purported presidential hopeful, evergreen tabloid punching bag and, in case you'd forgotten, real estate developer Donald Trump is, once again, in hot water. NBCUniversal, which aired Trump's reality show The Apprentice, severed ties with The Donald this week over comments he made regarding Mexican immigrants during the recent blustery announcement of his White House bid.
As usual, it was Trump's mouth and not his real estate holdings that brought him under fire. But several recent political scandals suggest that owning (or selling) real estate and holding office often don't mix.
The scandal: Aside from hotel no tell suites, this controversy had nothing to do with real estate. But New York Governor Eliot Spitzer, the heir to a New York City real estate family, resigned in disgrace just 15 months after taking over the reins of the state following bombshell revelations that he'd been a particularly sordid client of an elite prostitution ring. It didn't help that Spitzer made his mark as an attorney general crusading against corruption and sleaze.
The aftermath: Spitzer left office, throwing Albany into a fit of disarray bizarre even by the capital's circus-like standards. His marriage to Silda, who notoriously stood by him at the press conference addressing "Client #9," ended. And his attempt at a comeback via CNN talkshow quickly fizzled. But could redemption now come through development? Spitzer is making waves along the South Williamsburg Waterfront with plans for a strikingly modernist $700M residential complex.
The scandal: In February, the political career of Aaron Schock, Representative of Illinois, abruptly came undone following revelations he'd violated House ethics rules and spent more than $100K in federal funds to redecorate his office on the Hill in a style mimicking the English manors of Downton Abbey. Reports surfaced more or less concurrently that just before his 2012 election Schock had sold his Peoria home to big time donor Ali Bahaj for $925K, more than three times its assessed value. Further improper spending allegations ensued involving everything from transportation to cufflinks to Country Music Award tickets.
The aftermath: On March 17, Schock, just 33, announced his resignation from Congress. The race to fill his seat is currently unfolding.
The Scandal: During Bill Clinton's 1992 presidential campaign, it came to light that he and wife Hillary had lost money with an investment in the Whitewater Development Corporation, which had failed in its bid to develop vacation properties along Arkansas' White River. They'd partnered on the project with Jim and Susan McDougal, whose Madison Guarantee Saving and Loan had collapsed in the late '80s. Investigations into the failure of Madison Guarantee, and the Clintons ties to the company, led to a Senate committee hearing in which David Hale accused Bill Clinton of coercing him into making a $300K loan to Susan McDougal while Clinton was the governor of Arkansas.
The Outcome: In 1997, following a Securities and Exchange Commission investigation, Jim McDougal was convicted on 18 counts of fraud and conspiracy stemming from bad loans made by Madison Guarantee. Jim Guy Tucker, who succeeded Clinton as Arkansas governor, was also charged. The Clintons were never prosecuted, but Whitewater helped set the tone of scandal that shadowed Bill Clinton's presidency.
