The Times West Virginian

March 18, 2007

Mollohan has not received subpoena

Report congressman’s finances are target of grand jury probe labeled ‘unsubstantiated’

FAIRMONT — Rep. Alan Mollohan’s finances are the target of a grand jury investigation that will look at whether the veteran congressman failed to disclose source of income, The Dominion Post reported.

Witnesses have been subpoenaed by the U.S. attorney for the District of Columbia to appear before the grand jury on April 3, the newspaper said in Saturday’s editions, citing sources close to the investigation. The newspaper said it had agreed to withhold the sources’ identities.

Mollohan, who has denied any wrongdoing, said he was unaware of the grand jury investigation and had not been subpoenaed.

“If it’s true, then you know it and I don’t,” the West Virginia Democrat told the newspaper Friday.

On Saturday, Mollohan spokesman Gerry Griffith called the story an “unsubstantiated” one.

“In fact, the newspaper that originated it tried to claim that Mr. Mollohan himself had received a subpoena, which is incorrect,” Griffith said.

“They need to be cautious when they run unsubstantiated stories.”

Channing Phillips, spokesman for the U.S. attorney’s office in the District of Columbia, said the agency could not comment.

“Pursuant to department policy and grand jury secrecy rules, we cannot comment on such matters,” Phillips said Friday.

A conservative group, the National Legal and Policy Center, has alleged that Mollohan has undervalued his assets in annual financial disclosure reports.

The Justice Department has been investigating whether Mollohan has benefited from directing federal funds to nonprofit groups he helped start.

At issue is at least $202 million of federal funding that Mollohan has steered to five nonprofit groups in his district — with much of the money going to organizations run by people who contribute to the lawmaker’s campaigns.

Mollohan and a political action committee he controls have received more than $146,000 in the past 10 years from donors affiliated with these nonprofits.

Last year, Mollohan stepped down from the House ethics committee after media reports into his activities, and the FBI soon launched an investigation.

Earlier this year, the FBI subpoenaed financial records from the nonprofits, though no charges have been filed.

Canaan Valley Institute, which receives much of its funding from federal earmarks from Mollohan, turned over more than 15,000 documents but has not received any recent subpoenas, said Larry George, the institute’s attorney.

“After we delivered it, I never heard from them again,” George told the newspaper Friday.

Others who turned over documents or had been investment partners with Mollohan declined to comment, the newspaper said.