Several longtime acquaintances of U.S. Rep. Alan Mollohan, D-W.Va., have sold property and businesses to nonprofit foundations the congressman supports.

Sometimes the sales result in friends losing money.

In the past five years, the Vandalia Heritage Foundation and the Vandalia Redevelopment Corp. have purchased two pieces of property in Harrison County from people who have business or personal ties to the congressman or the foundations he supports.

The Vandalia Heritage Foundation purchased the Waldo Hotel for $197,000 in 2000 from the McCabe Land Co., which paid $150,000 for the building eight months earlier. McCabe Land Co. is owned by state Sen. Brooks McCabe, D-Kanawha.

McCabe was out of town and could not be reached for comment.

Two years later, Vandalia Redevelopment Corp. purchased the old Palace Furniture Co. for $1 million from C.D.I.G. Inc., a company owned by one of Mollohan’s long-time friends, Dale McBride. In that case, C.D.I.G. took a slight loss on the building. The company paid $1.05 million for the building 11 years earlier.

“I was in a mode where I wanted to simplify my life,” said McBride, who also owns FMW Composite Systems, a major government contractor based in Bridgeport, and also purchased a 297-acre farm with Mollohan in Tucker County last year. “FMW was going through an expansion and I wanted to shed some things.”

Laura Kurtz Kuhns, president of the Vandalia Heritage Foundation and CEO of the Vandalia Redevelopment Corp., declined to comment.

But some government watchdog groups say those two purchases are symbolic of a bigger problem where associates of Mollohan are making money off the nonprofits the congressman helped to form and fund.

“There are certainly some things going on for the Congressional Ethics committee to look into,” said Tom Schatz, president of Washington, D.C.-based Citizens Against Government Waste.

In particular, McBride and Kuhns are part of a tight-knit circle of Mollohan friends involved in the numerous non-profit entities Mollohan helped to create.

McBride and Mollohan have been friends for about five decades. Last year, the two men purchased a farm together in Tucker County along the Cheat River. The deeded price of the farm was $800,000, but some media reports have the farm as actually selling for much more.

C.D.I.G. is just one of McBride’s businesses. According to the West Virginia Secretary of State’s Office, McBride has registered 18 different companies in the state throughout the years. Some of those businesses, such as C.D.I.G., are now closed. Others are still in operation, such as FMW Composites, which received more than $30 million in federal government contracts between 2003 and 2005.

Kuhns is a former member of Mollohan’s congressional staff. She and her husband co-own beachfront property in North Carolina with Mollohan and his wife.

Both Kuhns and McBride serve on the board of directors for the MountainMade Foundation, which helps West Virginia artisans sell their crafts.

Kuhns and McBride also are members of Marion Financial Holdings, a bank Mollohan and others wanted to form to serve West Virginia’s high-tech businesses that depend on government contracts. Marion Financial filed paperwork with the state Secretary of State’s office in 2004, but it has yet to file any documents with the state’s Division of Banking.

Mollohan said there is nothing wrong with companies owned by associates selling property to a nonprofit.

“What would there be wrong with it? You tell me — is there anything wrong with it?” he asked. “What in this transaction — which I don’t know the particulars of — would be wrong? Vandalia buys — that’s what they are in the business of doing: taking difficult properties in downtown locations and creating a business base for them.”

The old Palace Furniture building has been renovated and converted into offices. The building, now known as Palace Business Center, is empty except for the Harrison County Chamber of Commerce. Other offices on the main floor of have “for lease” signs in the window.

The Waldo Hotel stands empty at the corner of Fourth and Pike streets in Clarksburg. Windows are shuttered or broken out. Several trees grow out of the building’s window sills and ledges.

A county employee who asked not be identified said he hadn’t been in the Waldo Hotel for about 15 years, but said it would cost hundreds of thousands of dollars just to get the old building up to fire code.

Some government watchdog groups said the property transaction raises questions about how the nonprofit foundations Mollohan helped to create are using the federal dollars they receive.

“It’s hard to say what exactly is going on, but it does raise questions. There are a lot of real estate deals, and this is something members may want to look at,” Schatz said.

Last month, the National Legal and Policy Center released information from a nine-month investigation of the congressman. The Center alleges Mollohan used the system of non-profits he “inspired” to reward friends, acquaintances and campaign supporters.

Mollohan said the accusations are ludicrous and insidious. He said the NLPC is a right-wing group working for Republican Party leaders who want to punish the congressman for fighting them on changes they wanted to make to the House Ethics Commission, of which Mollohan was the ranking Democrat until he stepped down April 21. Mollohan said he decided to temporarily leave the committee so he could focus his attention on answering the NLPC’s accusations.

“This is all politically driven,” Mollohan said. “These folks are close to the right-wing power structure. ... If you disagree with (them) or have taken on this power structure, then it’s very revengeful in its reaction.”

Ken Boehm of the NLPC said his organization has nothing to do with Republican leadership. He said he noticed inconsistencies with Mollohan’s congressional disclosures and started looking into the Congressman’s actions.

The more his office looked, Boehm said, the more they found.

“Again and again, you see this tight-knit organization of friends, family members and acquaintances who are linked to the foundations,” he said. “It seems almost beyond debate that favoritism is in play. ... If you try to diagram everything, it looks like a crazy spider web.”

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