The Solomon Scandals A Washington newspaper novel by David Rothman

Sen. Ribicoff’s spooky investment

Sen. Abra­ham Ribi­coff, the late Con­necti­cut sen­a­tor who also served in Pres­i­dent John F. Kennedy’s cab­i­net, secretly held a $20,000 invest­ment in a GSA–leased build­ing that the CIA moved into.

My story for States News Ser­vice, repro­duced below, appeared in the New Haven Reg­is­ter on May 29, 1975, and later made the NBC Nightly News.

The facts in it helped inspire The Solomon Scan­dals, which is fiction.

In real life, did Abe Ribi­coff delib­er­ately break fed­eral law and related GSA rules? They banned mem­bers of con­gress from par­tic­i­pat­ing in fed­eral leases, which the widely admired sen­a­tor was doing as a part­ner in the Wil­son Asso­ciates part­ner­ship in Arling­ton, Vir­ginia. Alas, this ques­tion is not com­pletely settled.

But con­sider that even after the pub­lic learned of Ribicoff’s invest­ments in nongovernment-leased build­ings owned by the same GSA land­lord and the real estate tycoon’s other friends, the Sen­a­tor still did not with­draw from those part­ner­ships. What’s more, he was chair­ing a Sen­ate com­mit­tee over­see­ing the agency.

Sig­nif­i­cantly, Ribi­coff was an actual part­ner in the CIA-occupied Key Build­ing, shown to the right, instead of going through a cor­po­ra­tion. And GSA vio­lated its own rule that leases name all part­ners. Not even the name of Ribicoff’s trustee in his “blind trust” appeared in the lease, parts of which I’ll repro­duce here via a PDF. Also, Ribi­coff didn’t with­draw from the invest­ment until after his reelec­tion in 1968. He said he couldn’t recall when or from whom he had learned of the CIA’s pres­ence in the Key Build­ing in Arling­ton, Vir­ginia. Dur­ing the cam­paign Ribi­coff had denied con­flict of inter­est alle­ga­tions from a Repub­li­can rival.

Com­pared to, say, Dick Cheney, Ribi­coff would be a thou­sand times less of a sleaze. Ribicoff’s eth­i­cally dubi­ous busi­ness rela­tion­ship with his friend the GSA land­lord was small pota­toes by cur­rent stan­dards. Same for the ques­tion­able actions of the real estate peo­ple he dealt with. No one started a war and killed thou­sands of Iraqis–with oil grabs and con­tract­ing oppor­tu­ni­ties being among the major moti­va­tions of the White House and friends.

But here’s the ulti­mate sig­nif­i­cance of Abe Ribicoff’s hid­den invest­ment and the landlord’s fail­ure to fol­low GSA reg­u­la­tions and name part­ners in the related lease. Ribi­coff was a hero in such areas as auto­mo­bile safety and civil rights, some­one I admired. He was even sec­re­tary of Health, Edu­ca­tion and Wel­fare under John Kennedy; and I expected more of him than of typ­i­cal politi­cians. Check out a video of Ribicoff’s well-crafted speech nom­i­nat­ing George McGov­ern, as a pres­i­den­tial can­di­date, at the Demo­c­ra­tic National Con­ven­tion. Notice his adept han­dling of Chicago Mayor Richard Daley, who wasn’t pleased? Ribi­coff did many good things, and did them well.

That said, I’d be sur­prised if some Repub­li­cans didn’t notice the fail­ure of the Sen­ate Ethics Com­mit­tee to rep­ri­mand Ribi­coff for his prob­lem­atic invest­ment. In the aggre­gate, mem­o­ries of sim­i­lar sit­u­a­tions could have helped Repub­li­cans like Cheney ratio­nal­ize away their own mis­deeds. A les­son for the reform­ers in the Obama Admin­is­tra­tion to remem­ber? Indeed. Same for their con­gres­sional allies. — David Roth­man (who voted for Obama and would do so again)

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Ribi­coff Was Involved In 1965–68 U.S. Lease

WASHINGTON — U.S. Sen. Abra­ham A. Ribi­coff, D-Conn., was from 1965 to 1968 one of a group of own­ers of an office build­ing leased to the fed­eral gov­ern­ment, in appar­ent vio­la­tion of fed­eral law.

The law, Sec. 431 of Title 18 of the U.S. Code, pro­hibits mem­bers of Con­gress from ben­e­fit­ing from most con­tracts with the fed­eral gov­ern­ment. While the law pro­vides for up to $3,000 in fines, the statute of lim­i­ta­tions has expired on Ribicoff’s involve­ment in the lease, which would pre­clude any legal action being taken.

While the gov­ern­ment con­tin­ues to lease 100,000 square feet of the build­ing, Ribi­coff dis­posed of his inter­est in the prop­erty in 1968.

Ribi­coff and his top aides con­sis­tently denied any such fed­eral involve­ment dur­ing his re-election cam­paign last year. He has been a mem­ber of the Gov­ern­ment Oper­a­tions Com­mit­tee since 1963, and is now its chair­man. The com­mit­tee over­sees the Gen­eral Ser­vices Admin­is­tra­tion (GSA), which han­dles most fed­eral pro­cure­ment, includ­ing the lease of the build­ing in question.

Recently Ribi­coff con­firmed his involve­ment in the lease, but denied any wrong­do­ing, say­ing he sold his inter­est in the build­ing as soon as he learned there were fed­eral ten­ants in it.

Ribicoff’s part own­er­ship in Wil­son Associates—linked with the Charles E. Smith Cos., a large Washington-area real estate man­age­ment firm and developer—was unveiled recently by this reporter dur­ing a lengthy inves­ti­ga­tion into GSA leas­ing practices.

Dur­ing last year’s cam­paign, Ribicoff’s oppo­nent, Repub­li­can James H. (Buddy) Bran­nen, charged Ribi­coff with a con­flict of inter­est in that he had large hold­ings with the Smiths whose firms in turn grossed at least $13 mil­lion a year from leases with the fed­eral government.

How­ever, the Sen­ate Ethics Com­mit­tee declined to inves­ti­gate Brannen’s charges, with Chm. Howard W. Can­non, D-Nev., call­ing Brannen’s charges “Unde­fined, vague and unsubstantiated.”

The Smith-linked com­pa­nies, which hold some $150 mil­lion in leases from the gov­ern­ment, are believed to be the largest lessor to Uncle Sam; the firm also owns and man­ages a great deal of pri­vate real estate.

Ribi­coff through a blind trust still has sub­stan­tial hold­ings with the Smith firm. While he refused to esti­mate his total invest­ment, one source con­ser­v­a­tively esti­mated it at “well over $100,001,” while another said, “it may be as high as $250,000.”

Ribi­coff estab­lished the “blind trust” in late l973, just prior to giv­ing out a sum­mary of his hold­ings to the Con­necti­cut News Service.

A check of a list of his cur­rent Smith hold­ings, pro­vided by Ribi­coff, seems to con­firm his state­ment that none housed fed­eral ten­ants. How­ever, Brannen—and some Smith crit­ics here—have charged it is poor pol­icy for a fed­eral offi­cial to have invest­ments with a firm which does sub­stan­tial busi­ness with the fed­eral gov­ern­ment through related sub­sidiaries. Dur­ing last year’s cam­paign, Ribi­coff and his aides replied that none of his invest­ments had any gov­ern­ment ten­ants in them presently, or in the past. This week, how­ever, Ribi­coff said, “I was refer­ring to these invest­ments con­tained in the list I released” of his present hold­ings dur­ing the campaign.

It has now been learned that Ribi­coff from 1963 to 1968 owned 2.88 per cent of Wil­son Asso­ciates, which owns the Key Build­ing in Ross­lyn. Va., just across the Potomac River from the George­town sec­tion of Wash­ing­ton. Ribiooff paid $20,000 for his inter­est in Wil­son Asso­ciates in 1963. In late 1964, 10 of the buildup’s 12 floors were leased to fed­eral gov­ern­ment for $4 mil­lion for 10 years, effec­tive in 1965.

Accord­ing to a 1974 GSA com­puter print­out, the fed­eral ten­ants in the build­ing at that time were the Cen­tral Intel­li­gence Agency (CIA), and the “Exec­u­tive Office of the “President.”

Ribicoff’s invest­ment was with­drawn fol­low­ing his re-election in 1968, after Wil­son Asso­ciates had grossed some $l.5 mil­lion from GSA. This week he said, “In 1963, there was no fed­eral ten­ant when I acquired my inter­est… In 1965, with­out my knowl­edge, there was a gov­ern­ment ten­ant. This was the first time I had heard about it, and I dis­posed of it immediately.”

He said he couldn’t recall exactly when, or from whom, he found it out.

The state’s senior sen­a­tor denied any wrong­do­ing, say­ing he had told Charles Smith, the firm’s founder “and a very close per­sonal friend” that “under no cir­cum­stances would I tol­er­ate hav­ing my money invested in a build­ing with fed­eral tenants.”

Ribi­coff, in an ear­lier inter­view, said, “I can’t tell you the name of a sin­gle ten­ant in a Smith build­ing … I don’t know who the Key Building’s ten­ants ever were except some­time in ’68 it came out in the course of a con­ver­sa­tion that there was a fed­eral tenant.”

The Smith firm—run by the senior Smith, his son Robert H. and son-in-law, Robert P. Kogod—depends heav­ily on the favor of GSA. Of the 20 leases it and its sub­sidiaries have with the gov­ern­ment, 13 of them weren’t pub­licly bid or advertised.

In the Key Build­ing lease, GSA per­mit­ted another irreg­u­lar­ity in addi­tion to Ribicoff’s participation.

The lease failed to name all the part­ners of Wil­son Asso­ciates, despite a clause in the doc­u­ment stat­ing: “When the lessor is a part­ner­ship, the names of the part­ners com­pos­ing the firm shall be stated in the body of the lease.” Many of Smith’s leases, and those of other lessors, have not met this requirement.

Between 1963 and 1968. Ribi­coff said, the invest­ment yielded him only $7,000, which was can­celed out by a cap­i­tal gains tax. He said he could have sold the $20,000 inter­est for $30,000, but vol­un­tar­ily opted for sell­ing it at the orig­i­nal $20,000 so as not to make a profit.

Speak­ing for the Smith firm, Kogod recently said Ribicoff’s pres­ence in the Key Build­ing part­ner­ship was an accident.

The Wil­son Asso­ciates part­ner­ship papers don’t con­tain Ribicoff’s name. Instead, “David Kotkin, Trustee,” is listed. Asked by this reporter how he had heard of this invest­ment oppor­tu­nity, Kotkin said, “I don’t remem­ber ever know­ing any­thing about it. Why?”

When told his name was on the doc­u­ment and asked whether he might have been rep­re­sent­ing Ribi­coff, Kotkin—Ribicoff’s for­mer law part­ner from Hartford—replied, “Oh yes, yes, that’s what it must be…”

Asked why the part­ner­ship papers didn’t list Kotkin as the trustee for Ribi­coff, but rather just as a trustee. Kotkin said, “Undis­closed prin­ci­pal is a device—and I use that word in the good sense, not the bad sense—that’s used by many people.”

He said. “Pro­fes­sional man­age­ment (was) equipped to han­dle the man­age­ment of the build­ing which would include the ordi­nary com­plaints…” Kotkin said it would be bad if peo­ple pestered a U.S. sen­a­tor about leaky faucets.

A long inves­ti­ga­tion shows that the Smith firm fol­lowed a prac­tice of includ­ing well-connected peo­ple in its ven­tures, giv­ing large polit­i­cal con­tri­bu­tions and enjoy­ing very good rela­tions with GSA.

But Robert Smith recently denied that the firm’s many con­tacts led to their many con­tracts. From their past state­ments, they attribute their suc­cess to low prices and their abil­ity to beat the competition.

How­ever, at least 13 of their 20 leases with GSA, includ­ing a more than $1O mil­lion lease in sub­ur­ban Vir­ginia, were not pub­licly advertised.

One high-ranking GSA offi­cial, who asked to not be iden­ti­fied, recently said, “Maybe we got a good deal” from the Smiths, “but did we get the best deal?” On the $60 mil­lion lease of 720,000 square feet, he pointed out that if the gov­ern­ment had been able to lower the rental cost one nickel below the approx­i­mately $4.25 per square foot agree­ment, the gov­ern­ment would have saved $720,000 over the 20-year life of the lease.

“… I’d ask for an inves­ti­ga­tion,” he said. “You mean to say that if we adver­tised, we couldn’t have cut those things a nickel a square foot?”

The three adja­cent build­ings in this lease house fed­eral agen­cies rang­ing from the Defense Depart­ment to the Library of Con­gress. The GSA offi­cial ques­tioned the need for the GSA-demanded space require­ment of 720,000 square feet which, he said, sub­stan­tially reduced the poten­tial com­pe­ti­tion for the lease.