The Solomon Scandals
The D.C. newspaper novel, the media,the Washington area, tech and other surrealism: David Rothman at large
Sen. Ribicoff’s spooky investment
Categories: Sen. Ribicoff

imageSen. 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.

imageBut 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 on a Senate committee overseeing the agency and even became its chair.

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.

image 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.

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