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Defaulting Dem waltzes to easy primary victory

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By Michelle Malkin  •  June 4, 2008 08:56 AM

Well, I guess the voters of the 37th congressional district in California don’t care if they’re represented by a habitual deadbeat. Democrat Rep. Laura Richardson, the serial home loan defaulter, cruised to an easy primary victory. Three weeks after a Sacramento weekly publication first exposed her serial mortgage woes and default-for-campaign cash scheme, her Democrat rivals finally got around to publicly criticizing her financial recklessness. But it was too little, too late.

So was this LA Times editorial, which didn’t get around to questioning her shady behavior until after the primary was over:

Richardson is not the typical American with a housing problem. She is a politician who overextended herself to meet her campaign goals and believed there would be no political consequences. And she’s right. If her financial sloppiness had become public a year ago, she might never have been elected to Congress. She had little difficulty raising money to campaign against a couple of challengers in Tuesday’s primary, and she faces no Republican opponent in November. Now that she has a safe district and a virtual sinecure in office, we are hoping that her experience teaches her something about responsibility. But we’re worried it might instead teach her that a member of Congress can get away with pretty much anything.

Her fellow members of Congress continue to turn a blind eye, even as ethics experts challenge her disclosure failures:

Rep. Laura Richardson (D-Calif.) could face fines for leaving a heavily indebted mortgage off her financial disclosure statement, according to campaign finance experts.

A review of Richardson’s 2007 financial disclosure shows that she failed to report her Sacramento home mortgage as a liability even though she owed $40,000 more than she paid for the home, which was purchased in January of that year. By the end of 2007, Richardson had accumulated $575,000 in total debt after failing to make payments on her original $535,000 mortgage, according to Sacramento County records.

Financial disclosure laws require members of Congress to report home mortgages as liabilities if indebtedness exceeds the purchase prices of the item.

“On a plain reading of the law, it’s not clear why this mortgage would not be included on her financial disclosure statement, given the situation,” said Meredith McGehee, the Campaign Legal Center’s policy director.

Lawrence Noble, former general counsel for the Federal Election Commission (FEC) and a campaign finance, ethics and lobbying expert, agreed.

“That is what the rule says,” Noble said. “The reality is that at the end of the year, if she was indebted for more than what she paid for the house, then she was required to report it.”

The home went into foreclosure and was sold at auction last month. Richardson is disputing the sale.

Her office did not return repeated calls seeking comment for this story. It also has not responded to questions about how Richardson was able to loan her congressional campaign $77,500 while continuing to default on several properties.

Most ethical House ever.

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In other foreclosure news, TV star Ed McMahon is getting lots of ink over his Beverly Hills home woes. His publicist is likening the celebrity to “hundreds of thousands” of other Americans in the “same situation.” Is it really the same situation? None of the articles mention whether McMahon has other homes–and the coverage leaves the impression that McMahon and his wife could be out of the street at any time. I somehow doubt that will happen.

Posted in: Subprime crisis