WASHINGTON — A Washington advocacy group Wednesday asked the U.S. Department of Justice to investigate whether Arkansas' U.S. Rep. Mike Ross accepted a bribe from a pharmacy chain while he was in a position to influence health-care policy.
The request came in a letter from Citizens for Responsibility and Ethics in Washington to Attorney General Eric Holder. The group wrote that as Capitol Hill geared up to debate major health-care legislation, Ross, a Democrat who sits on a House committee intimately involved in the issue, personally benefited when he sold his drugstore for more than $100,000 above market value to a pharmacy chain.
"He just cleaned up," said Melanie Sloan, executive director of the group.
The Justice Department, she said, should look into whether Ross "engaged in bribery and honest services fraud."
Ross dismissed the request as part of a smear campaign from groups on the liberal side of the political spectrum who disagreed with his health-care stance. He predicted that more inquiries are to come.
"Anybody with a typewriter and a piece of paper can write a letter to the Department of Justice about me or you," he said. "This is about trying to destroy me politically."
The request came a day after a story was printed about Ross' pharmacy sale, which was researched by the journalism Web site ProPublica. The article appeared in Politico, a political trade publication.
The letter to Holder outlines the 2007 sale by Ross and his wife, Holly, of their Prescott pharmacy, Holly's Health Mart, to USA Drug for $420,000. As part of the transaction, USA Drug's founder, Stephen LaFrance, also paid the couple between $500,000 and $1 million for the pharmacy's assets. In addition, USA Drug paid the couple between $100,001 and $250,000 to sign a noncompete agreement with the national drug chain.
The noncompete and pharmacy-asset figures are given in ranges, provided for in House financial disclosure documents that do not require exact figures.
According to ProPublica's research, real estate evaluators found that USA Drug paid between $143,850 and $220,000 more than the market value for the pharmacy's property.
That, along with the money paid for the pharmacy's stock and other assets, and the money paid in the noncompete agreement, according to Sloan, merit a criminal investigation.
HEALTH-CARE LINK
In the letter, the group noted that as a member of the House Energy and Commerce Committee, which writes healthcare legislation, and of the Blue Dog Coalition - a group of Democrats who promote fiscal responsibility - Ross has been at the center of the current health-care debate. Ross is chairman of the Blue Dogs' health-care task force.
The group noted that while 20 percent of Ross' constituents live below the federal poverty level and 22 percent do not have insurance, Ross came out against a proposed government-run "public option" for health insurance.
Previously, USA Drug's LaFrance called for the government to stay out of the healthcare business, telling the Arkansas Democrat-Gazette that without government involvement, there would be "nothing but good days ahead."
Sloan suggested that in taking his position on government-run health care, Ross was not being an honest broker to his poor constituents.
"We're not clear on what he actually may have done for the money," Sloan said. "But it seems like his position, in part, has been bought and paid for."
Ross said he has met LaFrance "three or four times."
He said USA Drug has "never asked me to vote for or against or approached me on any legislation."
On Wednesday, after the Citizens for Responsibility and Ethics in Washington released a news release about its request, Ross released a letter he wrote to Jason LaFrance, Stephen LaFrance's son and executive vice president of USA Drug, asking him to waive a confidentiality agreement on the transactions. Ross said doing so would result in information on the exact value of the pharmacy's inventory and business volume, that had an impact on the total transaction.
"I'm going to lay it all out there," he said. "There's nothing to hide."
LaFrance did not return calls seeking comment.
Ross denounced ProPublica's reporting as coming from "the people who fund ACORN and MoveOn.org."
ProPublica's chairman is Herbert Sandler, a San Francisco banking veteran and founder of the Sandler Foundation, a group that has given grants to ACORN (Association for Community Organizations for Reform Now), an embattled organizing group, and MoveOn.org, a liberal online advocacy group.
According to its Web site, Citizens for Responsibility and Ethics in Washington, founded in 2003, is "dedicated to promoting ethics and accountability in government and public life by targeting government officials ... who sacrifice the common good to special interests." Although it describes itself as a "nonpartisan watchdog," much of the group's efforts over the past several years have concentrated on Republicans.
It participated in the investigation of alleged ethics violations by former Rep. Tom DeLay of Texas, who resigned as House majority leader amid scandal, and the firings of U.S. attorneys by the George W. Bush White House.
Earlier this month, it successfully pushed the Obama administration to reverse its policy and release more information from White House visitor logs.
Sloan, a former counsel for the House Judiciary Committee under Rep. John Conyers, D-Mich., said that Citizens for Responsibility and Ethics in Washington is not funded by Sandler and that her letter to Holder was not part of a coordinated effort with Pro-Publica.
Citizens for Responsibility and Ethics in Washington is funded by individual contributions and foundation grants, including grants from the Open Society Institute, a group founded by George Soros, an investor who donates to liberal causes, and the Wallace Global Fund, a private family foundation that gives money to liberal causes.
A TOUGH SELL
In a 1991 case, McCormick v. United States, the U.S. Supreme Court held that an explicit quid pro quo (one thing in return for another) must be proved to find a politician guilty of bribery, if he accepts campaign money.
But in cases where a politician personally accepts a gift, Sloan said, no such tie between money and legislative action is necessary.
Still, some legal experts said the Justice Department would shy away from prosecuting a case without an explicit bribe.
"The key is, in exchange for what," said Peter Henning, a law professor at Wayne State University in Detroit. "If it's just about buying good will from him, that's a tough case."
The concept of whether a politician has committed "honest services" fraud may be even tougher.
In February, Justice Antonin Scalia dissented from the majority opinion of the court to deny hearing Robert Sorich, Timothy McCarthy and Patrick Slattery v. United States, a case involving hiring fraud in the Chicago city government.
The concept of "honest services," Scalia said, is too vague.
Scalia wrote: "Without some coherent limiting principle to define what 'the intangible right of honest services' is, whence it derives, and how it is violated, this expansive phrase invites abuse by headline-grabbing prosecutors."
The full court will take up the issue during its current term in the case Weyhrauch v. United States.
Meanwhile, the Department of Justice, which declined to comment, has received Citizens for Responsibility and Ethics in Washington's request.
But it still remains to be seen whether investigators will look into the matter.
Sloan said, "There's no guarantee by any stretch of the imagination."
Front Section, Pages 1, 2 on 09/24/2009