This article first appeared in the St. Louis Beacon, Oct. 10, 2012 - U.S. Sen. Claire McCaskill’s campaign was acting swiftly late Tuesday in an effort to tamp down the latest Republican attack against the business dealings of her husband, Joseph Shepard.
The new target is the $39 million in federal rent subsidies that since 2007 went to at least 100 of the 300 low-income housing companies in which Shepard had an ownership interest.
The Associated Press came up with those figures during a review of McCaskill’s annual financial-disclosure reports, filed since she took office in 2007. The reports list hundreds of companies with financial ties to Shepard, a wealthy businessman and developer whom she married in 2002.
The federal rent subsidies cover the difference between what low-income residents pay and what federal agencies determine is the market rent for the units. The subsidies were distributed by the U.S. Department of Agriculture’s Rural Housing Service or the Department of Housing and Urban Development.
McCaskill’s Republican rival, Todd Akin, is joining top GOP groups – including the National Republican Senatorial Committee – in alleging that the Democratic senator had a conflict of interest and should not have voted on appropriations bills that had allocations to the federal agencies that handle the low-income subsidies.
The Associated Press reported that McCaskill voted for some appropriations bills and against others. The news outlet added that there was no evidence that she lobbied for the subsidy contracts.
NRSC executive director Rob Jesmer in a statement: “This is funding that was included in legislation that McCaskill voted on directly in the Senate, and at least a portion of which then went directly into her personal bank account.
“Sen. McCaskill should apologize to the people of Missouri who sent her to Washington to rein in the size of the federal government, not to max out the government credit card and then get richer off of it.”
Akin sent out a fundraising email asserting, “Now, we have 40 million more reasons to vote her OUT of office!"
McCaskill says contracts contribute little to wealth
McCaskill’s campaign replied that it was inaccurate to allege that her family got wealthy off the contracts and that only a fraction of the $39 million went to her husband.
The campaign said the contracts in question were no different than those highlighted earlier by Akin, who cited $1 million in subsidy contracts in the 2009 federal stimulus bill that went to a handful of companies in which Shepard had a financial interest.
In the earlier case, Shepard’s financial interest totaled less than $25,000. His share of the $39 million cited Tuesday is unclear.
McCaskill’s disclosure reports, her campaign confirms, show that Shepard earned an income from the housing developments in the range of $400,000 to $2.6 million (the reports feature financial figures in ranges, not exact amounts).
But her campaign emphasized that many of the housing developments included unsubsidized units and that his income reflected profit primarily from those units – not the subsidized housing.
That was particularly true of $36 million from the USDA’s rural housing program, her campaign said in a statement. “The money went straight into a highly regulated property account for the low-income apartment units that can only be used for property operations, improving tenants' surroundings and maintenance,” her campaign said. “The USDA protects this money through audits of each project, and if the property money is spent a different way, the companies are prosecuted.”
McCaskill’s campaign said it was trying to clarify the situation regarding the remaining $3 million in subsidy contracts from HUD.
(UPDATE) Akin's advisor Rick Tyler called on Shepard to release his tax returns so it can be determined where his sources of income come from. McCaskill already has released her tax returns, but Tyler said the financial information on them was inadequate regarding the federal subsidies.
Tyler acknowledged that even if the Shepard returns were public, "I don't think it would be easy to figure this out."
Akin has not released his own tax returns. When asked, Tyler said that the congressman "would be glad to disclose their income taxes for the last five years," if McCaskill and Shepard produce theirs. Tyler added that Akin's taxes "are not the subject of inquiry here."
"They want us to believe that they don't make any money, but she is the ninth wealthiest member of the U.S. Senate," Tyler said. "They live the 1 percent luxury lifestyle that supporters decry." (End update)
Her campaign said that her votes on the appropriations bills were no different than the votes on the farm bill by U.S. Rep. Vicky Hartzler, R-Harrisonville, whose family has received at least $800,000 in federal farm subsidies.
McCaskill contrasts her votes with those of Akin, who secured an earmark for federal spending on a highway that could help bolster his family's property values. Her campaign says his action was improper.
Akin disagrees. A spokesman said that McCaskill's situation was "pretty wildly different."
"Roads and bridges affect all of us,'' said Akin spokesman Ryan Hite, referring to the highway earmark that has been linked to Akin.
The big question, for both Senate campaigns, is how the $39 million in contracts is used against McCaskill in the final weeks before the Nov. 6 election.
In 2004, Republican attacks against Shepard’s nursing-home interests in the final weeks of the campaign contributed to McCaskill’s defeat for governor. In 2006, she aired a special TV ad in the final weeks of her U.S. Senate contest to combat similar GOP attacks against Shepard’s business interests.
Will GOP SuperPACs return to Missouri?
The national and state GOP has continued to pay attention to Shepard's business interests since his success is the primary reason McCaskill is among the wealthiest members of Congress.
Akin crafted an ad a week ago about the earlier attack against the $1 million in contracts involving Shepard, but spent only about $50,000 to air it on TV stations around the state. That is a fraction of the roughly $450,000 that consultants in both parties say is needed to air a strong TV campaign for a week on major Missouri TV stations.
McCaskill, by contrast, is believed to currently be spending about $1 million a week on ads – many of them attacking Akin on his conservative views. Several Democratic-aligned groups, including the Democratic Senatorial Campaign Committee, also recently have launched attack ads against Akin.
Akin’s campaign has been expecting national GOP groups to air independent TV ads on his behalf that attack McCaskill. Several of the biggest-spending SuperPACs earlier had withdrawn their efforts in the wake of his televised comment Aug. 16 in which he alleged that victims of “legitimate rape” rarely get pregnant because their bodies naturally prevent it.
Akin has since apologized for that statement, and several Republican-aligned groups recently had indicated plans to begin spending modest amounts on his behalf. However, so far no independent TV ad campaigns on his behalf appear to be on the air.
The NRSC has been among the groups that have stayed out of Missouri. But its news release attacking McCaskill over the $39 million may indicate plans that it may return as well, possibly with ads focusing on Shepard's business interests.
