Alaska senator's land deal under scrutiny

JUNEAU, Alaska — Government watchdogs are criticizing a land purchase by U.S. Sen. Lisa Murkowski, adding the Alaska lawmaker's name to a growing list of the state's Republican lawmakers being challenged on legal or ethical grounds.

The issue: Whether Murkowski received a sweetheart deal on prized property on the banks of the state's Kenai River, a purchase not fully reflected in her annual financial disclosures filed in May.

"Land deals have been a way that public integrity can be bent a little, so it's very important to ask if she paid the fair market value," said Ken Boehm, chairman of watchdog National League and Policy Center.

A Murkowski spokesman defended the purchase as not only ethical but simply as an everyday transaction for land on which the senator's family plans to build a home. Spokesman Kevin Sweeney said Murkowski has followed all Senate ethics rules.

"She's not buying this to make an investment on it; she's building a home," Sweeney said. "She did everything she was required to as a United States senator by the Senate Ethics Committee."

Late last year, Murkowski bought a 1.27-acre vacant tract from real estate developer and longtime political backer Bob Penney, who recently testified in a grand jury investigation into the state's senior U.S. senator, Republican Ted Stevens.

The issue first was raised by national political Web blog tpmmuckraker.com on Monday. The sale was worth $179,400 for Penney, who lives two lots from the land he sold to Murkowski. He also owns the land between the two sites.

Penney said he considers the price fair for a welcome neighbor.

It was the assessed value at the time and almost four times higher than his original investment of $46,000 for that lot in 1996. The price paid by Murkowski was far higher than the 2005 assessed value of $120,000, he said.

"I've known Lisa since she was five and we'd like to have the family for neighbors," Penney said. "Part of the reason is that they're longtime friends and we like the entire family."

Area real estate broker Marty Radvansky said since January 2006, undeveloped land in that area has sold for between $250,000 to $350,000 depending on the waterfront location and the size, which is normally a minimum of nine-tenths of an acre.

The area's strong lure isn't just the beauty. The Kenai River attracts vistors nationwide seeking to enjoy time on the banks with a fishing rod hoping to take advantage of the huge seasonal salmon runs.

Linda McLane, a broker with the Ron Moore Co. who has worked in that area for 14 years, agreed with Radvansky's estimates, adding she would likely ask $300,000 for Murkowski's property were she to sell the land.

"Maybe even $350,000," she said. "Would I get $350,000 for it, maybe I would, I don't know, but that is a very nice area back there with lovely homes and it's near town (Soldotna) but still has the seclusion you want."

Even at $300,000 a quick sale could produce a $120,000 profit for Murkowski's family, but her spokesman insisted that's not her plan.

The assessed value of the property was $214,900 as of May, according to the Kenai Borough assessing department.

Murkowski did not report the transaction on her annual financial report. She did report a mortgage in Kenai, but did not initially check a box to identify the cost range into which the mortgage falls. Sweeney said she has since amended that, but he did not have a figure available.

Sweeney said Murkowski followed the rules and has reviewed her filings with the Senate Ethics Committee since posting it in May. Transactions don't have to list property used soley as a personal residence.

But Murkowski, who sold her Anchorage home, now lists a cabin in the ski resort community of Girdwood as her state residence. As a result, this precludes her from exempting a disclosure on the riverfront land, Boehm said.

Until a few days ago, Murkowski has been able to avoid the kind of attention that has beset fellow state and federal Republican lawmakers under legal and ethics scrutiny.

Now she joins a formidable list of elected officials targeted by federal prosecutors, a grand jury or watchdog groups.

— Stevens is under U.S. Justice Department scrutiny for his relationship with a wealthy contractor as part of the public corruption investigation. Last year, the FBI raided offices of several Alaska lawmakers including Stevens' son, former state Senate President Ben Stevens.

— One former state representative was recently found guilty of federal bribery and conspiracy charges. Three more former state representatives await trial on separate bribery and extortion charges.

— U.S. Rep. Don Young, the state's lone Congressman, has been criticized for relationships with several executives and for earmark funding. Among them: a $10 million appropriation for a road project in Florida that would benefit a developer who helped raise $40,000 in campaign money.

Now it's Murkowski's turn to be cast in an unflattering light. All week, she has been attacked by radio talk shows, political blogs and watchdogs for the land purchase.

Gerald McBeath, political science professor at the University of Alaska Fairbanks, said Murkowski should not be surprised at the attention.

Murkowski is no rookie, even if this is her first full term. She was appointed to fill a seat vacated by her father Frank Murkowski when he won the governor's race in 2002.

"Anything involving money, especially a large amount is going to attract attention," McBeath said. "She ought to have expected that. She's no longer a kid."

Still, McBeath said critics "may be reaching a bit."

"If the question of market value is the issue, market value is what somebody pays for it," he said.