A Democratic consultancy run by former top Obama campaign aides is working to place stories designed to stir up controversy over the personal finances of a House Republican leader.
The firm is working with other Democratic operatives who are trying to seize on a media frenzy that began with a humorous if slightly embarrassing Washington Post story about the Downton Abbey-themed office of Rep. Aaron Schock (R., Ill.).
Following that story, Citizens for Responsibility and Ethics in Washington (CREW)—a progressive activist group that recently came under the control of David Brock, the Media Matters guru and Hillary Clinton supporter—filed a complaint against Schock last week requesting an investigation into whether he sold his Peoria home to a campaign donor at an inflated price in violation of House ethics rules.
Additionally, Schock’s communications director later resigned after it was revealed that he made a number of racially tinged comments on Facebook.
Behind the scenes, a prominent Democratic consultancy run by former top Obama campaign aides has contacted reporters covering Schock’s tastes in interior design and offensive comments by his staff. The firm is pushing those reporters to cover the sale of Schock’s home as well.
Schock is a deputy GOP whip and considered a rising star in the Republican Party.
The allegations originated at Blue Nation Review, a blog run by Jimmy Williams, a former senior advisor to then-Sen. Joe Biden (D., Del.) and Senate Minority Whip Dick Durbin (D., Ill.), whose leadership PAC has donated $10,500 to Schock’s Democratic opponents.
In a Feb. 6 post, Williams claimed that the congressman "sold his home at what appears to be an inflated price to a political donor." It cited price data from Zilliow, the Internet’s most popular real estate information website.
The buyers were Gloria Bahaj and her husband, Ali Bahaj, then a vice president at Peoria-based Caterpillar. Both donated $2,300 to Schock’s first congressional campaign in 2008. Neither has contributed to any of his three subsequent re-election efforts, though Schock’s leadership PAC received $1,000 last year from a retired Ali Bahaj.
Schock is a frequent backer of Caterpillar, the largest employer in his district and a large contributor, through its political action committee, to Schock’s campaigns. The inflated home sale price amounted to a de facto financial contribution to the congressman in violation of House ethics rules, CREW said in its complaint.
"Congressman Schock on October 16, 2012 sold his home to the Bahajs for $925,000," Williams wrote in his post. "That’s more than three times the tax assessed value of the property. Zillow estimates that the house was worth approximately $695,000 that month."
Schock bought the house in 2003, Williams says, for $128,250. Though technically true, such a statement misrepresents the congressman’s return-on-investment on the house, according to Linda Kepple, a Peoria real estate broker, who sold his home.
"The purchase price … was the price for the lot—which was vacant with no home," Kepple said in an email. "It was an incredible lot, small but one-of-a-kind golf course views."
Williams, a former lobbyist for the National Association of Realtors, didn’t cite the home’s market value; he cited its assessed value, an entirely different measure. Kepple says Schock sold the home at market value.
"There is very little correlation in most circumstances between the two figures," according to Bill Gassett, a real estate writer.
"Tax assessor and real estate appraiser values are figured from previous home sales in a general vicinity within 12 months prior—which was when we were still in our recession," Kepple explained.
CREW’s complaint noted that the Bahajs paid more than the highest sale price for a home in Schock’s development in 2009. "Nothing in either the market conditions at the time or the sales prices of comparable houses justifies the excessive amount Mr. Bahaj paid Mr. Schock," CREW wrote.
Kepple says that that’s untrue, and that the Bahajs had the home independently appraised before closing.
"I sold Congressman Schock’s home in November 2012 which was the biggest come back year after a horrible 2009, 2010 and 2011," she said. "This is a common adjustment problem whenever markets are improving and declining. It takes some time to adjust to the new trend."
Williams spoke to Kepple while writing his piece, and says she is simply "protecting her client."
"I actually know what I’m talking about when it comes to real estate transactions," Williams said in an interview. He stood by his assessment of the value of Schock’s home, noting that he relied on more than Zillow price estimates to gauge Schock’s above-market return on the sale.
Kepple criticized those online estimates specifically. "Zillow is completely off," she wrote.
The site is a poor gauge of a home’s actual value, experts say. One study of the site’s "Zestimates" found that 70% of them valued homes below their sale prices.
CREW’s complaint also cited data from Trulia, a similar service that received Federal Trade Commission approval for a merger with Zillow last week. Real estate experts have leveled similar criticisms at Trulia, saying it is not a reliable source for the price of a home.
Williams also compared Schock’s sale price with assessed and Zillow-estimated values of other homes in the same development, which he said were significantly lower. CREW cited some of the same estimates in their complaint.
Kepple says that that is an inaccurate comparison.
"I am very familiar with all the homes Jimmy uses for comparables and they do not have the level of amenities that were present in Schock’s home," she said.
Williams’ allegations made their way into reports by the New York Times, the Huffington Post, CNN, and other mainstream news organizations.
Democratic consultancy Smoot Tewes pitched the story to reporters. The firm is run by former Obama 2012 deputy campaign manager Julianna Smoot and Paul Tewes, a senior official on the president’s 2008 campaign.
Smoot Tewes consultant Gary Ritterstein, who has worked on numerous Democratic congressional campaigns, emailed reporters last week linking to coverage of Schock’s home sale controversy and encouraging them to follow up.
"If you’re interested, I’d be happy to get you on the phone with the folks who have been helping research the story," he wrote.
Ritterstein, who has worked on numerous Democratic congressional campaigns, declined to speak on the record for this story. He would not say which news outlets he pitched the story to, who was providing the research for it, or whether he had collaborated with CREW on its ethics complaint.
"That’s more than three times the tax assessed value of the property," Williams wrote of Schock’s sale price. A CNN story included similar phrasing: "That's more than three times the total assessed value of the home of $255,240."