Environmental Protection Agency (EPA) Administrator Scott Pruitt has been embroiled in scandal for weeks, ever since it was revealed that he got a sweetheart deal last year on a Capitol Hill condo linked to an energy lobbyist. But as new details revealed by the New York Times this weekend show, this wasn’t the first time Pruitt turned to a lobbyist for his housing needs.
In 2003, while working as a state senator, Pruitt bought an Oklahoma City property from a retiring telecommunications lobbyist. But Pruitt was not the sole owner. Instead, the house was bought through a shell company linked to a friend and business partner — Kenneth Wagner — and the mortgage was financed by a bank run by another friend — Albert Kelly.
Both Kelly and Wagner now hold top positions in the EPA. Kelly, who was banned from the banking industry for life for violating federal banking laws, is in charge of the EPA’s Superfund program. Wagner is a senior advisor for regional and state affairs.
As with Pruitt’s $50 a night condo deal, Pruitt got a good price on the house which boasts a grand staircase and a view of the State Capitol’s white dome.
According to the Times’ investigation, the home was bought for $375,000. This is $100,000 less than what the lobbyist — Marsha Lindsey — paid for it just one year prior. Reports state that Lindsey’s employer, telecom giant SBC Oklahoma picked up the difference. (State records show that during the early 2000s Pruitt sided with the telecom company on several of its lobbying issues, including a deregulatory bill that would allow it to raise rates.)
The deal went down like this: Lindsey turned the deed over to a relocation company hired by SBC, which then signed the property over — at the discounted rate — to Jon Jiles, a health care executive and a donor to Pruitt’s campaigns. Jiles then transferred the deed to the shell company — Capitol House LLC — where he was listed as a manager. Wagner was listed as the registered agent. After this, Kelly’s bank — Spirit Bank — approved a mortgage for a higher value ($420,000) in the name of the shell company.
These real estate records did not include Pruitt’s involvement in the deal according to the New York Times. However, an EPA spokesperson confirmed to the newspaper that Pruitt was one of five investors in that shell company.
None of Pruitt’s financial disclosure filings in Oklahoma mentioned the shell company. This is a “potential violation of the state’s ethics rules” the Times wrote. According to Oklahoma ethics rules, officials are required to disclose their businesses or entities which hold securities valued at $5,000 or more.
Pruitt’s business relationship with both Wagner and Kelly extends beyond just this one housing deal, however. Pruitt at the time held a second job at Wagner’s corporate law firm. And Kelly’s bank helped finance several of Pruitt’s ventures, including his move from a suburban home in Tulsa to a lakefront property, and the purchase of a significant stake in a minor league baseball team.
As with Pruitt’s condo deal, the EPA told the Times that Pruitt’s business arrangements with Kelly and Wagner “were ethical,” adding that Pruitt’s stake in the shell company was “a simply real estate investment.”
“Mr. Wagner and Mr. Kelly left high-profile positions in law and banking in Oklahoma, to serve in the administration,” the EPA spokeswoman told the Times. “They are dedicated EPA employees who have earned the respect and admiration of EPA career employees across the country.”
Pruitt is facing mounting calls to resign or be fired from both Democrats and Republicans. And there are a series of investigations being conducted by government into his questionable spending and management practices. So far, President Trump has maintained his support for Pruitt — who continues to give priority to the fossil fuel industry and climate science deniers.