October 14, 2010

Rep. Frank's use of Sussman jet revealed

The Bay State legislator defends his trip to the Virgin Islands with 'friends' Chellie Pingree and her fiance.

By Glenn Jordan gjordan@pressherald.com
Staff Writer

Maine's Democratic Rep. Chellie Pingree isn't the only member of Congress who has flown aboard the jet owned by her fiance, hedge fund manager S. Donald Sussman.

Massachusetts Democrat Rep. Barney Frank: "I checked with House ethics and they gave it the OK. It was purely personal."

AP

Rep. Barney Frank, D-Mass., accepted a ride from Portland to the U.S. Virgin Islands shortly before Christmas last year. He described the gift as "First Class Round Trip Travel by Private Aircraft" with a value of $1,500 in a required House financial disclosure, filed in May and amended in July to show the destination and city of departure.

As the source of the gift, Frank listed Pingree and Sussman.

The Boston Herald published a story Wednesday about Frank, chairman of the House Financial Services Committee, accepting the flight. Frank said his partner lives in Maine and they have become "personal friends" with Pingree and Sussman.

"She and I have become friendly and they invited us to the Virgin Islands," Frank told the Herald. "I checked with House ethics and they gave it the OK. It was purely personal."

A review of the flight logs from Sussman's jet shows a departure from Portland to Charlotte Amalie, the capital of the Virgin Islands, on Dec. 19, 2009, with a return four days later.

The New York Times picked up the story and posted something similar on its website. Talk radio hosts gave it significant air time.

A spokesman for the Republican National Committee spoke of "a troubling conflict of interest" in Frank's acceptance of such largesse from someone in the industry that he is responsible for regulating.

"I've never talked with (Sussman) about any favorable treatment," Frank told the Herald. "I voted to raise his taxes. That's one of the most backwards things I've ever heard. I've taken the anti-hedge position."

The Herald story also says Paloma Securities, a subsidiary of the hedge fund run by Sussman, received $200 million in 2009 as part of the federal bailout of insurance giant American International Group Inc. The Maine Republican Party says the same thing in a TV ad attacking Pingree's use of Sussman's jet.

Pingree's campaign said neither Sussman nor any Paloma entity received money from the Troubled Asset Relief Program. The discrepancy centers around short-term loans of cash to AIG in which hedge funds including Paloma received third-party bonds as collateral, the campaign said.

Although a press release from AIG in March listed Paloma Securities as receiving "public aid" of $200 million, it is never mentioned in reports issued by the Special Inspector General for the Troubled Asset Relief Program.

Either way, Sussman's jet is back in the news, reminding voters of Pingree's strongly worded statement as head of Common Cause against members of Congress accepting rides aboard corporate jets. She cleared her travel with the House ethics committee, and her words in 2006 pertained to the Jack Abramoff lobbying scandal.

"I certainly don't go out and talk about (Pingree's travel travails)," said Dean Scontras, Pingree's Republican challenger in Maine's 1st District congressional race. "But everywhere I go, people are making the comment about her issues with the comments she made in 2006 and what seems to be happening now."

The latest independent Maine Poll, released Wednesday, showed Scontras closing a deficit that had been more than 20 percentage points to 15.

Staff Writer Glenn Jordan can be contacted at 791-6425 or at: gjordan@pressherald.com

 

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