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CREW I

citizens for responsibility and ethics in washington

April 1, 2011

Melanie Ann Pustay Director

Office of Information Policy u.s. Department of Justice 1425 New York Avenue, N.W. Suite 11050

Washington, D.C. 20530-0001

Re: Freedom ofInformation Act Appeal in Request No. 2011-439

Dear Ms. Pustay:

Citizens for Responsibility and Ethics in Washington ("CREW") hereby appeals the refusal ofthe Executive Office of the United States Attorneys ("EOUSA") to process and release to CREW any records responsive to our Freedom of Information Act ("FOIA") request of February 14,2011.

By letter dated and sent by facsimile on February 14,2011, CREW requested all records related to the investigations of former Rep. Alan B. Mollohan (D- WV) conducted by the Department of Justice ("DOJ") and the Federal Bureau ofInvestigation ("FBI"), including but not limited to DOJ's decision not to bring criminal charges against Rep Lewis. CREW explicitly excluded from its request records covered by grand jury secrecy pursuant to Rule 6( e) of the Federal Rules of Criminal Procedure. A copy of the request is attached as Exhibit A.

CREW also sought a public interest fee waiver, explaining that the requested records are likely to contribute to greater public awareness of alleged malfeasance and possible criminal behavior by Rep. Mollohan, as well as the decision of DOJ not to prosecute Rep. Mollohan despite his known conduct. As CREW explained, DOJ conducted an investigation of Rep. Mollohan related to $250 million in earmarks that benefitted non-profit organizations of Rep. Mollohan's campaign contributors. CREW further explained that DOJ notified Rep. Mollohan in January 2010 it had concluded its investigation of him and declined to prosecute him, and the United States Attorney's Office for the District of Columbia confirmed it had closed its investigation.

As CREW also explained, while DOJ decided not to prosecute Rep. Mollohan, his activities still may have been illegal or violations of the rules of the House, and the requested records would shed light on them. CREW further explained these documents would shed light

1400 Eye Street, N.W., Suite 450, Washington, D.C. 20005 I 202.408.5565 phone I 202.588.5020 fax I www.citilensforethics.org

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Office of Information Policy April 1,2011

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on the conduct of DO] and the FBI in conducting the investigations of Rep. Mollohan, and DOl's apparent decision to close the investigations without bringing charges against him.

CREW specifically noted its willingness to discuss with EOUSA the scope of its request and whether it can be narrowed or modified to better enable EOUSA to process it.

In response, EOUSA sent CREW a form letter dated February 23,2011 (attached as Exhibit B), acknowledging receipt of CREW's request and asserting records pertaining to a third party "generally cannot be released" without the express written authorization and consent of the third party (presumably Rep. Mollohan), proof that the subject of the request is deceased, or "a clear demonstration that the public interest in disclosure outweighs the personal privacy interest and that significant public benefit would result from disclosure." EOUSA added that because CREW did not provide consent, proof of death, or a public justification for release, disclosure "would result in an unwarranted invasion of personal privacy" and would violate the Privacy Act. EOUSA also claimed the records are "generally exempt from disclosure" pursuant to Exemptions 6 and 7(C) of the FOIA. Finally, EOUSA offered to release any public records maintained in its files upon further request by CREW.

By refusing at the outset to process any aspect of CREW's request that seeks anything beyond public record material - described as court records, news clippings, and the like - EOUSA has failed to meet its most basic obligations under the FOIA. EOUSA's reflexive reliance on the Privacy Act and Exemptions 6 and 7(C) fails to take into account the significant public interest in Rep. Mollohan's conduct, DOl's conduct in investigating Rep. Mollohan, and DOl's apparent decision to close its investigation without bringing charges against him, as well as Rep. Mollohan's diminished privacy interest in the requested records.

First, disclosure of records does not violate the Privacy Act where disclosure is required under the FOIA. 5 U.S.C. § 552a(b)(2). Under the FOIA, an agency must produce all responsive records except to the extent they, or any portion of them, fall into one of nine specified exemptions. 5 U.S.C. § 552(b). The only exemptions referenced by EOUSA are Exemptions 6 and 7(C). As explained below, EOUSA improperly relied on these exemptions to withhold the requested records.

Exemption 6 exempts from compelled disclosure "personnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy," 5 U.S.C. § 552(b )(6), and Exemption 7(C) exempts from disclosure records "compiled for law enforcement purposes" where disclosure "could reasonably be expected to constitute an unwarranted invasion of personal privacy," 5 U.S.C. § 552(b)(7)(C). Under these standards, to determine if a privacy exemption properly applies, a court must balance the privacy interest against the public interest in citizens being "informed about 'what their government is up to." us. Dep 't of Justice v. Reporters Comm. for Freedom of the Press, 489 U.S. 749, 762, 772-73

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(1989) ("Reporters Committee") (internal citation omitted). Information that "sheds light on an agency's performance of its statutory duties falls squarely within" the public interest. Id. at 773; see also Us. Dep'tofDefense v. FLRA, 510 U.S. 487, 497 (1994). Personal information may be withheld only when it "reveals little or nothing" about the government's conduct. Reporters Committee, 489 U.S at 773.

The records CREW requests unquestionably would inform the public about what a former member of the House Appropriations Committee, and the chairman ofthe subcommittee with jurisdiction over DOJ and the FBI, was up to. As CREW explained in the request, the requested records are likely to contribute to greater public awareness of alleged malfeasance and possible criminal behavior by Rep. Mollohan. DOJ and the FBI conducted extensive investigations into Rep. Mollohan's activities, and while DOJ eventually decided not to prosecute him, his activities still may have been illegal or improper. The public clearly has a strong interest in being informed about these activities.

In addition, these documents would shed light on the conduct of DOJ and the FBI in conducting the investigations of Rep. Mollohan, and DO]' s decision to close the investigations without bringing charges against him. Considering the importance of these investigations, the public has a powerful interest in fully understanding the DO]' s and the FBI's conduct.

These public interests clearly outweigh any privacy interests. EOUSA does not specify what privacy interests are at issue, but there is no need to protect Rep. Mollohan from being associated with the criminal investigations because - as CREW explained in our request - their existence has been reported widely. Indeed, both the U.S. Attorney's Office for the District of Columbia and Rep. Mollohan have publicly acknowledged the investigations. See Paul Kane, Justice Dept. ends probe of Rep. Mollohan, The Washington Post, January 26,2010 (attached as Exhibit C). Rep. Mollohan has no privacy interest in information he made public. See, e.g., Nation Magazine v. Us. Customs Serv., 71 F.3d 885,896 (D.C. Cir. 1995).

Furthermore, high-ranking government officials such as Rep. Mollohan have a diminished privacy interest in the balancing conducted under Exemptions 6 and 7(C). See, e.g., Stern v. FBI, 737 F.2d 84, 92-94 (D.C. Cir. 1984).

Even if the requested records contain some information for which some privacy interest outweighs the public interest in disclosure, EOUSA also did not comply with its duty under the FOIA to disclose all non-exempt, segregable portions of the records. The FOIA requires agencies to "disclose any reasonably segregable portion of a record ... after deletions of the portions which are exempt." 5 U.S.C. § 552(b). "[T]he focus in the FOIA is information, not documents, and an agency cannot justify withholding an entire document simply by showing that it contains some exempt material." Mead Data Central, Inc. v. United States Dep't of Air Force, 566 F.2d 242, 260 (D.C. Cir. 1977); see also Public Citizen Health Research Group v. FDA, 185

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F.3d 898, 907 (D.C. Cir. 1999). EOUSA should have redacted any legitimately exempt information and disclosed the remainder of the records.

EOUSA's initial determination withholding the requested records pursuant to the Privacy Act and Exemptions 6 and 7(C) of the FOIA plainly is in error and must be reversed. EOUSA must be ordered to process CREW's request and withhold only information pursuant to Exemptions 6 and 7(C) for which the privacy interests outweigh the compelling interest in disclosure.

ALWf!1D

Adam J. Rappaport Senior Counsel

Enclosures

EXHIBIT A

CREW I

citizens for responsibility and ethics in washington

Februarv 14 2011

. ,

By facsimile: 202-252-6047

William G. Stewart, II

Assistant Director, FO IA/Pri vacy U ni t Executive Office for United States Attorneys U.S. Department of Justice

Room 7300

600 E. Street, N.W. Washington, D.C. 20530-0001

Re: Freedom of Information Act Request

Dear Mr. Stewart:

Citizens for Responsibility and Ethics in Washington ("CREW") makes this request for records, regardless of format, medium, or physical characteristics, and including electronic records and information, audiotapes, videotapes and photographs, pursuant to the Freedom of Information Act ("FOIA"), 5 U.S.C. §§ 552, et seq., and U.S. Department of Justice ("DOl") regulations, 28 C.F.R. Pali 16.

Specifically, CREW requests all records related to investigations conducted by DOJ and the Federal Bureau of Investigation ("FBI") of Rep. Alan B. Mollohan (D- WV) that are not covered by grand jury secrecy pursuant to Rule 6( e) of the Federal Rules of Criminal Procedure, including but not limited to DOJ's decision not to bring criminal charges against him. DOJ conducted an investigation of Rep. Mollohan related to $250 million in earmarks that benefitted non-profit organizations of Rep. Mollohan's campaign contributors. See Paul Kane, Justice Dept. ends probe of Rep. Mollohan, The Washington Post, January 26, 2010 (attached as Exhibit A). DOJ notified Rep. Mollohan in January 2010 it had concluded its investigation of him and declined to prosecute him, and the United States Attorney's Office for the District of Columbia confirmed it had closed its investigation. ld.

Please search for responsi ve records regardless of format, medium, or physical characteristics. Where possible, please produce records electronically, in PDF or TIF format on a CD-ROM. We seek records of any kind, including electronic records, audiotapes, videotapes, and photographs. Our request includes any letters, emails, facsimiles, telephone messages, voice mail messages, and transcripts, notes, or minutes of any meetings, telephone conversations, or discussions. Our request also includes any attachments to these records.

If it is your position that any portion of the requested records is exempt from disclosure, CRE W requests that you provide it with an index ofthose documents as required under Vaughn v. Rosen, 484 F.2d 820 (D.C. Cir. 1973), cert. denied, 415 U.S. 977 (1972). As you are aware, a

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Rena Y. Kim February 14, 2011 Page 2

Vaughn index must describe each document claimed as exempt with sufficient specificity "to permit a reasoned judgment as to whether the material is actually exempt under FOIA." Founding Church of Scientology v. Bell, 603 F.2d 945,949 (D.C. Cir. 1979). Moreover, the Vaughn index must "describe each document or portion thereof withheld, and for each withholding it must discuss the consequences of supplying the sought-after information." King v. Us. Dep 't 0/ Justice, 830 F.2d 210,223-24 (D.C. Cir. 1987) (emphasis added). Further, "the withholding agency must supply 'a relatively detailed justification, specifically identifying the reasons why a particular exemption is relevant and correlating those claims with the particular part of a withheld document to which they apply. ", Id. at 224 (citing Mead Data Central v. us. Dep 't of the Air Force, 566 F.2d 242, 251 (D.C. Cir. 1977)).

In the event some portions of the requested records are properly exempt from disclosure, please disclose any reasonably segregable non-exempt portions of the requested records. See 5 U.S.C. § 552(b). Ifit is your position that a document contains non-exempt segments, but that those non-exempt segments are so dispersed throughout the document as to make segregation impossible, please state what portion of the document is non-exempt, and how the material is dispersed throughout the document. Mead Data Central, 566 F.2d at 261. Claims of nonsegregability must be made with the same degree of detail as required for claims of exemptions in a Vaughn index. If a request is denied in whole, please state specifically that it is not reasonable to segregate portions of the record for release.

Finally, CREW welcomes the opportunity to discuss with you whether and to what extent this request can be narrowed or modified to better enable EOUSA to process it within the FOIA's deadlines. Adam J. Rappaport, the CREW attorney handling this matter, can be reached at (202) 408-5565 or arappaport((i{citizensforethics.org.

Fee Waiver Request

In accordance with 5 U.S.C. § 552(a)(4)(A)(iii) and 28 C.F.R. § 16.11(k), CREW requests a waiver of fees associated with processing this request for records. The subject of this request concerns the operations of the federal government and expenditures, and the disclosures will likely contribute to a better understanding of relevant government procedures by CREW and the general public in a significant way. Moreover, the request is primarily and fundamentally for non-commercial purposes. 5 U.S.C. § 552(a)(4)(A)(iii). See, e.g., McClellan Ecological v. Carlucci, 835 F.2d 1282, 1285 (9th Cil'. 1987).

These records are likely to contribute to greater public awareness of alleged malfeasance and possible criminal behavior by Rep. Mollohan and why, despite this apparent malfeasance, DO] refused to prosecute Rep. Mollohan.

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From 2006 to 2010, the Justice Department investigated possible connections between Rep. Mollohan and five non-profit organizations that he created and supported with earmarks. See Kane, Wash. Post, Jan. 26, 2010. Rep. Mollohan earmarked $250 million for five nonprofits: West Virginia High Technology Consortium Foundation, Institute for Scientific Research, Canaan Valley Institute, Vandalia Heritage Foundation, and MountainMade Foundation. See Judi Rudoren, Special Projects by Congressman Draw Complaints, The New York Times, April 8, 2006 (attached as Exhibit B). Employees of the organizations, including board members and contractors, contributed at least $397,122 to Rep. Mollohan's campaigns from 1997 to 2006. ld. The non-profits were run by close friends and real estate partners of Rep. Mollohan. See Kane, Wash. Post, Jan. 26, 2010. DOJ notified Rep. Mollohan in January 2010 it had concluded its investigation of him and declined to prosecute him. ld.

The requested documents would shed light on the conduct of DOJ and the FBI in conducting the investigation of Rep. Mollohan, and DOJ's decision to close the investigation without bringing charges against him. In addition, while DOJ decided not to prosecute Rep. Mollohan, his activities still may have been illegal or vio lations of the rules of the House, and the requested records would shed light on them.

CREW is a non-profit corporation, organized under section 50l(c)(3) of the Internal Revenue Code. CREW is committed to protecting the public's right to be aware of the activities of government officials and to ensuring the integrity of those officials. CREW uses a combination of research, litigation, and advocacy to advance its mission. The release of information garnered through this request is not in CREW's financial interest. CREW will analyze the information responsive to this request, and will share its analysis with the public, either through memoranda, reports, or press releases. In addition, CREW will disseminate any documents it acquires from this request to the public through its website, \Nvl\v.citizensforethics.org, which also includes links to thousands of pages of documents CREW acquired through its multiple FOIA requests as well as documents related to CREW's litigation and agency complaints, and through www.scribd.corn.

Under these circumstances, CREW satisfies fully the criteria for a fee waiver.

News Media Fee Waiver Request

CREW also asks that it not be charged search or review fees for this request because CREW qualifies as a "representative of the news media" pursuant to the FOIA. In Nat 'I Sec. Archive v. Us. Dep 't of Defense, 880 F.2d 1381, 1386 (D.C. Cir. 1989), the Court of Appeals for the District of Columbia Circuit found the National Security Archive was a representative of the news media under the FOrA, relying on the FOIA's legislative history, which indicates the phrase "representative of the news media" is to be interpreted broadly; "it is critical that the phrase 'representative of the news media' be broadly interpreted if the act is to work as expected .... In fact, any person or organization which regularly publishes or disseminates information to the

Rena Y. Kim February 14,2011 Page 4

public ... should qualify/or waivers as a 'representative a/the news media. ,,, 132 Congo Rec. S14298 (daily ed. Sept. 30,1986) (emphasis added), cited in id.

CREW routinely and systematically disseminates information to the public in several ways. First, CREW maintains a frequently visited website, wwv/.citizensforethics.org, that received 53,145 page views in January 2011. In addition, CREW posts all of the documents it receives under the FOIA on www.scribd.com. and that site has received 607,799 visits to CREW's documents since April 14,2010.

Second, since May 2007 CREW has published an online newsletter, CREWCuts, that currently has 16,960 subscribers. CREWCuts provides subscribers with regular updates regarding CREW's activities and information the organization has received from government entities. A complete archive of past CREWCuts is available at

http://www.ci tizensforethics.o rg/newsletter.

Third, CREW publishes a blog, Citizens blogging for responsibility and ethics in Washington, that reports on and analyzes newsworthy developments regarding government ethics and corruption. The blog, located at http://www.citiznesforethics.org/blog, also provides links that direct readers to other news articles and commentary on these issues. CREW's blog had 4,045 page views in January 2011.

Finally, CREW has published numerous reports to educate the public about government ethics and corruption. See Record Chaos, which examines agency compliance with electronic record keeping responsibilities; The Revolving Door, a comprehensive look into the postgovernment activities of24 former members of President Bush's cabinet; and Those Who Dared: 30 Officials Who Stood Up For Our Country. These and all other CREW's reports are available at http://wvvw.citizensforethics.org/reports.

Based on these extensive publication activities, CREW qualifies for a fee waiver as a "representative of the news media" under the FOIA and agency regulations.

Conclusion

If you have any questions about this request or foresee any problems in releasing fully the requested records please contact me at (202) 408-5565. Also, if CREW's request for a fee waiver is not granted in full, please contact our office immediately upon making such a determination. Please send the requested records to Adam J. Rappaport, Citizens for

Rena Y. Kim February 14,2011 Page 5

Responsibility and Ethics in Washington, 1400 Eye Street, N.W., Suite 450, Washington, D.C. 20005.

Sincerely, ,,!l ;'"

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Adam J. Rappaport Senior Counsel

Enclosures

EXHIBIT A

Justice Dept. ends probe of Rep. Mollohan

http://www.washingtonpost.comlwp-dynlcontentlarticle/20 1 % 1 /26/ ..

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Justice Dept. ends pro be of Rep. Mollohan

By Paul Kane

Washington Post Staff Writer Tuesday, January 26, 20]0; 3:25 PM

The Justice Department has shuttered its nearly four-year investigation into the personal finances of Rep. Alan Mollohan CD- W. Va.), freeing the 14-tem1 lawmaker to pursue what could be a tough bid for reelection without the lingering cloud of a federal criminal probe.

The U. S. Attorney's Office for the District of Columbia

had been overseeing an investigation of Mollohan, a senior member of the House Appropriations Committee, for steering roughly $250 million in line-item expenditures to several nonprofit organizations run by close friends, who also were real estate partners with him.

Mollohan's office was notified this month that the investigation had been closed without criminal charges filed. Federal prosecutors declined to elaborate on what the investigation had found.

"We're not going to get into any details, but I can confirm we've closed the investigation into Alan Mollohan," Ben Friedman, spokesman for the U.S. attorney's office, said Monday evening.

Mollohan, 66, is expected to notify House Speaker Nancy Pelosi CD-Calif.) and Rep. David R. Obey CD-Wis.), chairman of the Appropriations Committee, of the development in a letter Tuesday. That would clear the way for him to resume full control of a subcommittee that oversees the roughly $28 billion budget for the Justice Department and the nearly $8 billion budget for the FBI.

In a statement, Mollohan said the investigation was sparked by a conservative watchdog group's partisan actions. The probe was launched when he was serving as the top Democrat on the House ethics committee.

"For nearly four years, in the face of a politically-motivated assault on my character, I have continued to fight for jobs and the working families of West Virginia. With this behind me, I am more determined than ever to stand up for the people of the First Congressional District and fight for what matters," Mollohan said.

He recently filed to run for reelection, squelching whispers that he might join several other longtime incumbents who decided to retire rather than face a tough political environment in November.

In recent weeks, the independent political handicappers Cook Political Report and the Rothenberg Political Report have downgraded Mollohan's seat to "lean Democratic" status. The Republican Party did not field a challenger to Mollohan in 2008, but national party leaders have recruited several potential candidates while seeking to maintain a drumbeat of criticism related to the criminal investigation. They pivoted away from the ethics matter Tuesday and sought to focus on the state's economy.

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Justice Dept. ends probe of Rep. Mollohan

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"Alan Mollohan's support for Obama's war on Mountaineer State jobs proves that it doesn't matter whether he's in Congress or behind bars -- he stopped representing West Virginians a long time ago," said Andy Sere, spokesman for the National Republican Congressional Committee.

A federal grand jury issued a flurry of subpoenas to West Virginia-based nonprofits in 2006 and 2007, after a SOO-page criminal complaint regarding Mollohan's finances in February 2006.

The complaint came from the National Legal and Policy Center, a conservative group that discovered discrepancies in Mollohan's personal financial disclosure forms. It raised questions about how his personal wealth rose -- according to congressional disclosure reports he filed -- from a minimum of $180,000 in 2000 to a minimum of $6.3 million in 2004.

Mollohan attributed much of that increase to a family inheritance and to the soaring property values of a condominium building he owns in the District's West End. After a self-imposed audit, Mollohan filed amended reports that corrected roughly 20 mistakes in his disclosure forms. He contended they were minimal in nature.

However, federal investigators continued to focus on multimillion-dollar earmarks that Mollohan steered to entities such as Vandalia Heritage Foundation, a historic-preservation group that was run by Laura Kuhns, a former Mollohan staff member.

The lawmaker's family also invested with Kuhns's family in North Carolina beach property, including a lot in Bald Head that went to foreclosure late last year.

Pete Flaherty, who co-founded the NLPC, questioned whether the Justice Department backed off the investigation because Mollohan is a loyal vote for the Obama administration. "Has Attorney General Eric Holder now made it legal for members of Congress to earmark money to their business partners? This is a horrible precedent," Flaherty said.

The Mollohan investigation came at the height of Democratic attacks on what Pelosi, then the minority leader, called the Republican "culture of corruption." Mollohan served as ranking Democrat on the ethics panel when it admonished House Majority Leader Tom DeLay CR- Tex.) in 2004 over fundraising activities. Mollohan also fought rules changes that GOP leaders imposed in 2005, leading to a virtual shutdown of the committee's work for several months.

Shortly after the investigation became public, Mollohan stepped down from the ethics committee. When Democrats claimed the majority in January 2007, Mollohan took over as chairman of the Appropriations justice subcommittee, but recused himself from voting on matters specifically related to the FBI and the attorney general's office.

In his statement Tuesday, Mollohan defended helping to fund the nonprofit groups: "These nonprofits are all about building West Virginia's economy and making our state a better place to live. I am very happy that they will be able to put this behind them and refocus on their core missions to create good jobs and improve the lives of West Virginians."

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Justice Dept. ends probe of Rep . Mollohan

http://www.washingtonpost.comfwp-dynfcontentlarticle/201 % 1/26/ ..

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EXHIBIT B

SPECIAL PROJECTS BY CONGRESSMAN ORA W COMPLAINTS '"

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This copy is for your personal, noncommercial use only. You can order presentation-ready copies for distribution to your colleagues, clients or customers, please click here or use the "Reprints" tool that appears next to any article. Visit www.nytreprints.comforsamplesandadditionalinformation.Orderareprintofthisarticlenow.11

April 8, 2006

SPECIAL PROJECTS BY CONGRESSMAN DRAW COMPLAINTS

By JODI RUDOREN; David Johnston and Aron Pilhofer contributed reporting for this article .

.AB lawmakers have increasingly slipped pet projects into federal spending bills over the past decade, one lawmaker has used his powerful perch on the House Appropriations Committee to funnel $250 million into five nonprofit organizations that he set up.

Those actions have prompted a complaint to federal prosecutors that questions whether any of that taxpayer money helped fuel a parallel growth in his personal fortune.

The most ambitious effort by the congressman, Alan B. Mollohan, is a glistening glassand-steel structure with a swimming pool, sauna and spa rising in a former cow pasture in Fairmont, W.Va., thanks to $103 million of taxpayer money he garnered through special spending allocations known as earmarks,

The headquarters building is likely to sit largely empty upon completion this summer, because the Mollohan-created organization that it was built for, the Institute for Scientific Research, is in disarray, its chief executive having resigned under a cloud of criticism over his $500,000 annual compensation, also paid by earmarked federal money.

The five organizations have diverse missions but form a cozy, cross-pollinated network in the forlorn former coal capitals of north-central West Virginia. Mr. Mollohan has recruited many of their top employees and board members, including longtime friends or former aides, who in turn provide him with steady campaign contributions and positive publicity in their newsletters.

The conservative National Legal and Policy Center in Falls Church, Va., filed a 50o-page complaint with the United States attorney for the District of Columbia on Feb. 28 challenging the accuracy of Mr. Mollohan's financial disclosure forms. The forms show a sharp spike in assets and income from rental properties from 2000 to 2004.

Federal authorities said yesterday that they were reviewing the complaint, which was reported in The Wall Street Journal.

The case has led several Republican leaders to call for Mr. Mollohan's removal from the House ethics committee, where he is the senior Democrat.

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SPECIAL PROJECTS BY CONGRESSMAN DRA W COMPLAINTS ...

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In a statement yesterday, he said, "These groups were not created to benefit me in any way, and they never have."

Mr. Mollohan noted that the National Legal and Policy Center had attacked other Democrats and their union supporters and that it began its inquiry last May after he had voted against Republican efforts to water down House ethics rules.

"Obviously, I am in the crosshairs of the National Republican Party and like-minded entities," said Mr. Mollohan, who faces a serious electoral challenge in November. Vice President Dick Cheney is scheduled to headline a fund-raiser on April 21 for the Republican whom the White House recruited to run against Mr. Mollohan.

"They are angry at me, and I fully expect that from now until November they will continue to make baseless charges against me, my record and my family," the statement said. "I will vigorously defend my service and not be intimidated by their heavy-handed tactics."

In previous interviews, Mr. Mollohan acknowledged that he had failed to pay 2004 taxes on income from rental properties in Washington and North Carolina, resulting in a state lien of $8,948.28 being filed on Dec. 1. He said the case was resolved by final payments of all taxes, interest and penalties by January.

"Obviously it's totally my fault," he said. "I just neglected this, and it was paid late, and I regret that."

In the last three years, Mr. Mollohan, a Democrat first elected in 1982 to a seat long held by his father, has bought $2 million worth of property on Bald Head Island, N.C., with Laura Kurtz Kuhns, a former employee who now runs one of the organizations and is on the boards of two others.

He was unapologetic about his earmarks, saying that local lawmakers knew their constituents' needs best, and that he was hardly alone in mainlining money back home. "The amount of money in the transportation bill spent in Illinois in earmarked projects is astronomical," he said. "It puts $100 million on the I.S.R. building in real perspective."

The earmarking occurred as an abundance oflocal projects was added to spending bills outside the normal budget review, from $32.9 billion in 2000 to $64 billion in 2006, the Congressional Research Service said. Although it is impossible to trace individual earmarks for certain, an analysis by Citizens Against Government Waste, a Washington watchdog, found $480 million added in the House or in conference committees, most likely by Mr. Mollohan, for his district since 1995. That sum helped West Virginia rank fourth on the watchdog list -$131.58 for each of the 1.8 million West Virginians this year.

Although Mr. Mollohan's mentor, Senator Robert C. Byrd, has long blanketed the state in bacon in the form oflarge public works projects and federal complexes, Mr. Mollohan has directed more than half his earmarks to his five organizations of his design.

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SPECIAL PROJECTS BY CONGRESSMAN DRA W COMPLAINTS .. ,

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Several people involved in the appropriations process said no other lawmaker employed that strategy to the same extent.

The first and largest is the West Virginia High Technology Consortium Foundation, which is absorbing the troubled Institute for Scientific Research. Another, the Canaan Valley Institute, works on stream restoration and wastewater treatment, The Vandalia Heritage Foundation redevelops dilapidated buildings, and the MountainMade Foundation helps artisans market wares.

"He's basically judge, jury and executioner for all this money," said Keith Ashdown, vice president ofthe Taxpayers for Common Sense in Washington.

Of the empty building in Mr. Mollohan's hometown, Fairmont, Mr. Ashdown added, "This is sort of Mollohan's field of dreams, but in his case, he's building it, and it doesn't look like they're going to come."

Kenneth F. Boehm, chairman of the National Legal and Policy Center, said the bulk of his complaint to the federal prosecutors was made up of public documents that showed 260 instances of omitted or undervalued assets on the financial disclosure forms that Mr. Mollohan filed with the ethics committee from 1996 to 2004.

Those forms show a jump in Mr. Mollohan's portfolio from less than $500,000 in assets generating less than $80,000 in income in 2000 to at least $6.3 millionin assets earning $200,000 to $1.2 million in 2004, along with large mortgage debts.

Among the concerns in the complaint, Mr. Boehm said, are commissions that Ms. Kuhns's husband, Donald, received as a real estate broker on deals for the organization that she controls. The couple have donated at least $10,000 to Mr. Mollohan's political committees since 1998.

The complaint also looks at whether Mr. Mollohan properly reported 27 condominiums in the Remington, near Foggy Bottom in Washington. He and his wife own the building with a cousin, Joseph 1. Jarvis, whose business once received money from a federal contract in Mr. Mollohan's district.

"The $64,000 question that's all over this thing is during the period oftime all these earmarks went to very closely associated nonprofits run by people who were very close to him, did any of the money go from Point A to Point B?" Mr. Boehm asked in an interview. "Did any of his newfound wealth result from, in any way, shape or form, individuals who had benefited from his official actions?"

Lifeblood for a Weak Economy

About 75 miles southeast of Fairmont along windy roads in Thomas (pop. 473) sits the Buxton & Landstreet Building, whose lifeblood is Mr. Mollohan's largess. The Vandalia Heritage

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Foundation used $1.2 million in earmarks from the Department of Housing and Urban Development to help transform the yellow-brick behemoth, built in 1901 as the coal company store, from broken down to bustling.

The first floor is a vibrant gallery where the MountainMade Foundation, relying on its own earmarks from the Small Business Administration to pay Vandalia its $5,166.67 in monthly rent, sells items like Mr. Byrd's thick autobiography for $35 and a maple desk for $5,25°.

Upstairs, 41 people work on stream restoration and wastewater treatment in the Canaan Valley office, whose $5,100 rent to Vandalia is covered by earmarks from the Environmental Protection Agency and the National Oceanic Atmospheric Administration.

"What else are you going to do to reinvent this economy?" asked Ms. Kuhns, Mr. Mollohan's former aide who runs Vandalia and is the co-owner ofthe North Carolina beach property with the congressman. "A lot of what we do would not get done otherwise."

Created in 2000 to help artisans market their creations over the Internet -- Mr. Mollohan favors the earthenware pottery -- MountainMade also runs glassblowing, spinning and felt-malting workshops in another downtown building that Vandalia renovated.

The Canaan Valley Institute, which grew out of an effort to create a wildlife refuge near property that Mr. Mollohan owns, is building a $33 million headquarters with classrooms and laboratories on 3,208 acres that it bought with earmarks he secured.

Vandalia owns more than a score of properties throughout Mr. Mollohan's district like the Baltimore & Ohio station in Grafton that it is turning into a museum and office space and lots in Fairmont, where it plans to build houses. Earmarks from HUD bought the mothballed Waldo Hotel in Clarksburg ($230,000 in 2000) and 1,129 acres in Canaan Valley ($204 million in 2004).

Mr. Mollohan and the organizations' managers said their goal was to wean from earmarks and be self-sustaining. But Canaan Valley, the oldest, continues to rely on earmarks for 97 percent of its money. Last year, MountainMade received $1,085,308 from the S.B.A., nearly twice its $553,000 in sales. MountainMade also had a $124,000 state grant.

As for Vandalia, 92 percent of its $31.5 million in grants since 1999 arrived through federal earmarks. Separately, the 2004 tax return for the organization shows that 96 percent of its $8.5 million revenue was from government grants.

None of the three groups have dues-paying members, like many such organizations, or run regular fund-raisers. They worry about the crackdown on earmarks. The Vandalia pipeline has begun to dry up since Mr. Mollohan left the subcommittee that appropriates HUD money. The organizations said success in finding other sources had been sporadic.

The Quid Pro Quos

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"The congressman gave us money" for this or that is how the groups' leaders frequently explain their programs. And they generally return the favor at fund-raisers.

A review of campaign finance records by The New York Times shows that from 1997 through February 2006, top-paid employees, board members and contractors of the five organizations gave at least $397,122 to Mr. Mollohan's campaign and political action committees.

Thirty-eight individuals 'with leadership roles, including all five chief executives -- all but one of whose 2004 salaries outpaced the $98,456 national average among nonprofit leaders -contributed, often giving the maximum allowed.

At the same time, workers at companies that do business with the federally financed groups were among Mr. Mollohan's leading contributors. Employees ofTMC Technologies, which had a $50,000 contract with Vandalia in 2003, have given $63,450 since 1998. Workers at Electronic Warfare Associates and Man Tech International, military contractors that rent space from the technology consortium and whose chief executives are on the board ofthe Institute for Scientific Research, combined to give $86,750.

For Kate McComas, a weaver who is the executive director of MountainMade, the $1,000 check that she wrote in March 2004 at a Mollohan fund-raiser was a first. "I bought a pair of high heels to wear," Ms. McComas recalled. "I thank him every occasion I see him for the opportunity we have here."

Asked whether contributions were required or expected, Kevin Niewoehner, the departed chief executive of the Institute for Scientific Research, said: " 'Required' is such a strong term. The political environment and the access that goes along with it has a number of expectations that involves what is appropriate and what isn't appropriate." He added that the first hint that he was falling out of favor occurred in October, when a $250 check he wrote to the campaign was returned uncashed.

"I received invitations to those events on a regular basis," he said. "I was invited to participate, and I participated."

'Teaming to Win'

Mr. Mollohan scoffed at the suggestion that the overlap among the groups that he supports and his supporters meant anything more than a meeting of the minds.

"I like to think I'm supported because I work hard," he said. "Because I bring a collaborative, a 'teaming to win,' if you will, approach to solving the really difficult challenges facing West Virginia."

The team includes overlapping rosters among the five organizations. In addition to Ms. Kuhns's multiple roles, Jack Carpenter, an old friend of the congressman, is vice president of the consortium and chairman of the MountainMade board. The board once included Mr.

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Mollohan's wife, Barbara,

Raymond A. Oliverio, executive vice president of the consortium, is also treasurer of the Robert H. Mollohan Foundation, named for the congressman's late father. Gina Fantasia, Vandalia's legal counsel, moved over last year from the Institute for Scientific Research. Her brother Nick, mayor of Fairmont, is chairman of the Vandalia Redevelopment Corporation, a heritage foundation sister.

"He effectively referred to it as a family," said a person involved in the Mollohan network, likening the operation to keiretsu, the Japanese concept of intermeshed corporate boards,

Down the hill from the steel structure here is the more pedestrian $14 million Alan B. Mollohan Innovation Center, built with $3.5 million in earmarks. It is the home of the high-tech consortium, which began in 1990 as six small companies hoping to seed a new economic area. The center has 200 affiliates throughout the state. Earmarks are its engine, underwriting high-tech projects like AmberView, which seeks to create a national database of three-dimensional school photographs to help find missing children.

The consortium has had better luck following earmarks with competitive grants. Its Information Research Corporation was spun off as a for-profit subsidiary after obtaining a $10 million Navy contract to build 2,500 BomBots, robotlike tractors that remotely deliver explosives.

"The congressman has enabled programs and entities to get started," said Tom Witt, director of the West Virginia University Bureau of Business and Economic Research. "But at some point, they're going to have to make the transition or they'll die."

The big test will be the $134 million Institute for Scientific Research building, three-quarters paid by NASA and HUD earmarks. The 57-member staff is barely large enough to fill a corner ofthe ooo-plus capacity ofthe building.

Photos: Alan B. Mollohan, left, senior Democrat on the House ethics committee, with Commerce Secretary Carlos Guitierrez at an appropriation hearing yesterday. (Photo by Stephen Crowley/The New York Times); (Photographs by Vandalia Foundation [Canaan Valley Institute, MountainMade Foundation] and Jeff Swensen for The New York Times)(pg. AlO)

Chart: "Local Projects, Federal Funds"

Alan B. Mollohan's Congressional district in West Virginia has received $480 million in special spending allocations known as earmarks since 1995. About half the money has gone to the five organizations at right, all of which Mr. Mollohan set up.

Earmarks for Mr. Mollohan's Congressional District

Graph tracks earmarks for the following groups since 1995.

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West Virginia High Technology Consortium Foundation FOUNDED: 1990

EMPLOYEES: 148

TOP SALARY: $260,000

ACTIVITIES: Runs its own research projects and works with companies to seed hightech projects. Planning a technology park.

EARMARKS SINCE 1995: $39 million from HUD, S.B.A. and the Justice Department

Institute for Scientific Research FOUNDED: 1990 EMPLOYEES: 57

TOP SALARY: $362,286

ACTIVITIES:Conducts basic information technology and engineering research for federal agencies.

EARMARKS SINCE 1995: $108 million from NASA and HUD

Canaan Valley Institute FOUNDED: 1995 EMPLOYEES: 49

TOP SALARY: $147.450

ACTIVITIES: Partners with local groups on environmental problems, particularly stream

restoration and wastewater treatment.

EARMARKS SINCE 1995: $71 million (awarded funds) from E.P.A. and NOAA

Vandalia Heritage Foundation FOUNDED: 1998 EMPLOYEES: 12

TOP SALARY: $102,000

ACTIVITIES: Restores historic buildings, acquires property for development and runs "legacy" projects of oral histories.

EARMARKS SINCE 1995: $28 million from HUD

MountainMade Foundation FOUNDED: 2000 EMPLOYEES: 19

TOP SALARY: $65,565

ACTIVITIES: Helps local artisans sell wares. Runs craft workshops. EARMARKS SINCE 1995: $8 million from S.B.A.

(Sources by Citizens Against Government Waste; tax returns ofthe five nonprofits)(pg. AlO)

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Map of West Virginia highlighting First Congressional District: Fairmont, W.Va., is the hometown of Representative Alan B. Mollohan. (pg. AlO)

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EXHIBIT B

U.S. Department of Justice Executive Office for United States Attorneys Freedom of Information & Privacy Staff

600 E Street, N. W, Suite 7300, Bicentennial BUilding Washington, DC 20530-0001

(202) 252-6020 FAX 252-6047 (lI'lI'lI'.usdoj.gov/lisao)

Requester: Adam 1. Rappaport

Request Number:...!:2,,-,,0~1~1-_4:...;3~9 _

Subject of Request: Rep,Alan Mollohan

Dear Requester:

The Executive Office for United States Attorneys has received your Freedom of Information Act request and assigned the above number to the request.

You have requested records concerning a third patty (or third parties). Records pertaining to a third party generally cannot be released absent express authorization and consent of the third patty, proof that the subject of your request is deceased, or a clear demonstration that the public interest in disclosure outweighs the personal privacy interest and that significant public benefit would result from the disclosure of the requested records. Since you have not furnished a release, death certificate, or public justification for release, the release of records concerning a third party would result in an unwarranted invasion of personal privacy and would be in violation of the Privacy Act, 5 U.S.C.§ 552a. These records are also generally exempt from disclosure pursuant to sections (b)(6) and (b)(7)(C) of the Freedom ofInformation Act, 5 U.S.C. § 552.

We will release, if requested, any public records maintained in our files, such as court records and news clippings, without the express authorization of the third party, a death certificate, or public justification for release. If you desire to obtain public records, if public records exist in our files, please reply with a letter asking for the public documents. Please send your letter to the address above.

Should you obtain the written authorization and consent of the third party for release of the records to you, please submit a new request for the documents accompanied by the written authorization. A form is enclosed to assist you in providing us the authorization and consent of the subject of your request. Your name should appear in the section titled "Optional." The authorization must be notarized or signed under penalty of perjury pursuant to 18 U.S.C. § 1001. Please send your new request to the address above.

Please note that your original letter was split into separate files ("requests"), for processing purposes, based on the nature of what of what you sought. Each file will have a separate Request Number (listed below), for which you will receive a separate response:

NOT SPLIT

(Page 1 of2) Form No. 006 - 3/10

This is our final action on this above-numbered request. You may appeal this decision in this matter by writing to the Office of Information Policy, Department of Justice, 1425 New York Avenue, Suite 11050, Washington, D.C. 20530-0001. Both the envelope and the letter of appeal should be marked "FOIA Appeal." Your appeal must be received by OIP within 60 days from the date of this letter. If you are dissatisfied with the results of any such administrative appeal, judicial review may thereafter be available in U.S. District Court. 28 C.F.R. § 16.9.

Sincerely,

William G. Stewart II Assistant Director

Enclosure

(Page 2 of2) Foml No. 006 - 311 0

u.s Department of Justice

Certification of Identity

FORM APPROVED OMB NO. 1103·0016 EXPIRES 10131113

Privacy Act Statement. Tn accordance with 28 CFR Section 16.41 (d) personal data sufficient to identify the individuals submitting requests by mail under the Privacy Act of 1974,5 U.s.C. Section 552a, is required. The purpose of this solicitation is to ensure that the records of individuals who are the subject of U.S. Department of Justice systems of records are not wrongfully disclosed by the Department. Requests will not be processed if this information is not furnished. False information on this form may subject the requester to criminal penalties under 18 U.S.C. Section 100J and/or 5 U.S.c. Section 552a(i)(3).

Public reporting burden for this collection of information is estimated to average 0.50 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Suggestions for reducing this burden may be submitted to the Office of Information and Regulatory Affairs, Office of Management and Budget, Public Use Reports Project (1 J 03-0016), Washington, DC 20503.

Full Name of Requester I . _

Citizenship Status 2 Social Security Number 3 _

Current Address

------------------------------------

Date of Birth

----------------

Place of Birth _

I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct, and that I am the person named above, and I understand that any falsification of this statement is punishable under the provisions of 18 U.S.C. Section 1001 by a fine of not more than $10,000 or by imprisonment of not more than five years or both, and that requesting or obtaining any reeord(s) under false pretenses is punishable under the provisions of 5 U.S.c. 552aO)(3) by a fine of not more than $5,000.

Signature 4 Date

----------------------------------------------- -----------------------------

OPTIONAL: Authorization to Release Information to Another Person

This form is also to be completed by a requester who is authorizing information relating to himself 01' herself to be released to another person.

Further, pursuant to 5 U.S.c. Section 552a(b), [ authorize the U.S. Department of Justice to release any and all information relating to me to:

Print or Type Name

I

Name of individual who is the subject of the record(s) sought.

2 c:

Individual submitting a request under the Privacy Act of 1974 must be either "a citizen of the United States or an alien lawfully

admitted for permanent residence," pursuant to 5 U.S.c. Section 552a(a)(2). Requests will be processed as Freedom oflnfonnation Act requests pursuant to 5 U;S.C. Section 552, rather than Privacy Act requests, for individuals who are not United States citizens or aliens lawfu lIy admitted for permanent residence.

3

Providing your social security number is voluntary. You are asked to provide your social security num ber only to facilitate the

identification of records relating to you. Without your social security number, the Department may be unable to locate any or all records pertaining to you.

4

Signature of individual who is the subject of the record sought.

FORM DO)·361

EXHIBIT C

Justice Dept. ends probe of Rep. Mollohan

http://www.washingtonpost.com!wp-dynlcontentlarticle/20 I % 1 /26/ ..

fi;be Wtts1Jingion post

Justice Dept. ends probe of Rep. Mollohan

By Paul Kane

Washington Post Staff Writer Tuesday, January 26, 2010; 3:25 PM

The Justice Department has shuttered its nearly four-year investigation into the personal finances of Rep. Alan Mollohan CD-W.Va.), freeing the 14-term lawmaker to pursue what could be a tough bid for reelection without the lingering cloud of a federal criminal probe.

The U.S. Attorney's Office for the District of Columbia

had been overseeing an investigation of Mollohan, a senior member of the House Appropriations Committee, for steering roughly $250 million in line-item expenditures to several nonprofit organizations run by close friends, who also were real estate partners with him.

Mollohan's office was notified this month that the investigation had been closed without criminal charges filed. Federal prosecutors declined to elaborate on what the investigation had found.

"We're not going to get into any details, but I can confirm we've closed the investigation into Alan Mollohan," Ben Friedman, spokesman for the U.S. attorney's office, said Monday evening.

Mollohan, 66, is expected to notify House Speaker Nancy Pelosi CD-Calif.) and Rep. David R. Obey CD- Wis.), chairman of the Appropriations Committee, of the development in a letter Tuesday. That would clear the way for him to resume full control of a subcommittee that oversees the roughly $28 billion budget for the Justice Department and the nearly $8 billion budget for the FBI.

In a statement, Mollohan said the investigation was sparked by a conservative watchdog group's partisan actions. The probe was launched when he was serving as the top Democrat on the House ethics committee.

"For nearly four years, in the face of a politically-motivated assault on my character, I have continued to fight for jobs and the working families of West Virginia. With this behind me, I am more determined than ever to stand up for the people of the First Congressional District and fight for what matters," Mollohan said.

He recently filed to run for reelection, squelching whispers that he might join several other longtime incumbents who decided to retire rather than face a tough political environment in November.

In recent weeks, the independent political handicappers Cook Political Report and the Rothenberg Political Report have downgraded Mollohan's seat to "lean Democratic" status. The Republican Party did not field a challenger to Mollohan in 2008, but national party leaders have recruited several potential candidates while seeking to maintain a drumbeat of criticism related to the criminal investigation. They pivoted away from the ethics matter Tuesday and sought to focus on the state's economy.

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"Alan Mollohan's support for Obama's war on Mountaineer State jobs proves that it doesn't matter whether he's in Congress or behind bars -- he stopped representing West Virginians a long time ago," said Andy Sere, spokesman for the National Republican Congressional Committee.

A federal grand jury issued a flurry of subpoenas to West Virginia-based nonprofits in 2006 and 2007, after a 500-page criminal complaint regarding Mollohan's finances in February 2006.

The complaint came from the National Legal and Policy Center, a conservative group that discovered discrepancies in Mollohan's personal financial disclosure forms. It raised questions about how his personal wealth rose -- according to congressional disclosure reports he filed -- from a minimum of $180,000 in 2000 to a minimum of $6.3 million in 2004.

Mollohan attributed much of that increase to a family inheritance and to the soaring property values of a condominium building he owns in the District's West End. After a self-imposed audit, Mollohan filed amended reports that corrected roughly 20 mistakes in his disclosure forms. He contended they were minimal in nature.

However, federal investigators continued to focus on multimillion-dollar earmarks that Mollohan steered to entities such as Vandalia Heritage Foundation, a historic-preservation group that was run by Laura Kuhns, a former Mollohan staff member.

The lawmaker's family also invested with Kuhns's family in North Carolina beach property, including a lot in Bald Head that went to foreclosure late last year.

Pete Flaherty, who co-founded the NLPC, questioned whether the Justice Department backed off the investigation because Mollohan is a loyal vote for the Obama administration. "Has Attorney General Eric Holder now made it legal for members of Congress to earmark money to their business partners? This is a horrible precedent," Flaherty said.

The Mollohan investigation came at the height of Democratic attacks on what Pelosi, then the minority leader, called the Republican "culture of corruption." Mollohan served as ranking Democrat on the ethics panel when it admonished House Majority Leader Tom DeLay CR- Tex.) in 2004 over fundraising activities. Mollohan also fought rules changes that GOP leaders imposed in 2005, leading to a virtual shutdown of the committee's work for several months.

Shortly after the investigation became public, Mollohan stepped down from the ethics committee. When Democrats claimed the majority in January 2007, Mollohan took over as chairman of the Appropriations justice subcommittee, but recused himself from voting on matters specifically related to the FBI and the attorney general's office.

In his statement Tuesday, Mollohan defended helping to fund the nonprofit groups: "These nonprofits are all about building West Virginia's economy and making our state a better place to live. I am very happy that they will be able to put this behind them and refocus on their core missions to create good jobs and improve the lives of West Virginians."

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