Rep. Laura Richardson (D-CA)

Rep. Laura Richardson (D-CA) is a first-term member of Congress, representing California’s 37th congressional district.  Rep. Richardson’s ethics issues stem from accepting favorable loans and her failure to properly report a loan on her financial disclosure statements.
                                
Home Foreclosure

In May 2008, it was reported that Rep. Richardson’s Sacramento home had been sold into foreclosure.  She claimed that this had happened without her knowledge and contrary to an agreement with her lender.  Rep. Richardson had failed to make mortgage payments on the property for nearly a year and had defaulted on other home loans as well.  Rep. Richardson also failed to include the mortgage on her Sacramento home on her personal financial disclosure statements.  According to press reports, Rep. Richardson has defaulted on loans at least eight times on properties she owns in Long Beach, San Pedro and Sacramento.  She also failed to pay approximately $9,000 in property taxes on the Sacramento residence.                         
At the same time that Rep. Richardson was missing payments and failing to pay her taxes, in June and July 2007, she made three loans to her congressional campaign totaling $77,500.

On June 2, 2008, Washington Mutual Bank, Rep. Richardson’s lender, filed a notice of rescission of the foreclosure sale.  By that time, James York, the man who had purchased the Sacramento home, had already invested money cleaning up the house and preparing it for resale.  As a result, Mr. York filed suit against Rep. Richardson and Washington Mutual, alleging that Rep. Richardson received preferential treatment from Washington Mutual because of her position as a member of Congress.  In July 2008, it was reported that Mr. York’s suit against Rep. Richardson and the bank had been dropped, allowing Rep. Richardson to reclaim the home.
    
Because it is unusual for someone with such a deplorable credit history to be repeatedly approved for mortgages, the House ethics committee should investigate whether: (1) Rep. Richardson received a preferential loan in violation of House rules; (2) whether she had received other favorable treatment from lenders in the past; and (3) what, if any, official actions she may have traded to acquire these preferential terms. The House ethics committee should also consider whether Rep. Richardson’s failure to include her mortgages on her financial disclosure forms violates House rules.
    
In addition, the committee should examine the timing of Rep. Richardson’s most recent default and the $77,500 she loaned her congressional campaign committee.  By funneling money that should have gone to pay her mortgage and property taxes to her congressional campaign, Rep. Richardson engaged in conduct that does not reflect creditably on the House.

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