WHAT CREW LEARNED ABOUT FORMER REP.

ALAN MOLLOHAN (D-WV)

If It Wasnt For Non Profits I Wouldnt Be In Politics
In February 2013, Citizens for Responsibility and Ethics in Washington (CREW) sued
the Department of Justice (DOJ) for failing to satisfy CREWs Freedom of Information Act
(FOIA) request for records concerning DOJs closed investigation of former Rep. Alan Mollohan
(D-WV). Federal authorities had looked into allegations Rep. Mollohan steered hundreds of
millions of dollars in earmarks to a series of nonprofits closely tied to his family in exchange for
contributions to his campaign and political action committees. There also were reports Rep.
Mollohan omitted millions of dollars of property values from his personal financial disclosures
over the course of many years. Despite this evidence, DOJ declined to prosecute Rep. Mollohan.
In 1990, Rep. Mollohan founded the West Virginia High Technology Consortium and the
Institute for Scientific Research (ISR), to bring high tech jobs to West Virginia and to keep
young people from leaving the state.1 In 1993, Rep. Mollohan established the West Virginia
High Technology Consortium Foundation (WVHTCF) to help with funding for the consortiums
programs and the two entities merged in 1996.2 Both ISR and WVHTCF are located in the
Mollohan Innovation Center office park in Fairmont, WV.3 In 1998, Rep. Mollohan established
the Vandalia Heritage Foundation (VHF), designed to revitalize and preserve historic buildings
in northern West Virginia, which also manages WVHTCF and ISR.4 Laura Kurtz Kuhns, a
former Mollohan staffer, served as president of VHF, board member of ISR, and was at one time
the executive director of WVHTCF.5 The Mollohan and Kuhn families also owned beachfront
property together in North Carolina.6 In the 1990s, Rep. Mollohan also founded the Canaan
Valley Institute (CVI) to help restore the areas polluted streams and Mountain Made Foundation
(MMF), an organization dedicated to promoting and selling the work of West Virginia artisans
and craftsmen.7 MMFs operations are housed in properties operated by Vandalia.8
It eventually became apparent, however, that through this web of purportedly nonprofit
organizations Rep. Mollohan may have been also looking for a way to line his own pockets and
those of his political campaign. In 2006, the National Legal and Policy Center, a conservative
watchdog group, filed a 500 page complaint with the Department of Justice detailing how Rep.
Mollohan had earmarked millions of dollars in federal funds to these nonprofit groups while also
receiving a constant flow of campaign contributions from their employees. The complaint also
questioned how his net worth increased exponentially in only a few years and claimed Rep.
Mollohan failed to accurately disclose his stake in a Washington, D.C. rental company, the beach
properties he owned with the Kuhns family, and a loan he received from them.9 In 2006, amid

Earmarks Come In, Donations Pour Out of Mollohan Innovation Center, Watchdog.org, December 14, 2009.
http://www.wvhtf.org/about/history.php.
3
Watchdog, Dec. 14, 2009.
4
Id.; http://www.vandalia.org/about.
5
Watchdog, Dec. 14, 2009.
6
Jeffrey H. Birnbaum, Rep. Mollohan Admits Errors in Disclosure, Washington Post, June 14, 2006.
7
http://www.mountainmade.com/about/.
8
Id.
9
Birnbaum, Washington Post, June 14, 2006.
2

news of a federal investigation, Rep. Mollohan voluntarily stepped down from his position on the
House Ethics Committee.10 Rep. Mollohan repeatedly called the investigation a smear by
Republican opponents seeking to unseat him.11 He referred to the allegations as rubbish,
claiming his familys financial success was due to his wifes expertise and experience in real
estate.12 In addition, he claimed his actions to acquire funding for the nonprofit groups were
squeaky clean.13
In January 2010, the Federal Bureau of Investigation (FBI) informed Rep. Mollohans
office it had closed its investigation of the congressman without filing charges.14 Four months
later, in pursuit of a fifteenth term, Rep. Mollohan lost the Democratic primary.15
After DOJ closed its investigation of Rep. Mollohan, CREW filed a FOIA request to
obtain documents relating to the criminal investigation.16 CREW explained the requested
documents would contribute to greater public awareness of possible criminal behavior by Rep.
Mollohan and why, despite this behavior, DOJ had declined to prosecute the congressman. DOJ
refused to release any FBI documents to CREW, claiming Rep. Mollohans privacy interest
trumped public interest in the material and withheld all responsive documents. Given DOJs
recalcitrant and legally untenable position, CREW sued the agency in February 2013. Only then
did DOJ begin releasing documents to CREW, culminating in a final release in July 2014.
The FBI documents released by DOJ are particularly revealing, confirming a thorough
investigation into Rep. Mollohans close involvement with the nonprofits he founded and the
extent to which he used them to enrich himself. They also offer insight into egregious
mismanagement of taxpayer funds: millions of dollars were wasted on graft, cronyism, and
flagrant misconduct.
As with most documents CREW receives through DOJ FOIA requests, hundreds of pages
were heavily redacted under various FOIA exemptions. While many of the redactions make it
difficult to tell who was interviewed or what program they were describing, the un-redacted
portions still provide a number of clues about how DOJ conducted its investigation and what
Rep. Mollohans role was in the scandals.
The released documents include notes from interviews with several former employees of
the nonprofit groups Rep. Mollohan founded and supported through earmarks: the WVHTCF,
the ISR, VHF, the CVI, and MMF. Many of the employees interviewed by the FBI painted a
picture of corruption and mismanagement in which Rep. Mollohan was deeply involved.

10

Jonathan Weisman, Democrat Leaves Ethics Panel, Washington Post, April 22, 2006.
Paul Kane, Justice Dept. ends probe of Rep. Mollohan, Washington Post, January 26, 2010; Beth Gorczyca,
Foundations' Property Dealings Reviewed, The State Journal, May 5, 2006.
12
Andrew Taylor, Congressman under investigation recuses himself from Justice Department budget work,
Associated Press, January 10, 2007.
13
Jeffrey H. Birnbaum, West Virginia Democrat is Scrutinized, Washington Post, May 15, 2006.
14
Kane, Washington Post, Jan. 26, 2010.
15
Chris Cillizza, Rep. Alan Mollohan loses Democratic primary in West Virginia, May 12, 2010.
16
http://www.citizensforethics.org/legal-filings/entry/crew-files-foia-requests-regarding-investigations-of-repmollohan.
11

Rep. Mollohans Involvement

Rep. Mollohan earmarked money to the organizations and closely oversaw how those
funds were used. For example, one witness told the FBI, Mollohan likes [to] manipulate and
control. Mollohan controls every aspect of individuals lives.17 Another witness said,
Mollohan controlled everything, down to the blinds. He had a very controlling hand an
allegation made repeatedly18 An AVHF employee said the congressman attended and controlled
every meeting of the board of directors.19 Illustrating this level of tight control, Rep. Mollohan
reportedly became enraged when an ISR manager obtained grants and funding without the
congressmans help in an attempt to make the organization more self-sustaining.20 Similarly, a
MMF manager was fired along with three other employees, who felt they were targeted for
trying to make the organization more self- sufficient.21
Employees said Rep. Mollohan had considerable influence over who was hired and
fired. The organizations often fired whistleblowers and anyone considered a threat.23 For
example, after one employee of the Canaan Valley Institute complained of harassment, she was
fired days later and asked to sign a letter promising to never speak badly about CVI.24
22

The nonprofits were also a source of do-nothing and no-show jobs for Rep. Mollohans
cronies. Many witnesses said a number of their colleagues typically filled out inaccurate
timesheets and billed for work they never did.25 In one case, an employee at Pro-Logic, a tech
firm located in the Mollohan Innovation Center, billed for hundreds of hours on a U.S. Army
Corps of Engineers project but only attended one 30-minute meeting.26 Another Pro-Logic
employee, told the FBI I never dreamt that Id be paid $45-50 thousand a year to sit in a chair
and do nothing- [I] thought wed be doing real work.27 He also expressed shock that an
individual, whose identity was redacted by the FBI, was on the payroll.28 She did nothing, he
said, I never saw her in the office doing anything and never understood why she is on the
company organizational chart.29 Another witness mentioned a woman who Rep. Mollohan
recommended for a job but was too inexperienced to realize she was making any mistakes.30
Property Deals
According to the interviews, Rep. Mollohan was very skilled at making strategic land
deals from which he stood to benefit personally and at surreptitiously moving money around to

17

Mollohan1129 (references are to the Bates numbers on the documents produced by the FBI).
Mollohan 683; Mollohan 706; Mollohan 1535; Mollohan 1148; Mollohan1519;Mollohan 1637.
19
Mollohan 789; Mollohan 805; Mollohan 1452.
20
Mollohan 1146; Mollohan 1639.
21
Mollohan 842.
22
Mollohan 732; Mollohan 738; Mollohan 1148.
23
Mollohan 1224.
24
Mollohan 725; Mollohan 1223.
25
Mollohan 1705; Mollohan 902; Mollohan 913.
26
Mollohan 901.
27
Mollohan 1784.
28
Id.
29
Id.
30
Mollohan 2839.
18

hide its source. He successfully negotiated with the Department of Commerce to obtain $2
million in Economic Development Administration (EDA) funding for VHF purportedly to
purchase and renovate a historic opera house in Thomas, WV.31 An individual interviewed by
the FBI called it the biggest waste of EDA dollars that hes ever seen.32
The same individual said Rep. Mollohan and an unidentified partner, possibly VHF,
purchased all land adjacent to an industrial park immediately following EDA approval of an
award for the project.33 This likely is referring to the 13 acres of land in Tucker Countys
Canaan Valley that CVI and VHF purchased in anticipation of a new four-lane highway
connecting Interstates 93 and 81.34 According to one interviewee, Rep. Mollohan wanted to
promote Canaan Valley to increase his property value.35 The individual said outright that Rep.
Mollohan was promoting certain areas, to improve the value of his property.36 Another said he
could not understand why VHF bought so much land in the Canaan Valley near CVI, and
guessed it could only have been because Rep. Mollohans house was nearby.37 One witness said
VHF purchased land in the vicinity of Rep. Mollohans property to prevent the development of
strip malls.38
Rep. Mollohan also allegedly prevented a local development authority from purchasing
1,000 acres along Highway 93 to build the Davis Juvenile Center, and instead purchased the land
himself.39
Rep. Mollohan, or an associate affiliated with these nonprofits, also may have brokered
property deals that cost American taxpayers dearly while enriching the congressman and his
cronies. For example, the U.S. government paid WVHTCF $4 million for a property valued at
less than $1 million,40 which one unidentified person labelled money laundering to AM [Alan
Mollohan].41 According to the source, a number of other unidentified individuals knew the
whole process was shady.42 Similarly, a heavily redacted portion of an FBI interview revealed
the government overpaid for another property, paying nearly $1 million -- which the interviewee
described as an astronomical amount of money -- for a parcel of land worth less than
$400,000.43 The heavy redactions make it difficult to determine the specific properties in
question, but the documents describe a pattern of behavior whereby Rep. Mollohan or an entity

31

Mollohan 864; Mollohan 1591;

http://www.usaspending.gov/explore?frompage=assistance&tab=By%20Prime%20Awardee&comingfrom=searchre
sults&federal_award_id=010107451&federal_award_mod=00&fiscal_year=all&typeofview=complete.
32
Mollohan 864; Mollohan 1591.
33
Mollohan 1593.
34
Gary Harki, Land deals by non-profit groups add up to thousands of acres, The Exponent Telegram, April 27,
2012.
35
Mollohan 1223.
36
Mollohan 726; Mollohan 1226.
37
Mollohan 1442.
38
Mollohan 952.
39
Mollohan 827.
40
Mollohan 875; Mollohan 1637.
41
Id.
42
Id.
43
Mollohan 1526; Mollohan 827.

associated with him secured government funding to purchase properties at prices far exceeding
their actual value.
Personal Enrichment
A number of individuals interviewed by the FBI also hinted that Rep. Mollohan may
have received rent for properties managed by VHF.44 For example, several witnesses believed
Rep. Mollohan collected rental fees for an apartment in the Carriage House, a property in
Fairmont, WV that VHF took over and renovated in 2003 using funds from the U.S. Department
of Housing and Urban Development.45 Similarly, MMF paid VHF $4,200 in rent, which the
interviewee characterized as extraordinarily high.46 One interviewee, whose identity was
redacted, said Rep. Mollohan made the individual buy a certain unidentified property, possibly
the Carriage House, and rent it back to VHF.47
Rep. Mollohan knew how to transfer government money from these organizations to his
own pocket or his family foundation. For example, one witness revealed Rep. Mollohan
routinely borrowed money directly from VHF.48 Another stated an unidentified individual
associated with one of the nonprofits gave Rep. Mollohan and his wife one car each per year.49
VHF also may have paid Rep. Mollohan $55 a day in per diem allowances according to the FBI
documents.50 Two people interviewed by the FBI mentioned that VHF tried to funnel money
indirectly to Rep. Mollohan because it would look bad if VHF paid AM [Alan Mollohan]
directly.51 In addition, in July 2001, WVHTCF transferred more than $150,000 in certificates
of deposit to the Robert H. Mollohan Family Charitable Foundation, an organization named in
honor of Rep. Mollohans father and run by Rep. Mollohan that offers scholarships and
community grants to West Virginians.52
Nonprofit Mismanagement
FBI interviews also disclosed how these nonprofit organizations, some of which were
funded entirely by the federal government, were fiscally mismanaged.53 The disclosed
documents contain an audit by the Inspector General of the Department of Commerce, which
reported the WVHTCF had improperly claimed more than $440,000 in award costs from the
National Oceanic and Atmospheric Administration.54 The nonprofits also came under fire for

44

Mollohan 2195; Mollohan 2197.

Mollohan 2195; Mollohan 1374.
46
Mollohan 1713.
47
Mollohan 1442; Mollohan 1776.
48
Mollohan 1719.
49
Mollohan 765; Mollohan 1357.
50
Mollohan 1441.
51
Id.; Mollohan 1446; Mollohan 785.
52
Mollohan 2779; http://mollohanfoundation.org/.
53
Judi Rudoren, F.B.I. Set to Present Subpoenas to Lawmaker's Nonprofits, New York Times, April 28, 2006,
54
U.S. Department of Commerce Office of Inspector General, National Oceanic and Atmospheric Administration,
West Virginia High Technology Consortium Foundation NOAA Award No. NA67ECO135, Audit Report No. ATL10634-9-0001, March 1999 available at http://www.scribd.com/doc/213327046/Responsive-Documents-CREWFBI-Regarding-Investigation-of-Rep-Mollohan-3-14-14#page=1380.
45

improperly using funds, often using company cars and credit cards for personal use.55 One
employee said, everyone had a credit card for travel; employees misused credit cards,
overcharges, alcohol was on the cards.56 Another said employees frequently used company
money to pay for groceries, cigarettes, hotels, personal vacations, clothing, shoes, and even
makeup.57 One interviewee said an unidentified CVI manager mishandled funds by overpaying
his friends.58 A MMF worker recalled certain individuals taking lavish trips abroad, including a
trip to China in which the traveler, whose identity was redacted in the FBI documents, brought
along a friend and charged $9,000 in expenses to the company.59 Another MMF executive took
a trip to Japan on company funds.60 According to the individual, Rep. Mollohan made the
decisions at MMF and must have known about the excessive expenses.61 According to a
WVHTCF worker, an unidentified individual was angry over an expensive trip to Spain, most
likely Rep. Mollohans 2004 trip, because it was a free trip to Spaina waste of funds.62
One Pro-Logic employee described the company as a body shop, meaning a place
created by an earmark or government money for a specific purpose but either no work or other
work not related to the earmark is worked on instead.63 The same employee said Pro-Logic
may have had another body shop in Rep. John Murthas (D-PA) district in Uniontown, PA.64
When the New York Times began looking into the suspicious spending at MMF, an
individual whose identity was redacted by the FBI advised a colleague to lie to the reporter.65
Similarly, other witnesses said their superiors told them not to talk to the media.66 MMF staff
also received a memo from the management instructing them not to talk to the media about the
companys spending and personnel issues because it was an election year.67 An unidentified
individual told employees I will fire your asses if I hear you talked about [Mountain Made]
issues.68
The interviews also reveal that people involved with the nonprofits knew they were
involved with something suspicious and possibly illegal. The interviews contain several cryptic
quotes such as he would like to see you become a millionaire, just after stating [he] didnt
want you to be the target of this [subpoena] six months down the road.69 There is also a
reference to someone making the congressman rich and bragging about it.70

55

Mollohan 725; Mollohan 1224; Mollohan 1533; Mollohan 1530.

Mollohan 1224.
57
Mollohan 1530; Mollohan 830.
58
Mollohan 1228.
59
Mollohan 1532-1533; Mollohan 834.
60
Id.; Mollohan 1532.
61
Id.; Mollohan 834.
62
http://www.rollcall.com/issues/51_118/-13206-1.html; Mollohan 1518; Mollohan 825.
63
Mollohan 955.
64
Mollohan 957.
65
Mollohan 1532; Mollohan 833.
66
Mollohan 1559; Mollohan 842.
67
Mollohan 857; Mollohan 842-3.
68
Id.
69
Mollohan 753; Mollohan 1302.
70
Id.; Mollohan 1447; Mollohan 787.
56

After the media and federal authorities began scrutinizing Rep. Mollohans connection to
the nonprofits, it seems the groups tried to cover their tracks. For example, a Rep. Mollohan
staffer called a MMF employee and said the congressman would not sponsor any earmarks for
the organization ever again, nor would he obtain earmarks for WVHTCF, VHF, CVI or ISR.71
In addition, after the New York Times article, a witness said one of the organizations
reformatted its computers and erased everything from the hard drives.72 Another witness said
someone erased the architectural plans of Rep. Mollohans house from VHFs server.73
After MMFs Board of Directors questioned one employees personal and improper use
of the company debit card, she submitted her resignation acknowledging she had knowingly filed
inaccurate reports to the Small Business Administration.74 Rep. Mollohan refused to accept her
resignation and encouraged her to stay on, telling her if she quit, it would be like an admission
of guilt.75
One of the most revealing quotes, perhaps unintentionally, was attributed to Rep.
Mollohan: If it wasnt for the nonprofits I wouldnt be in politics.76 Indeed, this seems to be
the theme running through the entire collection of documents.
Campaign Contributions
The issue of campaign contributions also arose in the FBI interviews. One interviewee
said an unidentified person, possibly a superior, asked for contributions each election cycle and
Rep. Mollohan would send letters thanking him for his donations.77 The employee said Rep.
Mollohans status as an appropriator was key to the unidentified individuals strategy.78 Rep.
Mollohan also asked his associates to encourage their employees to donate $25,000 to the late
Rep. Murtha, former chairman of the defense appropriations committee who came under
investigation for steering millions of dollars in federal contracts to lobbyists and contractors with
whom he was close.79 In addition, according to another interviewee, work on an unidentified
VHF project was slowed down until the congressman gets a check.80
Some employees said they felt campaign contributions would affect their status in the
organization. For example, a Pro-Logic employee said the companys executive management
sent a letter to all employees encouraging them to donate to the companys PAC.81 He donated

71

Mollohan 950.
Mollohan 909.
73
Mollohan 953.
74
Mollohan 951.
75
Id.
76
Mollohan 792; Mollohan 1455.
77
Mollohan 673.
78
Id.; Mollohan 992.
79
Mollohan 807; Mollohan 1432; Carol D. Leonnig, FBI was investigating Rep. John Murtha for possible
corruption, new records show, Washington Post, October 18, 2011.
80
Mollohan 1446.
81
Mollohan 913.
72

$10 from every paycheck to Pro-Logic PAC because he felt it would affect raises and bonuses,
while another donated $5 per paycheck.82
The documents also contain an interview with a former personal secretary to Rep.
Mollohan who said she not only controlled his personal bank accounts but also his political
action committee, Summit PAC.83 The FBI asked her about six Summit PAC checks totaling
$10,400 she wrote to herself for her salary that she then deposited into Rep. Mollohans
Congressional Federal Credit Union account.84 She claimed she immediately wired the money to
her own personal account, but routed it through Rep. Mollohans account to have enough to
cover the deposits and to get around a five-day waiting period the bank requires for insufficient
funds.85 She said the congressman was unaware of the process.86
Conclusion
The documents include stacks of paperwork pertaining to loans, bank statements, copies
of checks, and property deal records as well as campaign finance data, extensive lists of federal
awards to WVHTCF, CVI, and VHF, and lists of those who benefitted from the earmarks. DOJ
seems to have amassed enough hard evidence to consider bringing criminal charges against Rep.
Mollohan or a close associate. The documents include a 2008 letter from U.S. Attorney Jeffrey
A. Taylor urging the unidentified recipient to contact him as soon as possible as we are at a
critical juncture of our criminal investigation.87 The documents also contain a letter entitled
Re: Request for Grand Jury Investigation, in which a special agent in the FBIs Alexandria,
VA field office wrote to then-U.S. Attorney Kenneth L. Wainstein, I find there is reason to
believe that federal money laundering violations have been committed.88 Due to the redactions
however, it is impossible to tell if Rep. Mollohan was the target of these charges.
The volume of information DOJ eventually disclosed confirms the lack of merit in the
agencys initial response to CREWs FOIA request, specifically that it could not provide CREW
and the public with any documents without violating Rep. Mollohans privacy interests. Even
more significantly, the released documents contain hard evidence, accompanied by incriminating
testimony from former employees, of what appears to be criminal misconduct by Rep. Mollohan.
Given this evidence, it is difficult to understand why DOJ could not connect the dots and bring
charges against him. In this respect, the documents say nearly as much about the agency and its
failure to hold high level officials accountable as they do about the congressman himself. If the
evidence was not sufficient to support criminal charges a difficult conclusion to reach given the

82

Id.; Mollohan 955.

Mollohan 866.
84
Mollohan 867-68.
85
Id.
86
Id.
87
Letter from Jeffrey A. Taylor, United States Attorney, April 24, 2008 available at
http://www.scribd.com/doc/232485264/Responsive-Documents-CREW-DOJ-Regarding-Investigation-of-AlanMollohan-7-3-14#page=7.
88
Letter from Special Agent in Charge, Department of Treasury, Alexandria Field Office to the Honorable Kenneth
L. Wainstein, United States Attorney, Re: Request for Grand Jury Investigation, May 17, 2006 available at
http://www.scribd.com/doc/235085436/Responsive-documents-CREW-DOJ-Regarding-Investigation-of-Alan-BMollohan-7-23-14#page=195.
83

information contained in just a small portion of the investigatory records DOJ disclosed at the
very least they offer an inside look into how Rep. Mollohan presided over a web of federallyfunded programs, staffed by his close business associates and personal friends, seemingly
managed to use this network for his personal financial benefit, got away clean.