July 30, 2007
Monday

ANCHORAGE, Alaska -- U.S. Sen. Lisa Murkowski said that she and her husband have decided to sell back their Kenai riverfront property to Anchorage real estate developer Bob Penney.

The Alaska Republican announced the sell-back a day after a Washington watchdog group filed an ethics complaint against her, alleging that Penney sold the property at well below market value. The transaction amounted to an illegal gift worth between $70,000 and $170,000, depending on how the property was valued, according to the complaint by the National Legal and Policy Center.

Murkowski, who has said repeatedly that the deal was aboveboard, told reporters in her Washington office on Thursday that Penney agreed to buy back the property for the $179,400 purchase price she and husband, Verne Martell, paid last December.

"While Verne and I intended to make this our family home and we paid a fair price for this land, no property is worth compromising the trust of the Alaska people," Murkowski said in a written statement. "I cannot allow this to become a distraction from the major challenges faced in representing Alaska."

Murkowski said it was a heart-wrenching decision because she, her husband and their two sons -- all avid fishermen -- have long sought a place on the Kenai River.

"My family is amazing, and they make incredible sacrifices for me," Murkowski said. "For them to be living in Washington, D.C., for nine months out of the year, working here, going to school here and giving up Alaska, is a huge sacrifice. We want to be able to have our place back home, in Alaska. And that's what this was all about -- it was nothing nefarious or underhanded or improper."

Ken Boehm, chairman of the National Legal and Policy Center, said Thursday that Murkowski did the right thing by announcing she would return the property. But, he added, his ethics complaint should still be heard because Murkowski's 2006 disclosure remains inaccurate. Among his charges was that she failed to disclose the transaction as required by Senate rules.

Penney said in a telephone interview from his riverside home outside Soldotna that Murkowski did nothing wrong.

"It was totally unfair to the Martells that they end up not being able to build where they wanted to, on their new home site they were so excited about," Penney said. "They got pushed away."

Penney said he sold them the land because they were among a select group of people he would like for next-door neighbors.

The issue erupted in the blogosphere July 16 when the Web site TPMMuckraker.com reported the land deal. At first Murkowski and Penney refused to disclose the purchase price or other details.

What with increasing media attention on the Alaska political corruption scandal and links of U.S. Sen. Ted Stevens and U.S. Rep. Don Young, both Republicans, to ongoing federal investigations, reports of a possible sweetheart deal between Penney and Murkowski quickly caught fire. Penney has already testified before a federal grand jury looking into Stevens' activities.

The deal became the talk of talk radio in Anchorage, with hosts and callers lining up both with Murkowski and against her, and details emerged in a string of newspaper and television news stories, followed by Boehm's ethics complaint this week.

"It's just absolutely media madness," Penney said.

Murkowski said she has always known that her actions draw more scrutiny because of her position, but said she was not quite prepared for the ferocity of the backlash on talk radio and political Web sites. For now, though, she and her family will be looking for another home with access to good salmon fishing.

"I guess I've always known that I live in a glass house as a public figure, but I guess I'm not going to be living in a glass house on the Kenai River," Murkowski said.

Murkowski has always maintained that although there were errors in her ethics report, she never violated Senate disclosure rules.

"Senate ethics says that if the properties are used for personal use, you don't disclose it," she said. She said she disclosed the mortgage for the property but not the transfer, based on advice from ethics committee staff.

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