EPA chief Scott Pruitt purchased a house in 2003 from a retiring lobbyist through a shell company registered to a business partner who now holds top political job at the agency The New York Times reported Saturday.
As a state senator in 2003, Pruitt became an owner of an Oklahoma City house held by a shell company registered under the name of a business partner and law school friend, Kenneth Wagner, the Times reported, citing a review of real estate and other public records. Wagner is now a senior adviser for regional and state affairs at the EPA.
The mortgage on the house was issued by a local bank led by another business associate, Albert Kelly, the Times said, citing the records. Kelly is now also one of Pruitt's top aides at the EPA, in charge of its Superfund program.
The purchase price of $375,000 was $100,000 less than what the lobbyist, Marsha Lindsey, had paid just a year earlier -- a difference picked up by her employer, telecom company SBC Oklahoma, the Times reported.
Lindsey turned over the deed to a relocation company SBC hired to handle her move and severance for about what she had paid for the house, which in turn signed the property over to health care executive Jon Jiles, a donor to Pruitt's campaigns, at the discounted price, according to records the Times reviewed. The next month, Jiles transferred the deed to the shell company, Capitol House LLC, for which he was listed as the manager and Wagner the registered agent. A month later, Kelly's bank approved a mortgage in the amount of $420,000 in the name of the shell company.
Real estate records did not show Pruitt's involvement, the Times reported. But an EPA spokeswoman confirmed to the newspaper that Pruitt was one of the five investors in the shell company.
The shell company sold the property a couple of years later for $95,000 more than it paid, the Times reported. Pruitt's financial disclosures in Oklahoma, however, did not mention the shell company or the proceeds, potentially violating the state's ethics rules, the newspaper said. Oklahoma ethics rules require that officials disclose their businesses or entities in which they hold securities valued at $5,000 or more, the Times reported.
The report comes as Pruitt faces scrutiny for a string of ethically questionable arrangements or actions on his part that have surfaced over the past year, including questions about the size and cost of his 24-hour security detail; a $50-a-night room rental agreement he held with a lobbyist whose husband's firm lobbies the EPA.
An EPA spokeswoman told the Times that Pruitt's business arrangements with Kelly and Wagner "were ethical" and his stake in the shell company "a simple real estate investment."
"Mr. Wagner and Mr. Kelly left high-profile positions in law and banking in Oklahoma, to serve in the administration," the spokeswoman said in an email to the Times. "They are dedicated E.P.A. employees who have earned the respect and admiration of E.P.A. career employees across the country."