Rep. Laura Richardson (D-CA)

Representative Laura Richardson (D-CA) is a two-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. Rep. Richardson was included in CREW’s 2008 report on congressional corruption.

Falling into Foreclosure

In May 2008, Rep. Richardson’s Sacramento home was sold in 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, Mr. York dropped his suit, allowing Rep. Richardson to reclaim the home.

In October 2008, Rep. Richardson shared her personal financial records with her hometown paper in order to show she was up-to-date on previously defaulted home loans. She claimed the loans for her Long Beach, Sacramento, and San Pedro homes had been modified and that her finances were in order. Rep. Richardson’s amended 2007 and 2008 personal financial disclosures failed, however, to include the mortgage loans for her properties in Long Beach, Sacramento, and San Pedro.

Rep. Richardson’s housing issues have continued to plague the Sacramento neighborhood where one of her homes is located. In 2008, the Sacramento Code Enforcement Department declared her home a “public nuisance.” After visits to the home, city inspectors reported they found junk and debris in the driveway and rotting fruit in the backyard, attracting rodents. In May 2009, after neighbors complained about the home’s overgrown yard, the city posted another violation requiring that the lawn be mowed. The lawn was mowed but issues with the upkeep of the house did not end. Neighbors e-mailed and wrote letters complaining about the state of the home to Rep. Richardson and to House Speaker Nancy Pelosi, to no avail. Eventually, neighbors began taking care of the house themselves: paying gardeners to mow the lawn, water plants, and rake leaves.

Office of Congressional Ethics Investigation

In July 2009, it was reported that the Office of Congressional Ethics (OCE) had launched an investigation into the circumstances around the temporary foreclosure of Rep. Richardson’s Sacramento home and whether House gift rules were violated when neighbors spent money to clean up her property. The OCE contacted Mr. York and interviewed neighbors about the expenses they incurred cleaning up Rep. Richardson’s yard.

Legal Fees

Rep. Richardson’s campaign committee’s amended July 2009 quarterly report indicated the committee paid $6,000, and owed $36,474.43 in legal fees. In the campaign committee’s original July 2009 quarterly report, there was an additional $10,000 reported for legal services, but that was removed in the amended July quarterly report.

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