Thursday, October 26, 2006

Northup attacks Yarmuth's Wealth -- Hypocrisy?

Below is an article about the wealth of both candidates running for the 3rd district. As Anne attacks Yarmuth's making big bucks on his restaurants, maybe we should consider the fact that Anne and her husband are worth even MORE money than John. And I'm guessing that some of those investments she has are in companies that pay at least a few employees $5.15 an hour.

Northup's, Yarmuth's wealth reflects trend
Candidates outline financial assets
By Kay Stewart
The Courier-Journal

By Kay Stewart
The Courier-Journal

Third District congressional candidates Anne Northup and John Yarmuth disagree on most issues, but they have at least one thing in common: They are among the richest 1 percent of Americans.

They also are apparently the two wealthiest candidates for a U.S. House seat in Kentucky.

The five-term Republican congresswoman and her Democratic challenger each had more than $1 million in family income last year, according to their personal financial-disclosure reports.

Their wealth reflects a growing trend of millionaire House members and candidates, said Larry Sabato, director of the Center for Politics at the University of Virginia.

Millionaires in Congress are "not unusual at all," he said, adding, "People don't care." He said voters focus instead on issues important to them, such as the Iraq war and the economy.

Northup, 58, listed assets of at least $4.4 million, including her husband's radio supply business, by far the biggest source of the family's income.

Yarmuth, 58, who sold his 40 percent ownership in the weekly newspaper LEO in 2003, reported at least $2.68 million in assets, primarily in two businesses operated by his brothers, including a chain of barbecue restaurants that provided him with nearly all of his income.

Northup and Yarmuth will face each other in the Nov. 7 election to represent nearly all of Jefferson County, where median household income is $46,755.

Mary Gant, a retired teacher and board member of the Kentucky and Louisville chapters of the League of Women Voters, said it's unfortunate if a lack of money keeps talented people from office, but she added that candidates shouldn't be judged on their financial status.

"Integrity is more important," she said.

But Alex Knott, a political editor at the Center for Public Integrity, a Washington-based watchdog organization, argues that the trend is troubling because as the number of millionaires in Congress increases, "what you get at the end of the day is a lot of rich people who are out of touch with the financial needs of most Americans."

Yarmuth acknowledges that he would have a tougher time launching a campaign if he did not have personal wealth. He said he will lend up to $350,000 of his own money to his campaign. Campaign laws stipulate that if he exceeds that amount, Northup could accept individual contributions of $4,200, double the federal limit of $2,100.

Northup, who raised $3.3 million two years ago, and her husband, Robert "Woody" Northup, each will donate the individual limit of $2,100 to her campaign, said Terry Carmack, her chief of staff.

Different views on money
While the two candidates have similar financial standing, Yarmuth said they are far apart on issues related to wealth, from personal investment ethics to tax cuts.

Northup supports making tax cuts permanent, Yarmuth said, while he opposes tax cuts for the richest Americans. She opposes raising the $5.15-an-hour minimum wage; he favors an increase. And while she favors eliminating estate taxes, he says estates valued from $3 million to $5 million and up should be taxed because of the record national debt.

"She votes for every tax policy that favors herself, and I vote for ones that don't favor me," said Yarmuth, who spent $40,000 in tax cut benefits he received on his sale of LEO three years ago running television ads denouncing the tax cuts.

If he wins the election, Yarmuth has pledged to donate his congressional salary -- which would be $168,500 next year -- to local charity.

Northup declined to be interviewed about her personal financial statement, but Carmack said the candidates' disagreement over taxes and other economic issues reflects their backgrounds.

"What the Northups have is the result of years and years of hard work, and what John Yarmuth has appears to be the result of a multimillion-dollar inheritance. That's a big difference," Carmack said.

Northup believes the way to cut the national debt and to grow the economy is through lower taxes, Carmack said, adding that "voters will have a clear choice."

Yarmuth declined to say how much money he inherited after the 1975 death of his father, Stanley Yarmuth, a founder of the conglomerate National Industries, which was later sold.

He said his grandfather, Samuel Klein, a civic leader and wealthy banker, and his mother bequeathed bank stock to him over the years -- it's now BB&T stock valued from $500,000 up to $1 million on his report.

Yarmuth said the vast majority of his wealth comes from three businesses -- LEO, and the two others operated by his brothers. "My two brothers and I worked very hard to build successful companies that had nothing to do with inheritance," he said.

His two largest assets, listed in the financial report as being valued from $1 million to $5 million each, are a 150-restaurant chain, Sonny's, based in Orlando, Fla., and operated by Robert Yarmuth, and Almost Family, a home-health-care company based in Louisville and headed by William Yarmuth.

John Yarmuth reported income of at least $1 million from the restaurant chain and a total of $6,600 in earned income from television commentary.

Northup's earned income last year was $155,709, her congressional salary, while dividends from her husband's company, Radio Sound Inc., which supplies radios to Harley-Davidson Motorcycles, brought in at least $1 million. His salary was not required or listed in the report.

She listed stocks in some 70 diverse companies, including oil companies Exxon Mobil and Chevron Texaco, pharmaceutical giants Merck, GlaxoSmithKline, and Pfizer; and communications corporations Time Warner and Viacom.

Yarmuth said he believes her holdings present conflicts "when she is casting votes that directly affect companies she has substantial interests in." Citing her listing of Exxon Mobil stock valued at a minimum of $50,000, he said that she voted for an energy bill that provided subsidies and tax breaks for oil companies.

Yarmuth said if he's elected he would divest himself of holdings that could mean a personal gain for him if he voted on an issue, including his 70,000 shares of Almost Family stock. The restaurant chain is privately owned, but he said he would consider ways to avoid conflicts, including a blind trust.

Carmack said stocks listed on Northup's report, the vast majority of which are owned by her husband or by the couple jointly, have not influenced her votes or violated ethics rules. He said that she has opposed legislation favored by banking and pharmaceutical interests, among holdings on her report.

And he said Yarmuth can't completely distance himself from his family's home-health-care business, which is affected by federal legislation. "That's impossible," Carmack said.

A 'unique' benefit
Under House ethics rules, members of Congress are to recuse themselves from voting on legislation if it provides them with a "unique" benefit, said Jan Witold Baron, a Washington, D.C., election law and ethics lawyer.

But he said that since legislation that affects companies typically affects all shareholders, members of Congress aren't required to recuse themselves when their votes could affect their own stock values -- and rarely do.

The recently filed reports do not list residential real estate holdings or mortgages, but Northup's home on Lexington Road is assessed for tax purposes at $302,260, and Yarmuth's home on Nitta Yuma Drive is assessed at $666,230, according to county property tax records.

Northup's husband also owns a home on a golf course near Naples, Fla., that he purchased four years ago for $2.35 million, according to Collier County, Fla., property tax records.

And Yarmuth said he has deposited $300,000 on residential investment property on a golf course in Ireland. He declined to give the purchase price but said he will have a mortgage after the sale is completed.

Reporter Kay Stewart can be reached at (502) 582-4114.

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