Pharmacy makes Mike Ross rich UPDATE | Arkansas Blog

Tuesday, September 22, 2009

Pharmacy makes Mike Ross rich UPDATE

Posted By on Tue, Sep 22, 2009 at 9:00 AM

And this on U.S. Rep. Mike Ross deserves its own item:

Ross whined yesterday that his health industrial complex funding has not included campaign contributions from the pharmaceutical industry (by which he apparently means drug makers, not drug sellers, as we shall see). No, he's gotten better than campaign contributions from the pharmaceutical industry. He was made a rich man by a chain pharmacy. An independent, non-profit journalism organization, Pro Publica, is raising questions about the deal.

Arkansas Rep. Mike Ross -- a Blue Dog Democrat playing a key role in the health care debate -- sold a piece of commercial property in 2007 for substantially more than a county assessment [2] (PDF) and an independent appraisal [3] (PDF) say it was worth.

The buyer: an Arkansas-based pharmacy chain with a keen interest in how the debate plays out.

Ross sold the real estate in Prescott, Ark., to USA Drug for $420,000 -- an eye-popping number for real estate in the tiny train and lumber town about 100 miles southwest of Little Rock.

"You can buy half the town for $420,000," said Adam Guthrie, chairman of the county Board of Equalization and the only licensed real estate appraiser in Prescott.

But the $420,000 was just the beginning of what Ross and his pharmacist wife, Holly, made from the sale of Holly's Health Mart. The owner of USA Drug, Stephen L. LaFrance Sr., also paid the Rosses $500,000 to $1 million for the pharmacy's assets and paid Holly Ross another $100,0001 to $250,000 for signing a non-compete agreement. Those numbers, which Ross listed on the financial disclosure reports he files as a member of Congress, bring the total value of the transaction to between $1 million and $1.67 million.

And that's not counting the $2,300 campaign contribution Ross received from LaFrance two weeks after the sale closed.

Coincidence that Ross has been carrying the mail for drug stores in the health care debate?

UPDATE: Shocker, we actually got an e-mail from Ross' staff. Late this afternoon, he responds to Pro Publica story. "Gotcha" journalism, he says. Needless to say he provides no fuller accounting of how he jackpotted on sale of his drug store to a major drug chain, except to say the real estate sale price was justified. The $500,000 in assets; the non-compete; further employment arrangements? No detailed discussion of those, such as comparable drug store sales. He also says he welcomes debate. Perhaps he could start by taking phone calls from reporters. Full text on jump.

MIKE ROSS STATEMENT

WASHINGTON – U.S. Representative Mike Ross, D-Ark., today responded to the allegations made in a September 22, 2009, ProPublica story printed in Politico.
 
“This style of gotcha politics is why many folks are fed up with Washington and it is a shame serious debate on reform has, once again, fallen off course.  Instead of having civil dialogue over true and substantive disagreements about reforming our broken health care system, outside groups are trying to taint a completely legal and respected small business that my wife and I worked hard for 14 years to establish.
 
When we sold our family business, Holly's Health Mart, over two years ago, we reported and disclosed all the transactions required by the House Ethics reporting requirements. I also accurately reported the property on my personal financial statement in 2007, when I sold the business.  I sold it for the amount that I have indicated it was worth on every personal financial statement since 1999.  I spent $316,000 in 1998 constructing the building that houses the pharmacy and sold it for $420,000 in 2007 – the annual return on investment is less than four percent.  I would have made more during that time period if I had invested in a certificate of deposit (CD).
 
I have never done a favor for the buyer, who I have only met a few times in my life.  The buyer did not just buy brick and mortar; he bought a successful, trusted, centrally-located and profitable pharmacy in my hometown.  In two of my closest races, the buyer supported my Republican opponent in both of them.  He has since supported my campaign. 
 
I welcome any debate and review on my voting record and my positions on the issue.  I have said all along that we need health care reform in this country; in fact, I ran for Congress to address our broken system.  It is for these reasons why I supported health care reform legislation in the Energy & Commerce Committee in order to ensure that we could move forward with the legislative process and give Members of Congress time to read the bill and talk it over with their constituents.  We need common sense health care reform that reduces costs, increases access, forces insurance companies to cover pre-existing conditions and protects patient choice.  My ultimate goal has always been to pass a health care reform bill that will offer the kind of reforms I can support – a common sense plan that reflects Arkansas values.”

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