Sen. Lisa Murkowski (R-AK) has taken a lot of heat from buying a plot of land far below market value from Alaskan businessman Bob Penney. But she's standing by her decision, saying that she relied on a local assessment to set the low sale price.
Murkowski, who has remained silent since the story broke, finally commented
"By law in the state of Alaska, the municipalities are required to base their assessment on the fair market price," Murkowski said. "That's what our statute says. What we went off of, what we utilized as our transaction price, was the price that had been set by the municipality."
Despite what the law says, local real estate agents in the area disagree that assessed values do a good job representing market value. In the area where Murkowski purchased her property, value of land is "escalating rapidly" and the assessed value is not keeping up. There is also a limited amount of property along the renowned fishing river.
For Murkowski and Penney, the deal was clearly not based on competitive pricing, but on an agreement between old friends. Penney's family has also been a big financial backer for Murkowski, having donated $10,500 to her campaign fund since 2003.
"I bought the property from a friend that I think I have known since I was probably 5," she said. "It was before elementary school, let's put it that way. My husband knew him before he knew me. So we go back a long way."
"And I remember saying, 'Oh yeah, but I can't buy a lot from you. I know you,'" she said. "And he said, 'Lisa, you know everybody in the state."
Nonetheless, if she paid less than what the land is worth, she ought to disclose the difference as a gift. Murkowski's office has filed an amendment with the Senate Ethics Committee, but it'll require a trip up to the public records office to take a look at what she changed. (The office of public records will not give out information over the phone or via fax and the pdf's are not online) We'll have an update for you this afternoon.