Akin Chides Gov't Money Tied to McCaskill's Spouse

Missouri Sen. Claire McCaskill
Associated Press + More

By DAVID A. LIEB, Associated Press

JEFFERSON CITY, Mo. (AP) — Businesses affiliated with the husband of Missouri Sen. Claire McCaskill received almost $40 million in federal subsidies for low-income housing developments during her first five years in office, though it appears only a fraction of that has made it to the family's bank accounts, according to an Associated Press analysis.

McCaskill's Republican challenger, Rep. Todd Akin, says the federal payments should be a cause for concern among voters. He's attempting to portray the Democratic senator's family as a prime beneficiary of government largesse.

"There is a conflict of interest and a breach of trust with the citizens of our state," Akin said in an interview with the AP.

McCaskill denied that.

"The accusation is terribly unfair and distorted," she told the AP on Tuesday. "They are trying to make it appear that somehow my votes enabled my husband to make money — and that's just not true."

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There is no evidence that McCaskill personally routed federal money to her husband's businesses. She voted for some — and against other — bills that funded the federal housing and agriculture departments, which in turn provide subsidies to businesses with federal contracts to provide low-income housing.

The AP reviewed five years' worth of federal personal financial disclosure statements filed by McCaskill, which list more than 300 "affordable housing" businesses in which her husband, Joseph Shepard, had at least a partial ownership during the time she has been in office. At least one-third of those businesses also appear to be listed as recipients of federal payments in an online government database that tracks spending.

The firms affiliated with Shepard appear to have received about $39 million from the U.S. Department of Agriculture's Rural Housing Service or the Department of Housing and Urban Development between 2007 — when McCaskill took office — and the end of 2011. According to McCaskill's financial reports, Shepard earned an income of between about $400,000 and $2.6 million from those businesses in the years in which they received government payments. Some of those businesses also rent non-subsidized housing units, so it's hard to know how much of that income came from private verses government sources.

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McCaskill said "just a fraction of that income dealt with subsidized housing" and that her husband had only "a passive, minor investment role in" in many of the projects. Her campaign offered a variety of reasons why the payments pose no conflict of interest, including the fact that McCaskill opposed some of the funding bills and that those she supported also included appropriations for a wide variety of government programs.

McCaskill said the vast majority of the housing subsidy contracts were initiated long before she became a senator, although Shepard invested in some of them after she was elected and others were renewed during her term in office. The subsidies cover the gap between the rent paid by the tenant and the value of the housing unit as determined by the federal government. Consequently, much of the subsidy goes to the owners' operating costs, such as mortgage payments or facility maintenance, the campaign said. Were Congress to not fund the subsidies, the federal government would be defaulting on its obligations, McCaskill said.

"If you really boil this down, it is a small fractional interest in a number of housing projects that had ongoing contracts with the federal government that appropriations bills funded," McCaskill said. "This isn't like I had some role in some discretionary decision."

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Akin said McCaskill could have abstained from voting on bills that funded agencies involved in low-income housing developments.

But McCaskill then could have been open to accusations that she shunned her congressional duties — an assertion she has made against Akin for missing numerous House votes during his Senate campaign.