Dole’s Now Wealthy--After Modest Start : Assets of Wife in Blind Trust Nearly Doubled in Last Three Years
Over the last two decades, Sen. Bob Dole (R-Kan.) has been transformed from a man of modest means living in a $13,000 frame house in Kansas to a multimillionaire with a home in Washington’s exclusive Watergate apartments and an annual income of more than a quarter of a million dollars, according to financial information released Saturday by his presidential campaign.
Much of Dole’s wealth comes from investments held by his wife of 13 years, Elizabeth Hanford Dole, who served as transportation secretary from 1983 until last fall. Her assets, held in a blind trust until Friday, nearly doubled over the past three years, in large part through real estate transactions that recently have become controversial.
Finance Chairman Departs
On Thursday, that controversy forced the departure of Dole’s campaign finance chairman, David C. Owen, who had been an investment adviser to the trust. Much of the gain in the Elizabeth Dole trust appears to be from transactions in which Owen and his associates were involved.
Owen, a former lieutenant governor of Kansas and a longtime Dole political associate, “suspended” his association with the Dole campaign. In a statement he issued Thursday, he said that “at no time, under any circumstances, did I discuss the transactions of that trust with either the senator or Mrs. Dole.”
Dole and Vice President George Bush have been sparring over their relative wealth for several weeks. Dole, in his speeches and advertisements in Iowa, which holds the campaign’s first major contest on Feb. 8, has made a major attempt to portray himself as “one of us,” a hard-toiling son of the soil who has worked his way up. The goal has been to contrast himself with Bush, the son of wealthy parents and the product of elite East Coast schools.
Bush Seeks Dole Returns
Bush, seeking to deflect that attack, called 10 days ago for Dole to release his tax returns. His campaign circulated copies of newspaper stories that began the controversy over Elizabeth Dole’s transactions. Bush already had made public his tax returns for the past 14 years.
After releasing the financial information--21 years of tax returns and details on the trust--Dole promptly escalated the battle over wealth, challenging Bush, his main rival for the Republican nomination, to match his disclosure efforts.
“We’ve got to set an example,” he said at a campaign debate in New Hampshire. “George asked me to disclose my tax returns. Well, I’ve done that today, George, not just for 10 years, but for 21, so I called you and raised you.”
Comparison of the returns lends some support to each camp’s claims. Dole indisputably began in more modest circumstances than Bush. But in recent years Dole has been notably richer.
In 1984, for example, Bush and his wife, Barbara, had an adjusted gross income of $89,489 and paid $11,735 in taxes. Dole and his wife reported income of $316,383 and taxes of $23,722. In 1985, the Bushes reported income of $168,071 and taxes of $31,039. The Doles reported income of $364,209 and taxes of $45,949.
Dole’s Sale of Assets
In 1986, Bush paid $115,486 in taxes on income of $348,594. Dole’s income was substantially higher, $508,078, in part because of a one-time sale of assets. That year, he paid $133,856 in taxes. The released information does not contain the page from the Doles’ tax return that would show what property the couple sold. Dole spokesman Tim Archie said the page was missing as a result of a photocopying error and would be made available Monday.
The information Dole released, although copious, leaves unanswered several questions. The documents show, for example, the assets put into Elizabeth Dole’s trust when it was set set up on Jan. 1, 1985--close to $1.4 million--and the assets when the trust was opened Friday to allow public scrutiny--slightly more than $2.3 million. But the documents do not show the transactions over the intervening three years.
Much of the nearly $1-million increase in total assets, however, appears to be attributable to real estate transactions involving third parties connected to Owen.
Purchase of Townhouse
In 1985, for example, the trust paid $137,000 for a townhouse on Capitol Hill, which is rented out. To pay for the building, the trust obtained a $110,000, 12.5% mortgage from American Investors Life Insurance Co. of Topeka, Kan. Owen is listed as a director of the company. The company’s president, T. M. Murrell, is another longtime political ally of Dole’s and serves as the national co-chairman of his campaign.
American Investors also supplied the mortgage for the transaction that sparked Owen’s separation from Dole’s campaign--the January, 1986, purchase of an office building in Overland Park, Kan., a suburb of Kansas City. The building houses Dole’s Kansas City campaign headquarters as well as companies controlled by Owen.
Through a series of transactions, the trust was able to earn $63,182 in one year while risking comparatively little of its own money, the documents released Saturday show.
The Dole trust bought the building for $1.35 million, taking out a $1-million mortgage with an initial interest rate of 10% from American Investors. At the end of the year, the trust sold half of its interest in the building for $804,000 to a company called EDP Enterprises, which is tied to Owen and another former Dole aide, a black businessman named John Palmer.
Got Government Contract
Dole has said he helped Palmer and EDP obtain a $26-million government contract to supply food to an Army base in Missouri under a program that sets aside some contracts for minority-owned businesses. The federal Small Business Administration reported Tuesday that it had found no evidence that Dole exercised any “undue influence.”
The relationship between Owen and Palmer, however, remains under SBA investigation, said Art Seibert, an administrator in the SBA’s Kansas City office. The SBA is trying to find out whether EDP is truly a minority business or whether it is a front for businesses owned by whites.
The Kansas City Times reported Friday that, after EDP got its contract, Owen set up a business that sold $160,000 in food and goods to EDP and that Owens’ company, Eagle Distributors Inc., shares offices, directors and officers with EDP.