Brown failed to disclose troubled Landover holding

April 09, 1995|By Los Angeles Times

WASHINGTON -- For more than two years in office, Commerce Secretary Ronald H. Brown has effectively concealed his personal investment in a trouble-plagued, low-income apartment complex that is part of the rental empire of a Los Angeles businessman whom federal officials consider a notorious slumlord.

The two financial disclosure reports that Mr. Brown has filed since he was nominated by President Clinton in January 1993 list an interest in a residential rental property located in the upscale Washington suburb of Potomac, Md.

But a Los Angeles Times investigation has found that the apartment complex is actually located on the opposite side of town in one of the area's poorer communities: Landover, Md.

Known as Belle Haven Apartments, it is a dismal, drug-infested complex where some units periodically are declared "unfit for human habitation."

Belle Haven Apartments investors are part of a partnership with ties to A. Bruce Rozet, a Los Angeles millionaire who officials say has cost the government millions of dollars by abusing a federal program that helped him and his partners acquire low-income housing. They collect subsidized rents and get tax breaks, yet avoid maintaining the property, officials say.

Last October, Housing and Urban Development Secretary Henry Cisneros charged that Mr. Rozet "got filthy rich off this program, and he left filthy places behind him for people to live in." Mr. Rozet denies the charge.

Like many of Mr. Brown's other business associates, Mr. Rozet is a generous contributor to the Democratic Party, which Mr. Brown headed before becoming commerce secretary. Mr. Rozet helped fund the 1988 presidential campaign of the Rev. Jesse L. Jackson, which Mr. Brown managed at the end.

Asked about the discrepancy on Mr. Brown's reports, his press secretary, Carol Hamilton, said that Mr. Brown is a passive investor in Belle Haven Apartments and has no knowledge of its whereabouts. She offered no explanation of why he inaccurately described it as property in Potomac. "As a limited partner," Ms. Hamilton noted, "Secretary Brown does not now nor has he ever had any management or operating responsibilities."

Whether inadvertent or not, the erroneous report no doubt spared Mr. Brown embarrassing questions during his confirmation hearings. The required disclosure statements are intended to bring to light any possible conflicts of interest for top government officials or any private holdings or associations that might be considered inappropriate.

If Mr. Brown had declared an ownership interest in a troubled property on his report, it likely would have attracted attention in Congress.

Others involved in Belle Haven question how Mr. Brown could not have been well informed about the property and its location -- after he bought into the partnership in 1983.

All investors were required to receive a prospectus describing the property before they invested and periodic reports afterward. Other investors said they are familiar with the location of Belle Haven.

"There would be no reason for him not to know the property he invested in," Mr. Rozet said. "He would know what the investment was. He would not know day-to-day details. He certainly would know he was invested in the property."

Belle Haven is not the only part of Mr. Brown's financial affairs that is in question.

At present, a committee in Congress and the Justice Department are looking into several of his business relationships, including income he received from a company that defaulted on a $24 million federally guaranteed loan. Public integrity advocates have complained about the vagueness and lack of detail he has furnished about his holdings.

Attorney General Janet Reno is considering whether to call for an independent counsel's investigation of Mr. Brown's finances.

Mr. Brown's disclosure documents, said Gregory S. Walden, a Washington attorney and ethics law specialist who has examined them, are "one of the sloppiest reports I've ever seen."

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