Yet Another Undisclosed Bob McEwen Business Connection

I’ve gotta say, those Google News Alerts are something else.

One came in yesterday about a current business involvement of former Second District congressional candidate Bob McEwen that was not disclosed during his 2005 or his 2006 campaign. McEwen’s name is mentioned in passing in an announcement about another person:

Nationwide Exchange Services Names Former CIO of US Dept. of Homeland Security, Steven I. Cooper, to Board of Advisors

Nationwide Exchange Services (NES), a leading Qualified Intermediary for 1031 tax-deferred exchanges, today has announced the appointment of Steven Cooper to the Board of Advisors. Mr. Cooper presently is the Senior Vice President for Information Technology and Chief Information Officer (CIO) for the American Red Cross. Cooper joins former Ohio Congressman Bob McEwen and former CEO of BankAmerica Worldwide Trust Operations, Dick Griffith, to further round out NES’ industry leading Board of Advisors.

McEwen is at NES’s web site on the Management Team page in the Advisory Board section. Thank goodness for small favors: He’s identified as a former congressman, something he didn’t call himself during the 2005 campaign, in violation of Ohio election law.

So what does NES do? This is from their overview page:

Nationwide Exchange Services (NES) is a leading provider of 1031 tax deferred property exchange products and services.

For over a decade, NES has successfully conducted tens of thousands of 1031 exchange transactions from the West Coast to the East Coast, in categories that range from corporate jets to beachfront properties.

The idea behind a 1031 exchange (named for the IRS code section involved; also known as a “like-kind exchange”) is to defer the taxation that would take place if an asset were sold for cash by finding someone else with a similar asset who might want what you’re trying to sell. Put most simply, two people who currently own investment properties worth $200,000 that each purchased for less than that amount can avoid paying tax on their gains by swapping properties. Obviously, it can get a lot more complicated than that. NES apparently facilitates these deals in various ways with standardized paperwork and other value-added services.

There appears to be nothing wrong with any of this. 1031 exchanges are perfectly legal, but it’s easy to mess them up if you don’t have good help. 1031 appears to be a growing business, based on this link about the activities of a competitor. Critics consider them a tax loophole, and they have a point, but as long as the so-called loophole exists, those who exploit it can’t or at least shouldn’t be faulted.

As with any professional services, there are fraudsters on the loose in the 1031 exchange consulting business. This item about the consultants running off with invested funds, and this one about consultants losing funds day-trading in the stock market, serve to illustrate that it is more than a minor problem. But NES would appear not to be one of the industry’s problem children; in fact, this post at another blog would seem to indicate that the company is considered one of the major and more reputable players.

Based on a Google search only, the company’s founder, Tom Bottenberg, doesn’t appear to have any blemishes on his record. The most “controversial” thing I could find is that he registered the domain name Hillary2000.com and made about $6,000 when he sold it to Mrs. Clinton. I would call that a shrewd move.

So why didn’t voters of The Second District know about McEwen’s involvement with NES? With all the interest that was shown in Jean Schmidt’s resume, why wasn’t McEwen’s position on NES’s Advisory Board on his? And, of course, what else don’t we know about? Once again, we’re back to the same old question that bothered many of who opposed him in both of his congressional campaigns — Why was it so important (and it obviously was) that voters know as little as possible about Bob McEwen’s business involvements?

Because of his defeat, deserved for six big reasons (never mind relatively less-big reasons like the one discussed here), the preceding questions are, for now, academic. If Second District voters are fortunate, they’ll stay that way.
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UPDATE: I thought I heard echoes of the objections raised during McEwen’s 2005 and 2006 Second District Primary runs coming from a race on the West Coast. Indeed I did. There must be a language deficiency you acquire (call it “lobbyaria”) when you spend too much time as a lobbyist. Based on the article’s content, far-leftist and former McEwen Advantage Associate Ron Dellums would appear to have as a bad a case of lobbyaria as putative conservative Bob McEwen does.
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Second District 2006 Primary Collection