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A Times Editorial

Jeff Greene's real estate dealings need explaining

Jeff Greene, the Democratic candidate for U.S. Senate, says he made hundreds of millions by betting the housing market would decline and denies he helped create the economic implosion. The facts paint a different picture. The billionaire participated in a California real estate deal featuring the conversion of old apartments to condos, inflated sales prices to straw buyers and defaults that cost banks and taxpayers millions. The FBI is investigating, and it should talk to Greene.

The Times' Kris Hundley and Caryn Baird reported Sunday that Greene's company sold 1950s-era military housing aptly named La Mirage for up to $165,000 a unit in 2006. All of the buyers defaulted, every condo went into foreclosure and lenders later recouped about $25,000 per unit at auction. Documents show Greene's company sold about one-third of the units to a company owned by James Delbert McConville, who is now in jail facing criminal charges of conspiracy and money laundering in part because of this deal. The public records are a case study of the worst excesses that helped trigger the collapse of the housing market — and of the greed that fueled it.

Predictably, Greene says he did nothing wrong. He paints a different version of the deal than public documents reflect. He blames everyone but himself for what went sour, from McConville to the mortgage lenders. His real estate broker vouches for him and calls him "very ethical.'' But federal investigators should be asking the Democratic U.S. Senate candidate some hard questions:

• Why did Greene sign blank deeds, a practice described by one longtime appraiser as effectively enabling the fraud? Greene said he routinely signs blank deeds and that if McConville "put the deeds in other people's names, that's his business. All I care about is that I get my money.''

• Why is Greene's version of the sale at odds with public documents? He said he sold all 300 units at La Mirage to McConville. Loan documents show Greene's corporation first sold about two-thirds of the units to individuals and then the rest to McConville's corporation.

• Why are half of McConville's buyers the same people who bought from Greene and who defaulted on all of the loans?

This is not the first time that Greene spins one story while the facts indicate something else. His yacht seriously damaged a coral reef five years ago, according to eyewitness reports, scientific evidence and the Belize government's potential $1.87 million fine. His campaign says it never happened. Questioned why his yacht was docked at a Havana marina in 2007, Greene first said he wasn't there. Then he said he was in Cuba on a humanitarian trip to visit Jewish synagogues. Then, amid reports of partying on the yacht, his campaign said the stop was for boat repairs.

Federal investigators should keep digging around Greene's involvement in the failed development in the California desert. And Florida voters should not send to the U.S. Senate someone whose first line of defense is too often at odds with the facts.

Jeff Greene's real estate dealings need explaining 08/09/10 [Last modified: Tuesday, August 10, 2010 9:00am]
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