WASHINGTON — As he was seeking political favors, a friend of Sen. Orrin Hatch bought a whopping 1,200 copies of Hatch's largely self-produced music CDs, for which Hatch receives $3 to $7 each.
Hatch, R-Utah, and his friend, Monzer Hourani, a Houston developer who twice before has landed Hatch into major ethics controversies, say he wasn't trying to buy political help with those CDs and they merely share a love of his music.
But the story, first reported by the Wall Street Journal, is attracting national attention because, of course, ethics rules ban lobbyists from paying money directly to senators.
Also, the situation is reminiscent of a scandal that forced former House Speaker Jim Wright, D-Texas, to resign. In it, labor unions and other interest groups bought in bulk copies of a book that Wright wrote — giving him extra royalties. The House Ethics Committee accused him of using that purchase to evade outside earnings limits.
It isn't the first time that Hourani has caused ethics headaches for Hatch. Hourani was fined $10,000 in 1995 by the Federal Election Commission for illegally trying to evade donation limits. After he gave Hatch the maximum allowed, Hourani gave money to employees to donate in their names to him. Hatch said he didn't know about it, and he was not forced to return the illegal donations.
A more serious episode deepened Hatch's involvement in the Bank of Credit and Commerce International (BCCI) scandal, a bank closed for money laundering. After Hatch gave a Senate speech defending that bank, he asked its president to consider giving Hourani a loan. It helped deepen an ethics probe into whether Hatch unethically helped BCCI for favors, but he was cleared of any misdeeds.
This time, the Wall Street Journal reported that about when Hourani sought a favor from Hatch, he bought 1,200 copies of religious and patriotic music that Hatch recorded largely with his own financing through Prime Recordings. Hourani gave away the albums.
Hourani did not return phone calls to the Deseret Morning News seeking comment. Adam Elggren, Hatch's spokesman, said Hatch has "never really made any money" on those particular recordings and has broken about even after costs.
Meanwhile, Hatch's financial disclosure statement shows he also has an agreement with Medistar — a "medical real estate company" led by Hourani — to distribute Hatch CDs, an unusual arrangement for any company not in the music business.
Elggren said the senator had earned little or no money through that distribution arrangement with Medistar. Hatch's office declined to provide a copy of the contract with Medistar.
While Hourani bought Hatch's CDs, the Wall Street Journal reported that he also volunteered to seek help from the senator for HealthSouth, a health-care provider that is a major client of Hourani.
HealthSouth worried that a change in Medicare's policy for reimbursing physical-therapy costs would cut its annual profit by $175 million. Hourani told the Journal that he told a HealthSouth lobbyist that he would see what he could do to help, and that he "mentioned" the matter to Hatch "but did not tell Hatch to call anybody."
Hatch did call the administrator of Medicare asking him to look into the matter, the Journal reported. But Hatch told the paper he did so at the request of the man who was then HealthSouth's CEO, not at the request of Hourani. But Hatch said he was aware that HealthSouth was a major client of Hourani's Medistar.
Medicare did not give HealthSouth the relief it sought. HealthSouth also is currently embroiled in an accounting scandal, and 14 of its executives have been charged with fraud.
Hourani is a native of Lebanon who converted to The Church of Jesus Christ of Latter-day Saints 20 years ago. Hatch said he was first introduced to him by friends who asked him to help the Arab adapt to the LDS faith.
"Monzer Hourani and I have been very close friends since I first began to counsel him as a member of the LDS Church almost 20 years ago. I love Monzer like a brother. He is a warm, decent, high-quality individual and a brilliant engineer, and he shares my love of classical and inspirational music — that's why we have worked together to produce some CDs. Finally, I cannot stress enough that I have always disclosed all of my royalties," Hatch said.
Hatch and Hourani have had some other business arrangements as well. Hourani once managed for Hatch a small blind trust, in which Hatch originally invested $10,000. Hourani bought a rental townhome in Houston for Hatch with that money and managed it.
Hatch and his office denounced any suggestion that political favors were, or could, be bought from him.
"People often try to smear Sen. Hatch because he's an effective, influential, conservative lawmaker — he's a high-profile target. But the insinuations made in this story are without merit," Elggren said.
"As best as we can determine, no lobbyist has ever bought Sen. Hatch's CDs in any significant quantity — certainly nothing resembling a bulk purchase. The point is, everything he has done has been completely above-board, he's recognized as a successful songwriter, and all his royalties have been disclosed as required," Elggren added.
Hatch also issued a statement saying, "Everybody who knows me knows I make music as a labor of love. . . . I'm grateful I've had some success as a songwriter, but the important thing is, I'm able to share my thoughts and feelings with others through music. I'm going to keep doing that."
E-mail: lee@desnews.com