The Herald, Sharon, Pa.

October 10, 2012

Report: Official action, personal benefits

Kelly denies conflict of interest

By Nick HIldebrand
Herald News Editor/Weekends

WESTERN PA — U.S. Rep. Mike Kelly is one of 73 federal lawmakers who have sponsored or co-sponsored legislation that could directly financially benefit themselves or their families, according to a report by the Washington Post.

In a story Sunday, the newspaper detailed Kelly’s support of legislation favorable to the natural gas industry and his advocacy of Marcellus Shale drilling, while he has personal investments in companies involved in its development.

Kelly, Butler, R-3rd District, and his wife Victoria, made between $10 million and $50 million from the sale of stock in two natural gas companies in 2011. They continue to own stock in others working on the Marcellus Shale.

Contacted by The Herald Tuesday for comment, the congressman’s office denied any conflict of interest and rejected “any insinuation that his motives are anything other than to get Americans back to work and pursue policies that will strengthen our economy and create energy independence.”

Kelly’s actions are legal under the House’s ethics rules, which only bar lawmakers from advancing legislation “when they are the lone beneficiaries,” the Post reported.

The Post story identified specific instances in which they said Kelly voted for or promoted legislation that would help the natural gas industry:

ä In early 2011, Kelly voted for a bill to prohibit the Environmental Protection Agency from regulating greenhouse gases, large quantities of which some scientists say can be released during fracking. The bill passed the House and died in the Senate.

ä He co-sponsored a bill that called for between $5 billion and $9 billion in federal tax credits for initiatives to convert vehicles to run on natural gas. Kelly withdrew his support for the bill after conservative groups attacked it as a costly “boondoggle” and the proposal died in the House.

ä The paper also highlighted an op-ed piece Kelly wrote that was published in some district newspapers promoting Marcellus drilling and his participation in hearings where he “railed against the EPA for efforts to regulate the industry and for investigating concerns about water contamination in relation to fracking.”

Kelly’s support for Marcellus Shale development is in line with his energy policy, which supports fossil fuel development in the U.S., and the interests of many in his district.

The natural gas industry is both a large employer in western Pennsylvania and many residents of the 3rd District have gas and oil leases on their properties.

The expansion of the industry is seen as a key to reviving the moribund region.

“Rep. Kelly will continue to be an advocate, just like many Republicans and Democrats, for an aggressive domestic energy policy that will help turn around our nation’s economy,” his office said.

Kelly has also been a vocal critic of the government’s support of so-called green energy, including tax credits to those who buy electric or hybrid vehicles like the Chevy Volt, a car that he said he couldn’t sell at the car dealership he owns in Butler County.

Kelly is considered among the richest members of Congress, with a net worth of at least $14.9 million.

In a companion story Sunday, the Post tagged his and his wife’s fortune at more than $30 million, based on financial disclosure documents.

While Kelly earned between $100,000 and $1 million from his GM, Hyundai and Kia dealership, the bulk of his income in 2011 came from investments in the oil and gas industry, chiefly capital gains from the sale of two gas companies that were founded by his wife’s family nearly a century ago, according to the disclosure form.

The statement issued Tuesday by his office referred to those forms, saying Kelly “has been open, transparent, and has complied with all disclosures requirements” for lawmakers.