Fox News host who said Trump’s fixer ‘knows real estate’ has a portfolio that includes support from Department of Housing and Urban Development, a fact he did not mention when interviewing secretary Ben Carson last year
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| © Photo by Evan Agostini/Invision/AP, File FILE - In this April 12, 2018 file photo, Fox News personality Sean Hannity attends The Hollywood Reporter's annual 35 Most Powerful People in Media event in New York. Hannity is President Donald Trump's… |
By Jon Swaine in New York, The Guardian
When Sean Hannity was named in court this week as a client of Donald Trump’s embattled legal fixer Michael Cohen, the Fox News host insisted their discussions had been limited to the subject of buying property.
“I’ve said many times on my radio show: I hate the stock market, I prefer real estate. Michael knows real estate,” Hannity said on television, a few hours after the dramatic hearing in Manhattan, where Cohen is under criminal investigation.
Related: Will Sean Hannity's ties to Michael Cohen be his undoing?
Hannity’s chosen investment strategy is confirmed by thousands of pages of public records reviewed by the Guardian, which detail a real estate portfolio of remarkable scale that has not previously been reported.
The records link Hannity to a group of shell companies that spent at least $90m on more than 870 homes in seven states over the past decade. The properties range from luxurious mansions to rentals for low-income families. Hannity is the hidden owner behind some of the shell companies and his attorney did not dispute that he owns all of them.
Dozens of the properties were bought at a discount in 2013, after banks foreclosed on their previous owners for defaulting on mortgages. Before and after then, Hannity sharply criticised Barack Obama for the US foreclosure rate. In January 2016, Hannity said there were “millions more Americans suffering under this president” partly because of foreclosures.
Hannity, 56, also amassed part of his property collection with support from the US Department for Housing and Urban Development (Hud), a fact he did not disclose when praising Ben Carson, the Hud secretary, on his television show last year.
Christopher Reeve, Hannity’s real estate attorney, said in an email he would “struggle to find any relevance” in Hannity’s property holdings, which he said were highly confidential.
“I doubt you would find it very surprising that most people prefer to keep their legal and personal financial issues private,” said Reeve. “Mr Hannity is no different.”
Spokespeople for Hud and Fox News declined to comment on the record.
The real estate holdings linked to Hannity are spread across more than 20 shell companies formed in Georgia. Each of the companies uses a variant of the same name, which combines the initials of Hannity’s children. Public records show the companies have bought up dozens of properties in Alabama, Florida, Georgia, New York, North Carolina, Texas and Vermont.
Among the most valuable are two large apartment complexes in Georgia that Hannity bought in 2014 for $22.7m. The developments are in the cities of Perry and Brunswick, which have higher poverty rates and lower median incomes than the US averages. One- and two-bedroom units in Hannity’s apartment complexes are available to rent for $735 to $1,065 per month, according to brochures.
The Georgia purchases were funded with mortgages for $17.9m that Hannity obtained with help from Hud, which insured the loans under a program created as part of the National Housing Act. The loans, first guaranteed under the Obama administration, were recently increased by $5m with renewed support from Carson’s department.
Hannity, who is reportedly paid $36m per year for his television and radio shows, was criticised this week following Cohen’s court hearing, after it became clear he had defended Cohen and Trump on the air without disclosing that he also consulted Cohen for legal services.
He also declined to note his financial interest when he hosted Carson on Fox News last June for a discussion about Hud and housing. Hannity praised privatisation plans pushed by Trump and Carson.
Michael Cohen, second left, leaves court in New York.Photograph: Pacific Press/Barcroft Images
“I know you’ve done a good job,” Hannity told Carson.
Hannity complained during the discussion that home ownership in the US was at a 51-year low – a false claim he has made several times on air – and criticised the state of public housing.
“I like the idea of them owning the place,” Hannity said of people who receive housing assistance. “Well, that’s the real ideal,” said Carson.
Related: Fox News gives Sean Hannity 'full support' over Michael Cohen revelation
The shell companies used to buy the properties are registered to the offices of Henssler Financial, a wealth management firm outside Atlanta. Bill Lako, a principal at the firm, has appeared on Hannity’s radio show as an expert on money issues.
Lako recently wrote an article for the show’s website berating Robert Mueller, the special counsel investigating ties between Trump’s 2016 election campaign and Russia, without noting his ties to Hannity. He did not respond to an email.
When Lako appeared on Hannity’s radio show last month, Hannity disclosed that he was a Henssler client. He joked to Lako that the company took him on as a “charity case” when he worked in Georgia, but “now I’m the best client you have”.
The Georgia mortgages supported by Hud were guaranteed as part of a program aimed at protecting investors such as Hannity who buy rental apartment buildings. The government promises to cover losses if borrowers default on their mortgages. Borrowers pay an insurance premium to Hud in return. Bigger loan guarantees are available if the building houses low-income families.
Paperwork relating to the agreements with Hud, which was filed to county authorities, named Hannity as the principal of the shell companies used to buy the apartment complexes and to borrow the funds. Hannity personally signed several of the documents. A Hud source said Hannity was identified in non-public filings as the 100% owner of the apartment complexes.
Late last month, Hannity’s mortgages were replaced with loans for $22.9m that were rewritten with Carson’s Hud and a new bank. There was no indication that Carson was personally involved in the process. Carson does, however, have the authority to allow Hannity from 2019 to convert the rental complexes into condominiums for sale, which could be lucrative for the television host.
The shell companies used to buy the properties are limited liability companies (LLCs). Like in most states, they are not required to disclose their owners to Georgia regulators. LLCs are popular among well-known figures such as Hannity who wish to keep their business arrangements private.
But the Guardian obtained records in which Hannity signed deeds and other documents on behalf of four of the LLCs, sometimes being named as principal or manager. Four more of the shell companies have owned properties in which public records say Hannity or members of his family have lived.
Hannity also uses a separate company with a similar name to handle contracts relating to his syndicated radio show, according to records filed in two federal court cases. Georgia records say Hannity was chief executive, chief financial officer and secretary of this company before Lako took over the titles during 2016.
In other cases, only the relevant LLC’s name and a contact at Henssler Financial were identified in the real estate paperwork, meaning that it could not be confirmed whether Hannity was the hidden owner.
The list of properties bought by the Hannity-linked companies includes multimillion-dollar homes used by Hannity. It also features single-family units priced as low as $50,000 in relatively poor suburbs. In at least two cases, batches of homes were bought simultaneously at a discount, after they were repossessed by banks from their previous owners in foreclosure proceedings.
The entire portfolio connected to Hannity comprises at least 877 residential units, which were bought for a total of just under $89m. Another seven properties bought by the companies over recent years have subsequently been sold on for more than $4m, according to public records.
When Hannity this week stressed that his business relationship with Cohen related to real estate, he pointedly denied that it involved any financial settlements with other people.
Cohen previously arranged for a $130,000 payment to Stephanie Clifford, the pornographic actor known as Stormy Daniels, who alleged she had sex with Trump. Cohen also helped Elliott Broidy, a prominent Republican fundraiser, pay $1.6m to a woman who said she had become pregnant during an affair.
Hannity said he had only “occasional brief conversations” with Cohen. He made varying statements about whether Cohen was compensated, initially stating that he had not been billed but later saying: “I might have handed him 10 bucks.”
In footage unearthed this week that was broadcast on Fox News in January last year, Hannity mentioned having discussed an unidentified $2bn property venture in Dubai with Cohen.
“I said, ‘I’m interested in that deal myself,’” said Hannity.
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