Schuette spurns Calley's claim of land sale hypocrisy

Jonathan Oosting | Detroit News Lansing Bureau | 6:34 pm EDT May 10, 2018

East Lansing — Michigan Attorney General Bill Schuette on Thursday denied knowledge of expensive real estate transfers in the U.S. Virgin Islands after Lt. Gov. Brian Calley released documents that appear to show Schuette’s signature on paperwork authorizing the deals.

But Schuette’s campaign later disclosed he and his sisters inherited the property after the death of their mother and step-father, former Dow Chemical Chairman Carl Gerstacker, and have sold or are attempting to sell some parcels.

The Republican gubernatorial rivals clashed during a Michigan Press Association forum. Calley accused Schuette of violating his pledge to place his assets into a blind trust while serving as attorney general and of “hypocrisy” in calling for new disclosure laws for public officials.

“It appears as though he’s been directing the purchase and transfer of millions of dollars in offshore assets while attorney general,” Calley said.

Schuette fired back, calling the accusations “pathetic” and maintained that all his assets are in a blind trust designed to mitigate conflicts of interest that could arise during legal cases involving the state. “I comply with that fully and completely,” the Midland Republican said.

“You’re so desperate, you’re so behind, there’s nothing you won’t do to try to make false accusations and attacks,” Schuette told his Portland rival.

His campaign later disputed Calley’s characterization that Schuette “purchased” the property, calling it an inheritance, and said describing the U.S. Virgin Islands property as “offshore” falsely implies something “sinister.”

Calley’s campaign released documents during the forum that detailed the real estate transactions in question, including state filings that list Schuette as the registered agent for two Midland companies, Vircom LLC and Ditleff Point Lots — Group B LLC.

A 2014 warranty deed and affidavit signed by a William D. Schuette shows Vircom transferred roughly one acre of property on St. John island to Ditleff Group S, a separate Delaware company with a Midland mailing address, at an assessed value of $140,800. Other signed documents from 2012 and 2013 show Vircom transferred 1.27 acres in St. Johns for $1.1 million and 13.44 acres for $2.5 million.

Asked about the documents after the forum, Schuette told a Detroit News reporter he had “no idea” what Calley was talking about. He offered similar denials when asked if he sold property in the Virgin Islands or is the registered agent of a corporation that did so.

“Listen, he’s going negative,” Schuette said. “We’re going positive. I don’t even know what he’s talking about.”

Jordan Gehrke, a spokesman for a pro-Calley super political action committee, accused Schuette of lying to The News, saying “the state’s top law enforcement officer needs to come clean.” Stu Sandler, a spokesman for a pro-Schuette super PAC, accused “Lyin’ Brian Calley” of “making up lies because he is so far down in the polls.”

Calley did not accuse Schuette of any illegal activity.

“What I’m pointing out here is the hypocrisy of saying we should require financial disclosure,” Calley told reporters after the forum. “His excuse for not following his own recommendation is that he put all the assets in a blind trust, does not know anything about them so cannot disclose them, when clearly that’s not true.”

The Ditleff firms in the Vircom transactions appear to be part of a larger Ditleff Point development on St. John in the U.S. Virgin Islands. A company website describes it as an “exceptional gated community” on a 47-acre peninsula that is “the ultimate in Caribbean living.”

Ditleff Group B and Group S are currently trying to sell multiple undeveloped properties on St. John island, according to online real estate listings.

One of the properties, described as a “crème de la crème” 0.94-acre beachfront parcel, is listed at $2.5 million. Online records from the U.S. Virgin Islands Recorder of Deeds list both Vircom and Ditleff Point Lots — Group S as parties to the property.

The Calley and Schuette feud boiled over in the midst of a bipartisan forum that featured all seven major party candidates running for governor. The exchange was prompted by a question over federal disclosure rules for political candidates, which Michigan lacks but several candidates have proposed creating.

Democrat Abdul El-Sayed of Shelby Township briefly joined the fray, calling it “hypocrisy” for either Republican to propose new financial disclosure rules while supporting President Donald Trump, who broke tradition when he refused to release personal income tax returns.

Schuette has vowed to actively push financial disclosure laws for elected officials if elected governor, but Calley questioned why he hasn’t done so himself.

Bridge Magazine this year asked all major party gubernatorial candidates to voluntarily fill out a federal asset disclosure form. Only three candidates did so — Calley, El-Sayed and Republican Jim Hines of Saginaw.

Schuette announced in 2011 that he had put his assets into a blind trust to avoid “the potential for conflicts of interest” as attorney general.

“If you’re not hiding anything, fill out the form you’re proposing,” Calley told Schuette.

The attorney general noted he has voluntarily released his tax returns each year since taking office in 2011. When “we pass” an asset disclosure law, “I’ll do that,” he said.

Calley told reporters Schuette has used his blind trust claim as “an excuse” for declining voluntary asset disclosure.

“I don’t see how that could possibly be true if he himself is still signing documents — and he’s signed many since he’s been attorney general.”

The Schuette campaign said Thursday evening that owning property is not a conflict of interest. Schuette and his sisters have sold some of their Virgin Islands parcels, and the proceeds are shared among the siblings.

“By continuing to make negative and false attacks, Brian Calley is diminishing the office he holds and more importantly, the one he seeks to occupy,” said Schuette strategist John Sellek. “Michigan voters deserve better.”

But Schuette “lied multiple times about his financial holdings,” said Calley campaign spokesman Mike Schrimpf. “Now he wants voters to believe that selling millions of dollars in real estate for his own benefit poses no potential for conflicts of interest.”

Democrat Gretchen Whitmer, the former Senate minority leader from East Lansing who has not voluntarily disclosed her assets, said she supports mirroring federal rules at the state level.

“We have a right to know who our public servants, who the candidates, are working for,” she said. “We have a right to ask those questions.”

Shri Thanedar, a Democrat and Ann Arbor businessman, said he “absolutely” supports financial disclosure requirements. Hines and Republican state Sen. Pat Colbeck of Canton Township also expressed support.

“But anybody who thinks I got into this for money is sadly mistaken,” said Colbeck, who has not voluntarily released financial records.

joosting@detroitnews.com

Originally Published 1:06 pm EDT May 10, 2018
Updated 6:34 pm EDT May 10, 2018
Subscribe Now – Get Your Offer
Newsletter