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Tri-State's DC delegation: From millionaires to mortgage holders

Disclosure forms confirm most in Congress well off
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Posted at 6:01 AM, Sep 21, 2016
and last updated 2016-09-22 10:46:34-04

CINCINNATI -- When it comes to money, some local members of Congress are just like us, balancing mortgages and retirement funds. Others are straight-up rich.

According to official financial-disclosure statements, the median net worth of the Tri-State’s members of the U.S. Senate and House is about $800,000. The wealthiest, Kentucky Sen. Mitch McConnell, is worth a cool $10.6 million.

Every spring, members of both houses of Congress are required by law to file personal financial-disclosure reports. The reports detail members’ assets, debts, positions, transactions and outside income. An analysis of the 13 local Congress members’ disclosures showed who is richest and whose personal finances look more like an average American’s. First, a few details about the method:

The main point of making these finances open is to deter underhanded financial dealings or improprieties. The federal law requiring the statements, put in place in 1978, was a result of the Watergate scandal; it also mandates financial disclosures for members of the executive branch, including the president and vice president.

In these financial-disclosure forms, the value of every asset or debt is listed in ranges:

  • $1 to $1,000
  • $1,001 to $15,000
  • $15,001 to $50,000
  • $50,001 to $100,000
  • $100,001 to $250,000
  • $250,001 to $500,000
  • $500,001 to $1 million
  • $1,000,001 to $5 million
  • $5,000,001 to $25 million
  • $25,000,001 to $50 million
  • More than $50 million

There’s a lot of wiggle room in those ranges, especially in the bigger numbers. In calculating who’s richest, I tallied the assets based on their minimum value. (The holdings of any spouses and dependent children are also included.) That means the net worths listed here are minimums. The members could be worth much more.

Rep. Luke Messer's mortgage likely gives him a technical negative net worth.

Members also are required to list debts of more than $10,000, again in the ranges above. I’ve given these congressmen the benefit of the doubt and gone with the lowest number in the range to calculate their total debt. One thing to note is that, while members are required to claim mortgages for personal residences under their liabilities, they aren’t required to claim their primary residences as assets. That’s likely the reason why Luke Messer has a negative net worth.

Equity in a home is often the largest asset a person has. Statistics from the U.S. Census Bureau on wealth show that in 2011 the average American household had a net worth of $68,828, but that falls to $16,942 if the value of the home is excluded.

These net-worth calculations don’t include the annual salary these members of Congress make: a cool $174,000. As majority leader of the Senate, Mitch McConnell makes $193,400 per year. For comparison’s sake, the median household income in the city of Cincinnati is $34,002; nationwide it’s $53,482, according to the U.S. Census’s 2014 American Community Survey.

Tri-State Congress members ranked by net worth

How do these members of Congress rank among their colleagues? Sens. Mitch McConnell and Rob Portman ranked among the top 50 richest members of Congress in Roll Call’s list last year. No one from here, though, comes close to the No. 1 seed, Republican Rep. Darrell Issa of California, who was worth about $255 million.

Tri-State Congress members’ assets in detail

The “Other” category includes life-insurance policies, among other holdings. Dan Coats and his wife are particularly well-insured.

Tri-State Congress members’ debt in detail

Sen. Mitch McConnell is the richest of the Tri-State's delegation to Congress.

Mitch McConnell, Rob Portman and Dan Coats are multimillionaires, so it’s no surprise they have no outstanding debts to report, but the much more modestly heeled Steve Chabot is also a member of the no-debt club. Most of the local members’ debts are home mortgages. Warren Davidson has a loan of at least $15,000 out on a Honda minivan, and Michael R. Turner and Luke Messer each have at least $15,000 in student loans they’re still paying back.

Here, in descending order, is a rundown of the Tri-State’s 13 senators and representatives.

Sen. Mitch McConnell

  • Republican, Kentucky
  • First elected: 1984
  • Up for re-election this year? No
  • Before Congress: Jefferson County judge-executive,  deputy assistant U.S. attorney general
  • Net worth: $10.56 million
  • Total assets: $10.56 million
  • Total debts: $0

Sen. Rob Portman

  • Republican, Ohio
  • First elected: 2010
  • Up for re-election? Yes
  • Before Congress: Lawyer, member of U.S. House, United States trade representative
  • Net worth: $8.04 million
  • Total assets: $8.04 million
  • Total debts: $0

Sen. Dan Coats

  • Republican, Indiana
  • First in Senate: 1988 (appointed), 1990 (elected); elected in 2010 after 10-year hiatus
  • Up for re-election? Yes
  • Before Congress: U.S. Army, lawyer, ambassador to Germany
  • Net worth: $7.45 million
  • Total assets: $7.45 million
  • Total debts: $0

Rep. Brad Wenstrup

  • Republican, 2nd District, Ohio
  • First elected: 2012
  • Up for re-election? Yes
  • Before Congress: Podiatric surgeon, U.S. Army Reserve
  • Net worth: $2.74 million
  • Total assets: $3.24 million
  • Total debts: $500,001

Rep. Michael R. Turner

  • Republican, 10th District, Ohio
  • First elected: 2002
  • Up for re-election? Yes
  • Before Congress: Lawyer, mayor of Dayton
  • Net worth: $1.79 million
  • Total assets: $2.4 million
  • Total debts: $615,003

Rep. Warren Davidson

  • Republican, 8th District, Ohio
  • First elected: 2016
  • Up for re-election? Yes
  • Before Congress: U.S. Army, manufacturing
  • Net worth: $1.58 million
  • Total assets: $1.65 million
  • Total debts: $65,002

Rep. Thomas Massie

  • Republican, 4th District, Kentucky
  • First elected: 2012
  • Up for re-election? Yes
  • Before Congress: Founder of SensAble Technologies Inc.
  • Net worth: $802,001
  • Total assets: $1 million
  • Total debts: $200,002

Sen. Rand Paul

  • Republican, Kentucky
  • First elected: 2010
  • Up for re-election? Yes
  • Before Congress: Ophthalmologist
  • Net worth: $570,035
  • Total assets: $670,036
  • Total debts: $100,001

Rep. Steve Chabot

  • Republican, 1st District, Ohio
  • First elected: 1994
  • Up for re-election? Yes
  • Before Congress: Cincinnati city councilman, Hamilton County commissioner
  • Net worth: $505,035
  • Total assets: $505,035
  • Total debts: $0

Sen. Joe Donnelly

  • Democrat, Indiana
  • First elected: 2012
  • Up for re-election? No
  • Before Congress: Lawyer, U.S. House member
  • Net worth: $472,010
  • Total assets: $737,012
  • Total debts: $265,002

Rep. Steve Stivers

  • Republican, 15th District, Ohio
  • First elected: 2010
  • Up for re-election? Yes
  • Before Congress: Ohio Army National Guard, private business
  • Net worth: $278,047
  • Total assets: $579,049
  • Total debts: $300,002

Sen. Sherrod Brown

  • Democrat, Ohio
  • First elected: 2006
  • Up for re-election? No
  • Before Congress: Teacher, Ohio Secretary of State, U.S. House member
  • Net worth: $167,003
  • Total assets: $367,005
  • Total debts: $200,002

Rep. Luke Messer

  • Republican, 6th District, Indiana
  • First elected: 2012
  • Up for re-election? Yes
  • Before Congress: Lawyer, Indiana House member
  • Net worth: –$197,966
  • Total assets: $382,038
  • Total debts: $580,004

Congressional investment strategies

“My position has always been you should have a diversified portfolio in stocks and bonds,” says Steve Slezak, an associate professor of finance at the University of Cincinnati’s Carl H. Lindner College of Business. “I think most people trade way too much, and they’re way too undiversified.”

Rep. Steve Chabot is unusual for holding several individual companies' stocks directly.

Members of Congress probably aren’t “most people,” but it is interesting to see how their strategies vary. Steve Chabot holds stock in many companies directly – including Cintas, Facebook, the Finish Line and TripAdvisor. “Anyone that holds a relatively small set of individual securities, that would be only justified if they had very specialized information in those securities and knew they would outperform the market,” Slezak says. “You have to be pretty confident that you picked the right ones.”

Rob Portman is heavily invested in mutual funds but also owns many government bonds directly. The advantage to holding municipal bonds directly, Slezak says, is that you avoid paying a fee to a fund manager.

Most interesting investments

In addition to a number of rental properties, Rand Paul has $15,001 to $50,000 in silver coins. The cache first appears on his 2013 financial disclosure report. One can deduce that Paul isn’t entirely confident in the Federal Reserve and is hedging his bets against inflation, Slezak says.

Rep. Warren Davidson has invested in URLs -- website addresses.

The new kid in town, Warren Davidson, holds $15,001 to $50,000 worth of domain names. Saving URLs for a rainy day is an unusual investment strategy.

Most of Thomas Massie’s wealth comes from his million-dollar family farm, but he also holds a number of haptic technology patents from his time at the Massachusetts Institute of Technology.

Dan Coats holds a $1,001 to $15,000 stake in Radio Paradiso, a Christian radio station in Berlin, Germany.

Rob Portman holds mineral rights for 5 acres in Gaines County, Texas -- that’s oil producing country.

Book deals

Sen. Rand Paul earned $200,000 from book royalties.

Rand Paul reported receiving $209,502 in book royalties from Center Street, a nonfiction division of major publishing house Hachette. His fourth book, “Taking a Stand,” was released in 2015. His wife, Kelley Paul, also earned less than $1,000 in royalties from Center Street for her book, “True and Constant Friends.”

Mitch McConnell’s memoir, “The Long Game,” came out this May. He reported receiving $45,000 from Penguin in 2015, part of a $325,000 book deal.

Sherrod Brown didn’t report any earned income from book royalties in 2015, but that’s not surprising considering that his books, “Congress From the Inside” and “Myths of Free Trade,” were first published in 1999 and 2004, respectively.

Power spouses

Mitch McConnell’s wife, Elaine Chao, holds more than half of the assets in his financial report: about $5.79 million in bank accounts, stocks and mutual funds. Chao was a finance executive before becoming President George W. Bush’s secretary of labor from 2001 to 2009, after which she was president and chief executive of United Way of America.

About a third of Sen. Dan Coats’ worth is held by his wife.

Dan Coats’ wife, Marsha Coats, accounts for $2.32 million, about a third of the assets in his financial report, most of it in a family trust. Marsha Coats is a family counselor and Indiana's Republican National Committeewoman.

Michael R. Turner’s wife, Majida Turner, accounts for $2.26 million of the representative’s listed assets -- almost all of them. The couple married in 2015. Turner's wife is vice president for governmental affairs (read: lobbyist) at Cheniere Energy, a company that hopes to export liquid natural gas to Asia. 

‘Just invest in everything’

Sen. Rob Portman holds lots of government bonds.

Some members of Congress, including Mitch McConnell, hold large amounts of their wealth in trusts. One potential reason for that is that trusts are generally managed by other people, so a member of Congress who wanted to avoid any appearance of using knowledge of future legislation for personal gain could designate a trustee to make those financial decisions, Slezak says.

When it comes down to it, any investment is a good idea if it’s cheap enough. “People should probably hold a little bit of everything in the world,” Slezak says. “All the risks of the world will pay you a little bit for bearing them. You shouldn’t get too fancy in timing the market or being picky. Just invest in everything.”

One needn’t be so rich as a Congressman to get started. “Invest $100 every week in a mutual fund, and they’ll invest it in everything for you,” he says. “Some people aren’t in a position where they can save that much, but most people could save a little more, and that’s the best way to ensure your future. You can’t make a lot of money fast, so just save it all along.”

Grace Dobush is a freelance journalist specializing in technology, culture and politics, contributing to publications including Wired, Quartz and the Washington Post. Follow her on Twitter at @GraceDobushToGo.