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Drug Store Chain Releases Some Details About Its Transaction With Rep. Mike Ross

Rep. Mike Ross, left, talks to Rep. Baron Hill, D-Ind., right, during a mark up hearing on the health care bill before the House Energy and Commerce Committee on July 30, 2009  (Alex Wong/Getty Images)The drug chain that bought a pharmacy from Rep. Mike Ross, D-Ark., in 2007 has released a two-page summary (PDF) of the transaction, revealing for the first time the exact amount that Ross and his wife, Holly, received -- $1,254,420.10.

Previously, public documents had only provided a range: $1 million to $1.67 million.

Ross asked USA Drug to release the information in response to a story published Tuesday by ProPublica and Politico that raised questions about the real estate portion of the sale. Ross declined to be interviewed for that story.

"This should certainly clear up any misunderstanding the press may have about our transaction," Joe Courtright, president and CEO of USA Drug, wrote in the two-page summary of the business arrangement, which was published on a business Web site.

However, the summary offered no new information about the central question raised by the ProPublica story: How did USA Drug and Ross arrive at the $420,000 price for the building and lot that house the pharmacy at a time when the county estimated the value of both at a combined $263,700?

Ross paid $10,000 for the lot in 1997, and on Tuesday he said in a news release that he had spent $316,000 in 1998 to construct the building. But the county, taking stock of the building materials and the size of the building, valued it at $225,000 in 1999 and $237,700 in 2004. A recent reassessment by the county (PDF) set the current market value for the building and the lot at $269,000. An independent appraisal (PDF) paid for by ProPublica found the current market value of the property to be $198,000.

Real estate professionals in Prescott say property values in the economically depressed community, about 100 miles southwest of Little Rock, have been flat over the past decade, largely unaffected by the wild market swings seen elsewhere in the country. A sawmill that for some 50 years provided many of the town's jobs has closed, and a Firestone plant, the other major local employer, has cut its work force in half.

Courtright's summary did provide new information about the other two components of the pharmacy sale -- the valuation of the business assets and a non-compete agreement benefiting Holly Ross.

USA Drug paid $724,420 for the assets of the business and $110,000 as part of an agreement by the Rosses not to compete in the future against the business being sold, Holly’s Health Mart.

Courtright is on the board of the National Association of Chain Drug Stores, which represents pharmacy interests in Washington, including during the current health care reform debate. Calls to Courtright at his office in Little Rock were not immediately returned.

Ho hum, another (likely) shady deal between the regulator and the regulated. Want some real fun? Look into the banks apparent coup in capturing the entire mortgage industry and their two-way money flow with members of Congress. Bailout dollars going one way and campaign contributions the other. With trillions on the line, it makes this deal look small town.

Do your homework before you attempt to smear a good man.

The Arkansas Democrat Gazette reported on Sept. 25:

  It’s also common for a pharmacy chain to pay higher than assessed property values when acquiring land and buildings.

  Larger chains have paid premiums for land in smaller Arkansas towns in recent years. For instance, Walgreen Co., the Illinois-based drug giant, purchased 2.8 acres and a building in Wynne in 2007 for $650,000. The current value of the land, according to the Cross County assessor’s office is $145,800.

  The same year, the chain bought an empty 1.3-acre plot in Newport for $560,000. In 2008, the Jackson County assessor pegged the land’s value at $35,900.

  And in 2008, according to Garland County records, Walgreen paid $990,000 for 1.8 acres and a building that was listed with a $282,650 value.

Publication: Arkansas Democrat-Gazette;    Date: Sep 25, 2009;    Section: Front Section;    Page: 1

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