Buyers’ names were veiled in Edwards home sale

WASHINGTON – When former North Carolina senator and Democratic presidential candidate John Edwards finally succeeded last month in selling his imposing Georgetown mansion for $5.2 million after it had languished on the market, the names of the buyers were not publicly disclosed.

At the time, Edwards’ spokeswoman told reporters that the house had been sold to an unidentified corporation. In reality, the buyers were Paul and Terry Klaassen, according to several sources and confirmed by Edwards’ spokeswoman Thursday.

The wealthy founders of the nation’s largest chain of assisted-living housing for seniors, the Klaassens are cooperating with a government inquiry in connection with accounting practices and stock options exercised by them and other company insiders. They are also the focus of legal complaints by some of the same labor unions whose support Edwards has been courting for his presidential bid.

The grand 18th century house had lingered on Washington’s slowing real estate market for more than 18 months. The Edwardses paid $3.8 million in 2002 for the six-bedroom house, and they did substantial renovations. The final sale price was a half-million dollars below the asking price but still $1.4 million more than the Edwardses paid four years earlier.

Edwards closed the deal in late December – the night before he announced his presidential candidacy. Edwards aide Jennifer Palmieri said he left the details to real estate agent W. Ted Gossett. Gossett declined to reveal the Klaassens’ identity but said the buyer decided to purchase the mansion as a “surprise Christmas gift” for his wife.

Edwards was told the Klaassens’ name “in passing” around the time the offer came in on Dec. 18, Palmieri said Thursday night, but he did not investigate further and had no knowledge of their business until a reporter’s inquiry Wednesday. Palmieri said Edwards had not delved into the Klaassens’ background: “They left it to be done at arm’s length, real estate agent to real estate agent.”

Asked about the allegations lodged against the Klaassens by their union stockholders, she added, “He believes all CEOs should follow the law, should protect their shareholders and should protect their workers, and he expects that will happen in this case as well.”

The Klaassens declined to comment on the sale.

The paperwork for the sale was handled in such a way that it kept the Klaassens’ names off the public deed documents, which show that the buyer was P Street LLC. That limited-liability corporation was created Dec. 22, public records show. Palmieri said the Klaassens used it to purchase the house. Such corporations are frequently created by large real estate buyers to protect themselves from lawsuits by shielding buyers’ other personal assets.

Ellen Miller, head of the nonpartisan Sunlight Foundation, which studies public officials’ real estate deals, said presidential candidates should go the extra mile by determining who they are doing business with, especially when “a substantial amount of cash is changing hands on the eve of his campaign.”

Edwards has run into controversy once before on a house sale. In 2002, he reached a deal to sell a Washington house to a U.S. lobbyist for Saudi Arabia and then refused to give back the lobbyist’s $100,000 earnest money when the deal collapsed. At the time of the sale, the Saudis were trying to improve their image in Congress after the Sept. 11 attacks, and Edwards was serving on the Senate intelligence committee.