Queens Congressman's Sweet Stock Deal Exposed

By Hasani Gittens
|  Monday, Jan 11, 2010  |  Updated 10:31 AM EDT
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Queens Congressman's Sweet Stock Deal Exposed

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Rep. Gary Ackerman.

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Democratic Rep. Gary Ackerman could be in hot water after reports have surfaced indicating that he may have broken House ethics rules with a stock/loan deal.

The Daily News first exposed the scheme that centers around Ackerman hosting a meeting between Israeli officials and a defense contracting firm in which he had invested.

Ackerman later sold the Xenonics, Inc., stock for a big profit, but when he bought it in 2002 he put no money down. Instead he borrowed $14,000 from the company's top shareholder, a longtime friend, the News reported.

The loan required no collateral and had no written payback date -- a violation of Congressional ethics rules.

After the company went public, the stock price jumped and Ackerman repaid the loan at 6 percent interest and sold his shares for more than $100,000 in 2005 and 2006, the paper reported.

Ackerman's 5th Congressional District encompasses neighborhoods on both sides of the Queens-Nassau border, including Bayside, Corona, DouglastonGreat Neck and Port Washington.

In a statement, Ackerman said he "bought and sold his interest in Xenonics stock at its proper and fair-market value," and the transactions were "consistently, continually disclosed on his annual disclosure forms."

He "never profited from any transaction between Xenonics and the government of Israel, and, to his knowledge, no business between the two occurred," according to the statement.

House ethics rules prevent members of Congress from using official resources to promote commercial enterprises and also require written repayment plans for any loans members of Congress take out.

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