Rep. Mike Ross (D-Prescott) has been on the hot seat for the sale of a business to a prominent Arkansas pharmacy chain, which prompted the Fourth District Congressman to release more details of the two-year old deal.

Yesterday, ProPublica, a nonprofit newsgroup, and Politico, a Washington, D.C. web site, reported that Ross and his wife, Holly, were overcompensated in the sale of their Prescott pharmacy to Pine Bluff-based USA Drug, a charge that Ross vehemently denies.

Today, a D.C. watchdog group, Citizens for Responsibility and Ethics in Washington (CREW), filed a complaint with the U.S. Department of Justice seeking an investigation.  

Ross contends that CREW is a right-wing group with an agenda against him for his health care positions and that their complaint has no merit.  “Anybody with a typewriter and a blank piece of paper can write the Justice Department and call for an investigation,” Ross tells Talk Business.

He argues that left-of-center groups are also angry at his stance on health care reform, which led to the original report at the center of the controversy.

“The story was written by a left-leaning, self-described investigative journalism web site out of New York that has been funded by the same people MoveOn.org and ACORN,” Ross said.

Talk Business has obtained new financial information related to the transaction, including the purchase price of the land and buildings sold, how the inventory was valued, and details of a non-compete agreement between the Ross family and USA Drug.  Ross had requested a waiver in a confidentiality agreement with the pharmacy chain in order to make more information public.  You can access a two-page summary of the transaction at this link.

The purchase price for the assets sold by Ross to USA Drug was $724,420.10, which included buildings, inventory, prescription files, accounts receivable, goodwill and other items.

Ross, his wife, and a corporate entity, Ross Pharmacy Inc., received $110,000 in the transaction as part of a 10-year non-compete agreement with $108,000 being paid to Ross’ wife, a pharmacist.

Ross said that when the pharmacy sold on May 31, 2007, he and his wife felt that the sale was “a fair offer.”

He contends that the $2.41 per prescription price received in the sale is far below the industry standard of roughly $10 per prescription.  He also emphasized that the land value that has been at the center of the appraisal controversy is unfair because the sale was handled two years ago before the current economic recession, which has affected land prices across Arkansas.

Ross said he met, and at times, exceeded House ethics reporting requirements.

“Like most people do, Holly and I sit around and talked before and second-guessed the fact that we sold it and maybe we shouldn’t have because it was a very profitable business,” Ross said.  

With a high school senior and a child now in college, Ross said his family decided to sell the business at the time to allow more flexibility for the rigorous travel requirements of being a Congressman from south Arkansas.

“We wanted to get in the position to where once both children were out of the house, Holly had the opportunity to spend more time with me whether in D.C. or Arkansas, and obviously you can’t do that when you own a business with 12 employees,” Ross said.

National media reports have suggested that the sale of the pharmacy may have persuaded Ross’ political viewpoints on health care reform, but Ross denied the assertion.

Stephen LaFrance, owner of USA Drug, has been a contributor to Republican candidates, including Ross’ two-time opponent, former Congressman Jay Dickey.  LaFrance gave Ross’ congressional campaign a $2,300 contribution shortly after the sale closed in 2007.

“I’ve met him [LaFrance] several times in my entire life and he’s never asked me for a favor and I’ve never done a favor for him.  He’s never approached me on legislation and these are unfounded accusations,” he added.