On April 7, 2006, The New York Times reported that Mollohan "has fueled five non-profit groups in his West Virginia district with $250 million in earmark funding."  Mollohan created these nonprofit groups, which include the West Virginia High Technology Consortium Foundation, Institute for Scientific Research, Canaan Valley Institute, Vandalia Heritage Foundation, and MountainMade Foundation. Leaders of these groups were sometimes investors with him, possibly leading to his own personal gain.
On April 21, 2006, House Minority Leader Nancy Pelosi announced that Mollohan would temporarily step down as the Ranking Democrat on the House Ethics Committee. Howard Berman of California took Mollohan's place.
On April 25, 2006, The Wall Street Journal reported that Mollohan cooperated with CEO Dale R. McBride of FMW Composite Systems Inc. of Bridgeport, West Virginia for the joint purchase of his 300-acre (1.2 km2) farm along West Virginia's Cheat River. Mollohan had directed a $2.1 million government contract earmarked to FWM Composite Systems to develop lightweight payload pallets for space-shuttle missions. Federal Bureau of Investigation agents have started asking questions in Washington and West Virginia about Mollohanâ€™s investments and whether they were properly disclosed, according to the Journal. Mollohan had previously acknowledged he may have made inadvertent mistakes on financial disclosure forms, and in June he filed more than two dozen corrections to his disclosure statements.
In October 2009, NewBridge Bank foreclosed on North Carolina beachfront property owned by Mollohan, Laura Kurtz Kuhns, a former Molohan staffer and CEO of the Vandalia Heritage Foundation, and David Kuhns, who is employed by state Senator Brooks McCabe's company. The group purchased the property for $450,000 in 2004. It was assessed at $540,000 in 2007 and sold at foreclosure for $192,000.
In its 2009 report, Citizens for Responsibility and Ethics in Washington (CREW) named Mollohan one of the 15 most corrupt members of Congress, stating that he has "steered hundreds of millions of dollars in earmarks to family, friends, former employees and corporations in exchange for contributions to his campaign and political action committees. In addition, Rep. Mollohan misreported his personal assets on his financial disclosure forms. He is currently the subject of an investigation by the U.S. Department of Justice." Due to the pending investigation, Mollohan stepped down from his position on the House Appropriations Committee. Mollohan was also listed on the organization's 2006, 2007, and 2008 reports.
In a January 2010 statement, Mollohan announced his attorneys had been informed by the U.S. Department of Justice that no charges would be filed against him and its investigation closed. Mollohan attributed the allegations of wrongdoing to politically-motivated attacks. Ben Friedman of the U.S. Attorney's office in Washington told CREW that the Justice Department has "closed the investigation into the case." Mollohan may still face action from the House Ethics Committee, which had previously been asked to defer investigating Mollohan by the Department of Justice.
Alan Bowlby Mollohan (born May 14, 1943, in Fairmont, West Virginia) is the former U.S. Representative for West Virginia's 1st congressional district, serving from 1983 until 2011. He is a member of the Democratic Party.
The district encompasses the northern part of the state; it is based in Wheeling and includes Parkersburg, Morgantown, Fairmont and Clarksburg. He serves on the House Appropriations Committee and was ranking Democrat on the Ethics Committee until being asked to step down in 2006. He was defeated in the Democratic primary election held on May 11, 2010, by Mike Oliverio.