Last week the National Journal reported that Sen. Norm Coleman rents a Capitol Hill apartment for $600 from longtime political associate and Republican rainmaker Jeff Larson. Today Democratic Party chairman Brian Melendez charged that the questionable arrangement may violate the Senate’s gift ban policy.

"I have said that Senator Coleman is in bed with special interests," Melendez said at a Capitol press conference this afternoon. "But now we know that he literally sleeps under the same roof that they do."

The three-story, 2,069-square foot townhouse was purchased by Larson in March of last year for $989,900. Coleman has been living in a basement apartment since July. According to the National Journal article, the Senator failed to pay rent for either November or January until after the magazine raised questions about the arrangement. In another instance, Coleman paid the rent to Larson by selling him used furniture. And yet another of Coleman’s rent checks wasn’t cashed by his landlord for three months — just a few days after the magazine started making inquiries. "The rest of us don’t get to play by these sweetheart rules," Melendez said. "This doesn’t pass the smell test."

Larson and Coleman pooh-poohed the significance of the apartment deal when asked about it by the National Journal. The 58-year-old senator described it as a basement crash pad where he spends perhaps "three waking hours a night." He attributed the change in living arrangements to financial belt tightening. Previously the Senator, who makes $169,000, had been paying $1,780 a month in rent for a Washington apartment.

Larson described the apartment as a modest one-bedroom unit that barely accommodates Coleman’s bed and lacks even a stove. (This prompted Wonkette, hilariously, to begin referring to him as the "hobo senator from Minnesota.")

But Melendez pointed out that a real-estate listing for the townhouse, just four blocks from the Capitol, described it as having a "huge English basement" that includes a media center, office space and an oak bar. The DFL chairman further stated that similar such apartments on Capitol Hill typically rent for $950 to $1400 a month. "Even if the only part of the million-dollar townhouse that Coleman is renting is the huge English basement, it looks like he’s getting a much better deal than he says for the mere $600 a month he’s paying in rent," Melendez said. Senators are prohibited from receiving gifts greater than $100 from most citizens, while the limit goes up to $250 for personal friends.

Larson is a longtime political ally of Coleman and a principal of FLS Connect, one of the largest GOP fundraising firms in the country. It was founded in 1999 under the name Feather, Larson & Synhorst. The other two principals are Tony Feather, who served as political director for the 2000 Bush-Cheney ticket, and Thomas Synhorst, chairman of the DCI Group, which has taken heat during the current presidential campaign for lobbying on behalf of the oppressive military regime in Burma. Coleman has referred to Larson as "the most connected person in D.C. that nobody in Minnesota knows." Larson also serves as the chair of Coleman’s Northstar Leadership PAC. Since 2001, Coleman’s two senate campaigns and his PAC have paid roughly $1.6 million to FLS Connect for fundraising and consulting services.

The National Journal story also raised questions about Larson’s wife, Dorene, who has worked in Coleman’s office under her maiden name since September 2005, earning $101,218. "This arrangement looks like you scratch my back, I’ll scratch yours, and frankly it stinks," said Melendez. She is leaving the constituent services post on July 10.

Larson insisted that there was no attempt to hide her employment by the Senator and that the timing of her departure had nothing to do with the National Journal story. He told the magazine she made the decision "a couple months ago" in order to spend more time with their two sons.

Melendez said the party is contemplating filing an ethics complaint with the Senate against Coleman arguing that his living arrangement violates the gift ban. "We haven’t decided yet," he said. "We’re still exploring our options."