Buchanan and American Speedy were defendants in a string of lawsuits during the late 1980s and early 1990s by franchisees and master franchisees, who said they were not making the money that Buchanan had said they could expect. After the bankruptcy, he was accused by a creditors committee of taking excessive compensation and actions that resulted in overstated earnings for American Speedy. In a 1995 deposition, he said that he had no personal obligation to repay the loan from Merrill Lynch; a dispute with the Internal Revenue Service over taxes on the money Buchanan received from Merrill Lynch stretched through the 1990s.
The Internal Revenue Service has stepped up efforts in recent years to investigate offshore reinsurance companies, and has urged Congress to change laws that help people benefit from these offshore tax havens.
Buchanan has defended his record saying, "I have always paid my taxes and it is a substantial amount, but I don't think anyone should pay more taxes than they owe." His campaign spokeswoman added that his use of offshore reinsurance companies is normal. She noted, "This is a widely accepted practice offered by hundreds of businesses and enjoyed by thousands of consumers."
The settlement was unusual: Buchanan bought a penthouse apartment from a nephew of Buford's for $5 million; the nephew had purchased it the day before for $2.368 million. Buchanan owned the unit for slightly more than a year, until January 2003, and then sold it to another member of Buford's family for $6.35 million, using a deed dated a year earlier. The arrangement resulted in Buchanan paying about $260,000 less in federal taxes, because his profit of $1.35 million was taxed at 20% (capital gains) instead of 39.6% (regular income). Buford benefited because potential buyers checking property records would see that a penthouse had been sold to a wealthy car dealer for nearly $2 million more than any other condo in the building and then resold for a large profit a year later.
In the year he owned the penthouse, Buchanan used it for a number of charity benefits. That also benefited the developers: they got to show the Ritz experience to hundreds of the richest people in Southwest Florida and beyond.
In the November general election, Buchanan faced Democrat Christine Jennings, a banking executive. There were 216,000 registered Republicans and about 155,000 registered Democrats in the district, but Jennings polled ahead of Buchanan up to election day. Buchanan put more than $5 million of his own money into his campaign.
In October, Vice President Dick Cheney held a fund raising luncheon for Buchanan;; later that month, President Bush held a fund raising reception for him. Between the two events, Governor Jeb Bush, Senator Martinez, and Massachusetts Governor Mitt Romney came to the district to campaign for Buchanan.
Initial results of the November election showed Buchanan leading by less than 350 votes. Due to the closeness of the race, and a high undervote of 18,000 in Sarasota County, a recount was ordered. Voters in Sarasota County had given more votes to a hospital board than they had to their Congressional representative-- with 13% of voters not voting, compared to an average of 2% in neighboring counties. The touch-screen voting machines used provided no paper record. On November 20, 2006, the Florida Department of State certified the results of the recount, which showed Buchanan winning by 369 votes.
The U.S. House of Representatives had the right to make the final determination as to whether Buchanan will hold the seat for the remainder of the term or be replaced by Jennings. In April, a three-person House task force was created to evaluate the election. In early May, the task force voted along party lines to refer an investigation into Florida’s 13th district House race to the Government Accountability Office (GAO). Chairman Charles Gonzalez said he hoped to see results in as little as 45 days. In mid-June, the task force voted unanimously to move forward with a review of Sarasota County operations, suggested by the GAO. The target completion date is July 27.. Buchanan has not publicly commented on the investigation to this point.
On 25 February 2008, the committee and the House accepted the GAO's findings that no machine error was demonstrated as sufficient to have altered the outcome of the election. The House passed HR 989 affirming the findings of the committee, accepting the results of the 2006 race and formally dismissing Jennings' challenge of the election's results. Jennings formally dropped her challenge shortly thereafter to focus on her 2008 rematch against now-Congressman Buchanan.
Buchanan was sworn in as Representative for Florida's 13th Congressional District on 3 January 2007. Congressional Quarterly noted that Buchanan voted in support of President Bush's legislative agenda 66 percent of the time in 2007, the third lowest rate of the 16 members of Florida's Republican congressional delegation. OnTheIssues.org positions Buchanan as a "Populist Conservative", while GovTrack.us labels him a "Moderate Republican".
Buchanan introduced a constitutional amendment in January 2007 which would require Congress to pass a balanced budget if ratified. He introduced legislation to create a US Postage stamp honoring and assisting disabled veterans, as well as secured funding for the construction of a national veterans' cemetery in Sarasota County. Additionally, Buchanan introduced a bill to increase federal assistance for fighting gang crime and secured grant funding for local anti-gang efforts in Manatee County.
As of July 2008, Buchanan had voted to override five of President Bush's vetoes of legislation passed by the 110th Congress. These override votes included a vote in support of expanding the coverage range of the SCHIP program, the 2008 farm bill, and the Water Resources Development Act.
On September 29, 2008, Buchanan voted against the Emergency Economic Stabilization Act of 2008, but changed his vote to to support the the bill on the October 3, 2008 second House vote.
Buchanan was a member of two committees and three subcommittees: