“Trump’s Not Running For Vice President”: Trump’s New Line; Tax Returns From Thee, Not From Me
About four years ago at this time, Mitt Romney ran into a bit of trouble. He insisted on keeping his tax returns hidden, which was a problem made more acute when the Republican asked potential running mates to turn over their returns from the previous 10 years.
Apparently, Team Romney believed a thorough examination of a national candidate’s record meant a close review of tax materials – even while Romney said American voters couldn’t make a comparable examination of his own record.
The more things change, the more they stay the same.
Candidates hoping to earn a spot as Donald Trump’s running mate are reportedly expected to submit their tax returns to the campaign, even though the presumptive GOP nominee has said he has no immediate plans to make his own taxes public.
NBC’s Katy Tur reported Wednesday that all vice presidential hopefuls would be required to submit their returns as a standard part of the vetting process.
When NBC’s Katy Tur asked a Trump campaign source about the apparent hypocrisy, the source responded, “Trump’s not running for vice president.”
That’s cute, I suppose, but it only reinforces the absurdity of the candidate’s posture. The idea that disclosure and transparency requirements should be tougher for a vice presidential candidate than a presidential candidate is tough to defend.
Making matters worse, with each passing day, new questions arise about Trump’s finances. USA Today reported this morning that a fresh analysis found Trump’s businesses “have been involved in at least 100 lawsuits and other disputes related to unpaid taxes or how much tax his businesses owe.”
Trump’s companies have been engaged in battles over taxes almost every year from the late 1980s until as recently as March, the analysis of court cases, property records, and other documents across the country shows. At least five Trump companies were issued warrants totaling more than $13,000 for late or unpaid taxes in New York state just since Trump declared his candidacy in June 2015, according to state records.
This spring, as Trump flew to campaign rallies around the country aboard his trademark private jet, the state of New York filed a tax warrant to try to collect $8,578 in unpaid taxes from the Trump-owned company that owns the Boeing 757. The company has since paid that tax bill.
It makes it that much more difficult for the candidate and his team to suggest his tax documents are a meaningless distraction.
Hillary Clinton’s campaign, meanwhile, released a new video yesterday, hoping to maintain interest in the story, and speculating about the kinds of things Trump may be hiding while keeping his tax returns under wraps.
By: Steve Benen, The Maddow Blog, May 19, 2016
“Disclosures Neither Accurate Nor Honest”: Why Hasn’t Bernie Sanders Released His Tax Returns? (Or Cruz Or Kasich, Either…)
Bernie Sanders holds himself out to huge and adoring crowds as a model of personal, political and financial integrity. But when it comes to revealing his income tax returns, Sanders is as tricky a politician as Republicans Ted Cruz and John Kasich.
In this bizarre political year, Donald Trump has shown more candor than Sanders when it comes to his tax returns. That is an amazing and disturbing feat, given Trump’s penchant for exaggeration and just making stuff up, as I have been documenting since 1988. Understand that while Trump has fabricated an excuse for not disclosing any of his income tax returns, he was being more forthright than Sanders, who tries to pretend that he has disclosed his taxes.
What may surprise some is that of the five remaining Presidential candidates, only Hillary Clinton has been completely candid and forthright about her and her husband’s income tax returns, a policy of theirs that dates at least to 1992. Despite her singular transparency, news organizations routinely write, without citing any verifiable supporting facts, about Clinton’s perceived mendacity.
So what’s the issue? The Sanders, Cruz and Kasich campaigns have all distributed what they claim are tax returns; Kasich for seven years, Cruz for four, and Sanders for just one year, 2014.
But those proclaimed disclosures were neither accurate nor honest. None of those candidates has released even a single tax return.
What they made public instead was merely a summary known as IRS Form 1040. That form is no more a tax return than the Preamble is the Constitution.
No, a tax return is the entire document filed with the IRS – the forms, schedules, and statements that reveal the numbers and calculations about income, deductions, and tax liabilities behind the summary information on Form 1040. Without the full tax return, the public cannot know sources of income, justifications for deductions, or how aggressively tax law was applied to reduce the income tax due.
History tells us that disclosing complete tax returns, not just a summary form, is vital to determining a president’s trustworthiness. It was only 45 years ago that (freshly “resigned”) Vice President Spiro Agnew plead guilty to one count of tax evasion, making him a felon. Without the action of an IRS employee who illegally leaked President Nixon‘s 1969 through 1972 tax returns, we would never have known about the tax crimes in which the president was an unindicted co-conspirator, and for which one of his advisors plead guilty. If all we had were Nixon’s and Agnew’s Form 1040s, their tax crimes would have remained unknown.
On disclosing tax returns Trump scores better than Sanders, because while Trump will not release his returns, citing a bogus excuse, he has not tried to pretend that he did disclose. But that is exactly what Sanders, Cruz and Kasich did. (Trump says he can’t disclose because he is under IRS audit, even though revealing his returns would have no impact on the audit of a tax return, which is signed under penalty of perjury.)
Contrast their conduct with Hillary Clinton, whose every tax return signed by her and husband Bill has been disclosed since at least 1992. That’s how we know they are far more charitable than the self-described “ardent philanthropist” Donald Trump or any other of the various presidents back to FDR (and some presidential wannabes like Newt Gingrich) who have made public their tax returns. Those returns, and in some cases only Form 1040s, are posted at taxhistory.org, a website maintained by the nonprofit Tax Analysts, for which I write critiques of tax policy.
As for Sanders, the single Form 1040 he released raises more questions than it answers, especially since the junior senator from Vermont has a history of making incomplete and misleading financial disclosures.
In 2014, he reported an adjusted gross income of $205,271, most of it from his Senate salary.
What appears unusual are his itemized deductions, totaling $56,377, a whopping 27.4 percent of his income. People in his income class of $200,000 to $500,000 on average take 15.6 percent of their income as deductions, while those in the $100,000 to $200,000 range averaged 18.8 percent. Both averages are far below the Sanders itemization rate.
Sanders and his wife paid $27,653 in federal income tax, or 13.4 percent of their adjusted gross income.
When I tried to look more closely at Sanders’ taxes, Michael Briggs, the chief spokesman for his campaign, sent a statement that is simply not true, although he may not have understood why at first. In an email, Briggs wrote that Sanders and his wife Jane “made public his federal and state income tax returns last year when he became a candidate for president and intends to do so again this year.”
I wrote back to Briggs repeatedly, explaining that a Form 1040 is not a tax return. Perhaps that was unnecessary, since Briggs has more than two decades of experience as a political reporter and publicist for various U.S. senators. More than two decades ago on C-SPAN, he displayed a nuanced understanding of legal issues.
That background raises difficult questions about Briggs’ responses, which i tried to explore despite his failure to answer follow-up questions. The Cruz and Kasich campaigns also ignored emails asking for their complete tax returns or an explanation of why only Form 1040s were released
To readers who think this sounds too harsh, I’d say that when Sanders holds himself out as a paragon — running a campaign built on the idea that he remains untainted by money from the rich and powerful — he should be expected to walk the talk.
Sanders set the standard here. I am holding him to the same measure of integrity that I have used to assess Bill and Hillary Clinton, George W. Bush, Steve Forbes, and numerous other politicians at the federal, state and local levels going back almost 50 years to my first investigative story.
Last fall, Sanders revised his 2012 and 2014 financial disclosures twice. His 2013 disclosure was revised three times. Sanders failed to disclose four mortgages, all of them at market interest rates, which raises a question about his judgment, since nothing appears improper except the failure to fully disclose.
Mark Lippman of Daily Kos was evidently the first to report the Vermont senator’s incomplete disclosures. He also noted that the value of Jane Sanders’ “retirement accounts appreciated in value from $285,000 in 2011 to $481,000 in 2014.” Nothing wrong there, by the way, though readers may find the 68.8 percent increase puzzling because Lippman failed to give context. The broad stock market rose 64 percent during that period, indicating the big gain was basically owed to stock market returns, plus about $400 a month in additional deposits to Ms. Sanders’ retirement portfolio.
Why Sanders would play games with his income taxes is a mystery. While he is much better off than most Americans, he is a man of modest means compared to Clinton, Cruz, and Trump. But his conduct raises a question politically. Is he hiding something? Certainly Trump is, since the boastful billionaire probably pays close to zero in income taxes, as I have explained here, here and here.
The question to ask Sanders – as well as Cruz, Kasich, and Trump – is why they are hiding the information they supplied under penalty of perjury to the IRS as a true, complete, and accurate description of their income, deductions, and taxes.
And whatever you may think of Hillary Clinton, she deserves real props for more than two decades of being forthright and complete in disclosing her tax returns.
By: David Cay Johnston, The National Memo, April 1, 2016
“Awwwwwkward”: Meet Ted Cruz’s Tax-Dodging Sugar Daddy
Hedge fund CEO Robert Mercer is all in for the conservative Texas Republican Ted Cruz, and the billionaire will have unusually substantial influence in how his contributions get spent.
But the billionaire also has some baggage—like, the avoiding billions in taxes kind of baggage.
His alleged failure to pay those taxes led to substantial congressional scrutiny in 2014—and it’s not clear the investigation is over.
This, and some of Mercer’s side projects, could present interesting challenges for Cruz’s campaign. Especially since Cruz has been a vocal opponent of those who “give favors to Wall Street” and engage in “crony capitalism.”
On the one hand, Mercer’s support is fantastic for Cruz for all the obvious reasons (having a billionaire in your corner is nice). On the other hand, Mercer’s hedge fund—Renaissance Technologies—recently faced an unflattering congressional investigation, the results of which indicated that it used complex and unorthodox financial structures to dramatically lower its tax burden.This drew scorching bipartisan criticism from investigators on the Senate Permanent Subcommittee on Investigations.
“Renaissance profited from this tax treatment by insisting on the fiction that it didn’t really own the stocks it traded—that the banks that Renaissance dealt with, did,” said Sen. John McCain during a hearing on the issue, per Mother Jones. “But, the fact is that Renaissance did all the trading, maintained full control over the account…and reaped all of the profits.”
In his opening statement for that hearing, then-subcommittee chair Sen. Carl Levin, a Michigan Democrat, said that Mercer’s business avoided paying more than $6 billion in taxes between 2000 and 2013.
Since then, Levin has retired from the Senate and Republican Sen. Rob Portman has taken his place as subcommittee chair. When I called the subcommittee’s Capitol Hill office to see if any investigation into Renaissance was still underway, the person who answered the phone said he couldn’t comment on active investigations. I then asked if that meant the investigation was in fact active.
“I can’t say whether it’s active, I can’t say whether it’s inactive, I can’t even say whether we’ve investigated them,” he said.
Later, Portman’s spokeswoman, Caitlin Conant, emailed to say that the committee doesn’t comment on its work beyond what’s in the public record. Renaissance Technologies didn’t respond to a request for comment on whether they’re currently being investigated.
Given this probe into his company’s books, it’s no surprise Mercer has invested heavily in keeping financial industry watchdogs from gaining political power. However, you’d think this might conflict with his candidate’s populist zeal.
“[M]y criticism with Washington is they engage in crony capitalism,” Cruz told Bloomberg Politics. “They give favors to Wall Street and big business and that’s why I’ve been an outspoken opponent of crony capitalism, taking on leaders in both parties.”
But the Cruz campaign doesn’t seem to see any problems with the arrangement. When I asked Rick Tyler, the campaign’s senior communications adviser, if he was worried about potential conflicts, he said, “No way.”
Mercer has long backed conservative candidates, and he’s spending heavily on Cruz through a new breed of super PACs started by the super rich.
An anonymous Cruz source told Bloomberg on Wednesday that a franchise of pro-Cruz super PACs—formed just this week—will have raised $31 million by end of the day on Friday. There are four super PACs, called Keep the Promise, Keep the Promise I, Keep the Promise II, and Keep the Promise III.
This is not normal; presidential candidates usually give their imprimatur to one such group, which then rakes in contributions and makes independent expenditures to help the candidate. After all, there are legal limits on how much donors can give to presidential candidates, but no limits on how much they can give to these PACs.
One longtime campaign lawyer said the widespread Republican donor buyer’s remorse exists from the 2012 general elections—when a few powerful super PACs spent massive sums of money to get Mitt Romney elected, and were left empty-handed on Election Night. As a result, billionaires are starting their own PACs to fund political campaigns to have more control on how their money gets spent.
It’s worth noting that this explanation doesn’t make sense to everyone. Dan Backer, an attorney who’s worked extensively with Republican and Tea Party groups on campaign finance issues, said he thought having multiple super PACs could make life unnecessarily difficult for everyone involved.
“All you’re doing is multiplying your reporting and compliance burden for no good reason,” he said. “At first blush, it just strikes me as a little weird.”
Regardless, the operating assumption seems to be that having a cadre of super PACs will give mega-donors like Mercer more power over the dynamics of the presidential election. Saul Anuzis, a Michigan Republican operative who started a Mercer-funded super PAC in the 2014 midterms, indicated as much in an interview with Mother Jones. He told the magazine that he expected to see “more and more super-PACs starting that are donor-centric or district-centric.” In Cruz and Mercer’s case, that prediction seems remarkably prescient.
In 2010, 2012, and 2014 the billionaire spent significant money trying (unsuccessfully) to take out Oregon Democratic Representative Peter DeFazio, who has made his support of higher Wall Street taxes a signature issue. And DeFazio has used the fact that he’s a Mercer target to burnish his fiscal-progressive bona fides.
Mercer helped Lee Zeldin defeat former Securities and Exchange Commission prosecutor George Demos in a 2014 Republican House race primary. Mercer also helped Zeldin win the general election, where he defeated a Democratic incumbent who was a vociferous defender of Dodd-Frank.
But his areas of interest are broader than just elections. He singlehandedly paid for a $1 million TV ad campaign opposing the so-called Ground Zero Mosque. And his affinity for conservative causes seems to go back to his early days doing research for the Kirtland Air Force Base’s weapons lab in New Mexico.
Mercer hinted at his political evolution in a 2014 speech he gave to accept the Association for Computational Linguistics lifetime achievement award. He described rewriting a computer program so that it worked more efficiently, and then said that his bosses at the lab decided to just make the program do more complicated computations.
“I took this as an indication that one of the most important goals of government-financed research is not so much to get answers as it is to consume the computer budget, which has left me ever since with a jaundiced view of government-financed research,” he said.
Excepting Zeldin, Mercer’s chosen candidates haven’t fared particularly well. The billionaire spent $1 million to help pay for the 2012 Republican National Convention, and also gave Karl Rove’s Crossroads GPS significant funds to try to boost Republicans’ fortunes. And he spent $200,000 on Wendy Long’s Senate race. Who’s Wendy Long, you ask? Right.
There’s a kind of funny flip in the media narrative here, too. After Cruz announced that he would run, a Politico sub-hed blared that he was “months behind his competitors in recruiting mega-donors and bundlers.” If the storied $31 million materializes, then those concerns were probably meritless.
But, to paraphrase the poet, with new money comes new problems. And it remains to be seen how a cozy alliance with a guy whose hedge fund allegedly dodged $6 billion in taxes could play out for the senator.
By: Betsy Woodruff, The Daily Beast, April 10, 2015
“Rep Michael Grimm, Tax Evader”: The Felon Who Wouldn’t Leave Congress
Michael Grimm just got re-elected to Congress in November, so why should he resign over a minor detail like pleading guilty to a felony?
As first reported by the New York Daily News, the Staten Island Republican will plead guilty to one count of tax evasion in federal court on Tuesday afternoon. Grimm, who was indicted in April on 20 counts of fraud and tax evasion stemming from a health food store he once owned, is apparently going to try to keep his seat in Congress. While he said during his re-election campaign that he would resign if “unable to serve,” initial reports indicate the Republican congressman does not think his conviction should keep him from serving his constituents in New York’s 13th District.
The news that Grimm was set to plead guilty sent shockwaves through the leadership of the Republican Party on Staten Island. The two-term congressman cruised to re-election in November despite the ethical allegations swirling around him, besting former city council member Domenic Recchia by 12 points. Grimm had planned on regaining his Financial Services Committee membership, which he gave up under pressure when he was first indicted. Grimm has even been actively trying hire staff members for his office in recent weeks after several former aides deserted him.
Reached by phone after news of Grimm’s plea broke online, Guy Molinari, a longtime Island powerbroker and personal patron of Grimm’s, said he had not heard the news and declined to comment. The office of House Speaker John Boehner also declined to comment. John Antoniello, the chairman of the Staten Island Republican Party, said he had not been informed either but that the party continues to support Grimm.
Meanwhile, politicos were already trying to figure out their next play. Some Staten Islanders predicted that Boehner would only try to oust Grimm if he thought that the seat was likely to stay in Republican hands—a good prospect, many analysts suggested, considering Grimm’s easy win the last time.
The name that most Republicans seem both to expect and dread to consider running is Vito Fossella. The former congressman, a longtime fixture in Staten Island politics, stepped down when it was revealed after a drunk driving arrest that he had a second family in the suburbs of Washington, D.C. The Republican has frequently sparred with Grimm and thought about running in 2014, but it remains to be seen whether Fossella can withstand the scrutiny of another run, even in an era when scandal-scarred New York pols like Anthony Weiner and Eliot Spitzer have come back to run again.
“Does he have the balls to run again after someone resigns over ethical issues?” asked one Staten Island Democrat.
Daniel Donovan, the well-regarded Staten Island district attorney who has come under criticism for failing to win an indictment in the Eric Garner case, is not widely thought to want to leave his post.
On the Democratic side, many expect former Rep. Mike McMahon to make another run at the seat. McMahon took over when Fossella resigned but was edged aside two years later by Grimm in the Tea Party wave election year of 2010.
Neither McMahon nor Fossella returned calls for comment.
In the meantime, Grimm faces no legal pressure to leave office. There is no requirement for a member of Congress to resign after pleading guilty to a felony. However, House Rule XXIII suggests that a representative who has been convicted of an offense that may result in at least two years’ imprisonment should “refrain from voting.” A report by the Congressional Research Service notes that members are “expected to abide” by this rule, even though it is technically advisory. Tax evasion carries a maximum penalty of five years, and thus it seems likely that Grimm would be covered by the provision. Tom Rust, a spokesman for the House Ethics Committee, declined to comment to The Daily Beast.
Grimm could be forced from office if he is expelled by a two-thirds vote of the House. The penalty is only rarely imposed, as members often resign before they can be voted out of Congress. Only two members of the House have been expelled since the Civil War, and no one has ever been expelled for a felony committed prior to serving in Congress. As the Congressional Research Service notes, an offense leading to expulsion “has historically involved either disloyalty to the United States or the violation of a criminal law involving the abuse of one’s official position, such as bribery.” Interestingly, if Grimm is expelled, he is not legally prohibited from running in the special election for his seat. And if he is re-elected, the House advisory rules prohibiting him from voting no longer apply.
Should Grimm choose to fight back under those circumstances, he would likely have an easy go of it on Staten Island, considering his clear win in November and the fact that he is pleading guilty to a lesser charge. “Voters knew about this and seemed not to care,” said Roy Moskowitz, a leading Democratic consultant on Staten Island.
Still, his conviction will restart a House Ethics Committee investigation into his actions. The bipartisan committee had originally started to probe Grimm in 2012 but had then deferred any action after a request by the Justice Department. Once Grimm has pleaded guilty, it is unlikely the Justice Department will have any qualms about the House Ethics Committee resuming its investigation. Further, the committee’s rules mandate that it “shall” begin an investigation as soon as a member of Congress is sentenced in federal court.
The conviction won’t be Grimm’s first brush with notoriety. The congressman has been investigated in the past for campaign finance irregularities involving an Israeli businessman who allegedly illegally funneled money to Grimm’s campaign. He also sparked controversy earlier in 2014 when he threatened a reporter on live television after President Obama’s State of the Union address by saying, “I’ll break you in half. Like a boy.”
By: Ben Jacobs and David Freedlandlander, The Daily Beast, December 22, 2014
“Trust Me, Trust Me Not”: Mitt Romney’s Bain Capital Under Investigation For Tax Avoidance
The New York Times is reporting that Bain Capital, the private equity firm founded by GOP presidential nominee Mitt Romney, is among a number of firms being investigated by New York Attorney General, Eric Schneiderman, for failing to pay taxes.
The New York AG’s Taxpayer Protection Bureau has issued subpoenas to at least twelve financial firms, including Bain, looking into whether the companies converted management fees (taxed as ordinary income) paid by investors into fund investments which are taxed at a dramatically lower rate.
The controversial tax avoidance scheme came to light last month when Bain Capital internal financial information was published online by Gawker.com , however the investigation had reportedly commenced prior to the publication and is not believed to be tied to the document dump.
The tax strategy — which is viewed as perfectly legal by some tax experts, aggressive by others and potentially illegal by some — came to light last month when hundreds of pages of Bain’s internal financial documents were made available online. The financial statements show that at least $1 billion in accumulated fees that otherwise would have been taxed as ordinary income for Bain executives had been converted into investments producing capital gains, which are subject to a federal tax of 15 percent, versus a top rate of 35 percent for ordinary income. That means the Bain partners saved more than $200 million in federal income taxes and more than $20 million in Medicare taxes.
While Governor Romney has not been active at Bain Capital for quite some time, he does continue to receive profits from the company and held investments in some of the funds that utilized the tax avoidance strategy.
The Romney campaign issued a statement indicating that the Governor had not benefited from the practice.
R. Bradford Malt, an attorney for Governor Romney who manages the Governor’s investments and trusts, argued that investing fee income is a common, accepted and totally legal practice. “However, Governor Romney’s retirement agreement did not give the blind trust or him the right to do this, and I can confirm that neither he nor the trust has ever done this, whether before or after he retired from Bain Capital.”
According to Jack S. Levin, a finance lawyer who has represented Bain Capital, the practice has been in use by investment firms for twenty years and is something the IRS knows about.
The investigation will, inevitably, raise questions as to whether or not Attorney General Schneiderman, who has strong contacts to the Obama Administration, is attempting to embarrass Romney as we head towards the November election.
Still, prominent investment firms, including Blackstone Group and The Carlyle Group, have noted in regulatory filings that they have not participated in diverting management fees into investments in their funds.
By: Rick Ungar, Contributor, Forbes, September 1, 2012
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