Wednesday, May 10, 2023

Harlan Crow is "stonewalling" on turning over information about gifts to Clarence Thomas, but U.S. Senate might shine a hot light on Crow's tax records

Harlan "Stonewall" Crow

Ron Wyden (D-Ore), chair of the U.S Senate Finance Committee, is seeking an accounting of gifts from billionaire GOP donor Harlan Crow to Supreme Court Justice Clarence Thomas. Crow's response? A number of observers have described it as "stonewalling." Will Crow get away with that? Not without likely experiencing some tax headaches first, according to multiple news reports.

Above the Law, long one of the nation's most widely read legal blogs, provides a summary of the Thomas-Crow controversy, and then addresses the tax question and related issues.  Under the headline "Harlan Crow Decides To Play Hardball Over Record Of Gifts To Clarence Thomas; The Senate Finance Chair would really like to know the full extent of the gifts Harlan Crow gave to his favorite Supreme Court justice, Kathryn Rubino writes:

The list of extraordinary gifts GOP mega donor Harlan Crow gave to Supreme Court Justice Clarence Thomas over the course of his tenure on the Court just seems to grow and grow.

Quick recap: ProPublica initially released an article detailing the two decades of Justice Thomas receiving travel and other gifts from Crow. A few days later, we got more details of the financial entanglement between the two men as it was revealed Crow bought from Thomas three pieces of property — including one Thomas’s mother lives on — and improved it, all with Thomas’s mother never paying rent. Plus another report found Crow paid for Thomas’s grandnephew — Mark Martin, who Thomas and his wife were raising “as a son” — to attend an elite school (well, actually two: Hidden Lake Academy and Randolph-Macon Academy).

Has Crow been forthcoming? Not exactly. The tuition payments seem to be a particularly touchy subject for Crow. He generally has responded to questions about Thomas, but he has not responded to questions about the tuition issue. It might start getting warm under Crow's seat real soon, Rubino reports:

With all the drips and drabs of information that have gradually been discovered and released by the press over the last month, it may not shock you to learn some folks would really like to know the full extent of Crow’s largesse to Thomas. Like, for example, Senate Finance Chair Ron Wyden. Wyden requested an accounting of the gifts from Crow to Thomas, arguing the gifts were substantial enough they should have been reported on Crow’s annual gift tax returns to the IRS. But, as reported by Politico, Crow is unwilling to produce those documents.

According to Ryan Carey, a spokesperson for Wyden (D-Ore.), the Senate tax chief received an “obstructive letter” from a lawyer for Crow late Monday night declining to answer a series of questions about the billionaire’s financial arrangements with Thomas that Wyden posed to Crow in an April 24 letter.

The Finance Committee is expected to respond shortly. Wyden has previously said he would “explore using other tools at the committee’s disposal” should Crow not cooperate with the request.

How could Crow's tax records enter the picture? Rubino explains:

The Finance Committee may consider its subpoena power or tax code rules that may allow the Committee to get Crow’s tax returns from the Treasury Department. But, the GOP members of the Committee aren’t on board, with Sen. Mike Crapo, saying he’d oppose those efforts as they’d “undermine the independence of the Supreme Court and its individual Justices.”

Other Republicans have also come out in defense of Crow’s position:

Sen. Mike Lee (R-Utah) and 13 other Republican senators also wrote to Wyden on Monday to express concerns about Wyden’s request to Crow. The GOP lawmakers asserted the demands amounted to intimidation of a private citizen that had the ultimate goal of discrediting Thomas.

“We reject this manufactured ‘ethics crisis’ at the Supreme Court as a ploy to further Democrats’ efforts to undermine public confidence and change the makeup of the Court,” the Republicans wrote.

But no matter how much the GOP would like to wish away the growing Supreme Court ethics crisis away, it sure feels like a story with staying power.

Here's how Politico addressed the tax issue, and it brings Donald Trump's name into the fray:

Wyden had asked for details on the gifts Crow lavished on Thomas for more than two decades, as reported by ProPublica, that included trips aboard the billionaire’s super yacht to Indonesia, New Zealand, and Greece and free use of his private jet.

Although Thomas neglected to report the gifts on his annual disclosure forms, Wyden argued they were substantial enough that Crow would have been obligated to report them on his annual gift-tax returns to the IRS.

On Tuesday, Wyden repeated a vow he had previously made to use “any of the tools at [the committee’s] disposal” to compel answers from Crow and said he would confer with his Democratic colleagues on Finance.

In the letter to Wyden that was obtained by POLITICO, Crow’s attorney, Michael D. Bopp, argued that the Finance Committee lacks authority to compel the gift records from Crow and is “attempting to tarnish the reputation of a sitting Supreme Court Justice and his friend of many years, Mr. Crow.”

The committee’s next steps could include subpoenaing Crow for the requested records or using a section of the tax code that vests the chairs of Congress’ tax committees with the authority to obtain a private citizen’s tax returns directly from Treasury — a power that House Democrats used last year to publish the taxes of former President Donald Trump.

Crow's attorney, Mr. Bopp, is borrowing from the Trump playbook:

Attorneys for Trump had tried to derail that effort by insisting Democrats lacked a “legitimate legislative purpose” for seeking his returns, but federal courts rejected the argument in that case. Democrats had maintained throughout the litigation that obtaining Trump’s taxes was necessary to examine a program at the IRS that required the auditing of all sitting presidents.

Bopp used a similar argument in defense of withholding Crow’s information, saying the committee has jurisdiction of federal gift tax laws but is not empowered to initiate tax audits to expose the activities of private citizens.

Wyden countered that “the assertion that the Finance Committee lacks a legislative basis for an investigation of the abuse of gift taxes by the wealthy is simply preposterous.”

“I have used my Chairmanship of the committee to shine a bright light on tax schemes undertaken by the ultra-wealthy, including untaxed transfers of wealth,” he said.

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