'Serious concerns': Dems say Thomas may be liable for 'violations of federal tax laws'

16 May 2024

Two Senate Democrats recently sent a letter to the attorney for Supreme Court Justice Clarence Thomas asking for clarification on a loan from a wealthy Republican donor, saying the justice has not been forthcoming about whether he's satisfied both ethical reporting requirements and federal tax obligations.

The New Republic's Greg Sargent wrote Thursday that Democrats are trying to get to the bottom of whether Thomas paid back the principal for a loan of $267,000 by businessman Anthony Welters to purchase a luxury recreational vehicle. Welters has said the loan has since been "satisfied," but it's not clear if that means Thomas actually paid back the loan or if it was forgiven. In their letter to Thomas' lawyer Elliot Berke, Sens. Sheldon Whitehouse (D-Rhode Island) and Ron Wyden (D-Oregon) wrote that forgiving that loan would amount to a gift constituting "a significant amount of taxable income."

"Your client’s refusal to clarify how the loan was resolved raises serious concerns regarding violations of federal tax laws," they wrote.

Thomas has only said that he "made all payments" on a "regular basis until the terms of the agreement were satisfied in full." That agreement stipulated that Thomas was to make payments on the 7.5% interest rate for five years, then the principal would come due. The Senate Finance Committee — which Wyden chairs — found that Thomas actually only paid back a small portion of the interest, and that the principal itself was forgiven by Welters around 2008.

"The Justice acts as if the freebies and special favors Americans are reading about — comped flights on private jets and trips on luxury yachts, mega-wealthy individuals paying for school tuition, quarter-million dollar debts wiped away — is totally normal stuff," Wyden stated in February. "The reality is, it is not. It isn’t normal for anybody. And when the person receiving all these extravagant handouts is one of the nine most powerful jurists in the country — with unchecked power to rewrite laws from the bench — it looks a lot worse."

Wyden told Sargent that he only has more questions for Thomas based on the limited amount of information the justice has provided, saying it "raises the question of whether this justice is in compliance with federal tax law, which requires a disclosure of forgiven debt and taxable income."

"The central question is: Did he ever repay the principal?" Wyden said.

“We’re giving the justice the opportunity to clear this huge mess up," he added. “Nobody in this country is above the law. Not even Supreme Court justices.”

Clarence Thomas not being forthright about whether he paid taxes on the gift is important to the reputation of the Court as a whole, according to Stephen Vladeck, who is a law professor at the University of Texas-Austin. He said Americans are justifiably "worried about even the appearance that [justices] are deciding cases in ways that are consistent with their financial interests."

“We want judges and justices who are participating in the system and not subverting it,” Vladeck said, adding that it's incumbent on federal judges to “lead by example.”

Click here to read Sargent's article in full (subscription required).

From Your Site Articles