Latest NYTimes disclosure, the paper's disclosure not Clarence's. Carried by SeattleTimes:
Clarence Thomas’ $267,230 RV and the friend who financed it
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| NYT image "Justice Clarence Thomas, circa 2000, with his great-nephew and his Prevost Le Mirage XL Marathon motor coach." |
Justice Clarence Thomas met the recreational vehicle of his dreams in Phoenix, on a November Friday in 1999 [...] a used Prevost Le Mirage XL Marathon, 8 years old and 40 feet long, with orange flames licking down the sides. In the words of one of his biographers, “he kicked the tires and climbed aboard,” then quickly negotiated a handshake deal. [...]A few weeks later, Thomas drove his new motor coach off the lot and into his everyman, up-by-the-bootstraps self-mythology.
[...] But there is an untold, and far more complex, back story to Thomas’ RV — one that not only undercuts the mythology but also leaves unanswered a host of questions about whether the justice received, and failed to disclose, a lavish gift from a wealthy friend.
[...A]ccording to title history records obtained by The New York Times [...]the purchase was underwritten, at least in part, by Anthony Welters, a close friend who made his fortune in the health care industry.
[...] In an email to the Times, Welters wrote: “Here is what I can share. Twenty-five years ago, I loaned a friend money, as I have other friends and family. We’ve all been on one side or the other of that equation. He used it to buy a recreational vehicle, which is a passion of his.” Roughly nine years later, “the loan was satisfied,” Welters added. He subsequently sent the Times a photograph of the original title bearing his signature and a handwritten “lien release” date of Nov. 22, 2008.
But despite repeated requests over nearly two weeks, Welters did not answer further questions essential to understanding his arrangement with Thomas. [...] Nor would he share the basic terms of the loan, [...] And when asked to elaborate on what he had meant when he said the loan had been “satisfied,” he did not respond.
“‘Satisfied’ doesn’t necessarily mean someone paid the loan back,” said Michael Hamersley, a tax lawyer and expert who has testified before Congress. “‘Satisfied’ could also mean the lender formally forgave the debt, or otherwise just stopped pursuing repayment.”
Thomas, for his part, did not respond to detailed questions about the loan, sent to him through the Supreme Court’s spokesperson.
The two men’s silence serves to obscure whether Thomas had an obligation to report the arrangement under a federal ethics law that requires justices to disclose certain gifts, liabilities and other financial dealings that could pose conflicts of interest.
Vehicle loans are generally exempt from those reporting requirements, [...] But private loans like the one between Welters and Thomas can be deemed gifts or income to the borrower under the federal tax code if they don’t hew to certain criteria: Essentially, experts said, the loan must have well-documented, commercially reasonable terms [...]
Richard W. Painter, a White House ethics lawyer during the George W. Bush administration, said that when it comes to questions of disclosure, the ethics treatment of gifts and income often parallels the tax treatment. But those intricacies aside, he said, “justices just should not be accepting private loans from wealthy individuals outside their family.” If they do, he added, “you have to ask, why is a justice going to this private individual and not to a commercial lender, unless the justice is getting something he or she otherwise could not get.”
The Times’ unearthing of the loan arrangement is the latest in a series of revelations showing how wealthy benefactors have bestowed an array of benefits on Thomas and his wife, Virginia: helping to pay for his great-nephew’s tuition; steering business to Virginia Thomas’ consulting firm; buying and renovating the house where his mother lives; and inviting the Thomases on trips both domestic and foreign that included travel aboard private jets and a yacht.
Thomas has pointed to interpretations of the disclosure rules to defend his failure to report [...]
The Thomases’ known benefactors include wealthy men like Dallas real estate developer Harlan Crow, conservative judicial kingmaker Leonard Leo and several members of the Horatio Alger Association of Distinguished Americans, which honors people who succeed despite adversity. Among them: longtime Miami Dolphins owner Wayne Huizenga, who flew the justice around on his jet.
Welters, while also a Horatio Alger member, stands apart. For one thing, the two men’s friendship predates Thomas’ time on the federal bench. They met around 1980, when both were members of a small, informal club of Black congressional aides to Republican lawmakers — Welters worked for Sen. Jacob K. Javits of New York and Thomas for Sen. John C. Danforth of Missouri.
[...] As both men climbed the ladder as political appointees in the Reagan administration, their friendship grew. They stayed close after Thomas joined the federal appeals court in Washington in 1990 and Welters left government to found AmeriChoice, a Medicaid services provider that he sold to UnitedHealthcare for $530 million in stock in 2002 and continued to lead until retiring in 2016. Welters and his wife, Beatrice, named Thomas the godfather of one of their two boys, according to The Village Voice.
A toy for the rich
Thomas was turned on to the luxury brand by Bernie Little, a fellow Horatio Alger member and the flamboyantly wealthy owner of the Miss Budweiser hydroplane racing boat. Little had owned 20 to 25 custom motor coaches over the years, Thomas told C-SPAN in 2001.
Back in those days, a basic Prevost Marathon sold for about $1 million, [...] At the time, the Thomases’ primary source of income was the justice’s salary, then $167,900. He had yet to sell his autobiography, and property and other records show that the couple had significant debt: [...]
So, in Thomas’ telling, he began searching for a used Prevost at Little’s suggestion, one with enough miles on it to depreciate the value. “The depreciation curve — it’s very steep,” he made a point of saying in the 2001 C-SPAN interview.
[...] All these years later, he still hasn’t told some of his closest friends how he was really able to swing the purchase.
[...] The title history documents reviewed by the Times show that when the motor coach was sold for $267,230 to the Thomases in 1999, it had 93,618 miles on it, relatively few for a vehicle that experts say can easily log 1 million miles in its lifetime. It came equipped with plush leather seating, a kitchen, a bathroom and a bedroom in the back. In addition to its orange flame motif, it had a large Pegasus painted on the back, according to Jason Mang, the step-grandson of the previous owner, Bonnie Owenby.
“It was superluxury, really bougie,” he recalled.
On Nov. 19, 1999, after spotting the motor coach on the lot of Desert West Coach in Phoenix and putting a hold on it, Thomas attended a dinner at the conservative Goldwater Institute. In a speech that night, he said he had never yearned to be a federal judge. “Pure and simple, I wanted to be rich,” he said.
[...] While the terms of Welters’ loan to Thomas are unclear, rules governing loans of more than $10,000 between friends and family are not.
Loans can be reclassified as gifts or income to the borrower, either of which would have to be reported by the justice under court disclosure rules, if any portion of the debt is forgiven or discharged as uncollectable. But even if a lender does not take those steps, a loan can still be considered a reportable gift or income if it doesn’t meet certain standards.
Loan terms should be spelled out in a written agreement, with a clearly defined, regular repayment schedule, tax experts said. Lenders must charge at least the applicable federal interest rate, which was a little over 6% in December 1999, when the deal to buy the motor coach closed. And if a borrower is in arrears, lenders must make a good-faith effort to collect, even to the point of going to court.
[...] The title history records held by the Virginia Department of Motor Vehicles do not contain detailed information about the loan itself. What they show is that when the Thomases drove their motor coach back home to Virginia, they registered it in Prince William County, which does not charge personal property tax on RVs stored there, unlike Fairfax County, where they live.
[...] This story was originally published at nytimes.com. Read it here.
So we see how much a used luxury converted bus can cost, but still, how much does a used Thomas cost? Terms and conditions? Just kidding. However, the pattern of disclosure indifference, each instance being a non-disclosure, troubles the mind. The man does appear compromised, and arguably disqualified for the seat of power he holds. An ethics code clearly is needed for Supreme Court members, the more detail and rigidity to such a code, the better.
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As to the Prince William County/Fairfax County vehicle registration situation, it is possible that when not being used the vehicle itself is stored in Prince William County. That would provide cause to not register in the county of residence; unless State or residence county law demands otherwise. Fairfax County seems aware that some might want to avoid a vehicle tax.
It is a local question that the NYT item properly skipped over. In Minnesota, families having a vacation property in Wisconsin might register vehicles there, taxes being lower, and the practice is well known and frowned upon - register where you live being the rule. But a vehicle kept only at a vacation property, an RV or ATV perhaps, adds complication.