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New Bush Scandal: HHS Crony writes off 1.2 MILLION for $100k donations
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| New Bush Scandal: HHS Crony writes off 1.2 MILLION for $100k donations
- Click HERE to go to the original thread with graphics
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| incoherent |
Imagine if us working stiffs could get away with this level of corruption: Make a $100,000 donation to get 1.2 million in tax write offs! Some people would never have to pay taxes again!
HHS Chief's Fund Is Questioned
By Jonathan Weisman
Washington Post Staff Writer
Friday, July 21, 2006; Page A01
Health and Human Services Secretary Mike Leavitt and his relatives have claimed millions of dollars in tax deductions through a type of charitable foundation they created that until recently paid out very little in actual charity, tax records show.
Instead, much of the foundation's money has been invested or lent to the family's business interests and real estate holdings, or contributed to the Leavitt family genealogical society.
The Leavitts used nearly $9 million of their assets to set up the foundation in 2000 under an obscure provision of the federal tax code. But unlike standard private foundations, which are required to give away at least 5 percent of their assets to charitable causes, the Leavitt organization donated less than 1 percent of its assets in 2002, 2003 and 2004. The donations jumped to 6.3 percent of total assets last year, after the sale of family water interests that also allowed the foundation to increase its lending to Leavitt business interests.
While Mike Leavitt alone has claimed about $1.2 million in tax write-offs since 2000, the foundation gave away only $49,000 in 2002 and $52,000 the next year, according to tax returns and other documents filed by the foundation. Meanwhile, the foundation's assets have been used for a $332,000 loan to Leavitt Land and Investment Inc., in which the secretary owns a significant stake, and other secured loans for insurance and real estate deals, said Alan A. Jones, a trustee of the organization.
Leavitt Land and Investment, in turn, extended an interest-free loan to Leavitt in 2002 valued at more than $250,001, according to a recent financial disclosure.
"The foundation's activities are totally legal and proper," Christina Pearson, an HHS spokeswoman, said this week on the secretary's behalf.
But Rick Cohen, executive director of the National Committee for Responsive Philanthropy, said that "the Leavitts are using the foundation as a personal piggy bank, and that's not what the public -- or Congress -- ought to tolerate." Cohen reviewed the family foundation's records and tax returns at the request of The Washington Post.
The tax structure used to create the foundation is called a Type III supporting organization. The Internal Revenue Service has said the category is rife with abuse, designating "supporting organizations" this year as one of its "Dirty Dozen" top tax scams, along with Internet identity theft and offshore banks. Use of the tax structure could be significantly reined in under a tax provision that was inserted into pension legislation passed by the Senate and now under negotiation with the House.
Leavitt and his brother Dane have defended the family's actions as both legal and ethical.
Dane Leavitt said his family would change the operations of the foundation if Congress enacted the legislative changes, which were proposed by Senate Finance Committee Chairman Charles E. Grassley (R-Iowa).
"That's a public policy decision," Dane Leavitt said. "If Congress makes that decision, we will abide by it."
From its early roots in the settlement of Utah, the Leavitt family has built up a considerable fortune in land and business. The family created the Leavitt Group and built it into one of the largest insurance brokerages in the country. Before he was elected Utah's governor in 1992, Mike Leavitt was the group's president and chief executive, amassing holdings valued at $5 million to $25 million. He sold off those assets when he joined President Bush's Cabinet.
In August 2000, Leavitt's parents, Dixie L. and Anne O. Leavitt, established the supporting organization under their names. The family then donated nearly $8.1 million worth of water rights that it was using to irrigate its land in southern Nevada. It donated another $540,000 in stock from the Leavitt Group.
Under the regulations governing Type III supporting organizations, the Leavitts could then claim huge charitable deductions from their taxes using the fair market value of those assets. As owner of roughly 15 percent of the water rights, Mike Leavitt was entitled to around $1.2 million in tax write-offs, Jones said.
Unlike standard private foundations, the Dixie & Anne Leavitt Foundation was not required to invest its funds in a diverse array of assets. It kept the assets in the Bunkerville (Nev.) Irrigation Company, in which the family retained significant control, and the Leavitt Group, whose board includes Dane, David, Dixie, Eric, Mark, Matthew and Rod Leavitt.
According to tax documents, the Leavitt Foundation donated $49,087 of its $9 million trust -- or 0.5 percent -- in 2002 and $52,312 -- or 0.6 percent -- in 2003, the only years of tax data available.
"They're basically sitting on all this money, getting a charitable write-off and doing nothing with it," Cohen said.
The small percentage used for donations went largely to causes closely tied to the Leavitts. The bulk of the money has gone to the Southern Utah Foundation, under rules set out by the Leavitts under what is known as a donor-advised fund. Thousands of dollars more in donations have gone to Southern Utah University, Mike Leavitt's alma mater, and the Western Association of Leavitt Families, which promotes genealogical research and religious activities for the descendants of the first Leavitts, who helped establish Utah as a Mormon state.
"Secretary Leavitt's parents are generous people who are supportive of the people and causes in southern Utah. Organizations like Southern Utah University, which Secretary Leavitt attended, and the Southern Utah Foundation have provided services to thousands of people," Pearson, the HHS spokeswoman, said.
Dane Leavitt said the foundation's bylaws set strict limits on the contributions it can make to Leavitt family organizations.
The foundation maintains its holdings in the Leavitt Group, but last year it sold off the family's water rights to the Las Vegas Valley Water District for $11.9 million, Jones said -- substantially more than the $8.1 million originally claimed as a charitable deduction.
If the family had to pay out 5 percent of those assets a year, the foundation would have had to liquidate some of those water rights for less money. Now, it will have more money to give in the future, Dane Leavitt said. The proceeds from the sale should earn $800,000 in income, 85 percent of which will go to charities to "do some significant good," he said. Indeed, giving has increased substantially this year.
"It was a good thing to not liquidate that water stock until the time was right," he said, "and the time was right last year."
"Those limitations are in place," he said, "and I'm confident they are abiding by them."
But selling the water rights opened the foundation to a new criticism. Jones said some of the proceeds have been farmed out to secured loans to Leavitt-related interests, such as real estate investments and insurance businesses. Even before the asset sale, the Leavitt Foundation's 2002 tax return noted an outstanding loan of $332,000, which Jones said went to Leavitt Land and Investment Inc., secured by the water rights.
Mike Leavitt's stake in Leavitt Land and Investment -- which owns commercial and residential buildings, land and livestock -- was valued at $1 million to $5 million in his 2005 financial disclosure form. In the same year that the foundation made its loan to the company, the company gave Leavitt an interest-free loan valued at $250,001 to $500,000, the disclosure form states.
Dane Leavitt, the chief executive of the Leavitt Group, insisted it was not a loan but a promissory note from each of the six Leavitt brothers pledging to give the company funds and was "completely unrelated" to the loan the foundation gave the company that year.
Such loans -- from a family foundation ostensibly set up for charity to the family's business interests -- are precisely what IRS Commissioner Mark W. Everson labeled as an abuse last year when he excoriated Type III supporting organizations as personal piggy banks for the rich.
"Some promoters in this area have encouraged individuals to establish and operate supporting organizations . . . that they can control for their own benefit," Everson said. "There are a variety of methods of abuse, but a common theme is a 'charitable' donation of an amount to the supporting organization, and a return of the donated amount to the donor, often in the form of a purported loan that may never be repaid."
Jones said the Leavitt foundation's loans were nothing of the sort. The LL&I loan was repaid in full on Oct. 5, 2004, he said, and the more recent loans were approved by an independent trustee, who set the interest rates and repayment terms.
"This was not an abuse of the process," he said. |
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| tourette_ticker |
"Leavitt and his brother Dane have defended the family's actions as both legal and ethical"
It MAY be legal, but it ain't ethical. |
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| Billyfromsphily |
| He should be fired..........................But that would involved GWB taking time off from his vacation for the next 6 weeks. |
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| incoherent |
| Come on Bush lovers- defend this. I dare you! |
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| incoherent |
Not ONE Bush worshipper has stepped forward to defend this scam. Wonder why? Has the oxycontin addict not issued their marching orders on Leavitt?
From Leavitt's Webpage.
http://www.hhs.gov/secretaryspage.html
Secretary’s Principles
1. National standards, neighborhood solutions.
2. Collaboration, not polarization.
3. Solutions transcend political boundaries.
4. Markets before mandates.
5. Protect privacy.
6. Science for facts, process for priorities.
7. Reward results, not programs.
8. Change a heart, change a nation.
9. Value life.
Looks like he forgot his tenth commandment:
10. Rip off the taxpayer! |
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| incoherent |
| The Bush worshippers won't defend the guy, but they won't denounce him either. Guess no Oxycontin addict has told them what they are supposed to think yet. |
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| incoherent |
Silence from the Bush worshippers. They either support this guy transferring his tax burden to them, or they condemn him for it. But they are so afraid of saying anything against the Bush administration that they hide from ay comment at all.
Sad little Bush-worshippers. Must be a tough time for you all. |
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| DUDE-HERE |
| WHO CARES...HILARY DID IT..AND IF SHE CAN DO IT SO CAN EVERYONE ELSE |
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| incoherent |
Quote: Originally posted by DUDE-HERE
WHO CARES...HILARY DID IT |
Prove it. |
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| DUDE-HERE |
Quote: Originally posted by incoherent
Prove it. |
this is not it ..but it was intresting
HUNTINGTON, N.Y. - Hillary Rodham Clinton deflected questions over her campaign returning a donation to a woman with ties to a drug smuggler Wednesday, saying that her Senate opponent should give back a $100,000 donation from a man she called ''the number one polluter in America.''
''Some information came to my campaign's attention and we immediately returned a donation that was questionable,'' the first lady said of the donation made by Vivian Mannerud, whose Airline Brokers Co. runs charter flights between Cuba and Miami.
Mannerud donated $22,000 to a special account set up by Democrats to raise largely unregulated soft money for the first lady's campaign for U.S. Senate.
She has been linked to Jorge Cabrera, who in 1995 made a $20,000 contribution to the Democratic National Committee from a bank account in which he kept profits from drug trafficking. The DNC eventually returned that donation.
Cabrera pleaded guilty to smuggling 6,000 pounds of cocaine into the United States and was sentenced to 19 years in prison and fined $1.5 million. Mannerud was never charged with any wrongdoing.
She then said Republican Mayor Rudolph Giuliani's Washington-based Giuliani Victory Committee, set up to accept soft money donations which legally bypass federal fund-raising restrictions, should return $100,000 from the Renco Group.
''I would ask the mayor if he intends to keep $100,000 from the number one polluter in America,'' she added.
Kim Serafin, a spokeswoman for Giuliani's Senate campaign, declined to comment.
Among Renco's holdings is the Utah-based Magnesium Corp. of America, which was cited in a 1998 federal Environmental Protection Agency report as the nation's top dumper of toxic chemicals.
Renco is run by Ira Rennert, who has caused an uproar on eastern Long Island by building the largest house in the Hamptons - a 100,000-square foot beachfront complex in Sagaponack that features 29 bedrooms, 40 bathrooms, two bowling alleys and a movie theater. |
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| incoherent |
Dude-Here fails to understand basic reality.
Allegations are NOT proof.
A festering pile of allegations from Clinton-haters is not proof.
Your hate site fails to acknowledge that the Clintons have been cleared of charges by not just Fisk, but Starr (and Starr has multiple conflicts of interest against Clinton and STILL couldn't prove any of this crap).
Still no PROOF! Dude-Here fails again. |
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| DUDE-HERE |
| yea ok. thats what i thought you would say |
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| B.A. Baracus60 |
| DOUCHE-HERE is alone. He must work with out marching orders...........We know for sure NCDike won't show until he is told what his opinion is, then he will be here cutting and pasting crap as if he "researched" the topic and has formed an independent opinion. |
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| WillowGlen |
Quote: Originally posted by DUDE-HERE
yea ok. thats what i thought you would say |
You should expect it and be used to it by now. Your whole posting life is nothing but you running you mouth and being proved wrong with simple facts. |
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| DUDE-HERE |
Quote: Originally posted by B.A. Baracus60
DOUCHE-HERE is alone. He must work with out marching orders...........We know for sure NCDike won't show until he is told what his opinion is, then he will be here cutting and pasting crap as if he "researched" the topic and has formed an independent opinion. |
wow more insults... |
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| DUDE-HERE |
Quote: Originally posted by WillowGlen
You should expect it and be used to it by now. Your whole posting life is nothing but you running you mouth and being proved wrong with simple facts. |
good one |
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| DUDE-HERE |
The Bilderbergers
The Bilderbergers meet in secluded places, arrogantly plotting the subversion and silent takeover of constitutional governments everywhere. Their goal is a World Government run exclusively by their hand-picked puppets.
Shrewd and calculating, their hearts are filled with lust for power and consumed by greed for money. Rich and aristocratic, they despise Christians and they loathe the lowly working class. They control the world's press and virtually all our banks and financial institutions. They screen and choose who America's leaders will be and even determine who will run on the Democratic and Republican Party tickets. It was shortly after attending the 1991 Bilderberger meeting, Governor Bill Clinton was selected to be the next President of the United States. Bill Clinton and White House advisor Vernon Jordan's relationship goes back to it's Bilderberger connections.
Among the elitist membership is David Rockefeller, Henry Kissinger, Lloyd Bentsen, Helmut Kohl, Prince Charles, Prince Juan Carlos, Katharine Graham, Alice Rivlin, and Gerald Ford.
http://www.jeremiahproject.com/neww.../nworder04.html |
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| B.A. Baracus60 |
Quote: Originally posted by DUDE-HERE
arrogantly plotting the subversion and silent takeover of constitutional governments everywhere. Their goal is a World Government run exclusively by their hand-picked puppets.
Shrewd and calculating, their hearts are filled with lust for power and consumed by greed for money. Rich and aristocratic, they despise individual thinkers and they loathe the lowly working class. They control America's press and virtually all our banks and financial institutions. |
WOW! that sounds like the definition of the Republican party. |
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| incoherent |
Quote: Originally posted by DUDE-HERE
yea ok. thats what i thought you would say |
So if you knew it was a pile of easily disprovable false charges, what did you hope to gain by putting it out there, except to smear your own reputation and degrade your credibility? |
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| incoherent |
Dude_Here sure has made a lot of posts. Too bad not one deals with getting caught trying to pass off crap as proof. Dude-Here, are you saying you have no defense and you are admitting you are wrong?
Dude-Here fails to understand basic reality.
Allegations are NOT proof.
A festering pile of allegations from Clinton-haters is not proof.
Your hate site fails to acknowledge that the Clintons have been cleared of charges by not just Fisk, but Starr (and Starr has multiple conflicts of interest against Clinton and STILL couldn't prove any of this crap).
Still no PROOF! Dude-Here fails again. |
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| incoherent |
Quote: Originally posted by B.A. Baracus60
DOUCHE-HERE is alone. He must work with out marching orders...........We know for sure NCDike won't show until he is told what his opinion is, then he will be here cutting and pasting crap as if he "researched" the topic and has formed an independent opinion. |
That's a GREAT point. I think you are right. NCMike06 seems to ONLY defend Bush on topics covered by OXYCONTIN adicts and loofah fetishists. He doesnt seem to ever defend Bush when the subject is something they have no defense for, like this scam.
At least Dude-Here has the guts to make up his own made up facts, instead of NCMike who has to be spoonfed his made up facts. |
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| incoherent |
Still no defense for the ethics of the Bush admin from the Bush apologists. Update:
Senators Urge Bush to Help Block Tax Loophole
HHS Secretary's Deductions for Gifts to Family Group Prompt Call for Action
By Jonathan Weisman
Washington Post Staff Writer
Saturday, July 22, 2006; Page A04
Senate Finance Committee Chairman Charles E. Grassley (R-Iowa) and the committee's ranking Democrat, Max Baucus (Mont.), urged President Bush yesterday to help shut down a tax loophole that allowed his secretary of health and human services to claim more than $1 million in tax deductions for "gifts" that have been used to further his family's interests.
Grassley and Baucus, responding to a report in yesterday's Washington Post, wrote Bush to ask for his support in saving a provision in an embattled pension bill that would rein in what they called an abuse of the charity tax code. And they said the issue could be taken care of through regulatory changes in the Bush administration's control.
"Your IRS Commissioner, Mark Everson, has done a fine job of highlighting these problems but now the rest of your administration needs to pitch in and rewrite these regulations and end the abuse," Grassley and Baucus wrote. "We ask that you direct Treasury and [the Office of Management and Budget] to make a priority of rewriting these regulations in the next six months."
The issue received new attention this week when it was revealed that Health and Human Services Secretary Mike Leavitt and his family have claimed millions of dollars in tax deductions for contributions to a family foundation that until recently has given little to charity. Instead, through loans and investments, the Dixie and Anne Leavitt Foundation has used its $9 million fortune to further the family's real estate holdings, insurance interests, and even the Leavitt family genealogical society.
In 2002, the foundation lent $332,000 to Leavitt Land and Investment Inc., in which the secretary owns a significant stake. That same year, Leavitt Land and Investment extended an interest-free loan to Leavitt in the form of stock valued at between $250,001 and $500,000, according to a recent financial disclosure.
Everson has labeled such transactions one of the IRS's "dirty dozen" top tax dodges, and a provision under negotiation in a major pension bill would curb them. Under the provision, entities such as Leavitt's, known as Type III supporting organizations, would be prohibited from offering loans to parties related to the fund, and would have to give away 5 percent of assets each year, just as standard foundations are required to do.
The Leavitt foundation has reached that threshold only twice in the six years of its existence. Leavitt released a statement yesterday, defending his actions and noting that the foundation has increased its giving substantially, from $52,312 in 2003 and $81,250 in 2004 to $567,185 in 2005 and $691,221 so far this year.
"My family and I are grateful that we have the resources to give back to our community, and the Dixie and Anne Leavitt Foundation has already contributed nearly $1.5 million to charity and will continue to make generous contributions in the years to come," he said. "We find satisfaction that many people will benefit from our giving."
The Health and Human Services press office added that the issue had been reviewed by the Finance Committee during Leavitt's confirmation hearings.
That brought a sharp response from committee aides.
"When we reviewed this, it raised serious concerns for us, particularly the lack of payout," said one Finance Committee aide, who spoke on the condition of anonymity to avoid upstaging the chairman's letter. "And matters regarding the loans were not brought to our attention at all." |
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