Posts tagged: Idaho school endowment
Idaho state Rep. Phil Hart, R-Athol, has clarified to the state Endowment Fund Investment Board that a check he recently sent for $2,450 to the state’s public school permanent endowment fund is just a donation - not a payment on an outstanding judgment Hart faces for illegally logging timber from school endowment land in 1996 to build his log home in Athol. In a letter dated Nov. 4 and received at the endowment fund office today, Hart’s attorney, Robert Romero, wrote, “Please accept the cashier’s check referenced in your letter as a voluntary donation from Mr. Phil Hart on behalf of the Idaho State Public School Permanent Endowment Fund.”
It makes a difference - payments for timber on state endowment lands go into an earnings reserve fund, from which direct payments to schools go out every year; donations to the permanent endowment are held in perpetuity; only their investment earnings are distributed. The response means Hart’s payment falls into the latter category.
Numerous Eye on Boise readers have been asking whether Idaho Rep. Phil Hart’s voluntary donation to the state school endowment fund would be tax deductible, so I posed the question about such donations to Dan John, tax policy manager for the Idaho State Tax Commission. The answer: Yes.
“Under federal law, which we adopt, it would be deductible by an individual who itemizes their deductions as a charitable contribution,” John said. “There’s a specific code section under Internal Revenue Code that allows charitable contributions to the United States, states or possessions and their political subdivisions.” The section, Internal Revenue Code Section 170(c)(1), comes into play fairly often, John said, as it applies to such things as donations of parks to cities. “We have charitable contributions all the time,” he said.
Idaho state Rep. Phil Hart, R-Athol, sent a check as promised to the state’s school endowment for $2,450, but called it a “voluntary donation” to the permanent fund, not a payment on a judgment over a 1996 timber theft; Hart used the stolen logs to build his Athol home. That’s left the state endowment’s managers scratching their heads as to how the check should be handled. Revenue from timber sales on state endowment lands goes into an earnings reserve fund, from which direct payments to schools go out every year. Donations to the permanent endowment are held in perpetuity; only their investment earnings are distributed.
“It is somewhat at odds with his public statements, where he said, ‘I’m sending this money in respect to, to clear up any amount due on unpaid timber,’” said Larry Johnson, manager of investments for the endowment. “So I sent a letter back to his attorney asking him to clarify whether he really meant it as a donation, or whether he meant it as a payment for timber. But I guess if we don’t hear from him, we’ll take the letter at face value and assume it’s a donation.” You can read my full story here at spokesman.com, from Sunday’s Spokesman-Review.
Idaho state Rep. Phil Hart, R-Athol, announced today that he’s sending a check to the state for the 1996 “fair market value” of logs he stole from state school endowment land in 1996 to build his log home, and said, “I was mistaken to have done what I did.” You can read my full story here at spokesman.com.
“My logging experience back in 1996 was an expensive lesson in the school of hard knocks,” Hart said in a statement. “I was mistaken to have done what I did and will never make that mistake again. And just this past week, I have learned more about this case that I did not understand at the time. In order to clear up any question as to whether or not this timber was paid for, today I sent a check for the timber’s fair market value to the Idaho State Public School Permanent Endowment Fund. And since today’s fair market value is only one half of what it was back in 1996, the amount of the check was based on the 1996 value.”
Hart didn’t say in his statement how much he was paying, but in 1996, the Idaho Department of Lands determined that the trees he cut illegally from state school endowment land near Spirit Lake were worth $2,443. Because the penalty for stealing state endowment-owned timber is “treble damages” or three times the value, it ordered Hart to pay $7,328. Instead, he fought the case in court, arguing that as a citizen, he had a right to cut and take the logs to build his own home. He lost three times, ending in the state Court of Appeals, and each time incurred judgments for additional amounts for the state’s attorney fees and court costs for his “frivolous” challenges.
In the end, the Idaho Department of Lands filed a lien against Hart in Kootenai County for $22,827 in the case; that lien still is outstanding, but because more than five years have passed since the judgment, it’s no longer enforceable. The state Attorney General, however, has called it a “moral obligation” that still should be paid. Hart did forfeit a $5,000 bond he put up when he appealed the case to the state Court of Appeals, but there’s no record of any other payments.
You can read Hart’s full news release here.
S-R columnist Shawn Vestal writes today that John McHone has a beef with Phil Hart. McHone thinks anyone who steals timber from public lands – as Hart did to build a log home in Athol – ought to pay the penalty. “I think the (good Mr. Hart) ought to get some kind of time out of it,” McHone said – though his original comment was much saltier. “They got a lot of federal joints around here. They put me in a federal penitentiary.”
Like Hart, McHone stole timber from public lands. Unlike Hart, he served a sentence for the crime: a year in the federal pen. He and a team of others were busted cutting firewood in the Nez Perce National Forest back in 2003. You can read Vestal’s column here at spokesman.com.
Here’s video of Phil Hart being interviewed by the Kootenai County Sheriff’s Department back in 1996 about the theft of timber from Idaho state school endowment land. In the video, obtained under the Idaho Public Records Law, Hart, now a three-term Idaho state representative, tells the sheriff’s department his reasoning for why he thought it was legal to cut down and take 8,000 board feet of timber from the state land to use in building his log home in Athol, an argument that subsequently was rejected three times in court.
Idaho state Rep. Phil Hart stole timber from state land to build his log home in Athol in 1996, according to court documents, and still hasn’t paid a judgment against him for the theft. What’s more, the property Hart illegally logged is school endowment land, meaning the timber there is supposed to benefit Idaho’s public schools.
Hart contended then – and still does today – that a loophole in state law allowed him, as a citizen, to cut and take the logs, totaling nearly 8,000 board feet of timber. But three court rulings found that argument not only wrong but unreasonable and “frivolous.” In court documents, the state called Hart’s conduct “a blatant, unjustified trespass on state endowment land that resulted in a substantial loss to the state’s school endowment fund.”
Hart, whose only opponent for a fourth House term this November is a write-in candidate, did forfeit a $5,000 bond he had to put up for his last appeal in the case. And he may have made a partial payment for attorney fees; state records are unclear. But liens against Hart filed in Kootenai County by the Idaho Department of Lands for $22,827 were never lifted – and now they’re not enforceable, because more than five years has passed since the judgment. You can read my full story here at spokesman.com, read the Kootenai County Sheriff’s Department investigative report on the log theft here, read the Court of Appeals Decision in the case here, and click below to read a summary of Idaho’s school endowment and how it works.