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Idaho State Tax Commission whistle-blower Stan Howland is now speaking in the Senate flex room, room WW17 in the Senate wing, on the lower level of the state Capitol. At least half a dozen legislators, from both parties, are among those in the audience. “Auditors are not against compromising taxes,” Howland told the group. “What we are concerned about is the legality of them, the process, and how often they should be used. … The Tax Commission currently does not have sufficient internal controls.”
Howland estimated that Idaho could lose $50 million to $100 million in state tax revenues in 2011 due to secret compromise deals, plus another $20 million to $30 million a year in future years. “It could be more,” he said. At the conclusion of his talk, he'll take questions from lawmakers and others.
Howland detailed a list of changes he said are needed in Idaho's tax-settlement process to end improper secret settlements, from less secrecy to restoring restrictions on when cases can be settled, rather than leaving that to the tax commissioners' discretion. “The fact is, folks, that the Tax Commission is broken,” he said. “You can't remove that commissioner and cure this problem, because unless you change the law, this problem will rear its head again.”
Three education groups are seeking to join Rep. Shirley Ringo, D-Moscow, in her lawsuit over secret tax deals at the state Tax Commission, saying the alleged deals are causing education funding in the state to suffer. ”We take the allegations very seriously,” said John Rumel, general counsel for the Idaho Education Association, one of the three groups. “The representative’s allegations indicate that because of some sweetheart deals and corrupt practices, a substantial amount of funds that should be going into the coffers of the state are not getting there.”
In addition to the IEA, the Idaho Federation of Teachers and the American Federation of Teachers local from the University of Idaho all have filed motions to intervene in the case as plaintiffs. The UI group represents 65 professors and staffers at the university; the IEA is the state’s largest teachers union, with 13,000 members. You can read my full story here at spokesman.com, and read the latest filings in the case here.
Sen. Brent Hill, R-Rexburg, chairman of the Senate Local Government and Taxation Committee, said he doesn’t see great need to reform Idaho’s state Tax Commission. “We tried to address some of the concerns with compromises, and yet these whistleblowers keep claiming there should be no compromises, and I don’t agree with that concept,” said Hill, a CPA. “That’s why the Legislature stepped in and very clearly said, ‘Yes, there should be compromises under these circumstances,’ and we outlined those.” He added, “As far as I’m concerned, we have addressed this issue, we’ve taken care of it, but … we are certainly amenable to suggestions from the public, from other legislators, from anyone else of how we can run our government better, and that includes the state Tax Commission.”
Rep. Wendy Jaquet, D-Ketchum, is proposing sweeping reform legislation, aimed in part at taking politics out of the process; but Hill said issues like property tax rules and revenue forecasts ultimately are decided by the state Legislature. “How you depoliticize the Legislature I don’t know - politics is part of what makes representative democracy work,” he said. “I don’t think politics is a bad thing necessarily.” You can read my full story here at spokesman.com.
Idaho stands to lose more than $75 million just from tax compromises that are now in the works, according to a group of whistleblowers who are current and former employees of the state Tax Commission - including one $203,000 tax break about to be handed to a taxpayer on his $7 million private plane. “This is the worst scandal I’ve seen in Idaho since I first came here in 1950,” declared Robert Huntley, the former Idaho Supreme Court justice who’s representing Rep. Shirley Ringo, D-Moscow, for free in her lawsuit against the state over the deals.
Ringo has offered to put the lawsuit on hold in favor of an immediate state investigation, along with job protection for the current Tax Commission auditors and managers who came forward with sworn statements about the deals. But so far, the state hasn’t taken her up on the offer; you can read my full story here at spokesman.com, plus see the full documents.
Three current employee of the Idaho State Tax Commission - a manager and two auditors - have gone on the record in affidavits in Rep. Shirley Ringo’s lawsuit over secret tax deals, the Times-News reports today, making a total of eight current or former Tax Commission employees, each with decades of experience, charging under oath that influential people got big tax breaks at everyone else’s expense. Click here to read the full report from reporter Ben Botkin, and see the full documents in the case.
Ringo, D-Moscow, has offered to dismiss the state Legislature as a defendant in the lawsuit if the state convenes an investigation and offers job protection to Tax Commission employees to testify.
Here’s a link to the letter that Rep. Shirley Ringo’s attorney, Robert Huntley, delivered to the Idaho Attorney General’s office yesterday on secret tax deals, with the three new sworn statements attached along with an earlier affidavit from Stan Howland. One note: One of the affidavits names two names, both of North Idaho legislators. The affidavit of Joe Schwartz, former longtime head of the North Idaho office of the state Tax Commission, includes a comment about “Representative Hart of Athol,” saying he “refuses to file or pay taxes.” Hart’s tax case, which became public when he filed an appeal to the state Board of Tax Appeals this spring, indicates he failed to file state tax returns for three years in the 1990s, but there’s no indication that he’s failed to file since, though he’s disputing the amount due.
The affidavit also references “Senator Shawn Keough” as an example of lawmakers who allegedly threatened to “punish” the Tax Commission if it attempted to enforce certain laws and allegedly advised constituents not to comply. Keough said, “I don’t recall ever saying anything like that. I don’t remember anyone by that name. I would never tell anyone to break the law.” She added, “I am pretty astounded by the charge.” Said Keough, R-Sandpoint, “At this point, so that the air can be cleared, I would welcome a full investigation and perhaps a court of law is where that needs to occur to remove any cloud of impropriety or political pressure.”
Three more longtime senior employees of the Idaho State Tax Commission have come forward with sworn statements charging that secret tax deals were offered to those with political influence, and now Rep. Shirley Ringo, D-Moscow, is offering to put her pending lawsuit over the deals on hold in favor of an in-depth investigation of the charges. “I think it should make people realize that we have something very serious we’re dealing with,” Ringo said today. She and her attorney, former Idaho Supreme Court Justice Robert Huntley, sent the three new sworn statements to Attorney General Lawrence Wasden yesterday, along with a letter offering to suspend the lawsuit if the state launches an investigation meeting certain requirements, and grants job protection to current Tax Commission employees who testify.
“We have found several people who work within the Tax Commission who would like to speak up, but they’re in fear of jeopardizing their employment,” Ringo said. Bob Cooper, spokesman for the Attorney General’s office, said, “We did receive Mr. Huntley’s letter yesterday, and we’re reviewing it.” You can read my full story here at spokesman.com.
Bob Huntley, attorney for Rep. Shirley Ringo, D-Moscow, in her lawsuit over secret tax deals at the state Tax Commission, sent a letter to Idaho Attorney General Lawrence Wasden today with three new affidavits attached from longtime senior tax auditors, all making allegations just as shocking as those in the original affidavit from retired senior auditor Stan Howland about special tax deals being offered to those with political influence, and Huntley proposed that if the state would convene a special investigation panel to look into the charges and follow certain requirements, he and Ringo would suspend their lawsuit that’s now pending in 4th District Court.
Idaho’s initial response to Moscow Rep. Shirley Ringo’s lawsuit over secret tax deals: She can’t do that. The state has filed a motion to dismiss the case, saying Ringo lacks standing to sue as a lawmaker, something she and her lawyer dispute. Meanwhile, Ringo’s filed an amended complaint saying the secret deals that allegedly allow some wealthy and politically connected taxpayers to get millions in breaks violate constitutional guarantees of equal protection under the laws. Ringo’s also asking for an injunction to stop all secret tax compromises until Idaho institutes a new system.
“If we don’t do something like that, it’ll just be business as usual,” Ringo said, “and sometimes these things take quite a long time to work their way through the system. … It puts a little bit more urgency on it.”Bob Cooper, spokesman for the Idaho Attorney General’s office, declined to comment on the pending case, saying, “We will make any response to the court.” Fourth District Judge Cheri Copsey has scheduled a Sept. 9 hearing on the state’s motion to dismiss the case. If she grants it, the lawsuit would end there; if not, Ringo is seeking a November hearing on the proposed injunction; you can read my full story here at spokesman.com, plus read the documents filed in the case.
A North Idaho legislator has filed a lawsuit against the state over secret tax deals that allegedly allowed some wealthy and politically connected taxpayers to get millions in breaks. Those deals violated the Idaho Constitution, said Rep. Shirley Ringo, D-Moscow, which requires taxing to be “uniform.” Examples listed in the lawsuit, filed this morning in 4th District Court in Boise:
* A wealthy Idaho resident was given a $1.6 million tax break before the audit report on that taxpayer’s case had been filed, and the case was removed from the Tax Commission’s auditors. Auditors had alleged the taxpayer was fraudulently claiming no substantial business operations in the state.
* One state tax commissioner “reversed an audit adjustment on a friend and individual who is prominent in Idaho politics.”
* A tax manager for a large Idaho company “told a commissioner in a protest hearing that his opinion was asked by the governor on all reappointments. This event occurred several months before the commissioner was up for reappointment and the taxpayer received a $100,000 discount.”
Ringo called the cases cited in the lawsuit “appalling.” “If those things have been going on, it just speaks to the need for reforms,” Ringo said. “I would put in on the emergency status, because I don’t want to accuse anybody of being corrupt, but I think it bears looking into.” You can read my full story here at spokesman.com.