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Today’s Coeur d’Alene Press reports that the Kootenai County Republican Central Committee will vote tonight on whether to remove their state committeeman for denouncing Rep. Phil Hart over his tax and legal troubles. “This vote is important, because it’s going to identify what the local party’s identity is. If they vote me out, it’s because a lot of people support what Phil Hart is about,” said Matt Roetter, a four-term committee member and two-term state committeeman. “This vote’s not really about me, it’s about Phil Hart.” Roetter said, “I won’t support a guy who has these issues surrounding him, because it’s not good for the Republican party. Character matters. Being honest matters.”
Others on the central committee said Hart is the party’s nominee and that’s that; he’s being challenged by another Republican, Howard Griffiths, in a write-in campaign. “I don’t care who it is. If the guy is elected through the primaries, that is the person we’re obligated to support,” said Vermont Trotter, precinct 60 committeeman. “It could be Bozo the Clown, for all I care. Not that Phil Hart is a bozo.” You can read the full story here, and here’s a link to yesterday’s Huckleberries post on the topic.
That means Hart’s total tax debt to the IRS, as identified in liens that are public record, should be reduced from $941,347.90 to $493,088.91. That includes the $471,269.79 the IRS has filed in liens against Hart personally, plus the $21,819.12 in liens it’s filed against another trust Hart set up as owner of his Hayden engineering firm; those liens are for business taxes and do not duplicate the other liens. When his state income tax debt of $53,523, an amount he’s still attempting to appeal, is added to the total, it brings Hart’s total state and federal tax debt for back taxes, penalties and interest to $546,611.91/Betsy Russell, Eye On Boise. More here.
Question: What do you make of this latest development?
The IRS has reversed itself and now says the new liens it filed last week against tax-protesting Idaho Rep. Phil Hart as a nominee of a trust could duplicate other liens it earlier filed against Hart personally; it’s a nearly half-million-dollar difference when it comes to total tax debt for Hart, who maintains his decade-and-a-half fight with the IRS is the result of political persecution. You can read my full story here at spokesman.com. Today’s IRS comments were the opposite of what the agency said on Friday, when IRS spokeswoman Karen Connelly said the IRS typically won’t file duplicate liens for the same tax debt, and said, “No, generally speaking, you add them together, because otherwise, it’s sort of like double jeopardy. If it’s an individual plus a nominee on a trust, usually those two amounts would be for two separate tax issues.”
Today, Connelly said she’d been mistaken. “Apparently nominee liens can and often do cover the same tax debt as individual liens,” she said. Here’s why it makes a difference: A line-by-line comparison of liens the IRS has filed against Hart and those it’s filed against him as a nominee of the trust that owns his Athol home shows that virtually all of the liens against the house trust duplicate some, though not all, of the liens against Hart himself. That means Hart’s total tax debt to the IRS, as identified in liens that are public record, should be reduced from $941,347.90 to $493,088.91. That includes the $471,269.79 the IRS has filed in liens against Hart personally, plus the $21,819.12 in liens it’s filed against another trust Hart set up as owner of his Hayden engineering firm; those liens are for business taxes and do not duplicate the other liens. When his state income tax debt of $53,523, an amount he’s still attempting to appeal, is added to the total, it brings Hart’s total state and federal tax debt for back taxes, penalties and interest to $546,611.91.
So what’s the significance of the new liens filed last week? They show the agency is still going after Hart, though he contends he’s paid thousands in taxes in the past five years and is in negotiations with the IRS about the remaining amounts he owes. Hart said Friday that he didn’t want to discuss those negotiations, but that they’re still ongoing. Interestingly, the liens the IRS has filed against the trust that owns Hart’s home now total $448,258.99 - far more than the assessed value of the home, which according to Kootenai County records is just $271,573.
The IRS doesn’t comment on individual taxpayers’ cases, but Connelly said she wanted to “set the record straight” about her earlier comments on duplicate liens. “The IRS nominee lien secures the government’s interest in property that a taxpayer transfers to a nominee entity,” she said. “We file a ‘regular’ tax lien and also a nominee lien for the same tax years. In essence, it can be construed as a duplicate lien. We need it to ensure creditors understand the IRS has a lien interest in the property that is titled to a nominee.”
The Internal Revenue Service has filed another nearly $300,000 in tax liens against Idaho Rep. Phil Hart, R-Athol, bringing the total that public records show Hart owes in back taxes, interest and penalties to nearly a million dollars. The IRS filed two liens for $292,935 against Hart on Wednesday in Kootenai County, both targeting Hart as a nominee for the trust that owns his Athol home. All are for individual income taxes, penalties and interest from the tax years 1997 through 2003, plus 2006 and 2008. In addition, on Sept. 7, the federal tax agency filed another $3,906.86 in liens against the trust that owns Hart’s North Idaho engineering firm; those liens were for withholding taxes and corporate income taxes.
Hart said Friday that he was unaware of the additional liens until informed of them by a reporter. “I’m finding out about it for the first time,” he said. Asked why the IRS might be filing additional large liens against him now, Hart said, “Well, all I know is it’s the election season.” You can read my full story here at spokesman.com, and see the new liens here.
Remember when Rep. Phil Hart’s attorney, Starr Kelso, issued a statement last week charging that the House Ethics Committee’s action against Hart, through its unanimous vote to recommend his removal from the House Revenue & Taxation Committee while he presses his own personal fight against back state income taxes, had “no basis in law or procedure and exceeds the Committee’s authority”? Turns out those claims aren’t going anywhere. Here’s why: “There is no judicial review of this,” said Brian Kane, the deputy attorney general assigned to the Ethics Committee, who attended all its meetings and advised members throughout the process.
“This is a wholly internal procedure of a single chamber of Idaho’s Legislature,” Kane said. “Courts generally have been extremely resistant to getting into the inner workings of the legislative body, as far as committee assignments and things like that. That would be a really clear violation of the separation of powers, in my opinion.”
Kane outlined for the panel, at both its meetings, the options it had before it: Dismissal of charges, reprimand, censure, or expulsion. “Each of those are recommendations to the full body,” he said. “And they can include within those measures additional recommendations such as removal from a committee or removal from all committees, or different combinations of things that perhaps the speaker or the body would want to invoke against that member.”
BOISE, Idaho (AP) — House Speaker Lawerence Denney says it “might be the best” for a lawmaker embroiled in a $700,000 tax dispute to be stripped of his assignment on a key legislative tax committee. A seven-member House ethics panel voted Wednesday to recommend Rep. Phil Hart’s removal from the House Revenue and Taxation Committee. Denney told The Associated Press Thursday he won’t make a final decision until December. He first wants to sit down with Hart and discuss the matter. Still, Denney, a Republican from Midvale, said removing Hart from House Revenue and Taxation Committee “might be the best thing.” Before making their removal recommendation, a majority on the ethics committee concluded Hart’s votes didn’t violate conflict of interest rules, and dismissed a charge of abuse of legislative privilege; however, they said his continued service on the tax committee while he presses his personal tax fight did constitute a conflict of interest.
Idaho Rep. Phil Hart’s attorney, Starr Kelso, has sent out a defiant response to today’s House Ethics Committee decision on Hart’s behalf, arguing that the panel’s decision “has no basis in law or procedure and exceeds the committee’s authority.” That’s not what the Idaho Attorney General’s office advised the ethics committee. You can read Kelso’s statement here; headed, “Phil Hart’s Response to the Idaho Ethics Committee Rulings,” declares, “Since January 2005 Mr. Hart has paid over $120,000 in txes. Mr. Hart believes that when the law is applied to the facts it will be determined that he has overpaid his income taxes.”
Public records, including IRS liens, show that Hart owes $700,000 in back federal and state income taxes, penalties and interest. In a motion for reconsideration to the state Board of Tax Appeals that Kelso provided to the Ethics Committee on Wednesday, he wrote that Hart’s tax woes are “entirely the result of political persecution of Mr. Hart by the IRS.”
Rep. Tom Loertscher, R-Iona, chairman of the special House Ethics Committee, said after the panel’s meeting today that he’s wondered why Hart delayed so long to file a state tax appeal that was due in December - he waited until March 31st - but decided “it’s immaterial.” He added, “That’s not the way I would do business.”
Hart claimed legislative privilege allowed him the delay, but the state Board of Tax Appeals said even if that did apply, he’d still missed the deadline. Loertscher said that left the ethics panel without guidance on the privilege issue. “I’ve thought about this and agonized about it a lot,” Loertscher said. “It’s a hard process. … No matter how bad it looks, he hasn’t violated the rule as determined by the majority of this committee.”
Hart, who stopped filing both federal and state income taxes in the mid-1990s while he unsuccessfully pressed a lawsuit claiming that the federal income tax is unconstitutional, owes nearly $700,000 in back state and federal taxes, penalties and interest, according to public records. He was running unopposed for re-election in November until Hayden Lake businessman Howard Griffiths decided to run against him as a write-in because of his tax woes.
Loertscher said, “I think he’s got enough constituents up there - write the other guy in if they don’t approve of what he’s done.”
Here’s a link to my full story at spokesman.com on the House Ethics Committee hearing today, in which the panel voted unanimously to recommend that Rep. Phil Hart, R-Athol, be removed from the House Revenue & Taxation Committee while he presses his own personal fight against back state income taxes.
That vote was unanimous, but Rep. George Sayler, D-Coeur d’Alene, voted with the panel’s Republican members in an earlier 5-2 vote to dismiss a charge against Hart of abuse of legislative privilege. “I’ve said before I don’t think this is a partisan issue,” Sayler said. “I don’t see that we had a clear standard to judge by, in terms of the immunity clause … when it can be used and when it cannot be used. I certainly thought it was inappropriate, and cast a black mark on the legislative body, and I would hope that Rep. Hart would change his practice, but in terms of a clear violation of that clause, I didn’t see it.”
Sayler said, “From a personal perspective, I do believe his behavior was unethical. But from a legal perspective, I didn’t see we had the justification.”
Rep. Dell Raybould then moved that the Ethics Committee recommend to the speaker to remove Rep. Hart from the House Revenue & Taxation Committee. Rep. George Sayler seconded the motion, and it passed unanimously.
Rep. Dell Raybould has moved to dismiss the complaint against Rep. Hart for abuse of legislative privilege. Rep. Rich Wills seconded the motion, and it passed on a 5-2 vote. Rep. George Sayler, D-Coeur d’Alene, joined the panel’s Republicans in that vote. Now the committee is moving on to consideration of Hart’s membership on the Rev & Tax Committee.
Rep. Wendy Jaquet said Hart can talk to the speaker and his fellow committee members any time. “I don’t think the people would be very satisfied with that answer,” she said. Chairman Tom Loertscher said, “If he chooses not to resign (from the House Rev & Tax Committee) at this point, then we will discuss that matter.” Kelso responded that in his view, the only issue before the committee is “whether or not there was a violation of ethics by the assertion of a constitutional provision. … I’m just clarifying the issue, that’s the issue,” Kelso said.
“It seems to me that his continued presence there is problematic,” said Rep. George Sayler, D-Coeur d’Alene, noting that the committee’s original charge included the option of recommending that Hart be removed from the tax committee.
Rep. Phil Hart is refusing to resign from the House Rev & Tax Committee. “I am authorized on behalf of Rep. Hart to state that regardless of which direction the vote of the Ethics Committee goes, he will speak and discuss this issue with the speaker of the House and the committee membership,” his attorney, Starr Kelso, told the Ethics Committee. Rep. Wendy Jaquet tried to ask Hart a question about that, but Hart won’t answer; Kelso is speaking for him.
The House Ethics Committee is taking a 15-minute recess, at the suggestion of Rep. Dell Raybould, “to see whether or not Rep. Hart would prefer to resign from the Rev and Tax Committee while this process with the Tax Commission is going on, so that there isn’t any conflict.” Raybould said, “If he would voluntarily do that, why then I think this issue would be completely resolved … for now.” The committee then voted unanimously to take the 15-minute break.
Rep. Dell Raybould said, “What I think we ought to discuss here today, is whether his membership on the tax committee is a conflict because of his personal issue with the Tax Commission.” He said the previous ruling of the committee that Hart didn’t have a conflict of interest in his votes came because the votes referred to a class of people, but now the committee is looking at Hart’s personal tax case - which doesn’t affect anyone but him. Rep. Rich Wills, R-Glenns Ferry, said he agreed. Rep. Bert Stevenson added, “I do have some concern with the fact that he has served on the Rev & Tax Committee.”
Rep. Bill Killen, D-Boise, said if the ethics committee lets Hart slide, it’s setting precedent with regard to abuse of legislative privilege. “We’re suggesting to future bodies that it’s no big deal - I think it is a big deal,” he said.
Rep. Wendy Jaquet, D-Ketchum, said she believe the ethics committee must consider the abuse of privilege issue. “It seemed like basically a smokescreen to again not pay what was due the state,” she said. “So even though we don’t have any precedent, I think that our constituents feel that this is a person that’s taken advantage of something that he shouldn’t have taken advantage of, that he’s taken advantage of it over a period of time. … He’s basically saying I don’t care about the institution of the Legislature, I don’t care about what my actions do with regard to other legislators, I just am going to continue to do this because I don’t believe I should pay my taxes, and I’m just going to drag this on forever. Frankly I think he tarnishes the reputation of legislators and he tarnishes the institution of the Legislature.”
Ethics Committee Chairman Tom Loertscher, R-Iona, is arguing that because the Board of Tax Appeals didn’t rule on whether the legislative privilege from civil process applies to a lawmaker’s personal tax appeal or not - they ruled that even if it did, Hart still exceeded the timeline for an appeal, so his appeal was rejected - that it may be difficult for the Ethics Committee to act on the charge against Hart of abuse of the privilege. “I think the question is do we want to go there and talk about the provision in the Constitution altogether, or do we want to base our decision on whether or not it was improperly used in this case? That might be a difficult thing for us to do, seeing as how the Board of Tax Appeals did not use that as an issue at all,” Loertscher said.
Rep. Phil Hart has filed a motion for reconsideration with the state Board of Tax Appeals, Ethics Committee members were informed. Hart last month lost his case there, where he’d tried to get extra time to appeal a state order to pay $53,000 in back income taxes, penalties and interest on the basis of legislative privilege - because he said his status as a state lawmaker should allow him more time. He cited the constitutional privilege against arrest or civil process during legislative sessions.
The House Ethics Committee is gathering for its meeting. Chairman Rep. Tom Loertscher, R-Iona, asked about the agenda, said, “We’re just going to discuss this last item about this matter and resolve it once and for all, get this behind us so we can move on with life.”
The special House Ethics Committee investigating the actions of Rep. Phil Hart, R-Athol, convenes this afternoon at 2:30 Boise time in the House State Affairs Committee hearing room, East Wing Room 40 in the lower level of the state Capitol, for a telephone conference call meeting. A live audio stream will be available to the public at the Legislature’s website under “Announcements.” Here’s a link to the official notice of the meeting.
The special House Ethics Committee that’s investigating ethics complaints against state Rep. Phil Hart, R-Athol, has set its next meeting for Sept. 22, when the panel will meet at 2:30 p.m. via conference call. A live audio stream of the meeting will be available to the public on the Legislature’s website under “Announcements,” and the meeting will take place in the House State Affairs Committee meeting room, east wing room 40 in the lower level of the state Capitol. At its July meeting, the ethics committee voted 4-3, along party lines, to clear Hart of one of the two charges, conflict of interest. The remaining charge is abuse of legislative privilege. Both involve Hart’s actions as a state lawmaker while pressing his personal fights against both federal and state income taxes, which he contends are unconstitutional.
Idaho Rep. Phil Hart’s write-in challenger, Howard Griffiths, has filed a complaint with the Idaho Secretary of State’s office over Hart’s campaign finance filings for a PAC he formed this year called “North Idahoans for Liberty.” Tim Hurst, chief deputy secretary of state, said the office has not yet received the complaint, but Hart’s report for the PAC has been under review by staffers in the office since it was filed for errors and discrepancies, including possible missing pages. “They’ve asked him repeatedly to get those in, he hasn’t done so,” Hurst said today. “I just called him to tell him, and he wasn’t in, but I left him a message that we need that report in and we need it in now.”
Political candidates or committees that fail to file reports or that falsify the data can face fines and even misdemeanor criminal prosecution; for a PAC, the fine can be up to $2,500. Late filings can bring fines of $50 per day. You can read my full story here at spokesman.com, and read the complaint here.
Rep. Tom Loertscher, R-Iona, chairman of the special House Ethics Committee that’s investigating the conduct of Rep. Phil Hart, said now that the state Board of Tax Appeals has rejected Hart’s appeal, he’ll likely reconvene the Ethics Committee to hear the second charge against Hart, abuse of legislative privilege. “It’s something that we’d rather not do at all, but that’s our charge, and that’s what we’ll do, we’ll do what’s required of us,” Loertscher said. “We’ll have to make the determination now as to whether or not he’s abused this constitutional privilege or not. Quite frankly, this is probably the more serious of the two charges in the complaint.”
Loertscher said, “The reason why we decided not to move forward was because we just didn’t want to muddy the water for that appeal. So as soon as I get word about that and everything’s put together, then we’ll probably convene the committee again.” He added, “I think the Ethics Committee would want to know why the thing (Hart’s appeal) hadn’t been done in a more timely fashion.”
The ethics complaint against Hart, filed by House Minority Leader John Rusche, D-Lewiston, charged Hart with possible abuse of the privilege, which he’s cited repeatedly to seek delays in his state and federal income tax battles; and with conflicts of interest for voting on and sponsoring tax legislation while pressing his own personal fight against the state Tax Commission over back income taxes. Last month, the committee voted 4-3, along party lines, to clear Hart on the conflict of interest charge. Hart is a third-term Republican from Athol with a history of tax protesting; he stopped filing both state and federal income tax returns in 1996 while he pressed an unsuccessful lawsuit claiming the federal income tax was unconstitutional. He’s since been wrangling with both federal and state authorities over back payments; public records show he owes nearly $700,000 in state and federal income taxes, penalties and interest. In his state appeal, Hart also alleged that the state income tax was unconstitutional.
Idaho’s state Board of Tax Appeals has rejected Rep. Phil Hart’s bid to appeal an order to pay $53,000 in back state income taxes, penalties and interest, saying his appeal wasn’t timely. Hart argued that he should have months extra to file his appeal because of the state Constitution’s provision granting freedom from arrest or civil process to state legislators during legislative sessions; the appeal period ran out 10 days before the start of this year’s legislative session. You can read the decision here, and read my full story here at spokesman.com.
The board’s decision is especially significant because Hart faces a pending ethics charge of abuse of legislative privilege for repeatedly citing the constitutional privilege to win delays in his state and federal income tax fights. A special House Ethics Committee, which earlier voted 4-3 along party lines to clear Hart of a conflict-of-interest charge, delayed considering the abuse of privilege charge to await the pending tax appeal decision.
The House Democratic Caucus has issued a statement commenting on the outcome of today’s House Ethics Committee on the conduct of Rep. Phil Hart. Minority Leader John Rusche, D-Lewiston, said in the statement, ““I appreciate the Speaker forming a committee in response to my complaint and am grateful for Chairman Loertscher’s leadership of the committee deliberations. With that said, I am disappointed in the dismissal of the conflict of interest issue by a majority of the members of the committee and their implicit conclusion that Representative Hart’s behavior and actions were acceptable.” Click below for the full release.
A special House Ethics Committee has voted 4-3 along party lines to clear Rep. Phil Hart, R-Athol, of conflict of interest charges over his votes on various tax legislation while pressing his own tax fights against state and federal income tax. “I don’t think that the allegations were specific enough,” said Rep. Rich Wills, R-Glenns Ferry. “I hope if nothing else that come out of this, that it’s a wakeup call for all of us to be very careful about our appearances.” The three minority Democrats on the committee said Hart’s actions showed a pattern of ignoring the House rule that requires conflicts of interest be disclosed. They favored a motion to reprimand Hart and recommend his removal from the House Revenue and Taxation Committee, but it failed on a party-line vote. “I think that the behavior does reflect badly on all of us,” said Rep. Wendy Jaquet, D-Ketchum. “It reflects badly on the credibility of the body. So I can’t vote to dismiss here.” More here - Betsy Russell, Eye on Boise
Here’s a link to my full story at spokesman.com on the House Ethics Committee hearing today, at which a 4-3 party-line vote cleared Rep. Phil Hart of conflict-of-interest charges. Hart still faces an additional ethics charge of abuse of legislative privilege; the committee will convene another time to consider that charge. Rep. Tom Loertscher, R-Iona, the ethics committee chairman, said, “My emphasis has been dealing with this fairly, looking at it totally objectively, trying to divorce the personalities from the issues. When it comes down to that … I think we probably did a pretty good job today.”
Rep. Wendy Jaquet, D-Ketchum, the panel’s vice-chair, said, “I’m disappointed. I think to me, the perception is out there and the constituents are upset, and his actions do stain the credibility of the institution. And that’s what I’m really concerned about.”
An unrepentant Rep. Phil Hart said at a press conference after today’s House Ethics Committee meeting that he has no plans to declare conflicts of interest in situations like those examined by the committee today, in which he voted on or proposed tax legislation while also pressing his own personal fight against paying a $53,000 judgment from the state Tax Commission for back income tax, penalties and interest. “I think that’s a troubling road to go down, to have a disciplinary action based on perceptions,” he said. “I think as citizen legislators, we all do something else for a living. I think we ought to have some flexibility and some deference to the members.”
Hart said, “I am glad that we had this hearing today … and that there has been an opportunity to present this in front of the public … and to get this out in the open.” He said, “I hope that we don’t have future possible candidates scared away from the electoral process,” because of the attention his case has received.
Hart said he expected the conflict-of-interest charges against him to be dismissed. “I don’t think there is a connection between those votes I made and my personal circumstances,” he said. “I think the issue got an adequate hearing, we heard voices from both sides, and I think the decision was right.” He expressed optimism about his prospects on the remaining charge of abuse of legislative privilege. “I think I’ve got a very solid foundation, and I think when it’s ultimately resolved, it’ll be resolved in my favor.”
Still pending before the Ethics Committee is the question of whether Hart abused legislative privilege by invoking it repeatedly to win delays in his state and federal income tax cases. The committee will wait for court resolution of that issue before taking it up on the ethics charge. The committee has now adjourned for today.