Clarence Thomas’ $267,230 RV and the friend who financed it

Justice Clarence Thomas met the recreational vehicle of his dreams in Phoenix, on a November Friday in 1999.

With some time to kill before an event that night, he headed to a dealership just west of the airport. There sat a used Prevost Le Mirage XL Marathon, eight 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.

In a documentary financed by conservative admirers, Thomas, who was born into poverty in Georgia, waxes rhapsodic about the familiarity of spending time with the regular folks he meets along the way in RV parks and Walmart parking lots.

“I don’t have any problem with going to Europe, but I prefer the United States, and I prefer seeing the regular parts of the United States,” he told the filmmakers, adding: “There’s something normal to me about it. I come from regular stock, and I prefer being around that.”

But there is an untold, and far more complex, back story to Thomas’ RV – one that leaves unanswered a host of questions about whether the justice received, and failed to disclose, a lavish gift from a wealthy friend.

His Prevost Marathon cost $267,230, according to title history records obtained by the New York Times. Thomas, who in the ensuing years would tell friends how he had scrimped and saved to afford the motor coach, did not buy it on his own. In fact, the purchase was underwritten, at least in part, by Anthony Welters, a close friend who made his fortune in the health care industry.

He provided Thomas with financing that experts said a bank would have been unlikely to extend – not only because Thomas was already carrying a lot of debt, but because the Marathon brand’s high level of customization makes its used motor coaches difficult to value.

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.

He would not say how much he had lent Thomas, how much the justice had repaid and whether any of the debt had been forgiven or otherwise discharged. He declined to provide the Times with a copy of a loan agreement – or even say if one existed. Nor would he share the basic terms of the loan, such as what, if any, interest rate had been charged or whether Thomas had adhered to an agreed-upon repayment schedule. 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.

Richard W. Painter, a White House ethics lawyer during the George W. Bush administration, said that “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 much of the largesse he has received. He has said he was advised that the trips fell under an exemption for gifts involving “personal hospitality” from close friends, for instance, and a lawyer close to the Thomases contended in a statement that the justice did not need to disclose the tuition because it was a gift to his great-nephew, over whom he had legal custody, rather than to him.

Thomas was turned on to the RV luxury brand by Bernie Little, 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 and could fetch far more depending on the bells and whistles.

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: They had purchased their house in 1992 for $552,000 with 5% down, then refinanced it two years later, taking out a 15-year mortgage of $496,000. Plus, they had at least one line of credit of $15,000 to $50,000.

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.

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. It came equipped with plush leather seating, a kitchen, a bathroom and a bedroom. 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.

Wayne Mullis, the owner of the now-defunct Desert West, said in an interview that Thomas never discussed obtaining traditional financing with him, and that “as far as I know, he paid for it.”

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.

“Absent that, it’s more of a gift,” said Rich Lahijani, tax director of Edelman Financial Engines, an independent wealth planning and investment advisory firm.

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.

And as of late last month, when the Times reviewed the records, they still listed Welters as the lien holder, notwithstanding the signed release he said he gave Thomas in 2008 so he could obtain a new, clear title.

Welters said he could not explain why he was still listed as the holder of the lien. After he gave Thomas the paperwork, he said, “I don’t know what process the borrower should have followed.” (To clear the title, the paperwork should have been brought to the DMV, where the lien release would have been recorded and a replacement title issued.) As for Thomas, that was among the matters he declined to discuss with the Times.

This article originally appeared in The New York Times.