Posted on 12/11/2003 9:23:01 PM PST by HAL9000
Tucker gets penalty reduced
After years of insisting that the Office of Independent Counsel incorrectly charged him in a tax-conspiracy case, former Gov. Jim Guy Tucker on Wednesday finally got to hear the government concede that he was right.
The concession took the steam out of allegations, leveled by the independent counsel eight years ago against Tucker and a business partner, William Marks of Boston, that the pair conspired to put their cable television company through a sham bankruptcy to avoid paying $3.8 million in corporate income taxes on the profits.
According to a formal stipulation agreed to in court Wed- nesday, the maximum potential corporate tax the men avoided through the bankruptcy filing should have been no higher than $125,429.88.
Of that, Tucker’s share of any corporate tax liability cannot exceed $62,714.94, with the exact amount yet to be determined. It’s even possible Tucker will receive a refund, a U.S. Department of Justice tax attorney told U.S. District Judge Stephen M. Reasoner.
In a courthouse hallway minutes later, flanked by attorney Jeff Rosenzweig, Tucker expressed elation and anger.
He continues to maintain that the bankruptcy wasn’t a sham, that he didn’t cheat the government out of corporate taxes and that he owes nothing. He and Rosenzweig said they were relieved that an appeal of Tucker’s conviction in the bankruptcy case can now move forward. The appeal has been stalled at the 8 th U.S. Circuit Court of Appeals while the tax matter was in dispute. "This is additional support" for the appeal, Rosenzweig said of the tax stipulation.
Years ago, the 8 th Circuit upheld a federal jury’s 1996 bankfraud conviction against Tucker in another Whitewater-related case. That conviction led Tucker to resign as governor. It centered on a governmentbacked loan that he received from Capital Management Services Inc., which was owned by former Pulaski County Municipal Judge David Hale.
In the bankruptcy case, Tucker said Wednesday that he shouldn’t have had to endure the long and expensive fight to get to this point. "I’ve spent a lot of money getting this finally established," he said. "It is absolutely indisputable that the independent counsel went to the grand jury [in 1995] and told them a law applied that in fact had been repealed one year before," Tucker said.
He said he believes the independent counsel’s office "knew they were wrong at least as early as 1998." He also said, "If any other attorney represented to a court that a law existed that didn’t, he’d be in serious trouble." Tucker said he didn’t know in 1998 — when he pleaded guilty to a lesser charge — about the independent counsel’s application of the wrong law when charging him. He said that’s because the independent counsel’s office refused to reveal details of its conspiracy case before trial. Tucker said he pleaded guilty to impeding the Internal Revenue Service in the determination of a tax, rather than face trial on the more serious and vague conspiracy charge, largely because he feared prosecutors had a theory that would be difficult to defend. He said he had serious physical problems with his liver and didn’t want to wait out an appeal in prison if he were convicted during a trial.
What he agreed to in his guilty plea was that he failed to include relevant information to the U.S. Bankruptcy Court in a bankruptcy-disclosure statement.
But he reiterated Wednesday that the information he omitted from the bankruptcy document had been disclosed to the IRS. "The government should never put a citizen in that position where he’s being coerced to make a plea when he doesn’t know what the facts are," Tucker said. He said if the facts had been presented correctly, "I never would have entered a plea."
Noting Wednesday that his argument about the repealed law is now supported by the IRS and the Justice Department, which took over the lingering tax questions after the Office of Independent Counsel disbanded, Tucker said, "governments can be dangerous. Ad hoc governments can be absolutely disastrous."
He said that’s what the independent counsel’s office became when it was given unfettered power to investigate a series of financial transactions that became grouped under the "Whitewater" heading.
Tucker said he was furious that the independent counsel could get away with "indicting a sitting governor — or any citizen — under a law that’s indisputably been repealed."
Rosenzweig agreed, saying, "it’s like indicting someone for murder without checking to see that they’re dead."
Both men said it was only when the Department of Justice took over the case and applied standard investigative procedures that the problem was resolved.
A short time earlier in the courtroom, Reasoner echoed Tucker’s dismay after Justice Department attorney Gregory Tortella of Washington explained how an IRS recent examination of the case showed that the law used to charge Tucker shouldn’t have applied to any transactions occurring after Jan. 1, 1987 — including the January 1988 sale of the cable company.
The IRS determined that a "new Section 1374" of the Internal Revenue Code of 1954 was in effect at the time of the sale, and, "that resulted in a substantial reduction in the amount of tax liability" for Tucker. The independent counsel’s office had charged Tucker under the old Section 1374. "That would have been nice if somebody had told me that back at Mr. Tucker’s sentencing," Reasoner said, referring to a 1999 hearing at which he ordered Tucker to pay $1 million in restitution as the government requested and a pre-sentence report agreed. "Then I wouldn’t have made such an egregious error."
Tortella responded that the 8 th Circuit didn’t necessarily say Reasoner had erred but remanded the case with instructions that he make the government prove the amount of restitution it claimed Tucker owed.
Elizabeth Murray, another of Tucker’s attorneys, told Reasoner that the independent counsel’s office "misled this court." "I’ll tell you what has changed in this case," she said. "It’s that the Office of Independent Counsel is gone, and Mr. Tortella and the IRS have now conceded, confessed, that Gov. Tucker, his CPAs, his tax lawyer, we were correct all along."
Murray persuaded Reasoner to exclude interest from the final restitution order. She noted that Tucker has already paid $100,000 toward restitution and interest into the court’s registry on April 17, 2000, and potentially could get all or some of that back.
Marks, who last year was believed to be living overseas and whose location is unknown, was barely mentioned in Wednesday’s proceedings.
I'm pretty certain it was
There sure are a lot of "coincidences" in Arkansas, aren't there?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.