House Financial Services Committee Chair Barney Frank (D-MA) is just the latest member of Congress facing scrutiny for taking joy rides on a private jet owned by hedge-fund billionaire and federal bailout recipient S. Donald Sussman.
Republicans say that Frank needs to clear up ethical concerns about his flight to the U.S. Virgin Islands on Sussman's $25 million private plane in 2009, and his subsequent vacation at the hedge-fund owner's luxurious Caribbean mansion. Sussman, a major philanthropist to liberal causes, has reportedly raked in $200 million in federal bailout funds for his company Paloma Securities. As head of the House Financial Services Committee, Frank helped push through the Wall Street bailout as well as extensive financial reforms.
According to the Boston Herald, aviation experts said that Frank's flight could have cost as much as $30,000 each way, but Frank reported that the air travel cost was just $1,500 in financial disclosure forms. The Massachusetts lawmaker reported no other expenses from the vacation.
Frank said that his connection with Sussman never influenced any of his political decisions. "I've never talked with [Sussman] about any favorable treatment," Frank told the Portland Press Herald. "I voted to raise his taxes. That's one of the most backwards things I've ever heard. I've taken the anti-hedge position."
The House Ethics Committee said that it cleared the vacation, granting "unusual" permission for the trip because Frank's partner Jim Ready is close friends with Sussman.
But Republicans say that Frank has not answered all of their ethical concerns. "If there's nothing to hide, Chairman Frank should be forthright with his constituents and immediately address why accepting a paid jet to the Caribbean from Sussman is not a blatant conflict of interest," said Republican National Committee spokesman Parish Braden told the Boston Herald.
Frank is just the most recent House member to catch heat for his ties to Sussman. Sussman's fiancé, Rep. Chellie Pingree (D-ME), has also come under heavy criticism for allegedly taking rides to campaign events on the hedge-fund owner's plane in September.
Maine GOP filed an ethics complaint against Pingree, claiming that the trip appeared to be in violation of the Federal Election Campaign Finance Act of 1971, which bars lawmakers from traveling to campaign events on non-commercial private aircraft. However, the House ethics committee cleared Pingree of wrongdoing after the congresswoman pointed out a loophole in the rules that allows politicians to travel on non-commercial planes that are owned by family members.
In addition to Sussman's philanthropy to liberal causes, the billionaire's use of tax havens has also been scrutinized by Republicans. In 2000, the hedge-fund owner set up a company and established full-time residency in the U.S. Virgin Islands, in order to reduce the amount of income tax that he pays. While Sussman now claims primary residency in Maine, financial documents from September indicate that he may still be receiving U.S. Virgin Islands tax breaks.
Frank and Pingree have both been critics of tax havens, even while they have accepted gifts and contributions from Sussman.
Last May, Pingree pushed legislation that she promised would "crack down on tax loopholes that allow hedge-fund managers to avoid paying income tax on much of their salaries." In 2002, the congresswoman made her opposition to tax havens a key element of her unsuccessful senate run against Sen. Susan Collins (R-ME).
Maine GOP spokesman Lance Dutson said Pingree's criticism of tax dodging was at odds with some of her recent actions.
"When [Pingree] takes the floor and demands that hedge fund managers should stop taking tax loopholes while benefiting from it herself, that's hypocrisy," he said.
But Pingree said her record on tax issues speaks for itself. "My positions couldn't be more clear and they haven't changed a bit," she said, lamenting that "each of my last three opponents has tried to make Donald an issue, and suggested my relationship with him will somehow influence my vote. Nothing could be further from the truth."
Alana Goodman is NLPC's Capitol Hill Reporter.
Related:
Did Rep. Pingree Get Engaged to Beat Ethics Rap?
Barney Frank’s Ties to Bailed-Out Financier Sussman Raising Ethics Questions-----In 2000, the hedge-fund owner Sussman set up a company and established full-time residency in the US Virgin Islands, in order to reduce His US income tax payments. While Sussman now claims primary residency in Maine, financial documents from September indicate that he may still be receiving U.S. Virgin Islands tax breaks. Cong Frank and Cong Pingree have both been critics of tax havens, even while they have accepted gifts and contributions from Sussman. Frank'a got more than ethics questions. Frank was closely identitfied with the criminal money-making enterprise of the Democratic party---Fannie Mae. Read on.
Frank Accused of Fannie Mae Conflict of Interest
Friday, October 03, 2008
By Bill Sammon, Washington FOX News, Deputy Managing Editor
Unqualified home buyers were not the only ones who benefited from Massachusetts Rep. Barney Frank’s efforts to deregulate Fannie Mae throughout the 1990s. So did Frank’s partner, a Fannie Mae executive at the forefront of the agency’s push to relax lending restrictions. Now that Fannie Mae is at the epicenter of a financial meltdown that threatens the U.S. economy, some are raising new questions about Frank's relationship with Herb Moses, who was Fannie’s assistant director for product initiatives.
Moses worked at the government-sponsored enterprise from 1991 to 1998, while Frank was on the House Banking Committee, which had jurisdiction over Fannie. Both Frank and Moses assured the Wall Street Journal in 1992 that they took pains to avoid any conflicts of interest.
Critics, however, remain skeptical. ‘It’s absolutely a conflict,’ said Dan Gainor, vice president of the Business & Media Institute. “He was voting on Fannie Mae at a time when he was involved with a Fannie Mae executive. How is that not germane? “If this had been his ex-wife and he was Republican, I would bet every penny I have - or at least what’s not in the stock market - that this would be considered germane,’ added Gainor, a T. Boone Pickens Fellow. ‘But everybody wants to avoid it because he’s gay. It’s the quintessential double standard.’
A top GOP House aide agreed. ‘C’mon, he writes housing and banking laws and his boyfriend is a top exec at a firm that stands to gain from those laws?’ the aide told FOX News. ‘No media ever takes note?
Imagine what would happen if Frank’s political affiliation was R instead of D? Imagine what the media would say if [GOP former] Chairman [Mike] Oxley’s wife or [GOP presidential nominee John] McCain’s wife was a top exec at Fannie for a decade while they wrote the nation’s housing and banking laws.’
Frank’s office did not immediately respond to requests for comment. Frank met Moses in 1987, the same year he became the first openly gay member of Congress. ‘I am the only member of the congressional gay spouse caucus,” Moses wrote in the Washington Post in 1991. “On Capitol Hill, Barney always introduces me as his lover.’
The two lived together in a Washington home until they broke up in 1998, a few months after Moses ended his seven-year tenure at Fannie Mae, where he was the assistant director of product initiatives. According to National Mortgage News, Moses ‘helped develop many of Fannie Mae’s affordable housing and home improvement lending programs.’ Critics say such programs led to the mortgage meltdown that prompted last month’s government takeover of Fannie Mae and its financial cousin, Freddie Mac. The giant firms are blamed for spreading bad mortgages throughout the private financial sector.
Although Frank now blames Republicans for the failure of Fannie and Freddie, he spent years blocking GOP lawmakers from imposing tougher regulations on the mortgage giants.
In 1991, the year Moses was hired by Fannie, the Boston Globe reported that Frank pushed the agency to loosen regulations on mortgages for two- and three-family homes, even though they were defaulting at twice and five times the rate of single homes, respectively.
Three years later, President Clinton’s Department of Housing and Urban Development tried to impose a new regulation on Fannie, but was thwarted by Frank. Clinton now blames such Democrats for planting the seeds of today’s economic crisis. ‘I think the responsibility that the Democrats have may rest more in resisting any efforts by Republicans in the Congress or by me when I was president, to put some standards and tighten up a little on Fannie Mae and Freddie Mac,’ Clinton said recently.”
Lefty financier and congresswoman’s fiancée dodged U.S. taxes as Virgin Island Resident
Weekly Standard | Oct 15, 2010 | ALANA GOODMAN
FR Posted Saturday, October 16, 2010 by fight_truth_decay
Lberal financier S. Donald Sussman the hedge-fund billionaire has pumped millions into the coffers of Democratic politicians and their political pet projects since 1989. Sussman sits on the board of the non-profit Center for American Progress, the non-profit Democracy Alliance and the dovish non-profit Israel Policy Forum, and he’s been one of the top contributors to left-leaning 527 non-profit organizations.
Progressive organizations and Democratic pols have taken significant financial contributions from Sussman – and have long vilified offshore tax havens, pointing to them as evidence of corporate greed gone wild. Sussman's girlfriend Rep. Pingree (D-Maine) has been an outspoken critic of this type of tax evasion, and made it one of the cornerstones of her unsuccessful 2002 senate bid against Sen. Susan Collins (R-Maine). (Excerpt) Read more at weeklystandard.com ...
Sussman has long kept a behind-the-scenes profile, a recent ethics controversy in Maine has flung him into the center of a complicated dispute over state residency, tax dodging and congressional ethics – the implications of which extend all the way from the rocky coast of southern Maine to the offshore tax haven of the U.S. Virgin Islands. According to Sussman’s fiancée, Rep Chellie Pingree (D-Maine), the philanthropist lives with her and has been a resident of Maine since 2009. But financial records and other documents indicate that Sussman has claimed full-time residency and extensive tax breaks in the U.S. Virgin Islands for years – and may be continuing to claim them.
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HOW'D THEY DO THAT? The court-appointed man ID'ing Ponzi Madoff's assets, unearthed a labyrinth of interrelated international funds, institutions and entities of almost unparalleled complexity and breadth...... and assets and businesses in 11 places overseas. No question,tax evasion and money laundering was the name of the game for the wealthiest ----- posing as philanthropists----businessmen who were funneling income to Madoff to avoid US taxes. The crooks take on the image of "philanthropists" ....forming non-profits that contribnute to their fave "charities"....the MO for tax evasion and money laundering.
Frank's and Sussman's connections to Israel, and the non-profit Israel Policy Forum, should be rigorously scrutinized----Israel is the only place in the world, one can debark, go to a bank with a suitcase full of cash, and nobody asks where it came from or if taxes were paid on it.
