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Posted on 07/13/2002 2:02:00 PM PDT by Ernest_at_the_Beach
LOS ANGELES (Reuters) - California Republican gubernatorial hopeful Bill Simon defended his tax record on Friday after the Wall Street Journal reported that he took advantage of tax shelters the government says may be illegal.
The Journal said Friday the Internal Revenue Service ( news - web sites) had identified Simon, the millionaire philanthropist who was the surprise victor of California's Republican primary in March, as one of dozens of people put into the shelters by auditing firms KPMG LLP and BDO Seidman.
Simon, who has come under Democratic attack for declining to release his full tax returns, issued a statement Friday saying the matter was "between the IRS and these public accounting firms."
"Like many Californians and Americans, and due to the technical complexity of IRS regulations, I have, and my firm has, utilized the advice and guidance of tax professionals, including KPMG, other accountants and tax attorneys," Simon said.
"All U.S. companies and individuals have an obligation to follow the laws and regulations established by appropriate regulatory entities," Simon said. "When I enter into business transactions, I do it for maximizing my returns, just as any other investor, large and small, and I follow the law."
Money has become a major campaign issue in the race, with Simon slamming incumbent Democratic Gov. Gray Davis ( news - web sites) for "strong arming" campaign donations with his powerful fund-raising machine and Davis attempting to portray the Republican challenger as secretive about his vast wealth.
'CAGEY AND EVASIVE'
"This issue will give us a good indication of what kind of governor Bill Simon will be," Davis campaign spokesman Roger Salazar said on Friday. "If he is as cagey and evasive and secretive about his businesses as he has been, the people of California should take that into account."
The Journal said Simon was one of a number of people named in IRS filings made in connection with suits against the two accounting firms, which it has accused of flouting tax laws to help hundreds of companies and individuals avoid billions of dollars in taxes through improper use of tax shelters.
KPMG, in a statement to the newspaper, said the IRS public filings had violated its clients' right of confidentiality, and reiterated that it had not done anything wrong.
"We provide tax planning services for clients in an appropriate manner," KPMG said.
Simon, a political rookie running on a platform of lower taxes, less government and conservative social values, is an heir to the fortune built by his family's investment firm, William E. Simon & Sons, which controls or has interest in companies with sales exceeding $2 billion as well as hundreds of millions of dollars worth of real estate.
On Friday, Simon said that he had paid more than $1 million per year in state and federal taxes while repeating that he firmly believed the details of his tax return were a private matter between himself and the government.
He said, however, that he had fully complied with California's public disclosure laws requiring prospective public servants to detail potential conflicts of interest with state business, filing "hundreds of pages" of documentation on his business activities.
"I would argue that there has been no candidate for governor or governor in modern-day California that has provided such thorough and extensive disclosure," he said.
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Well, he was running a good campaign until now.
Buh-bye Bill.
Simon has to find a way to link Davis' over-the-top accusations and negative campaigning to the over-the-top accusations that the national Democrats are hurling at Bush.
I believe that Americans are waking up to the Democrats' hysterical campaign practices by virtue of their repeated attempts to smear Bush with half-truths and innuendos, only to backtrack when they are found out to be worse offenders. If Simon can suggest that Davis is doing the same thing because he doesn't have anything else to run on, Simon might convince some voters who are turning off to the national message that he is a victim here.
It might be an easier thing to do than one might think, considering that Davis is attacking Simon's handling of corporate financing and taxes. The Democrats are stuck right now -- they are accusing Bush of shady stock deals while they cover up McAuliffe's mathematically impossible Global Crossing sale, Gephardt's vacation home mortgage deal, his loan from McAuliffe, Daschle's refusal to release his income taxes because of his wife's lobbying, and their attempt to blame Bush for the wrong-doing on Wall Street while the wrong-doing occurred durning the Clinton Administration.
If Simon can paint a broad brush picture that this is part of the same scheme, he might get Californians to sympathise with him, or at least resent Davis for the tactics.
-PJ
Saying for the sake of argument that Simon has been "cagey and evasive," he has been so about his personal business. Davis, on the other hand, has been so about the state's business.
Nice try.
Maybe you had better rethink that logic. Rove wants a centrist RINO party. That agenda includes gays, Federally controlled schools, and open borders. Rove ran Riordan. Simon beat Riordan. Simon is a conservative. Rove wants to prove that a centrist party will win big and conservatives have no place to go. If Simon wins that discounts Rove's (and Bush's) "giving them what they want and spending for votes always works" premise. If conservatives can enlist swing votes on conservative principles, Rove is out of a job.
Got it?
There is plenty of evidence supporting this thesis, particularly with the way that the Party under Gerry Parsky (who Rove force fed to California) is denying the Simon campaign funds for normal operations. You should know that there is bad blood between Parsky and the Simon family over money. Even discounting personal vendettas, the pattern is too consistent to ignore.
Examples? The budget to get out the absentee vote will be one tenth of normal. Spending for already budgeted computers and office equipment is being withheld. There was an article just a few days ago out of the Hoover institution attacking Simon (and the author was Riordan's chief brain trust). There is a lot more that is more subtle.
It's a screw job, just like Schundler got. I think it's Rove.
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