A Senate committee has discovered that US Supreme Court Justice, Clarence Thomas, did not pay back most, if not all, of the “sweetheart deal” he took out to borrow more than $267,000 to purchase a luxurious RV.
The New York Times was the first to report on the $267,230 loan as Michael Hamersley, a tax attorney and congressional expert witness, was quoted by The Times on Wednesday saying: “This was, in short, a sweetheart deal’ that made no logical sense from a business perspective”.
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Although Thomas disputes any misconduct, disclosures about the megadonor Harlan Crow and other justices’ undisclosed gifts and windfalls have raised concerns about the court’s impartiality and fueled calls for ethics reform.
On Wednesday, however, the Senate Finance Committee announced that it had obtained documentation indicating a 7.5% annual interest rate with no requirement to pay down the principal—just $20,042 in interest payments annually.
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In addition, the committee claimed to have seen a note from Thomas pledging to follow the guidelines.
The panel stated that none of the records examined by committee staff suggested Thomas ever paid Welters more than the loan’s yearly interest.
According to the Times, despite the fact that Justice Thomas had collected $500,000 of a $1.5 million advance for his autobiography, according to his financial disclosures, the previous year,” Welters gave a 10-year extension when the loan was due in 2004.
The committee’s report states that Mr. Welters then merely forgave the remaining loan sum in late 2008.
The committee claimed to have seen a contemporaneous note from Welters stating that Thomas’ “interest-only” payments were more than the RV’s worth.
However, there was insufficient evidence to support this claim because Welters had only provided investigators with one copy of a canceled check for Thomas’s annual interest amount.
“No bank acting in a commercially reasonable, arms-length manner would have given that loan in the first place,” Hamersley told the Times.
Additionally, Hamersley stated that any such donation would be viewed as taxable income by the Internal Revenue Service.
The Democratic head of the Senate Finance Committee, Ron Wyden, stated: “We now know that Justice Thomas had debt forgiven totaling up to $267,230, but he never disclosed it on his ethics forms. The committee should be informed by Justice Thomas of the exact amount of debt forgiven. As well as whether or not he properly reported the loan forgiveness on his tax returns and paid all applicable taxes. The average American has no wealthy buddies who will write off enormous debt.”
Many have called for Thomas’s resignation or his impeachment and removal.
Despite being extremely improbable, Caroline Ciccone, president of the watchdog Accountable, mentioned such outcomes on Wednesday.
Thomas had descended to a “new low,” with the justice conducting “business as usual” on the Supreme Court and eschewing all ethical norms to profit hundreds of thousands of dollars from his affluent cronies.
