Simon relents, shows media his tax returns

gwhunter69

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Simon relents, shows media his tax returns
By Gary Delsohn -- Bee Capitol Bureau
Published 2:15 a.m. PDT Tuesday, July 23, 2002
After refusing for three months to release his income tax returns and taking a beating for it on the campaign trail, Bill Simon rented a room in a Sacramento hotel Monday and let reporters pore over 11 years worth of state and federal tax returns.

Numbers in the inches-high pile of complex filings seemed to affirmatively answer Gov. Gray Davis' repeated challenge about whether the multimillionaire businessman has paid his fair share of taxes.

According to the returns, which Simon campaign aides said he decided only Sunday to release, Simon and his wife have paid about $11.5 million in state and federal taxes since 1990 on income of $36 million.

"I changed my mind," Simon said of his past insistence that his returns were a private family matter, "because I believe this issue has become a distraction in the campaign."

"While I regret that my privacy and, really more my family's privacy, is being compromised, I think for the people of California, it is necessary to focus the attention on what the issues really ought to be," he said.

Even before the returns were made available, Garry South, Davis' political consultant, conducted a conference call with reporters in which he said he expected what Simon released to be "pitifully inadequate and totally misleading."

But while complex tax returns can be hard to decipher unless one knows the background of all the investments, gains and losses that are listed, Simon's aides said the filings were "100 percent" of everything the Internal Revenue Service and state Franchise Tax Board had received. Nothing was omitted, they said.

Now, Simon said during a press conference in Burbank before the returns were made available, he hopes the campaign will focus on what he called Davis' record as "perhaps the most failed governor in all our history."

Simon's reversal on his tax returns comes 10 days after initial news reports that the IRS was investigating a national accounting firm -- KPMG LLP, which also prepares Simon's taxes -- that had sold offshore tax shelters that might be illegal to the Simon family and other wealthy investors.

Simon's decision to release the returns was based in part, aides said, on political fallout from those reports.

The issue of releasing the tax returns had seemed to die down in recent weeks, but campaign sources said Simon acted because of the KPMG news, as well as reports of corporate scandal that polls show have lowered the public's opinion of big business.

When he spoke to reporters in Burbank, Simon denied he had invested in any offshore tax shelters, but he didn't discuss any details of the transaction being investigated by the IRS.

"I'll let the documents speak for themselves," he said of his tax returns.

But later in the day, after reporters had spent two hours looking at the returns but weren't allowed to copy any of the pages or consult tax experts, Sal Russo, Simon's chief political adviser, emphatically declared that the Simon family opposes tax shelters and doesn't invest in them.

"As a matter of policy, Bill Simon does not believe in investing in tax shelters," Russo said. "He hasn't invested in any. It's not just his view. It's his brother and sisters' view. It was the view of his dad.

"His accountants looked at it. They did not believe it was a tax shelter. Therefore they invested in it."

The investment being investigated by the IRS was made by a Simon family partnership called Weskids. It shows up on page after page of his returns, without any explanation of what the partnership invests in.

Like nearly everything else in Simon's portfolio, Russo said, it's owned in equal parts by Simon, his brother, Peter, and his five sisters. The siblings are all equal partners in William E. Simon & Sons, the New Jersey investment firm started by their father, the late William Simon, who was Treasury secretary under President Nixon.

Also included in the filings were returns from the charitable foundation that Simon and his wife, Cindy, created in 1995. From 1996 to 2001, the foundation gave away $3.1 million, the tax returns show.

Simon released returns through last year for the foundation but only through 2000 for his family. He's asked for an extension on filing last year's taxes, as he has done virtually every year since 1990, and aides said that when he files for 2001 those returns will also be released.

"What the tax returns illuminate, I think, are two things," Russo said. "He pays an awful lot of taxes in California and is quite generous." The family's taxes are typically about 30 percent of their total taxable income, the returns show, a rate Russo said is quite high for someone of Simon's wealth.

Simon said he had not been pressured to release the return by leaders in the national Republican Party, as some recent news reports have said, nor anyone else.

Some members of his campaign staff, however, have been urging Simon to release his tax returns almost from the moment Davis began criticizing his decision not to soon after the primary election in March.

Simon stumbled over the issue for several days and even likened Davis to Karl Marx, a communist icon, for suggesting that Simon hadn't paid his fair share of taxes.

(Edited by gwhunter69 at 1:38 pm on July 23, 2002)
 

karstic

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As usual Davis' camp is satisfied that Simon has released his returns.

Let's get on with it already. Davis is too embarrased to admit screwing up California so he dogs on Simon. Jerk.
 
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