-9999

Floor Speech

BREAK IN TRANSCRIPT

Mr. WYDEN. Madam President, I come to the floor to talk about something every American wants from their public officials: transparency and accountability.

Unfortunately, after repeated attempts, Congress has not received that transparency or accountability from Supreme Court Justice Clarence Thomas, and it is feeding the perception of corruption. For the past 6 months, the Senate Finance Committee has been trying to get straight answers from the Justice and his wealthy friends about the growing list of handouts they have lavished on the Justice.

Most recently, we sought to figure out whether Justice Thomas secretly had over $250,000 in debt written off--simply wiped away--by a wealthy benefactor. If so, as chairman of the Senate Finance Committee, I am working to learn whether he paid the taxes he was supposed to-- taxes that any American is legally required to pay.

The Justice has refused to respond. Justice Thomas acts as if the freebies and the special favors Americans are reading about--the flights on private jets, comped; trips on luxury yachts; megawealthy individuals paying for school tuitions; quarter-million-dollar debts wiped away--is totally normal stuff.

The reality is, it is not. It isn't normal for anyone, and when the person receiving all of these extravagant handouts is one of the nine most powerful jurists in the country, with unchecked power to rewrite laws from the bench, it looks worse.

With respect to this disappearing debt, here is what we know. In 1999, one of Justice Thomas's friends loaned him $267,230 to buy a luxury RV. That is some kind of friend.

Justice Thomas wants to believe the story is simple, like the couple hundred bucks you would loan somebody to get their car fixed in an emergency. This is the story that the Justice has, in effect, apparently subscribed to obscures the truth.

The simple fact here is that loans have to be repaid, and it sure looks like this one was not. According to the terms of the loan agreement--which, by the way, was written down on Supreme Court stationary from the chamber of Clarence Thomas--Thomas's friend supplied the money to buy Thomas the luxury RV. In return, the Justice was supposed to pay 7.5 percent interest for 5 years. Then the loan would come due, and then Justice Thomas would be responsible for having to repay the full principal. But from what I have seen, the payment never happened.

Through my investigation, I have uncovered that Justice Thomas only paid interest on the transaction. When the deadline hit after 5 years, his friend extended the maturity date on the loan for another decade. But just 4 years later, Thomas' friend simply decided to stop collecting payments from the Justice, even though the Justice still owed him more than $\1/4\ million.

Justice Thomas's friend wrote a note telling him that the interest he paid was good enough and that he wouldn't accept further payments. That means that the debt--likely the entire $260,000 in principal--was considered forgiven. Again, that is quite a friend.

So the documents we have seen indicate Justice Thomas received a $267,000 loan to buy a luxury RV and never repaid most--and, likely, not even a dollar--of the money that his friend originally loaned him. This has legal consequences.

The Tax Code makes clear that in instances where a debt is canceled, forgiven, or discharged for less than the amount owed, the borrower must report the amount canceled or forgiven as income for tax purposes. Furthermore, the forgiven debt is income that Justice Thomas is required by law to report on his financial disclosure report.

But Justice Thomas never reported the $\1/4\ million in forgiven debt on his financial disclosure report in 2008, the year his debt was forgiven. He won't give the Finance Committee a direct answer on whether he reported it on his taxes, raising serious legal questions.

After I publicly revealed these findings, Justice Thomas, through his lawyer, said the documents that I reviewed were untrue. The Justice said:

The loan was never forgiven. Any suggestion to the contrary is false.

And--

The terms of the agreement were satisfied in full.

This contradicts the documents I reviewed. So, along with Senator Whitehouse, our colleague from Rhode Island, we wrote to Justice Thomas's lawyer and gave him a chance to prove his claim. Personally, I believe that a sitting Supreme Court Justice would jump at the opportunity to correct the record and prove that he repaid his debt and did not cheat on taxes. I wish I could report to the American people that was the case and that this whole mess was just a misunderstanding. But that did not happen.

Justice Thomas did not give us any documentation about his so-called loan. Senator Whitehouse and I gave him a month to respond and received nothing--no loan agreement, no payment schedule, no evidence of principal payments, and no explanation for why he and his lawyer said the documents and information I uncovered were untrue. If what Justice Thomas and his lawyer are saying about the loan is accurate, the question is, What is behind all the stonewalling?

Does the Justice believe he shouldn't ever have to answer the questions about all these major windfalls and luxury travel, not even to prove that everything was on the level? Justice Thomas and his lawyers could put this whole affair to rest by providing copies of checks repaying the $\1/4\ million loan.

My personal guess is they can't because those payments never happened.

If a wealthy friend forgave a $\1/4\ million loan to Justice Thomas, the law requires that he declare it.

As chairman of the Senate Finance Committee, it is essential that Justice Thomas list that income on his taxes. He is also required to disclose the money on his financial disclosure report. Based on what we have seen, it seems like he did neither. Our laws, including our tax laws, have to apply to everyone. The law applies to everyone, especially one of the nine most powerful jurists in America. Congress must ensure that they do.

It is time for Justice Thomas to respond with the facts about this $\1/4\ million loan and any similar money and gifts he has received as a Supreme Court Justice.

Now, Madam President, I am going to yield to my colleague on the Finance Committee. He is also the chairman of the Budget Committee and chairman of the important Judiciary Subcommittee on Federal Courts, our colleague Senator Whitehouse of Rhode Island.

BREAK IN TRANSCRIPT

Source