May 17, 2013
The Robber Can’t Guard the Bank
We wouldn’t trust a robber to guard a bank. But by tapping scandal-plagued former used car salesman Congressman Vern Buchanan to help lead today’s hearing into the IRS, Republicans have done just that.
Congressman Buchanan’s long and scandal plagued history of financial improprieties and potential financial crimes are well documented:
- Congressman Buchanan used offshore reinsurance companies to avoid paying his full taxes;
- Congressman Buchanan manipulated his tax rates to avoid paying his full taxes;
- Congressman Buchanan engaged in an eight year fight with the IRS and was ultimately forced to pay over $2 million in back taxes to the IRS;
- A federal investigation concluded that Congressman Buchanan “more likely than not” violated federal laws by forcing his employees to launder campaign contributions to his used car dealerships.
Given Congressman Buchanan’ own contentious history with the IRS, the Democratic Congressional Campaign Committee is again calling today for Congressman Buchanan to recuse himself from the IRS hearings in order to preserve the integrity of this investigation:
“Given Congressman Buchanan’s long history of being investigated by the IRS, it is impossible for Congressman Buchanan to conduct the type of impartial and rigorous investigation that both Republicans and Democrats have demanded,” said David Bergstein of the Democratic Congressional Committee. “We cannot trust the robber to guard the bank – and we certainly can’t trust him to investigate it. Congressman Buchanan should excuse himself from this investigation in order to preserve the integrity of the committee’s findings.”
- Buchanan Used Offshore Reinsurance Companies to Reduce Tax Burden. According to the Herald Tribune, Vern Buchanan has used offshore reinsurance companies in Bermuda and the Turks and Caicos Islands to reduce the tax burden for auto dealerships that he owns. The offshore companies do not do not occupy any office space and do not employ anyone on the island nations where they are licensed. They are managed from the U.S., and basically provide insurance to insurance companies. [Sarasota Tribune Herald, 10/31/06]
- Buchanan Was Forced to Pay the IRS $2.5 million. From 1994-2002, Buchanan was involved in an eight year tax fight with the IRS and by the end of his fight, Buchanan ended up paying the IRS $2.5 million. “Buchanan has said he originally sent in a $1.2 million check for his 1992 taxes, but the IRS sent it back and said he owed more. Buchanan said he decided to dispute the IRS’s claim that he owed another $1 million in taxes. It took eight years of court battles, but by 2002 the parties had settled and Buchanan paid the $1.2 million he always insisted was the real amount he owed. But during the time he fought the tax, penalties and interest piled up and the IRS charged him another $1.3 million.” [Sarasota Tribune Herald, 7/01/08]
- Buchanan Used the Capital Gains Tax Rate to Save $260,000. From 1999-2002, Buchanan was involved in a controversial development project of the Ritz Carlton. In 2002, Buchanan settled the deal in an “unusual fashion” and saved $260,000 by paying capital gains taxes opposed to income taxes. “In 1999, the developers of a Ritz-Carlton hotel and condos in Sarasota agreed to give Buchanan an interest in the project if he could obtain financing by that Aug. 31. He didn’t meet the deadline, the developers arranged their own financing and Buchanan sued. The case was settled in unusual fashion. In 2002, Buchanan bought a Ritz penthouse for $5-million from a relative of co-developer Robert Buford and sold it back to another Buford relative for $6.35-million just more than a year later. As the Sarasota Herald-Tribune reported shortly before the 2006 election, the deal was good for both sides. Buchanan got the $1.35-million he originally sought but saved about $260,000 by paying capital gains taxes at the 20 percent rate instead of income taxes at the 39.6 percent rate.” [Tampa Bay Times, 9/20/08]
- Buchanan Cut a Deal That Avoided $300,000 In Federal and State Taxes. In 2008, the Tampa Bay Times reported that Buchanan structured a real estate deal to avoid paying taxes on more than $300,000 to the federal and state government. “A multimillionaire with vast business holdings, Buchanan cut his own taxes on two real estate deals that experts say were structured to avoid paying more than $300,000 to the federal and state government.” [Tampa Bay Times, 9/20/08]
- Buchanan “More Likely Than Not” Violated Federal Election Laws In Employee Contribution Reimbursement Scheme. The Federal Election’s Commission’s “investigation went back to 2005, when Buchanan began his first campaign for the 13th Congressional District. Former employees for some of Buchanan’s car dealerships alleged they were pressured to donate to Buchanan’s campaign and were later reimbursed. Pressuring employees to give donations and reimbursing them are both against federal election laws […] According to the FEC general counsel’s final report, the evidence in the case ‘comes close to supporting a finding that it is more likely than not’ that Buchanan had violated federal election laws.” [Sarasota Tribune Herald, 1/20/12]
- CNN: Congressman Buchanan could be “serving his next term behind bars.” “But all that could be jeopardized. Federal investigations underway could result in Buchanan serving his next term behind bars. CNN has confirmed there are no fewer than four congressional and federal investigations into Buchanan's business practices, his campaign finances and his alleged attempt to try to stop a witness from talking.” [CNN, 6/23/12]