🎶 Me and My R.V., Me And My R.V… 🎶
What’s good enough for other folks ain’t good enough for Justice Thomas.
For decades it has been part of his folksy narrative. Justice Clarence Thomas is just a regular guy who loves to drive across America in his modest R.V., park in Wal-Mart parking lots to be among the people, and spend time in the states everyone else usually flies over.
Except that none of this is the real story. Far from enjoying his spare time among the MAGA masses, Justice Thomas has been flown around the world on private jets by billionaires, been fêted on their yachts in the South Pacific, and was comped for life at the most exclusive golf club in the world, owned by one of his benefactors. This doesn’t even get to how he had his extended family’s housing and private tuition covered by another billionaire, all without disclosing the gifts and apparent conflicts of interest.
This week, the Senate Finance Committee has confirmed details of a report first published by the New York Times. The scoop questioned how Justice Thomas even came to own that Prevost Le Mirage XL Marathon R.V. back in 1999. After all, a 40’ long vehicle such as that isn’t cheap; Justice Thomas paid a cool $276K and change for it. Hard to do on a judge’s salary.
It turns out, another wealthy longtime friend of his, Anthony Welters, who made his fortune in healthcare, loaned him the money to buy the vehicle. Which is all fine and dandy. Nice friend. But then came the sweetheart deal: Despite paying nothing but interest payments on the R.V., Welters forgave the entire principal balance nine years later. Justice Thomas got a quarter million dollar vehicle for nothing but the interest on the loan.
And what’s worse, it doesn’t look like Thomas ever reported this loan forgiveness either, not on his taxes nor on his federal financial disclosures that every high level U.S. official must complete annually.
The public understandably has a lot of questions about all this, so I’ll walk through some of them today.
When a loan becomes a windfall
The investigation by the Senate Finance Committee is being led by Senator Ron Wyden (D-OR). And the more the Senate Finance Committee uncovers, the worse this loan looks for Justice Thomas.
The principal conclusions of the Committee so far are these:
Justice Thomas did not repay a substantial portion of the loan;
He failed to report the forgiven debt on his ethics filings; and
This raises questions about his tax compliance.
Let’s walk through these quickly to understand what apparently was going on.
The unpaid loan. The records consist of four documents:
A handwritten promissory note dated December 6, 1999, between Thomas and his wife Ginni as borrowers and Welters as the lender, for a $267,230 loan at 7.5 percent interest;
A “security agreement” where the R.V. would act as collateral to secure payment on the loan;
A record of just one payment on the loan: a bank check in the amount of $20,042.23, made December 21, 2000, representing interest; and
Another handwritten note dated November 22, 2008, stating that Welters would no longer seek payment and that Thomas had paid interest only on the loan.
Failure to file disclosures. Under federal disclosures laws, officials generally don’t have to disclose a loan for something like a “personal motor vehicle.” This can create a big loophole, however, especially if the loan is very big and very favorable or even, in this case, wholly forgiven. Last time I checked, if someone forgives a quarter million dollar loan, that’s a huge windfall. It’s like handing you piles of money you never have to return.
Now, we should be clear. There’s no indication that Welters had any business before the Court, or any evidence, yet, that this was anything but a loan from a rich friend. But given Thomas’s failure to disclose all manner of other gifts from wealthy friends who actually did and still do have business before the Court, directly or indirectly, we shouldn’t accept his word for it, or the word of his friend. After all, letting a Supreme Court justice off the hook for his debts invites plenty of doubt by the public. (Hello, Justice Kavanaugh, who paid off your debts?)
Tax compliance questions. It’s not just Thomas’s failure to abide by federal disclosure laws that should concern us. That huge windfall also created a taxable event. When a loan is forgiven by the lender, it is generally treated as income to the borrower. That makes sense because all of a sudden you don’t have to repay that money. It’s now yours, free and clear. If Welters intended to make a quarter million dollar gift to the Thomases, he would have had to disclose that on a federal gift form for tax purposes. If Welters treated the loan as a loss and wrote it off, that is something the public also deserves to know.
Either way, based on the record we have, it doesn’t appear that the Thomases reported over a quarter million dollar windfall in 2008. For a Supreme Court justice who is charged with upholding and interpreting the laws of the land to so flagrantly violate them is certainly grounds for congressional action, including impeachment.
Impeachment by the House
The Thomases have now got to be concerned about what is going to happen next November. If the Democrats retake the House, the Judiciary Committee could launch its own investigation and hearings, and that could result in findings that the Thomases failed to pay back taxes and that Justice Thomas failed to disclose all manner of gifts and privileges. He’s swimming in corruption. And if Hunter Biden can be charged for failure to pay taxes, why not the Thomases?
And that could lead to a momentous point: an impeachment of a sitting Supreme Court Justice. That hasn’t happened since 1804, when Justice Samuel Chase was impeached by the House for political bias but was acquitted by the Senate. Another justice, Abe Fortas, faced allegations around his own involvement with a financier that were far less egregious than what Thomas has done. Fortas resigned in May of 1969 rather than face impeachment and possible removal.
It isn’t clear at this time whether a Democratic-led House would move to impeach Justice Thomas, but that should become a rallying cry and another reason to retake the House. The GOP will never move against Justice Thomas with their current majority, and even if he is impeached we should be under no illusion that there are enough principled Republicans in the Senate to convict him. But the threat of impeachment, with all of his malfeasance on display before the cameras, conceivably could be enough for Thomas to throw in the towel, just as Justice Fortas did.
Even if Thomas would fight an impeachment, as I assume he would, it is critical that our system at least try to hold him to account. This has the benefit of educating the public about both his misdeeds and the cynicism of those in Congress who continue to protect him.
These newest revelations put additional pressure on the Supreme Court to create an ethical code that the justices agree to abide by. For that to have any teeth, the decision about whether a justice has exceeded the bounds of ethical behavior needs to rest in the hands of third parties, e.g., an independent panel of retired judges and justices. The Court has proven itself incapable of reining in its own excesses.
On this question, the winds may be shifting. It is unsurprising that Justice Elena Kagan, who is famous for refusing a gift of bagels from her admirers, has pressed strongly for court reform, and that her liberal colleagues are on board. But recently, and notably, Justice Amy Coney Barrett called an ethical code for the justices “a good idea.” If this gains acceptance among one more justice—perhaps Chief Justice Roberts—there would be five in favor.
There is also strong pressure for the Court to do something about its reputation. There is talk of expanding the Court and making it less partisan. And there are movements afoot to impose term limits on justices. (Next Tuesday in The Big Picture, we are publishing an exclusive interview with the founders of Term Limit the Court, who urge 18 year term limits with justices rotating off. Be sure not to miss it by subscribing here.)
We certainly haven’t heard the last about the R.V. loan windfall or Justice Thomas’s other ethical and legal breaches. The woefully scant paper trail unearthed so far raises more questions than answers. For example, did the Thomases make any other interest payments on the loan, or really just that one? Was their failure to disclose the loan forgiveness an intentional act to evade tax liability? Did someone else come in and satisfy the loan? If so, why? Are there other sweetheart loans we haven’t heard about?
The public and the press have got their eyes on Justice Thomas now. And they won’t stop until they get to the truth. From there, we’ll see how well sunlight disinfects his long history of hidden, shady dealing.