Supreme Court Justice Clarence Thomas failed to pay back a “substantial portion” of a more than $200,000 loan used to purchase a luxury motor home before the loan was later forgiven, according to Democrats on the Senate Finance Committee.
According to information and documents obtained by the committee, the loan, which amounted to approximately $267,230, was given to the Supreme Court justice by Anthony Welters, an American businessman and longtime friend of Justice Thomas.
The loan was granted in 1999 and Justice Thomas used it to buy a luxury Prevost Marathon motor coach. At the time it was given, Justice Thomas agreed in a handwritten note to pay interest of 7.5 percent a year and repay the money by Dec. 31, 2004, or within five years.
However, documents provided to the committee show the Supreme Court justice made just one repayment of $20,042 in 2000—the same amount as the annual 7.5 percent interest payment on the $267,230 loan—and that the payback deadline was extended to Dec. 31, 2014.
Eventually, Mr. Welters wrote in a handwritten note to Justice Thomas dated Nov. 22, 2008, that he would no longer be seeking any further payments on the loan “in recognition of the payments made” by the Supreme Court justice, which Mr. Welters “characterized as interest-only payments that exceeded the amount of the original loan,” according to the committee.
“Welters believed that Thomas had paid interest greater than the purchase price of the bus and that Welters did not feel it was appropriate to continue to accept payments even though he had the right to them,” the committee said, citing a handwritten note by Mr. Welters addressed to Justice Thomas.
The committee said it was not provided additional documents by Mr. Welters that could offer more clarity on the agreement.
Loan Forgiveness Is a ‘Taxable Event’
However, it concluded that Justice Thomas had failed to disclose the forgiven debt on his ethics filings, which they said raised tax and ethics concerns.“Justice Thomas did not disclose this forgiven debt on his ethics filings, raising questions as to whether Thomas properly reported the associated income on his tax returns,” they added.
In a press release announcing the latest findings, Senate Finance Committee Chair Ron Wyden (D-Ore.) said that the committee finally has the answer to “one of the pressing questions raised” by reporting about Mr. Welters’s arrangement with Justice Thomas as to whether or not the loan was ever repaid.
“Now we know that Justice Thomas had up to $267,230 in debt forgiven and never reported it on his ethics forms,” Mr. Wyden said. “Regular Americans don’t get wealthy friends to forgive huge amounts of debt so they can buy a second home. Justice Thomas should inform the committee exactly how much debt was forgiven and whether he properly reported the loan forgiveness on his tax returns and paid all taxes owed.”
The senate chairman said he has directed the committee to share its findings with the Judiciary Committee to evaluate the ethical implications of this disclosure.
Concerns Raised Over Alleged Ethics Issues
The Senate inquiry was prompted by a New York Times report published in August, which found that Justice Thomas purchased his Prevost Marathon Le Mirage XL through finance provided by Mr. Welters.Democrats’ inquiry also follows multiple reports alleging shortcomings among Supreme Court justices, including Justice Clarence Thomas, who also received a number of gifts from conservative billionaire and close friend, Harlan Crow, including private jet trips.
Other justices, including Justice Samuel Alito, have also come under scrutiny for alleged ethical issues such as failing to disclose a paid fishing trip.
The justices “want that respect for the institution to be shared by the American people,” he said at a judicial conference in Ohio on Sept. 7.
“To the extent that we can increase confidence, we’re working on that,” he added.
