Like a Virgin Island Resident
Lefty financier and congresswoman’s fiancée dodged U.S. taxes.
4:45 PM, Oct 15, 2010 • By ALANA GOODMAN
Sussman’s Securities and Exchange Commission filings from September also list his address as the Virgin Islands, as do political contributions he made in 2009. The website for the Great Cruz Bay Homeowners Association in St. John names Sussman as the organization’s president.
Over the past few years, the U.S. Virgin Islands have come under scrutiny for being a magnet for criminal tax evaders; individuals who want to take advantage of the territory’s 90 percent tax savings, but don’t want to make it their primary home. The Internal Revenue Service takes EDC fraud seriously – in 2003, the agency raided the offices of a major Virgin Islands-based firm, and charged several businessmen with claiming false residencies in order to receive the area’s financial benefits.
Sussman, himself, has been a critic of this type of fraud. In a 2004 interview with the New York Times, the hedge-fund owner railed against phony Virgin Islands residents, calling their behavior “outrageous” and dangerous to the EDC program.
“I live in St. John. I follow the rules. I do what I'm supposed to do,” Sussman told the Times. “If what has been alleged is true, those nonresidents who masquerade as residents are engaged in outrageous behavior and potentially endangering the EDC program.”
The Times wrote that “Sussman is confident that he is within the law and upset that others may be playing fast and loose.”
But while it’s unclear whether the billionaire’s current financial activities could be considered “playing fast and loose,” his well-documented use of tax havens to duck income taxes in the past raises questions about some of the Democrats he has contributed to.
Rep. Barney Frank (D-MA), Rep. Mary Jo Kilroy (D-OH), Rep. Michael Michaud (D-ME), and Rep. Mark Schauer (D-MI) have all taken stands against tax havens, and received political contributions or gifts from Sussman. The philanthropist also sits on the board of the Center for American Progress, which has publicly opposed this form of tax evasion as well.
Sussman’s fiancée, Rep. Pingree, has been a vocal critic of tax havens, even as she has received thousands of dollars in political donations from Sussman. In 2009, the philanthropist contributed $4,800 to his fiancée’s campaign, listing his address as “6100 Red Hook Quarters, St. Thomas, Virgin Islands.”
But in a speech before congress last May, Pingree pushed for legislation that she said would “[crack] down on tax loopholes that allow hedge-fund managers to avoid paying income tax on much of their salaries.” In 2009, Pingree joined other House members in signing letters to President Obama and Nancy Pelosi calling for a crackdown on the “use of offshore tax havens and abusive tax shelters,” particularly by corporations like AIG and Citibank.
And in Pingree’s unsuccessful senate bid in 2002, she made her opposition to tax havens one of the focuses of her campaign.
"Business owners here in the state of Maine ... end up being left with an unfair burden because corporations have decided to take a vacation from paying their taxes,” said Pingree during a press conference in August, 2002.
The congresswoman called for stricter laws, insisting that, "Ending tax loopholes that allow big corporations to evade taxes by using an overseas P.O. box is the right thing to do.”
Pingree denied that there was a contradiction between her previous statements and her current financial involvement with Sussman.
“Each of my last three opponents has tried to make Donald an issue, and suggested my relationship with him will somehow influence my vote. Nothing could be further from the truth and all you have to do is look at my record,” Pingree told me. “My positions couldn’t be more clear and they haven’t changed a bit.”
But Lance Duston, the spokesman for the Maine GOP said that this was just another example of hypocrisy among lawmakers.
“When somebody wants to change a law to legislate how other people act, I think it’s pretty reasonable to think they should lead the way,” said Dutson. “So when [Pingree] takes the floor and demands that hedge fund managers should stop taking tax loopholes while benefiting from it herself, that’s hypocrisy…We can parse the legality of these things but it’s a matter of right and wrong.”
Alana Goodman is a culture and media reporter at the Media Research Center.
Recent Blog Posts