Effect Measure

How the rich get richer

It’s hard for a lot of us to understand how the rich get richer by giving money away, but here’s one way.

Health and Human Services Secretary Mike Leavitt and his relatives have claimed millions of dollars in tax deductions through a type of charitable foundation they created that until recently paid out very little in actual charity, tax records show.

Instead, much of the foundation’s money has been invested or lent to the family’s business interests and real estate holdings, or contributed to the Leavitt family genealogical society.

The Leavitts used nearly $9 million of their assets to set up the foundation in 2000 under an obscure provision of the federal tax code. But unlike standard private foundations, which are required to give away at least 5 percent of their assets to charitable causes, the Leavitt organization donated less than 1 percent of its assets in 2002, 2003 and 2004. The donations jumped to 6.3 percent of total assets last year, after the sale of family water interests that also allowed the foundation to increase its lending to Leavitt business interests.

While Mike Leavitt alone has claimed about $1.2 million in tax write-offs since 2000, the foundation gave away only $49,000 in 2002 and $52,000 the next year, according to tax returns and other documents filed by the foundation. Meanwhile, the foundation’s assets have been used for a $332,000 loan to Leavitt Land and Investment Inc., in which the secretary owns a significant stake, and other secured loans for insurance and real estate deals, said Alan A. Jones, a trustee of the organization.

Leavitt Land and Investment, in turn, extended an interest-free loan to Leavitt in 2002 valued at more than $250,001, according to a recent financial disclosure. (Washington Post)

Hmmm. Here’s a quiz. What could possibly be a defense for this? We’ll give you a minute to dredge up an answer, based on your knowledge of what officials always say when they caught with their hands in the cookie jar (or maybe in your personal records). Don’t peek at the answer.

OK. Here it is:

“The foundation’s activities are totally legal and proper,” Christina Pearson, an HHS spokeswoman, said this week on the secretary’s behalf.

[snip]

Leavitt and his brother Dane have defended the family’s actions as both legal and ethical.

Legal, maybe.

But Rick Cohen, executive director of the National Committee for Responsive Philanthropy, said that “the Leavitts are using the foundation as a personal piggy bank, and that’s not what the public — or Congress — ought to tolerate.” Cohen reviewed the family foundation’s records and tax returns at the request of The Washington Post.

The tax structure used to create the foundation is called a Type III supporting organization. The Internal Revenue Service has said the category is rife with abuse, designating “supporting organizations” this year as one of its “Dirty Dozen” top tax scams, along with Internet identity theft and offshore banks. Use of the tax structure could be significantly reined in under a tax provision that was inserted into pension legislation passed by the Senate and now under negotiation with the House.

The Leavitt family is one of the most prominent in Utah, making a fortune in land and insurance. Mike Leavitt was governor of the state and was the president and CEO of the Leavitt Group. He divested his company assets when joining the Bush Cabinet. But his family still profits and profits handsomely. Most of the money in the “charity” wasn’t even in cash, but in the form of the equivalent cash value of the family’s $8.1 million in water rights, of which Mike Leavitt had a 15% share. This allowed him to take a $1.2 million tax write-off. Meanwhile the assets remained in the Bunkerville (Nev.) Irrigation Company which the family still controls.

Thanks to Congress and a wealthy club of tax code lobbyists it’s legal.

But ethical?

Comments

  1. #1 BenM
    August 29, 2006

    My favorite example of this type of “charitable giving” was Barbara Bush’s donation to the vicitims of hurrican Katrina that stipulated it could only be used to buy educational software from her son Neil’s company. The people of the Gulf Coast may or may not benefit from this gift, but that would be an incidental goal after taking into account the tax benefits and revenue accrued by the Bush family.

  2. #2 william
    August 29, 2006

    Once unethical actions and general social injustice reaches a critical mass, it appears to produce an explosion of resistance in the population. The US Empire invades Iraq, and Iraq becomes impossible to govern, which blocks the ability of the US to extract the oil. In other words, the Empire sheds the blood of civilians in Iraq to steal the oil, and it produces resistance. But the US population is indifferent to the killing, as long as the citizens have gasoline for their cars. That is why Bush can now plan to use tactical nuclear weapons, which may kill millions, in order to stop Iran from developing an atomic bomb. Again, the US population is indifferent to the mass slaughter which will soon impact Iran, as long as US citizens have gasoline; just as German citizens were indifferent to the mass slaughter of Jews in the concentration camps during WW11, as long a Hitler could protect Germany from a Communist takeover.
    It is time to look to Mexico to see the future. Felipe Calderon of the PAN has been cleared by the courts of any guilt in regard to voter fraud, and he will probably be named the new president of Mexico on September 1, when President Fox gives his last state of the union address to the congress. Calderon will take power on December 1.
    But Andres Obrador of the PRD insists he really won, and was denied the presidency due to voter fraud. In the poor southern state of Oaxaca, the teachers went on strike, and the violence is so bad, the police and army, even after shooting some of the rioters, are loosing control of the situation. This violence may now spread to Mexico City.
    This may be the start another explosion of resistance which the government may not be able to control without massive repression, and the killing of the rioters. Mexico may become like Iraq, with a poor southern region fighting the rich north to the death.
    And no matter how much repression is applied, the violence and dying may continue. So we may soon have a situation similar to what exists in Iraq, but this time in Mexico.
    Could this happen in the US? Of course not. Our government and corporate leaders are 100% ethical and social injustice does not exist here. We live in a Democracy, and we are bringing democracy to the Middle East. That is why the Arabs love us, and Arab children throw flowers as our troops march past. Vice President Cheney was correct when he said we would be welcomed as liberators in Iraq. Of course there might have to be a small amount of collateral damage, meaning dead and wounded civilians, but it does not matter, as long as we liberate the people. Long live the US Empire.

  3. #3 william
    August 29, 2006

    If Pemex workers in Mexico, Pemex being the major oil company, go on strike in sympathy with the striking teachers; and if there is sabotage of the oil installations; the US may have to send in the US Army into those oil installations; and kill any strikers involved in violent protests; if the Mexican Army cannot control the situation. This could directly impact the US oil supply.

  4. #4 crfullmoon
    August 29, 2006

    Ouch.LeavittLand. :-/

    (I’ll buy william and juan a virtual round of drinks, wherever they are.)

  5. #5 Ana
    August 29, 2006

    In Europe many people wonder aloud, when will the US people rise up? The more conventional ones, who believe what is in the mainstream media, and believe the US is a ‘democracy’, cannot understand why the people cannot get rid of Bush, whom they blame for all the present disasters – in a Republic like France or a hands-on democracy like Switzerland (where I live), it would have been done long ago they opine, with subtle smiles of self-satisfaction.

    There are several ways geo-political alliances could limit and curb the US’ present wildly aggressive actions.

    The obvious one is a European (geographical Europe) alliance with Russia (followed possibly by some ex-USSR), with Turkey on board, plus maybe some N Africa ex-French or EU colonies. (Kaddafi is always approachable and has been virulent about Lybia itself this past month.) The strategy would be non-threatening sort of stick and carrot approach – its all for your own goood! Whether it is a real possibility or not, whether it would work or not, is interesting to debate. It is probably unrealistic, and might even be dangerous, it is very hard to judge.

    The unbreachable gulf between the two hoped-for checks – the Americans rise up; the International Community (?!) finds some balls and determination, is really striking. The American people are considered isolated and trapped; they don’t reach out to anyone; they appear to be beyond hope, they are inactive, accepting, etc. etc. it is said (.. compare to the Mexicans, in a very different position to be sure..) The media is a propaganda arm of the Gvmt, is one explanation, there are many others, the loss of power on the left, etc.

    Still, there it is.

    Hegemony and isolation. Hubris and despair. Individualism, free speech and a Gvmt. that encourages a war economy. Social/cultural issues that are hyped and faked to obscure real politics. A dominant gangster capitalist class, with lower down people clinging to belief in old values – probity, exactitude, technical savvy, honesty, morality in business dealings, anti-racism, ‘freedom’.

    Oof that was long. Some of us, anyway, are there for you.

  6. #6 william
    August 29, 2006

    crfullmoon,
    Thank you, I am glad you enjoyed reading my posts.

  7. #7 william
    August 29, 2006

    Ana,
    The US gangster capitalist class cannot be stopped. Bush has control, and plans to slaughter Iranians with nuclear weapons. He is commander and chief of the armed forces. Before Bush leaves office in 2009, he will use tactical nuclear weapons in Iran. This may bring in Russia and China, that are allies of Iran. We may be near a nuclear winter, if Russia and China respond to the initial US attack.
    Richard Holbrook recently said in a Washington Post editorial we are now in a situation as dangerous as the 1962 Cuban Missile Crisis. Dick Cheney’s real name is Doctor Strangelove.
    I know it sounds radical to say, but the world may really be destroyed this time. Thank you President Bush for destroying all life on the planet.
    But even if Bush destroys the world, the American public
    is happy with their leader. Long Live President Bush. Of course Bush may have to live out his last years in an underground nuclear bunker.

  8. #8 Steph
    August 29, 2006

    There’s not going to be a revolution in America, unless it’s staged.

    We’re too programmed, lazy, and in some serious denial. Plus, the cable’s still on and we get at least 6 credit cards applications every day! (Bread & circuses?)

    When we feel the heat, it will be far far too late.

    Don’t worry about saving us either. I’m not sure it’s worth risking what you have, Ana. Really. Sauve qui peut. Is that the right way to say it?

    Cheers, meekly,
    Steph

  9. #9 Ana
    August 29, 2006

    William, I have argued since 2001 that the US will not attack Iran.

    Afgh, Iraq and Syria were, are, different. The indirect pincer (Lebanon) applied recently does not count for much. Was a failure.

    Reality bites. Hard.

    Iran, the big winner so far of inconsidered US military adventures, would, if seriously threatened, attacked, block the Straits of Ormuz, crashing several economies (Japan, for ex.) and would cut supply lines to the US military in Iraq, who would be sitting ducks in a maelstrom of violence, helpless. Iran would immediately take over part of the North.

    Cheney knows all that, Bush will listen.

    Bombing has its limits as Hizbulla just showed.

    There is no way the US can even contemplate a ground war: Iran has more than 10 million Revolutionary guards. Sure, they are poorly armed… so was Hizbulla.

    Today, I just hope I was right.

  10. #10 Charles Roten
    August 30, 2006

    Ana, there are some of your statements I must take exception with.

    Cheney may indeed understand that a war with Iran is a lost war from the git-go. But DO NOT expect W to listen to him. W listens to no man. He’s a regular born-again Ethelred the Redeless. That could put us right smack dab into a coup d’etat and government by junta, by way of consequence.

    The actual effect on Hizbullah wasn’t necessary to predict that the Israeli bombing campaign would be a loser. Read up on the Battle of Monte Cassino some time. Any time some Air Force General, from anybody’s Air Force, tells you that he can win the war from the air, you can be sure you’re listening to arrogant nonsense.

    Iran wasn’t the only big winner. Unless I miss my guess, Hizbullah is something more than simply an Iranian client, though it surely is that. And Sheikh Hassan Nasrullah has parlayed the criminally negligent folly of Olmert and the Israeli military into dominance over Southern Lebanon.

    I was really somewhat surprised when Nasrullah stated in a recent interview that if he had known the intensity of Israeli reaction, he would seen to it that those Israeli troopers weren’t seized in the first place. Because it looked, at my remove, as if he’d replayed the Ems Spa telegram incident pretty well. With befuddled incompetent Ehud Olmert playing the part of the befuddled, incompetent Napoleon III.

    Mind you, I don’t carry a brief for Hassan Nasrullah! I can think of about 241 reasons, right off the top of my head, why I’d like to see that guy in his own personal Mussolini Moment. But unless he loses about 50 IQ points right off the top, that’s not going to happen anytime soon.

    IMHO, you are quite right about a ground war. The Iranians may not know the US Army playbook, and would suffer disproportionate casualties. But these are people whose own 12 and 13 year old kids ran across minefields during the Iran-Iraq War to “clear” them. So I think it’s fair to say that the degree to which they’d accept casualties is far higher than anything we are used to.

    Assuming that it came to that. We have 130,000 combat troops in Iraq, who, W. Randolph Kruger to the contrary notwithstanding, would become so many potential hostages if the Iraqi Shiites decided to turn on us as one.

    At best, the resulting mess would make the retreat from Chosin Reservior seem like a Veteran’s Day parade.

    Given the nature of the fighting in South Lebanon, Hizbullah wasn’t that badly armed at all. There are persistant stories about Hizbullah possession and use of advanced post-breakup Russian man-portable anti-tank rockets like the RPG-29 and the AT-14 Kornet. But there are also eye-witness reports of Israeli tank columns getting caught in killboxes where all you need to light up enemy armor .. even Merkava tanks .. are old-fashoined AT-3 Saggers, which first saw service more than 40 years ago under Soviet Premier Nikita Khrushchev!

  11. #11 Ana
    August 30, 2006

    Ah Steph if William’s scenario comes true we are all for it in one way or another – the fallout, the fragility of our consumer societies, etc. It will be up to some survivors and isolated peoples to give humanity another shot. :)

    Bush is incompetent, but he is a puppet. He seems to have just one bee in his tiny bonnet – Iraq. He can’t stand the idea of failure, so is pig-obstinate. Charles, my reading is that Bush does ‘listen’ in the sense that his circle and advisors take care to hint and suggest and then make it appear that King George the Supreme Leader in His Wisdom has decided x. Now his entourage is nothing to write your dear auntie about, nevertheless there are some realists there. They – and Bush – will not risk the troops in Iraq.

    Limited bombing on Iran would solve nothing; massive bombing with or without nukes would destroy the world arrangement as we know it, and as W. says, and I agree, it is likely that Russia would not sit still. A US ground invasion is impossible: the ‘attack’ choice is between doing nothing much or going for all out chaos and destruction. Both options will be avoided and we will see more diplomatic grandstanding. (I hope.)

    I agree that the Hezb. was quite well armed (from my vague understanding of rockets etc.) and that it is far more than an Iranian offshoot. At heart, the Hezb. is a nationalist and ‘egalitarian’ movement, a resistance grass-roots affair, which explains its success for a large part. It’s agenda is not cultural-religious, it is Islamic only in name as appealing to those who live in that region, probably even more mildly so than the ‘faith based’ US Gvmt. + church initiatives. iIt has never argued for any kind of Islamic state (contra Iran) and has made many moves to show it supports all people, such as Christians, etc. It isn’t even pan-Arab, though it acquires that status now. It is not explicitly socialistic or communistic, it is implicitly ‘democratic, free market, capitalistic’ — truly a state within a state, as Lebanon is all those. The Hezb. gets gifts. and has no economic policy, just as Hariri Inc. did not (except for luring foreign investors, etc.)

    So negotiations will work.

  12. #12 M. Randolph Kruger
    August 30, 2006

    Ana-The Swiss are pretty much French. Gen Schwarzkopf covered both with the statement, “Going into war without the French is like going deer hunting without your accordion.” Love your cheese though. The media is the governments propaganda arm…? Do you not get CNN over there? They absolutely hate Bush and take every available shot at him they can. I just assume you are uninformed living in a socialist state with no defense and a proletariat to run your life, healthcare, and above all keeping those slopes open in the winter. As far as rising up well lets see you guys did that against which of your rulers… Napoleon? He stomped you for it. We deal harshly with traitors and people who plot to overthrow our government from within and without. You might want to remember that when sending that crap here. They do the same thing in your country for sedition and the penalty is either life or death. .

    William-The US is not going to nuke Iran unless they pop a nuclear cap first or get one. If that happens the Russians might beat us to the punch of taking them out. They arent going to let fallout breach their borders and Tehran is well within the drift range of it if it happens be it the US or Israelis. If Teheran picks up a nuke, the US will respond immediately if they launch it against any nation and they will relieve them of the will to use it. Its all in the threat against the Middle Eastern neighborhood. Nor will the Israelis. They will wade in with everything they have from a tactical standpoint from the air and take them out.

    C. Roten is right about a few things and wrong on others. There has never been an air war that has been allowed to completely decimate an enemy from the air-so the statement that an Air Force General couldnt win the war is one not tested. The one time it was tried it was called atrocity, war crime, etc. Yep, we wouldnt need to nuke Teheran. Just level the place. Every couple of years they would/will attack via terrorism and we will just sit back and do nothing until they get organized. But it does preserve the general peace just to kill most of a population now doesnt it? Kind of what Ana wants to do to us. Sorry Ana but a French/Swiss alignment will get you killed and especially if you join up with the Russians. But Ana is Swiss and they didnt even become members of the UN until 2002. What are you pissed because we beat the Russians? You are Swiss Ana and werent they were defeated by the French Army? Thats a statement in itself. Every war the French started they couldnt finish or they lost. But they beat the Swiss! Rattle your saber Ana. I like the sound of it.

    C. Roten is right too about the children and the minefields. Its not the job of our military though to sort them out in a ground war Charles. Its their job to kill them man, woman and child if they are combatants. I personally would be more than happy to send them on their way. We are outnumbered about 4 to one on this planet by Muslims and taking that average down from a military speaking standpoint is a good idea. Especially good idea if it presents itself such as a the Shiites give us a kdnapping incident. Chines, Russians, US, UK are all taking hits now from their radical Muslim populations. If you have more people you can get jiggy anytime you want.

    William-Taking Teheran out will be difficult. Only an idiot would sit there and do the things they are doing on the world front and not prepare. They have. Once again the French to the rescue, upgrading our old Hawk missile batteries with new software and fresh rounds. Legardere/Matra also has been selling them with a flourish Exocets, and anti aircraft missiles. They know that the attack is coming, and soon. Sell baby, sell. Prolong the situation in the UN. and hold off.the inevitable and then with a deep French sigh give the green light to an invasion. We all know where its heading and when you have three members of the UN selling to a rogue nation, what kind of response do you expect? The last time the French asked for more proof, troops were marching under the Arch de Triomphe.

    Roten is right about the Hez. They were HEAVILY armed. Why was that allowed to continue by the UN? Ah! Customers. The Israelis simply enforced the provisions of 1559 post withdrawal and then got yelled at. Once they started killing the customers off the French stepped in. Future sales would be down if that were allowed to happen. See the set up. French troops in contact on the ground with Israeli troops. This is the set up to a much bigger war and very soon. They will fire on the French who will try to defend their customers and then scream for the wine bottle and the EU/NATO troops when they get their asses kicked.

    Folks its very simple. We can continue to try to use general police tactics against a very highly motivated underground ARMY, or we can embrace the horror and smoke Damascus and Teheran. 15 minutes after that happens we tag Pyongyang and not with nukes. The civilians? The very well loved B. Clinton killed more civvies than GWB ever did and in Europe to boot. Its time fo rthe gloves to come off. Sorry but diplomacy is about to go out the window here soon on all fronts.

  13. #13 Edmund
    August 30, 2006

    I suspect that William and M. Randolph Kruger are polar personalities of the same individual. Interesting posts!

  14. #14 M. Randolph Kruger
    August 30, 2006

    Not really Edmund. I am just a realist. This country has been bailing Europe out of its little messes including Kosovo for over 100 years.Its time for the shoe to be on their own feet. I dont include the Brits in this because they kind of backed up at the beginning of the last century with colonialism and had pulled back into their borders by about the 1990’s. Everyone seems to think that some Lebanese kid has the same rights as we do and that we should just find out what Hezbollah and other little bad actors want and negotiate. Well for one they want the destruction of Israel. Not going to happen. Then they want us dead too as the Great Satan in Iran and Syria and Iran want to create a another Axis type of power structure only using the worlds old supply as a lever against us. Well it aint going to happen.

    What is going to happen in Iran? Hard to say the time frame but if they develop a bomb then they are going to lose the facility, maybe the capital and a lot of heads are going to get cracked. Roten would assert that we would become hostages of the Shia’s. One hour and 20 minutes after such an attack began, the G model B-52’s would start launching from Diego Garcia with either conventional loads or ALCM’s. This is the kind of firepower that would be brought to bear against them. Tactical fighters from the carrier groups would be sortied within 30 minutes and politely put they would rain Hell down onto them. It would be good though, they would be out in the open where we could keep the civ casualties down. Polar personalities, not hardly.
    I have seen this diplomatic merry go round go on and on and on for my entire life. Its time for us to just take one of them out and that means as a people. They do have a choice. We are not going to leave Iraq as a back door to a dictatorship. So its going to be either a Shia or Sunni run government. Those people that are being caught are Iranians and/or Iraqi’s from the far eastern side of the country. The Sunnis are not so fired up about killing people. So the necessary issue is to cut the head off the octopus. That means their money, their intellligence, their supply lines. Make the price so expensive that regardless of Allah that they know their families might be killed as a result of their action.

    Case in point. Beirut 1980, two Soviet diplomats were taken hostage by the Hezbollah. The KGB went out and found two of the known ringleader operatives and threw them into a car. Took them to a secluded alley and shot them in the head and crammed pig meat into their mouths. Then they took the bodies back and dumped them. The diplomats were released unharmed two hours later.

    Its a mean world and we keep trying to impose our American value system into a system that is on a juggernaut straight into Hell. This deal in Lebanon is the prelude to another war. If Hez rearms they are going to beat the crap out of them again. Egypt made peace, so did Jordan. Hez is on the endangered species list.