Senate Dems allege Justice Thomas violated ethics and tax laws with unreported RV purchase loan forgiveness

 October 27, 2023

As part of a continuous effort to undermine the credibility of the current conservative-leaning U.S. Supreme Court, Democrats and leftist activists and their media allies have launched a series of clearly partisan attacks, particularly against Justice Clarence Thomas, alleging a variety of ethical and even legal violations.

The latest assault on Thomas involves allegations that he failed to fully repay a substantial loan from a friend for a luxury RV that was subsequently forgiven and then unethically refused to report that forgiven loan in public disclosure forms or as taxable income to the Internal Revenue Service, according to CNN.

Those were the findings of Democrats on the Senate Finance Committee following an investigation, which were wholly disputed as "false" by an attorney representing Justice Thomas who insisted that the loan "was never forgiven" and that the terms of the agreement had been "satisfied."

Questions raised about repayment of loan to purchase RV

The Senate Finance Committee's Democratic staff issued a memo Wednesday to summarize its findings following a probe of Justice Thomas' 1999 purchase of a luxury RV through a $267,230 loan from a personal friend named Anthony Welters.

"While additional documents pertaining to the loan agreement may exist, documents reviewed by Democratic staff suggest that Justice Thomas did not repay a significant portion of the loan principal," the memo stated. "In fact, none of the documents reviewed by Committee staff indicated that Thomas ever made payments to Welters in excess of the annual interest on the loan."

"Forgiveness of the loan results in a taxable event for Justice Thomas. Under tax rules, forgiveness of the entire principal by Welters requires Justice Thomas to include up to $267,230.00 in taxable income and report the amount on his tax filings," the memo added. "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."

As evidence to support the allegations, the Democratic staff pointed to a handwritten Dec. 1999 note on Supreme Court stationery from Thomas that referenced a promissory note and security agreement that established that Thomas would make annual 7.5% interest-only payments, around $20,000, until the loan principal was due no later than Dec. 2004, with that deadline later extended until 2014.

However, in Nov. 2008, Welters informed Thomas through a letter obtained by the committee that no more payments were due because "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."

Committee Democrats raise ethics and tax violation allegations

All of that was further summarized in a statement released along with the memo by Senate Finance Committee Chairman Ron Wyden (D-OR), who reiterated the allegations that Justice Thomas had failed to fully repay the loan and also failed to report the loan forgiveness in ethics disclosure forms or as taxable income to the IRS.

"Today the committee has the answer to one of the pressing questions raised by reporting about his arrangement with Justice Thomas -- was the loan ever repaid? Now we know that Justice Thomas had up to $267,230 in debt forgiven and never reported it on his ethics forms," Sen. Wyden said.

"Regular Americans don’t get wealthy friends to forgive huge amounts of debt so they can buy a second home," the chairman added. "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. I have also directed the committee to share our findings with the Judiciary Committee to evaluate the ethics implications of this disclosure."

Attorney for Thomas disputes findings; friend who provided loan speaks out

The Hill reported that the Democratic staff committee's findings were disputed by an attorney for Justice Thomas, Elliot Berke, who said in a statement, "The loan was never forgiven. Any suggestion to the contrary is false. The Thomases made all payments to Mr. Welters on a regular basis until the terms of the agreement were satisfied in full."

Furthermore, The New York Times, which was the first to report on questions about the RV loan in August, reached out to Welters -- who has been friends with Thomas since they both worked together as Senate Republican staffers and in the Reagan administration -- for his take on the committee's findings with regard to the loan he gave to his friend nearly 25 years ago.

Welters responded that "bank records -- which I have sought -- no longer exist. While not a tangible record, I continue to put stock in my contemporaneous belief" that the loan agreement was satisfied. He added, "While I understand the attention given who this involves, the difference between what you’re comparing to and what happened here is that a friend lent another friend money. As anyone who has borrowed from or lent to family or friends knows, it’s simply not the same as a bank."

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