Supreme Court Justice Clarence Thomas‘ attorney is denying allegations that a six-figure loan that Thomas used to pay for a high-end motorcoach in 1999 was forgiven.
A new Senate committee report shows that a longtime friend of Thomas, Anthony Welters, forgave most of a $267,000 loan used to pay for the R.V. in 1999. Thomas was a justice on the federal bench then. He never reported this gift or the loan, even though the official code of conduct requires judicial officers to declare gifts of a non-business nature that exceed more than $415.
It isn’t a surprise that Thomas has friends in high places. And it’s no secret that those high-profile friends have gifted Thomas lavish trips, activities, and other endowments, some of which have gone undisclosed over the course of several years. And while this raised questions among members of the public, Congress has finally opened an ethics inquiry into one gift to Thomas from more than 20 years ago.
News of that gift first circulated earlier this year. Welters, a longtime friend of Thomas, did say that the loan was “satisfied” in 2008 after reporting that Thomas made interest-only payments.
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It wasn’t until recently that the Senate Finance Committee said it had seen documents indicating those statements might not be totally accurate.
Those records revealed a handwritten note by Thomas on his Supreme Court letterhead in which he agreed to definitive terms to repay the interest of the loan five years from the purchase date. However, Thomas only paid $20,042 to Welters in 2000, amounting to just one interest payment. When the rest of the money came due in 2004, Welters gave Thomas until 2014 to repay him in full. Yet, Thomas never paid more than that one payment in 2000, according to reports.
Nine years of interest-only payments would amount to roughly $180,000, according to The New York Times, which is much less than what Thomas paid and the loan amount.
However, Thomas’s attorney, Elliot Berke, told Reuters in a statement that “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,” Berke said.
Thomas and Welters reportedly met around 1980 when they were both congressional aides to Republican lawmakers.
Congressional expert witness and tax lawyer Michael Hamersley told the Times, “This was, in short, a sweetheart deal’ that made no logical sense from a business perspective.”
“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,” the panel said.
“No bank behaving in a commercially reasonable, arms-length manner would have given that loan in the first place,” Hamersley said. “And a bank doesn’t just say, ‘Oh gee, you’ve paid a lot in interest – we’re good, no need to pay back what you actually owe.’”
Earlier this year, ProPublica posted lengthy and thorough reports revealing many other expensive, luxury, and, again, undisclosed gifts that Thomas has received over the years from wealthy conservative supporters, including from Republican mega-donor Harlan Crow.
Welters released a statement to The Times on Wednesday, stating that because the loan was made decades ago at this point, “bank records — which I have sought — no longer exist. While not a tangible record, I continue to put stock in my contemporaneous belief.”
“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,” Democratic Senate Finance Committee chairman Sen. Ron Wyden of Oregon said in a statement.
Professor of law at Northwestern University, Steven Lubet, said Thomas’s failure to disclose the motor coach loan “is more significant than the past failures.”
“There isn’t even a plausible excuse this time,” Lubet said. “The directions could not be more clear. It’s a quarter of a million dollars – it’s hard to attribute that to inadvertence.”
