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Sat 3 Sep, 2005 11:17 am
washingtonpost.com
Rove Not Entitled to D.C. Homestead Deduction
Bush Adviser to Reimburse City for Back Taxes
By Lori Montgomery
Washington Post Staff Writer
Saturday, September 3, 2005; A02
Presidential adviser Karl Rove may live in Washington. But in his heart -- and for voting purposes -- he remains a Texan. Which means he is not legally entitled to the homestead deduction and property tax cap he's been getting on his Palisades home for the past 3 1/2 years.
This week, the D.C. tax collector was alerted to the problem. And Rove agreed to reimburse the District for an estimated $3,400 in back taxes, city officials said. But now some Lone Star officials also are wondering about the place Rove calls home.
In a letter released yesterday by the White House, the D.C. Office of Tax and Revenue accepted blame for the error, which also has affected numerous members of Congress. The homestead exemption gives District taxpayers a substantial tax break on their primary residences. But starting in 2002, a change in the law made it available only to District property owners who do not vote elsewhere, city officials said. That made Rove, and many others, ineligible.
"OTR failed to rescind the benefit when the law changed. As a result of OTR's error, the property inadvertently received tax deductions for which you no longer qualified," chief assessor Thomas W. Branham wrote Rove. "We regret any inconvenience that this error on the part of OTR may have caused you."
Rove, who was touring the hurricane-damaged Gulf Coast with President Bush yesterday, was unavailable for comment, White House spokeswoman Erin Healy said. She said Rove never intended to make an improper claim to the deduction.
"When Mr. Rove purchased the home in January 2001, he qualified for the exemption. He was not made aware of the changes in D.C. law," Healy said. "Now that it has been brought to his attention, he is making restitution. He certainly was not trying to mislead anybody."
Going forward, Healy said, Rove will forgo the exemption and tax cap on his Washington house -- valued at more than $1.1 million -- rather than give up his status as a Texas voter. But that raises a new set of questions.
Rove sold his longtime home in Austin in 2003. He was getting a homestead exemption there, too. So for three years, from 2001 until the sale, Rove was claiming homesteads in Texas and Washington, which is, technically, illegal, according to tax collectors in both cities. "Strictly speaking, you can only have one homestead," said Art Cory, chief tax appraiser in Travis County, Tex.
Cory said he would, nonetheless, probably not bother to investigate.
Anyway, Rove is now registered to vote in Kerr County, about 80 miles west of Austin in the Texas Hill Country. He and his wife, Darby, have owned property there, on the Guadalupe River, since at least 1997, according to county property records.
But as far as the locals know, the couple have never actually lived in either of two tiny rental cottages Rove claims as his residence on Texas voter registration rolls. The largest is 814 square feet and valued by the county at about $25,000.
"I've been here 10 years and I've never seen him. There are only, like, three grocery stores in town. You'd think you'd at least see him at the HEB" grocery, said Greg Shrader, editor and publisher of the Kerrville Daily Times.
Charles Ratliff, secretary of the Kerr County Democratic Party, said he's never even heard rumors of Rove's presence. "I have no memory of anybody saying to me, 'Hey, Karl Rove is in town, and he's speaking at the courthouse.' Or, 'Karl Rove is in town and I saw him at the grocery store.'
"Now, you do hear people say that all the time about Kinky Friedman," Ratliff said, referring to the novelist and lead singer for the Texas Jewboys. "If somebody famous like Rove lived near Kerrville, I think I would hear about it all the time."
Down in Texas, when you register to vote in a place where you don't actually live, the county prosecutor can come after you for voter fraud, said Elizabeth Reyes, an attorney with the elections division of the Texas Secretary of State. Rove's rental cottage "doesn't sound like a residence to me, because it's not a fixed place of habitation," she said. "If it's just property that they own, ownership doesn't make that a residence."
Still, under state law, the definition of a Texan is really pretty loose, Reyes said, even for voting purposes. So someone would have to file a complaint.
In the end, she said, "Questions of residency are ultimately for the court to decide."
Lawyer Is Fired After Talking to 'Wash Post' About Rove
Lawyer Is Fired After Talking to 'Wash Post' About Rove
Published: September 10, 2005 6:19 AM ET
AUSTIN, Texas (AP)
A lawyer with the Texas secretary of state was fired after she spoke to a reporter about presidential adviser Karl Rove's eligibility to vote in the state.
Elizabeth Reyes, 30, said she was dismissed last week for violating the agency's media policy after she was quoted in a Sept. 3 story by The Washington Post about tax deductions on Rove's homes in Washington and Texas.
Scott Haywood, a spokesman for Texas Secretary of State Roger Williams, confirmed Reyes' firing but wouldn't discuss specifics. He had earlier told the Post that Reyes "was not authorized to speak on behalf of the agency."
Reyes told the Post on Friday a superior told her that her bosses were upset about the article. Williams has raised hundreds of thousands of dollars for Republicans, including President Bush, who relies heavily on Rove for political strategy.
While Reyes said she didn't know she was talking to a reporter, she said the press policy doesn't bar her from speaking with the media.
"The policy allows us to talk to members of the media," she told the Post. "The policy says if it's a controversial issue or a special issue, it needs to be forwarded on to someone else. Just talking to the media doesn't violate it, as I read it. ... Karl Rove didn't come up. It wasn't something you could classify as controversial."
She said she sent a certified letter to Williams's office asking that her dismissal be reconsidered.
The Post earlier reported that Rove inadvertently received a homestead tax deduction on his home in Washington, even though he had not been eligible for the benefit for more than three years. Rove was eligible for the deduction when he bought the home in 2001, but a change in the tax law in 2002 made the deduction available only to property owners who do not vote elsewhere. Rove is registered to vote in Texas.
The tax office admitted the mistake, saying it failed to rescind the deduction, and Rove agreed to reimburse the city an estimated $3,400 in back taxes, the Post reported.
Rove is registered to vote in Kerr County, Texas, where he and his wife own two rental homes that he claims as his residence. But two local residents told the Post they had never seen Rove there.
The Post reported Saturday that when its reporter called the Texas secretary of state's office for her story, she was told the press officer was on vacation and she was transferred to Reyes.
The attorney told the reporter that it was potential vote fraud in Texas to register in a place where you don't actually live, and she was quoted as saying Rove's cottages don't "sound like a residence to me, because it's not a fixed place of habitation."
The Post ran a correction Saturday saying Reyes had not been asked about Rove by name and that the story should have mentioned Reyes's further explanation that an individual's intent to return to a home owned in Texas is a primary factor in qualifying for residency.
However, the reporter did identify herself as working for the Post during two phone conversations with Reyes, and in the second one she said she was asking about a presidential adviser who had moved from Texas to Washington, the newspaper said.
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