WHO WILL WIN IN NOVEMBER?

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I ask the question of anyone intersted in this event: what laws did Reid break?

Cycloptichorn wrote:

I ask the question of anyone intersted in this event: what laws did Reid break?

I don't know that he broke any. I also don't know that he didn't. Your Daily Kos article is written so incoherently that even if its facts are true, I can't tell whether it's a genuine refutation or not. Hence, the case is analogous to that of Mr. Foley, since also don't know that he broke any laws. Nevertheless, I presume you consider the brouhaha around Foley a real scandal.

The senator's aides said no money changed hands in 2001 and that Reid instead got an ownership stake in Brown's company equal to the value of his land. Reid continued to pay taxes on the land and didn't disclose the deal because he considered it a "technical transfer," they said.

They also said they have no documents proving Reid's stake in the company because it was an informal understanding between friends.

The senator's aides said no money changed hands in 2001 and that Reid instead got an ownership stake in Brown's company equal to the value of his land. Reid continued to pay taxes on the land and didn't disclose the deal because he considered it a "technical transfer," they said.

The gist of it, as far as I can tell, is that the land was transferred from his name into an LLC; which, as far as the IRS is concerned, is a 'technical transfer

According to the AP, "The complex dealings allowed Reid to transfer ownership, legal liability and some tax consequences to Brown's company without public knowledge, but still collect the payoff nearly three years later." In other words, Reid accepted favors from Brown: Brown's company "assumed legal liability and some tax consequences", and apparently lobbied officials for a profitable re-zoning of Reid's property. Having accepted these favors from Brown and his company, Reid hid from Congress the information that would have let them trace these favors. Although this is probably legal, it's unethical under Senate Ethics rules, and properly so. That is true no matter if Reid's sale to Brown, considered purely as business transaction, was just technical or something more.

Update III: A tax lawyer reader writes:

Quote:

FYI, I am a tax attorney. A single member LLC (i.e. an LLC owned 100% by a single person) is treated by the IRS as non-existent for tax purposes. The LLC owner continues to treat himself as the direct owner of the property for tax purposes as if the property were never transferred to the LLC. That could explain why someone might continue to consider himself the owner of property which he has transferred to a single member LLC.

A multiple member LLC is treated as a partnership for tax purposes. Again, if an existing partnership transfers property to an LLC owned by the same partners in the same percentages, the LLC will usually be treated as the same entity as the orignal partnership, and again an individual might reasonably believe that no transfer has taken place.

The latter paragraph is relevant to this discussion. Reid owned a 75 percent interest in two plots of land, his partner 25 percent. They created the LLC in the same exact percentages.

Ultimately, there might be a technical violation of Senate rules -- Reid has asked for clarification from the ethics committee. But bottom line is that Reid followed the spirit of the law. He disclosed his ownership of the land -- down to the exact plots -- which would allow for watchdogs to monitor any potential conflicts of interest. That is better than disclosing ownership in a shadowy private LLC, with no public access to its assets. (Which is, btw, essentially what Hastert did.)

Look, if Reid committed a crime, or broke a serious ethics violation, he has to be investigated and proper action has to be taken, whether or not it is censure or removal from office. I don't defend elected officials who are criminals or those with poor ethics or morals. But I haven't exactly seen any evidence that Reid did anything wrong, other than not filing some paperwork.

Cycloptichorn wrote:

Look, if Reid committed a crime, or broke a serious ethics violation, he has to be investigated and proper action has to be taken, whether or not it is censure or removal from office. I don't defend elected officials who are criminals or those with poor ethics or morals. But I haven't exactly seen any evidence that Reid did anything wrong, other than not filing some paperwork.

As I remember the Alito confirmation hearings, Democrats kept bringing up an even more trivial paperwork violation as a reason not to confirm him. Alito's violation, unlike Reid's, did not involved any accepting of favors.

I don't know why you bring up the word "criminal". Reid is accused of an ethics violation. If you compare the text of the Senate provision with the facts of the case, Reid has clearly violated it. Why can't you just bring yourself to saying: Yes, Reid violated the Senate's ethics rules, and that isn't okay?

It certainly merits an investigation, which, as far as I can tell, is going on currently.

In 2001, Reid sold the land for the same price to a limited liability corporation created by Brown. The senator didn't disclose the sale on his annual public ethics report or tell Congress he had any stake in Brown's company. He continued to report to Congress that he personally owned the land.

After getting local officials to rezone the property for a shopping center, Brown's company sold the land in 2004 to other developers and Reid took $1.1 million of the proceeds, nearly tripling the senator's investment. Reid reported it to Congress as a personal land sale.

Senate ethics rules require lawmakers to disclose on their annual ethics report all transactions involving investment properties -- regardless of profit or loss -- and to report any ownership stake in companies.

I do take task with the 'favors' aspect of it. I'm not sure what favors you are talking about.

I didn't realize Reid was a closet republican. He appears to do well with the spirit of capitalism commonly known as the GOP. Perhaps he should convert.

Cycloptichorn wrote:

It certainly merits an investigation, which, as far as I can tell, is going on currently.

Excuse me, but that sounds a lot like Foxfyre's 'the jury is still out between evolution and ID, I don't really know which side to trust, so I'll just keep an open mind about it.' Puleeaze!

AP wrote:

In 2001, Reid sold the land for the same price to a limited liability corporation created by Brown. The senator didn't disclose the sale on his annual public ethics report or tell Congress he had any stake in Brown's company. He continued to report to Congress that he personally owned the land.

After getting local officials to rezone the property for a shopping center, Brown's company sold the land in 2004 to other developers and Reid took $1.1 million of the proceeds, nearly tripling the senator's investment. Reid reported it to Congress as a personal land sale.

AP wrote:

Senate ethics rules require lawmakers to disclose on their annual ethics report all transactions involving investment properties -- regardless of profit or loss -- and to report any ownership stake in companies.

How much more investigation do you need to conclude that quote 1) is in violation of quote 2)?

Cycloptichorn wrote:

I do take task with the 'favors' aspect of it. I'm not sure what favors you are talking about.

1) Brown assuming legal liabilities and "some tax consequences" that would have otherwise been born by Reid; 2) Brown lobbying local public officials to rezone the land for the financial benefit of Reid, a powerful US Senator. Those are clearly favors a private entrepreneur gave to a public official whose legislation he would possibly benefit from in the future.

Now that I think about it, I know that quote 1 is inaccurate, because Reid didn't 'sell' the land to anyone. Entering into an LLC is not the same thing as selling land, at all.

Brown had a lot to gain from the land as well as Reid.

What did he have to gain? Reid's stake in the company equaled the value of his land. Brown's stake in the company excluded the land formerly owned by Reid. What did Brown have to gain from re-zoning Reid's land?