This article first appeared in the St. Louis Beacon, March 21, 2011 - U.S. Sen. Claire McCaskill, D-Mo., said today that her family had failed to pay close to $290,000 in personal property taxes owed to St. Louis County since 2007 on the airplane partially owned by her family that has been at the center of controversy for several weeks.
McCaskill's admission adds more fuel to the Republican effort to cast doubt on her image as a federal cost-cutter concerned about ethics. From the GOP's standpoint, the party's hope is that the controversy will weaken McCaskill's re-election bid in 2012 and perhaps encourage more Republicans to consider challenging her.
The senator told reporters in an afternoon conference call that she had discovered the non-payment herself when she "put on my auditor's hat" and probed all aspects of the plane's finances as a result of the attacks, many made by Republicans, over her use of the family-owned plane for political and congressional flights.
The taxes were to be paid immediately, she said.
"I take full responsibility for the mistake," McCaskill said, adding that no personal property taxes had been paid the county because of an oversight as to the state and local laws regarding such taxes.
No personal property taxes were owed in Illinois, she said, where the plane used to be housed before her family opted to move it in 2007 to Spirit of St. Louis Airport in St. Louis County.
The taxes owed to St. Louis County span four years, since 2007, McCaskill said. She added that the amount may change when the county assesses how much is owed for back interest and late-payment penalties.
Because planes are not licensed in Missouri, the state has no record of who owns them, so local governments -- who levy any property taxes -- send no bills. As a result, McCaskill said, her husband and the company owning the plane had no knowledge that the property taxes were owed.
Payment of plane property taxes is therefore up to the owners to self-report that they own such an item, she said. McCaskill said she wasn't going to point blame at others more directly involved in the plane's finances. "I should have checked,'' she said.
McCaskill said the family's company had properly paid the sales taxes due monthly to the state of Missouri, which had totalled almost $39,000 since 2007.
Because of such problems, she added, "I have convinced my husband to sell the damned plane."
Republicans Pounce On atest admission
McCaskill's admission of unpaid taxes comes as the Missouri Republican Party, national GOP groups and challengers to her 2012 re-election bid have continued to hammer her over the plane. The state GOP ran a full-page ad this morning about the plane in the Springfield (Mo.) News-Leader.
The controversy began with the web news site Politico's disclosure that McCaskill had been using her office money -- which comes from taxpayers -- to pay for flights on the family-owned plane. Such procedures violate no Senate ethics rules, as long as all the flights were for official business and the payments are in line with standard costs for chartering a plane.
But because of GOP questions as to whether the payments were too high, or if a profit was being made, McCaskill paid almost $89,000 to the federal Treasury Department to reimburse the government. McCaskill acknowledged at the time that she also was concerned about public perception, even though she believed she was legally in the clear.
Soon after, though, it became clear that one of McCaskill's 89 flights had been for a political event, in March 2007. That does violate Senate ethics rules, prompting the Missouri GOP to file a formal complaint.
McCaskill said her own close examination of each flight revealed that another -- involving eight stops -- had included a couple political events as well. The use represented eight percent of the entire flight, she said, which would be small enough not to violate any federal Senate rules. But she opted to disclose the events now, in an apparent attempt to air any additional negative information herself about the plane.
McCaskill has maintained that the Republican target is really her husband, Joseph Shepard, a successful businessman and millionaire. The plane was owned by one of his businesses, Sunset Cove LLC, which is a subsidiary of another company, Timesaver LLC, that also is owned by Shepard and other investors.
Since 2004, when McCaskill made a failed a bid for governor, the GOP has called for Shepard to release his tax returns. He has declined to do so. McCaskill has released her own tax returns.
Today's statement by Missouri Republican Party chairman David Cole reflected that longstanding line of attack:
"In the past two weeks, we have learned that Claire McCaskill billed taxpayers for political travel and failed to pay nearly $300,000 in personal property taxes on her plane. Over the last four years, cash-strapped school districts and the children in these schools have been deprived of these much-need funds because McCaskill avoided paying taxes by hiding her assets with a Delaware shell company.
"These actions are unacceptable evasions of the law by McCaskill, who brags about her background as an auditor, lawyer, and self-described government watchdog. And it begs the question: what else is hidden in the nearly 300 LLCs, LPs, and shell companies that McCaskill has listed on her personal financial disclosure? McCaskill herself said it best back in 2006, 'if my walk doesn't match my talk, then shame on me and don't ever vote for me again.' "
Later, her Republican rivals weighed in. Asserted former state Treasurer Sarah Steelman in a statement: "How can we trust her to manage our tax dollars when she has so blatantly abused them for her own personal benefit?"
Said GOP rival Ed Martin, a St. Louis lawyer: "This is an embarrassment to Missourians and an insult to taxpayers but it only raises more questions about the hundreds of companies that the McCaskill family owns and, like the Air Claire companies, appear to pay no taxes. It also provides a pointed lesson about liberal spending priorities."
The National Republican Senatorial Committee also has launched a web ad attacking McCaskill over the plane.
McCaskill to Take to the Road, Use Less Air
Republican accusations about the plane go back to 2006, when she first ran for the U.S. Senate. The attacks didn't stick, because of other plane-related disclosures directed at the Republican incumbent at the time, Jim Talent.
McCaskill said today that the matter of taxes didn't arise then, because the plane was new -- purchased in July 2006. No taxes were owed until 2007, so the family was unaware of the personal property tax issue, she said.
McCaskill added that if the family had been trying to avoid paying taxes, it would have left the plane in a hangar in Illinois, since no property taxes on planes are levied there. McCaskill said that Missouri is among a minority of states that allow local governments to assess personal property taxes on planes kept in their jurisdiction. McCaskill's plane, like many private planes, is registered in Delaware, where no taxes are imposed.
McCaskill noted that the cost to taxpayers for her use of her family plane had been less over four years than now-former Sen. Christopher "Kit" Bond, R-Mo., charged taxpayers for one year's worth of flights.
Even so, she continued, "I am very happy that I've convinced my husband to sell the plane."
McCaskill plans to travel more by car; she already is planning to lease an RV for her campaign travels around the state, which is what she did in 2006.
When plane travel is needed, McCaskill said she now plans to take commercial plane flights when she can, traveling by coach. At times, she will still be chartering a plane.
The senator acknowledged that the change could well cost taxpayers more for her transportation.
But owning an airplane has been too big of a political headache, despite any savings, McCaskill said. She added, "You're damned if you do and damned if you don't."
