Sarah Palin won’t get an Obama tax cut
October 21, 2008 8 Comments
Not if the $150,000 or so in clothes she’s gotten from the RNC counts as income…
The Republican National Committee has spent more than $150,000 to clothe and accessorize vice presidential candidate Sarah Palin and her family since her surprise pick by John McCain in late August.
According to financial disclosure records, the accessorizing began in early September and included bills from Saks Fifth Avenue in St. Louis and New York for a combined $49,425.74.
The records also document a couple of big-time shopping trips to Neiman Marcus in Minneapolis, including one $75,062.63 spree in early September.
and not if she’s in prison!
The cash expenditures immediately raised questions among campaign finance experts about their legality under the Federal Election Commission’s long-standing advisory opinions on using campaign cash to purchase items for personal use.
image via Wonkette
update! Via CBS News on October 22, 2008:
The McCain campaign released a statement late Tuesday night saying, “With all the important issues facing the country right now, it’s remarkable that we’re spending time talking about pantsuits and blouses. It was always the intent that the clothing go to a charitable purpose after the campaign.”
The intent was always to put her ‘lightly used’ clothes on Ebay? To raise money for the RNC? I mean, a “charity”?
update! Via ABC News on October 22, 2008:
I wonder if the governor knows that she’s going to have to pay taxes on those clothes, even if she ultimately gives them away?
Tax experts say that even if she only wears them for professional reasons — locked away in a special “candidate” cabinet, say — Palin will be on the hook for those fancy new duds just as if someone had written her a check for $150,000. […]
UPDATE: Someone familiar with this situation writes that, “Because these accessories belong to the RNC and they will be returned to the national committee, it does not trigger any gift tax liability.” So these clothes were purchased for Palin but she will return them to the RNC and they won’t count as gifts? Perhaps some tax lawyers/accountants out there can shed some light on this.
It makes sense if Palin herself is a prop…
update! It looks like Sarah Palin qualifies for an Obama tax cut after all, since apparently she only needs to declare the “rental value” of the clothes as income, assuming she returns them to the RNC. via Wonkette, from ABC News on October 22, 2008:
He said that, after consulting with a number of experts at his prominent firm, he thinks the RNC and Gov. Palin are wrong.
“It’s probably not a ‘gift,'” he said. “The issue is whether it counts as ‘income.'”
Palin’s claim that the pricey duds belong to the RNC and she’s just “borrowing” them and will return them later, reminds him, he says, of some of the issues going on in the prosecution of Sen. Ted Stevens, R-Alaska. (Some of the issues, he specified, not the allegations of criminality.)
“This is exactly the issue with the Stevens case,” he said. “When you loan something to someone can you call it a ‘loan’ if, upon its return, it has no practical value?
“The consensus view is she would have to count the wardrobe as income at least in the amount of the fair value of the rental of the wardrobe,” he said.
He added that the law is clear that uniforms — “big brown suits with your name on them” — don’t qualify as income, but it would be hard to make the argument that fancy dress suits from Saks Fifth Avenue and Nieman Marcus are a uniform.
“Especially since Palin is employed by the state of Alaska and not the RNC,” he said.
update! via Newsweek on November 5, 2008:
NEWSWEEK has also learned that Palin’s shopping spree at high-end department stores was more extensive than previously reported. While publicly supporting Palin, McCain’s top advisers privately fumed at what they regarded as her outrageous profligacy.
One senior aide said that Nicolle Wallace had told Palin to buy three suits for the convention and hire a stylist. But instead, the vice presidential nominee began buying for herself and her family—clothes and accessories from top stores such as Saks Fifth Avenue and Neiman Marcus. According to two knowledgeable sources, a vast majority of the clothes were bought by a wealthy donor, who was shocked when he got the bill.
Palin also used low-level staffers to buy some of the clothes on their credit cards. The McCain campaign found out last week when the aides sought reimbursement. One aide estimated that she spent “tens of thousands” more than the reported $150,000, and that $20,000 to $40,000 went to buy clothes for her husband. Some articles of clothing have apparently been lost.
An angry aide characterized the shopping spree as “Wasilla hillbillies looting Neiman Marcus from coast to coast,” and said the truth will eventually come out when the Republican Party audits its books.
update! now officially a hot potato, via ABC News on November 6, 2008:
[longtime aide to Alaskan Governor Sarah Palin] Meg Stapleton offers an explanation of some of the more stinging criticisms that have come out in recent days since the McCain-Palin defeat.
Regarding the $150,000 worth of clothing the campaign bought Palin, Stapleton says a New York stylist was given a blank check and told to go and make Palin look presidential.
According to Stapleton, Palin saw a price tag of $3,500 on one outfit and said she didn’t want to wear it. Stapleton says Palin was simply presented with her wardrobe and staff. Palin was told “here’s your people, here are your clothes.”
Stapleton adds that the McCain staffers tried to hide the cost of the wardrobe. “They said, ‘bill the convention under wardrobe so that the cost could be hidden.’ And then they realized and they were told that’s illegal. So then they said, ‘OK, how do we make this legal and appropriate?’ So they had somebody pay for it and then the RNC (Republican National Committee) would reimburse them.”
According to Stapleton, the campaign said, “‘this is what you need as a VP candidate.’ It was the campaign and/or the RNC … But it wasn’t the governor saying this is what she needs.”
There was also a directive to buy any and all clothes before Sept. 4, the day the Republican convention in St. Paul ended, so that it could be buried as part of other convention costs. The campaign also bought clothing for the children, so they, too, would look nice, Stapleton added.
don’t pick it up don’t pick it up don’t pick it up…