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Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Thursday, October 6, 2005

Miers Helped Bush Hide "Questionable Tax Advantage"

MiersThe L.A. Times reports today that Harriet Miers's role in hiding a "questionable tax advantage" led her into George W. Bush's inner circle:

For Harriet Ellan Miers, the road to a Supreme Court nomination began in summer 1994, with an ugly little legal problem involving an exclusive East Texas fishing camp and the soon-to-be governor, George W. Bush. A caretaker named J.W. Moseley alleged that Bush and the other members — who included two former Texas secretaries of state and former Dallas Cowboys owner H.R. "Bum" Bright — had unjustly fired him out of "spite and ill will."

For most of the members, men of established wealth and power, the suit was little more than a nuisance. But for Bush, it carried the potential for public embarrassment that no rising political star needs, especially because there was talk that cabins at the camp, known as the Rainbo Club, had been used to gain questionable tax advantages.

Bush turned to Miers, a relative newcomer to his political team. Although lawyers for the other defendants opted for confidential settlements with Moseley, Miers elected to fight. She not only got the complaint against Bush dismissed, she handled it so deftly that there was no awkward publicity. "It took awhile to get it disposed of, but it did go away. She did a crackerjack job," said Jim Francis, a Dallas lawyer who originally brought Miers on board as general counsel for the gubernatorial campaign. A grateful Gov. Bush made Miers his personal attorney — and a de facto member of his inner circle. It would transform Miers' life. "She took the pill. She said: 'I'm yours,' " said a longtime GOP strategist in Texas who has worked with Bush and Miers, speaking on condition of anonymity.

For more on the "questionable tax advantages" surrounding the Rainbo Club, see this Buzzflash News Alert:

Bush’s Rainbo Club Estate Manipulated Recreational Tax Exemption For Tax Break. When Rainbo Club no longer qualified for an agricultural exemption, one of the club’s members, who was also a lawyer, came across another tax break. In 1992, Rainbo Club filed for recreational status. The club rewrote their deed to say, “The restricted land shall be used only and solely for recreational, park or scenic use, for individual or group sporting or recreational activities as defined in the statutes.” In 1994, the 1,187 acres of Rainbo Club was valued at $652,850, but due to the recreational exemption, the club only paid taxes on $258,400, paying $6,174 in taxes instead of $13,534. This exemption is rare in Central Texas. The former chairman of the Henderson County Appraisal District board said, “I think they are within the law, but I think it is a lousy law.” [Austin American-Statesman, 11/9/95; Boston Globe, 1/3/0/00]

Bush Gave His Athens Property A Tax Break. “When Gov. George W. Bush goes fishing at his lakeside retreat [in Athens, TX], he can be sure the biggest bite won't come from the tax man. Along with cutting property taxes for Texans, Bush has managed to reduce his tax bill by half on the rustic hideaway. The Republican presidential candidate is among homeowners who have qualified for reduced taxes on private lake property in the piney woods of East Texas.” [Baltimore Sun, 8/24/99]

(Thanks to Kirk Stark (UCLA) & Reed Shuldiner (Penn), who raised the issue on the TaxProf Discussion List.)

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