Paul L. Caron

Saturday, October 18, 2008

Lindgren: Why Is the Media Focusing on Joe the Plumber's Tax Problems, But Not Barack Obama's?

Jim Lindgren (Northwestern) asks why the media is focusing on Joe the Plumber's tax problems while ignoring the clear violation of law shown on the face of Barack Obama's tax returns.  The Illinois Governmental Ethics Act (5 ILCS § 420/2-110) prohibits state legislators from accepting any "Honorarium," defined as any payment "for an appearance or speech." Obama reported "speaking fees" on his 2000 and 2002 tax returns while he was an Illinois state legislator: 

  • 2000:  On his 2000 Schedule C-EZ, Barack reported that he received $16,500 as a “Foundation director/Educational speaker.”
  • 2001:  On his 2001 Schedule C-EZ, Barack reported $98,158 from a Chicago law firm, Miner, Barnhill, for “Legal services/attorney” (and nothing for speaking).
  • 2002:  On his 2002 Schedule C, Barack reported $34,491 for “LEGAL SERVCES / SPEAKING FEES.” These “speaking fees” are in addition to the amounts that Barack was paid as an employee, a lecturer at the University of Chicago, reported on the first page of his 1040s.

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I think it unlikely that the 2000 payments were honoraria--it appears to be regular compensation for an organization--there would not, I think, be a violation unless there was separate payment each time he gave a speech.

2. We don't have enough information to know whether any of the 2002 payments violated the statute, so it is a bit presumptious of Jim to say there was a "clear" violation. (Even more presumptious with respect to the 2000 compensation.) And the penalty for a violation appears to be simply surrender of the improperly accepted honoraria.

Posted by: | Oct 18, 2008 1:04:05 PM

No one cares, because it is a stupid rule.

Posted by: Scott | Oct 18, 2008 1:59:55 PM


"No one cares, because it is a stupid rule."

If this is your idea of a "sophisticated retort," then put your dunce cap back on and sit in the corner some more.

Posted by: MarkJ | Oct 18, 2008 2:38:42 PM


Posted by: Ted | Oct 18, 2008 3:44:30 PM

Two reasons why Obama is receiving very little scrutiny in the general election cycle:

1. Media bias. In the primary cycle, there were enough Hillary supporters in newsrooms to whether the Jeremiah Wright stuff was allowed to air. But there are virtually no McCain supporters. Thus, the media spends 100% of its time digging dirt on McCain and Palin and 0% of its time digging dirt on Obama or Biden.

2. More aggressive astroturfing and media campaigns by Obama. McCain is a very timid campaigner. He rarely does vicious attacks against Obama, which is why his Ayers line of attack shocked so many people. So it stands to reason that his campaign and its surrogates are not "feeding" these kinds of stories to the press. ON the contrary, the liberal blogs and Obama attack machine dug dirt on Joe The Plumber and spammed the press with it, until it got picked up.

Posted by: Outlander | Oct 18, 2008 3:49:06 PM

regular compensation for an organization, would be.... you know, regular. It would be more than just one year.

Thats why the lack of a speaking fee on 2001 is important.

Posted by: Buck | Oct 18, 2008 4:19:41 PM


I normally do not engage in "sophisticated retort(s)," and I will not make an exception for this amazing piece of journalism on Obama's tax return.

Palin's tax return is riddled with errors that have real substance to more than just Illinois State senators, a very exclusive group (in numbers). Speaking compensation, for a state senator does not seem to be even in the ballpark of things that I dare to care about, or anyone should care about.

Next time I make a comment, I will be sure to check the box that says what type of remark I plan on making. This time, the box was not intended to be marked "sophisticated retort."

Posted by: Scott | Oct 18, 2008 4:39:41 PM

Barack Obama will never be held to the standard that any white candidate, male or female, is held to.

Posted by: Toads | Oct 18, 2008 4:44:47 PM

No, no problem here. This stuff has been thoroughly vetted already, guys. Do you really think nobody has dug through Obama's tax returns with a microscope until 17 days before the election?

As defined in the statute, an honorarium is a payment for an appearance or speech. ("An" is important here: it's a one-off. The one-off distinction is critical.)

In 2000, Obama was serving his last year as foundation director (I've also seen "chairman" reported) of the Chicago Annenburg Challenge, funded by Walter Annenburg. (This has been reported endlessly. :-)) That's almost certainly what the $16,500 was from, and it's regular employment that started in 1995. Because 2000 was his last year, that's why you see nothing comparable in 2001.

As for 2002, that's already been reported extensively in the Los Angeles Times back in April. (You can still find the article via Google.) From March, 2001, until April, 2002, Electronic Knowledge Interchange (EKI) employed Obama on a retainer as their legal advisor. He was paid $8,000 per month. That accounts for $32,000 of the $34,491 reported in 2002. (Of the $98,158 in 2001, $80,000 was from EKI, starting in March, 2001.) All the EKI payments in both years went through Miner, Barnhill & Galland, the law firm where he worked. The balance ($2,491) reflects Obama's other legal work at the firm before he left in April, 2002 (as the $18,158 balance did for 2001). EKI was his biggest client by far. I'm just spelling all this out for completeness, but the Los Angeles Times verified the $34,491 as coming from Miner, Barnhill & Galland.

Note again there's no Illinois prohibition on "speaking." (That's what lawyers do, after all, on behalf of their clients and employers. And that's what education foundation directors do.) There's no problem putting that word on your tax return. The speaking just can't be one-off, because one-off remuneration drifts into the appearance of impropriety. Quite simply, you cannot have ad hoc speaking relationships as a state legislator under Illinois law. But that's not what happened here. In both cases Obama was regularly employed, and his employers were very well known (at the time and especially now): the Chicago Annenburg Challenge (1995-2000) and Miner, Barnhill & Galland (up until 2002).

Somebody needs to change the headline and lede of this original blog post. It's inaccurate and unfair to Obama.

Posted by: Timothy | Oct 18, 2008 11:02:57 PM

1) For not agreeing with Obama you are a racist (tm).
It is racist to oppose The One's entitled right to be President
When he is in office, it will be racist to oppose his policies.

2) Let us all remember that Obama not being held to standard of "any white candidate" is NOT because he is black, but because he is a black DEMOCRAT.
If he was a black Republican, he would be treated as a "house n*" or a "race traitor" (See Clarence Thomas) and openingly treated to a "high-tech lynching".
Just as Palin (a female Republican) is expected to get back in the kitchen and raise those kids, and not worry her pretty little head about, men's politics.

Posted by: Boris | Oct 18, 2008 11:31:17 PM

thanks to Toads for answering the query which by now is all over every right wing blog on the internet. They think they've found a live one! My, my they do try harder.
The article in LA Times does confirm your information. Basically, it confirms there was no violation.,0,6789688.story?page=2

Posted by: Mae | Oct 19, 2008 9:52:32 PM

The title of this is misleading. I am not sure how this even qualifies as a tax problem. Never heard of someone having a tax problem for trying to report income.

File this under an unsophisticted retort.

Posted by: Braney | Oct 20, 2008 9:58:28 AM


You're a jerk. Toads posts a logical rebuttal of the author's post, and you respond with a nonsensical talking point attack.

Things must be bad if you can't even come up with a logical response.

Posted by: tafka pb | Oct 20, 2008 11:18:50 AM

To the first commenter:

You might read my two posts on the issue. I didn't call it a "clear" violation.

That was Paul's spin.

Jim Lindgren

Posted by: Jim Lindgren | Oct 21, 2008 11:29:10 AM

Timothy wrote:

In 2000, Obama was serving his last year as foundation director (I've also seen "chairman" reported) of the Chicago Annenburg Challenge, funded by Walter Annenburg. (This has been reported endlessly. :-)) That's almost certainly what the $16,500 was from, and it's regular employment that started in 1995. Because 2000 was his last year, that's why you see nothing comparable in 2001.

I think you're wrong.

Obama's service on Annenberg ended in 1999, not 2000.

Try again.

Jim Lindgren

Posted by: Jim Lindgren | Oct 21, 2008 11:41:40 AM

Jim wrote: "Obama's service on Annenberg ended in 1999, not 2000."

Jim, I think you're wrong.

Annenberg's 2001 990 lists Obama as director.

Try again. Or better yet, don't try again: keep your unsourced false statements to your own little group of bitter wingnuts.


Posted by: 1mantruthsquad | Oct 22, 2008 5:34:32 AM

Where's Obama's federal gift tax return for 2005 or 2006, whichever year he paid Rezko's wife $104,500 for a piece of land appraised at $40,500? By my math, that's a $64,000 gift. Sure, he can gift-split with his wife, and they can each shelter an amount with a gift tax annual exclusion. He's still required to file a return. Once, it's filed, then I want to know why he was making a $64,000 gift to the wife of a money man of his.

Anyone have an answer for that?

Posted by: SAM | Oct 22, 2008 5:52:16 AM

Obama purchased one sixth of the lot next door. That lot had previously sold for $625,000. He paid 1/6th of that price, rounded up to the nearest 500: $104,500. (with links to sources)

Posted by: 1mantruthsquad | Oct 23, 2008 11:53:28 AM