Supreme Court Justice Clarence Thomas appears to have failed to repay a “significant” portion of a $267,230 loan from a friend that allowed him to buy a luxury motorcoach in 1999, according to a report released Wednesday by Democrats on the Senate Finance Committee.
The committee said in a memo summarizing its heir findings that the documents it reviewed showed Thomas only paid some interest on the loan before it was forgiven. The committee also said the omission of the forgiven debt from the justice’s financial disclosure forms raises fresh questions about whether he “properly reported the associated income on his tax returns.”
The committee’s revelations are the latest to dog Thomas. The justice has come under fire in recent months from critics who charge him with skirting ethics rules by accepting lavish trips and rides on private jets without always disclosing them on his annual financial disclosures he’s required to submit.
The committee qualifies its new report by noting that “additional documents pertaining to the loan agreement may exist” but that so far “none of the documents reviewed by Committee staff indicated that Thomas ever made payments” to his friend in “excess of the annual interest on the loan.”
The New York Times first reported the congressional memorandum Wednesday and in August, on the financial arrangement between Thomas and his friend Anthony Welters, which triggered Democrats on the Senate committee to launch their investigation.
“Now we know that Justice Thomas had up to $267,230 in debt forgiven and never reported it on his ethics forms,” Chairman Ron Wyden said in a Wednesday statement.
“Regular Americans don’t get wealthy friends to forgive huge amounts of debt so they can buy a second home. Justice Thomas should inform the committee exactly how much debt was forgiven and whether he properly reported the loan forgiveness on his tax returns and paid all taxes owed,” the Oregon Democrat added.
A Supreme Court press officer said she had no comment on the report and CNN’s calls to Thomas’ lawyer were not returned.
According to the new report, back in 1999, Thomas entered into an agreement with Welters, who personally loaned him money to help finance the purchase of the RV: a Prevost Marathon motorcoach.
Welters told the Times this summer that the loan was ultimately “satisfied” in 2008, but the new report offers more details about the transactions.
In the report summary released by the committee, its staff said they received more information about the loan, including a handwritten note from Thomas on Supreme Court stationery dated December 6, 1999. The documents included a promissory note detailing that the principal balance of the note had an interest rate of 7.5% per year.
In 2004, the loan was extended for 10 years. According to the summary, committee staff reviewed a note from Welters in 2008 that stated that Thomas had been paying him interest only on the vehicle for “many years” and that Welters would no longer seek payment because he believed that Thomas had paid interest greater than the purchase price of the bus.
According to the report, “Welters did not feel it was appropriate to continue to accept payments even though he had the right to them.”
But the committee staff said that “none of the documents” reviewed by staff “indicated that Thomas ever made payments to Welters in excess of the annual interest on the loan.”
“Based on the documents reviewed by Committee staff, Anthony Welters forgave a substantial amount, or even all of the principal balance of his loan to Clarence Thomas, constituting of the forgiveness of approximately $267, 230 of debt owed by Justice Thomas,” the report concludes.
The summary says the new revelations raise “a number of potentially serious tax questions” for Thomas because the failure to repay the entire principal of the loan “would have generated a significant amount of taxable income for Justice Thomas.”
The report also says that Thomas failed to report the forgiven debt on his 2008 Financial Disclosure Report.
“Since the loan agreement with Welters was first reported in August 2023, Justice Thomas has not provided any information on loan payments made to Welters, or stated whether he properly reported the income from the forgiven debt on his tax returns,” the report concludes.
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