Sussman, Frank, and Pingree

http://www.futureofcapitalism.com/2010/10/sussman-frank-and-pingree

The Wall Street Journal has a humdinger of an editorial today on Rep. Barney Frank's re-election battle in Massachusetts:

The Boston Herald reports that Mr. Frank and his domestic partner travelled to St. Thomas in the U.S. Virgin Islands last winter on a private jet owned by hedge-fund operator Donald Sussman. Mr. Sussman is the fiancé of Representative Chellie Pingree (D., Maine), who was also aboard.

The House ethics committee approved Mr. Frank's acceptance of the free trip because of "the relationship between Representative Pingree and Mr. Sussman," according to a December 18, 2009 letter to Mr. Frank from ethics committee Chairman Zoe Lofgren and ranking member Jo Bonner. Normally, Mr. Frank would never be permitted to accept such a gift, but Members are allowed to accept gifts from other Members. So the committee classified the gift from Ms. Pingree's boyfriend as a gift from Ms. Pingree herself: "the Committee deems this an unusual case in which it would be appropriate to grant a waiver of the gift rule under House rule 25, clause 5(a)(3)(T)."

That was certainly accommodating of the ethicists, but the committee may have made an even larger accommodation without even realizing it. Mr. Frank has been using the committee's waiver to justify his behavior, but in seeking the waiver, what did Mr. Frank tell the committee? Nowhere in the letter is there any reference to Mr. Sussman's work in the financial services industry. Yet Mr. Frank was at that very moment drafting a reform of the financial industry, including hedge funds.

The Journal doesn't get into it, but the Maine politics Web site Pine Tree Politics notices that Mr. Sussman was reportedly, for tax purposes, a resident of the U.S. Virgin Islands, which, subject to the approval Congress, offers those who take advantage of the provision the ability to reduce their federal income tax by 90%. The New York Sun did some groundbreaking coverage of the Virgin Islands tax break back in the day. The comments thread on Pine Tree Politics says Mr. Sussman has now moved to Maine from the Virgin Islands.

Anyway, it's nice to know that Mr. Frank isn't having to fly commercial while he's purporting to represent the interests of the beleaguered American middle class as part of the Democratic leadership in Washington. First Reid of the Ritz, then Senator Kerry's yacht, now this. And they say the Republicans are the party of the rich?

by Ira Stoll  |  Oct 15, 2010 at 12:34 pm Related Topics:  Politics, Taxes receive the latest by email: subscribe to the free futureofcapitalism.com mailing list