Clarence Thomas, his luxury R.V., and his magical mystery disappearing loan

A justice who cared about ethics would want to resolve the questions surrounding the loan immediately — particularly if there were an answer.

Oct 30, 2023

The latest news on Justice Clarence Thomas’s disregard for ethics is a remarkable affront to the Supreme Court, his colleagues, and the country.

The Senate Finance Committee announced this past week that it had obtained information that Thomas “never repaid a substantial portion” of a $267,230 loan given to him by a wealthy friend, Anthony Welters, to enable the justice to purchase a luxury R.V.

Why is this revelation such an affront?

After all that has come out over this year about Thomas’s questionable practices and failed disclosures (at best), Thomas did something rather unusual when he filed his 2022 financial disclosure form (late) in August: He included more than 1,300 words of “additional information or explanations” for his form — which included updates on items “inadvertently” left out of past disclosures. He also had hired an outside lawyer, Elliot S. Berke, to assist with the disclosure — and who released a politicized statement in addition to Thomas’s explanation.

One of the stories that came out about Thomas’s actions, however, was about the R.V. In a New York Times report from Jo Becker and Julie Tate dated Aug. 5, the pair reported:

His Prevost Marathon cost $267,230, according to title history records obtained by The New York Times. And Justice Thomas, who in the ensuing years would tell friends how he had scrimped and saved to afford the motor coach, did not buy it on his own. In fact, the purchase was underwritten, at least in part, by Anthony Welters, a close friend who made his fortune in the health care industry.

The Times story got some information about how Welters helped to make Thomas’s purchase of the R.V. possible:

In an email to The Times, Mr. Welters wrote: “Here is what I can share. Twenty-five years ago, I loaned a friend money, as I have other friends and family. We’ve all been on one side or the other of that equation. He used it to buy a recreational vehicle, which is a passion of his.” Roughly nine years later, “the loan was satisfied,” Mr. Welters added. He subsequently sent The Times a photograph of the original title bearing his signature and a handwritten “lien release” date of Nov. 22, 2008.

But, it also detailed significant unanswered questions:

He would not say how much he had lent Justice Thomas, how much the justice had repaid and whether any of the debt had been forgiven or otherwise discharged. He declined to provide The Times with a copy of a loan agreement — or even say if one existed. Nor would he share the basic terms of the loan, such as what, if any, interest rate had been charged or whether Justice Thomas had adhered to an agreed-upon repayment schedule. And when asked to elaborate on what he had meant when he said the loan had been “satisfied,” he did not respond.

We now know more about that — thanks to the Finance Committee investigation — but, before I go further, I just want to highlight that Thomas’s disclosure form, with its long “additional information” section, was filed four days after the R.V. story was published, on Aug. 9.

There was nothing in the disclosure or Berke’s statement about the R.V. loan.

In the initial R.V. report in the Times, Thomas provided no comment — but the Times did highlight the ethics question this raised:

Justice Thomas, for his part, did not respond to detailed questions about the loan, sent to him through the Supreme Court’s spokeswoman. The two men’s silence serves to obscure whether Justice Thomas had an obligation to report the arrangement under a federal ethics law that requires justices to disclose certain gifts, liabilities and other financial dealings that could pose conflicts of interest.

Fast-forward to this past week when the Senate Finance Committee released its information on the loan.

OCTOBER 25,2023 Justice Thomas Did Not Repay Substantial Portion of $267,230 Loan, Finance Committee Investigation Reveals; Failed to Report Forgiven Debt on Ethics Filings, Raising Questions About Tax Compliance Documents Show Businessman Forgave the Loan, which Thomas used to Purchase a Luxury RV

In a memorandum from the committee’s Democratic staff to committee Chair Ron Wyden, they detail information provided to the committee from Welters, including the terms of the loan; conclusions they drew from that information about the loan and repayment, such as there was; and the implications of their findings. It is astounding:

While additional documents pertaining to the loan agreement may exist, documents reviewed by Democratic staff suggest that Justice Thomas did not repay a significant portion of the loan principal. In fact, none of the documents reviewed by Committee staff indicated that Thomas ever made payments to Welters in excess of the annual interest on the loan.
Forgiveness of the loan results in a taxable event for Justice Thomas. Under tax rules, forgiveness of the entire principal by Welters requires Justice Thomas to include up to $267,230.00 in taxable income and report the amount on his tax filings. Justice Thomas did not disclose this forgiven debt on his ethics filings, raising questions as to whether Thomas properly reported the associated income on his tax returns.

This, in and of itself, would be shocking behavior for a justice — but Thomas’s failure to address this at all in his financial disclosure dated Aug. 9 makes it outright offensive. (As the committee memo also makes clear, there could be tax implications for Thomas of this beyond the ethics questions.)

When The New York Times’s Jo Becker followed up, Thomas’s lawyer — the same one who issued the external statement when Thomas’s disclosure was released — responded with a statement that really says nothing.

A lawyer for Justice Thomas, Elliot S. Berke, disputed the committee’s findings, saying, “The loan was never forgiven.” He added, “The Thomases made all payments to Mr. Welters on a regular basis until the terms of the agreement were satisfied in full.” But he did not to respond when The Times asked him to reconcile that statement with documents obtained by the committee and cited in its report, including a 2008 letter from Mr. Welters to Justice Thomas stating that he would not seek further payments on the loan despite being entitled to them. Nor would Mr. Berke say whether “satisfied” meant that the justice had fully repaid the $267,230 he borrowed plus interest.

What’s remarkable here is not just Thomas’s behavior, it’s that he makes it plainly and abundantly clear that he does not believe he should have to justify it to anyone. If the loan was not “forgiven,” what happened to it? The only clue we has so far is a handwritten note from Welters, which the committee memo summarized as such:

A Handwritten Note from Anthony Welters to Clarence Thomas, Dated November 22, 2008. Committee staff reviewed a handwritten note dated November 22, 2008 from Anthony Welters to Justice Thomas. Welters’ note states that Thomas has been paying Welters interest only on Thomas’s bus for many years.3 Welters’ note indicates that after Thomas’s upcoming payment, Welters would no longer seek further payments from Justice Thomas on the loan because, according to Welters’ note, Welters believed that Thomas had paid interest greater than the purchase price of the bus, and that Welters did not feel it was appropriate to continue to accept payments even though he had the right to them.

It appears from the public information available that Thomas was likely only paying the interest on the loan (and there’s not even solid evidence that he did that). If that is so, then Welters stopping repayment after 2008 was far outside of the loan’s terms — and certainly not at all what would have happened under a traditional loan. If it’s not, and he paid off any substantial part of the principal, why is neither Thomas nor Welters saying so?

So, what is it? What happened? A justice who cared about ethics would want to resolve such questions immediately — particularly if there were an answer.

There’s much more compelling information about this story in Becker’s two reports. Check them out.

I wanted to write about this tonight to focus in on the fact that even after all of the criticism that Thomas has faced this year, after he hired outside help and spent extra time preparing his financial disclosure, and after he addressed past omissions in this year’s disclosure, he still decided to go forward with filing that disclosure four days after the R.V. loan story came out without addressing it in any way.

Honestly, though, I can hardly claim to be surprised about this. As I wrote here about Thomas’s August disclosure:

Notably, Thomas stated in the “explanations” section that he “continues to work with Supreme Court officials and the Committee staff for guidance on whether he should further amend his reports from any prior years.” So, he took these extra months, released a lengthy statement along with the report, and gave himself an out for this report still being incomplete by telling us that more “supplemental information” … could be forthcoming later.

Since the initial Pro Publica report about Thomas’s actions setting off this year’s stories was published on April 6, several justices have said they expect the court to take steps to adopt a code of ethics.

They have not done so yet, and it is hard to imagine how — in the absence of a legal obligation to do so — they will be able to get Thomas to agree to any changes of substance.

Thomas’s handling of the R.V. loan questions makes clear that not only does he not care about the public’s view of his ethical standards — but he also doesn’t care about the effect that his behavior has on the rest of the court.

Ben

Very cool that paying interest on a loan counts as full repayment to a SCOTUS justice. I'm looking forward to what this means he'll vote in any further student loan cases.

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Jean in Florida

Shame on Justice Thomas, who feels that he is above the law. (And shame on his wife Gini, who blatantly encouraged the insurrection of January 6th.) Justice Thomas is not the only member of the Supreme Court to fail to report “gifts”, but he is unapologetic (as are the others), & the more he attempts to justify his omissions, the deeper he digs the hole.

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Clarence Thomas, his luxury R.V., and his magical mystery disappearing loan

A justice who cared about ethics would want to resolve the questions surrounding the loan immediately — particularly if there were an answer.

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