It's a phrase that makes a lot of people nervous, even when they ought to know better. Like, say, when politics are involved.
For instance, you'd be surprised at the number of people who don't realize that their donations to campaigns are a matter of public record. Or that while candidates are not required to list the names of donors who give under $100, that doesn't mean they won't.
You'd also be surprised at the shocked looks on some candidates' faces when we asked them to disclose their tax returns—the president does it, Congress does it, why not Knoxville's mayoral and City Council candidates?
Or, then again, you might not be surprised at all. Because money's a personal matter, right? It's impolite to discuss how much money someone makes, right? Even if that person wants to represent you in local government and make decisions on your behalf. Right?
We don't think so, which is why we asked every candidate running for municipal office if they were willing to disclose their tax returns, just like former Mayor Victor Ashe did for 25 years while he held local and state offices.
"I think it's unfortunate that hasn't happened in the last two mayoral cycles," Ashe says, noting former-mayor, now-Gov. Bill Haslam's reluctance to disclose much of anything at all about his finances. Ashe says he not only disclosed his annual federal tax returns but also issued a statement of net worth, which included the valuation of his house, cars, stocks, and other property—and he sent the information to media outlets as well as to the Election Commission to keep it on file for the general public to see.
"I was the first and only mayor of Knoxville to do it," Ashe says now, with more than a hint of pride in his voice. "I thought it was the right thing to do. People are entitled to know if the people representing them have any financial conflicts and how they derive their income."
We don't have any candidate's statements of net worth—yet. But we do have the majority of this year's slate of candidates' 2010 federal tax returns. Most who cooperated just gave us the first two pages, not the full schedules, though two went even further. (And if we get any more, we'll be reporting it.)
It's true that a 1040 is only the tip of the iceberg, that a person's stated income isn't as important as the sources of that income, which is why this is just the beginning of a campaign-long pursuit of transparency. We don't think the vague statements of interest that have to be filed with the Tennessee Ethics Commission are nearly detailed enough. And while we have no legal recourse to make any candidate disclose anything—in this regard, at least—we feel that you, the voters, ought to know who's actually committed to making his or her life an open book.
The Mayoral Race
After discussing it with his wife, Bennett agreed to release their joint 2010 tax return. The Bennetts had wages and salaries of $40,870 but business losses of $6,486, resulting in an income of $34,384. Bennett works as a 911 dispatcher.
"I don't have anything to hide," Harmon responded when we asked him about sending us his tax returns, and sure enough, Harmon was the only mayoral candidate to send us his full 2010 return, not just the first two pages. Harmon and his wife Carolyn's joint income was $76,576 last year, $4,805 of which came from three rental properties. Harmon retired from the city's Stormwater Division earlier this year.
Repeated phone calls to Hultquist were unreturned. When we finally got hold of him last Friday, he said he would think about it over the weekend; we weren't able to get in touch with him again by press time.
When we asked Padgett, he said he would need to consult his wife, but that he'd "absolutely consider doing that." And in fact, Padgett was the only candidate to provide four years of tax returns, all filed jointly with his wife Katie. The Padgetts' income was $82,475 in 2007, $96,392 in 2008, $70,570 in 2009, and $59,283 in 2010. Of that income, around $26,000 each year was in wages and salaries ($29,728 in 2010) and the rest was in rental real estate (the Padgetts now rent the first home they bought), "royalties, partnerships, S corporations, trusts, etc" — i.e., from Padgett's company, eGovernment Solutions.
Rogero at first declined to release her tax returns, saying that since she files jointly with her husband, she needed to respect his wishes to not release them. She wrote, "He is in a highly competitive private sector industry (engineering/construction management) and salaries are not public in his firm."
But after further reflection, Rogero consulted her CPA and released a statement that showed her own financials, separate from her husband. (It should also be noted that her salary as a city employee the past four years is a matter of public record.) Her pre-tax gross wages last year were $114,981 with take-home pay of $86,421 and $14,385 paid in federal taxes. Rogero has also already filed her TEC disclosure (the deadline isn't until July 16), which lists additional income with her spouse from rental property and from Managed Response Inc. Her investments are detailed as Vanguard IRAs held by both her and her husband, and a TIAA/CREF Retirement Annuity, a City of Knoxville Pension Plan, and a Prudential-City of Knoxville Deferred Compensation Plan held by herself.
City Council Seat A
After some days of contemplating whether or not he would release his tax returns, Berney sent the following e-mail: "I was asked by a former manager not to discuss my salary with other coworkers. This request was made of everyone who worked with this firm in order to avoid morale issues that might arise as a result of coworkers comparing differences in pay. … For this reason, I will do what the governor has done and release my sources of income. I continue to believe in government transparency. I therefore believe that it is important for the voters to know for whom their elected officials have worked and from whom they have received campaign contributions."
Berney says all of his 2010 income came from work for Elizabeth Eason Architecture, LLC, and Kathy Manning, RPA (that's Registered Professional Archaeologist, if you're wondering).
Repeated phone calls to McBath were unreturned.
"I have no qualms about doing that," Stancil told us on July 1, when we asked if he'd send us his tax returns. He even e-mailed us a few days later and said he'd be delivering the returns the next day. But on Tuesday, just before our deadline, we received the following e-mail from Stancil: "I work for Stanley Access Technologies and that was the sole source of my income last year. I do have investment vehicles in the form of 401k retirement accounts that reflect the normal course of working for companies using that contributory method of retirement savings.
"After checking with election officials on the state level, I find your request is not a requirement for seeking office at this time. To date you are the only publication, daily or weekly, that is seeking such sensitive information. My concern, along with my wife whose personal information is also listed on our joint tax return, is one of security of personal information.
"Thank you for your concern for all things Knoxville and I do wish you well in your quest for legitimate information regarding candidate involvement in community and ideas for serving our City."
George C. Wallace
When we tracked down Wallace, a West Knoxville Realtor, he was blunt and to the point: "I am not willing to release my tax returns," he told us. "Even if all the other candidates do?" we asked. "Even if all the other candidates do. Even if you lay down in front of my car." (We thought about sending an intern to test him, but we were worried about the temperature of the pavement.)
City Council Seat B
W. L. "Buck" Cochran Jr.
When we asked Cochran about sending us his 2010 tax returns, he told us he hadn't filed one. "So you made under $12,000, or whatever the amount is where you don't need to file a return?" we asked. "Yes," he replied. "What about your 2009 return?" we continued. "I didn't file one then," Cochran said. "Well, when was the last year you did file one?" we asked. "I don't remember," he said. (On his campaign financial disclosure form, Cochran listed just one contribution, for $50, which was described as "gift from girlfriend.")
Owen, a former state senator who now works as a lobbyist, had no problem with releasing his returns. He told us, "I have to file disclosure reports quarterly detailing my income and my clients. I have no problem releasing my tax returns since most of what I do is public record anyway." He also told us that by the end of the month he'll send us his estimated taxes and income to date for 2011 and his firm's client list.
"You have sent shivers up the spines of several candidates with whom I have spoken," Owen wrote in an e-mail. "I … would hope that other candidates will release their firm's client list and the income their firm receives. I think full disclosure by the employer and the employee is the only way voters may know of any potential conflicts of interest a candidate may have."
Owen's 2010 tax return states an income of $39,122. Of that, $11,496 was from his pensions and $3,600 was from fiduciary fees.
Stair was originally reluctant to release his returns since his law firm, Lewis, King, Kreig & Waldrop, considers its associates' salaries and bonus structure to be proprietary information (like most law firms, we should note). However, after getting permission from the firm, Stair issued the following press release to almost all the media outlets in town: "Marshall Stair, Knoxville city council candidate, today released his tax returns for 2010. The return reflects an income in 2010 of $82,111.00 and payment of combined federal, state, county, and city taxes of $16,352.00 or roughly 20 percent of his income.
"‘I think it is important that Knoxville voters have [the] opportunity to review the tax returns of their elected officials. This is an important part of transparency. If elected to council, I will annually release my tax returns for public inspection,' he added."
Stair's income includes $4,154 from ordinary dividends and $1,849 from capital gains. Stair was also the only Council candidate to release his full tax return, not just the first two pages. (Which probably pleases Ashe, an old friend of Stair's father. Ashe and his wife, Joan, have each contributed $500 to Stair's campaign.)
City Council Seat C
When we asked Peabody, who works for New York Life, about releasing his returns on June 30, he told us, "I don't necessarily have a problem with that." But when we followed up with him via e-mail a few days later, Peabody had apparently changed his mind. He wrote (all sic), "Based on the Standard that you mentioned of Mayoral Candidates releasing their financial statements, at such time as I decide to run for Mayor of Knoxville, I will be happy to comply with your request." Repeated follow-up phone calls went unreturned.
Saunders immediately agreed to release his tax documents, but he also let us know he was upset that we asked such a thing. "I will do that," he said. "But I'll tell you frankly that will have a chilling effect on future elections." Saunders said he might not have run if he had known we'd be asking for such details. We emphasized that he was under no legal obligation to release his returns, and that other candidates were choosing not to do so, but he said he wanted to comply.
In 2010, Saunders and his wife, Ellen Bebb, made $290,536. Of that amount, $59,284 was salary and wages (Saunders is retired, and Bebb works for Oak Ridge city schools); $34,007 was ordinary dividends; $151,145 was capital gains; and $25,496 was income from "Trust Co of Knoxville."
Welch, a pastor at New Living Faith Community Church, originally told us she'd send in her 2009 tax return, as she had gotten an extension on her 2010 return and has not yet filed it. "I don't have nothing to hide on my tax returns," she told us. "I don't make enough money." But shortly after this conversation, Welch called us back and said she wanted to think about it a little bit longer. When we followed up again on Tuesday afternoon, Welch said she still needed more time.
City Council District 5
"I don't know how this relates to local politics, but sure, I'll do it," Campen told us. After discussing it with his wife Emily, she sent over their tax returns for the past two years. Mark Campen is executive director of the Tennessee Izaak Walton League, a nonprofit conservation group. The Campens file jointly and had an income of $79,763 in 2009 and $77,811 in 2010. Less than $200 over both years came from taxable interest; the rest was from wages and salaries.