Democratic Senate Candidate McCaskill Sees Ethics Problems
Democratic Senatorial candidate Claire McCaskill is in a heap of hot water with an Ethics Committee over her wealthy husband’s seemingly worthless real estate partnerships. The Kansas City Star reported the news this morning:
Claire McCaskill is having a hard time pleasing the Senate Ethics Committee…
McCaskill, a Democratic U.S. Senate candidate who expects to face incumbent Republican Jim Talent in November, has had to file two amendments to her personal financial disclosure report because the Ethics Committee said her initial report was inadequate.
At issue: The committee wants more precise information about the complex holdings of Joseph Shepard, McCaskill’s wealthy husband, which include hundreds of seemingly worthless real estate partnerships and a Bermuda reinsurance company.
McCaskill filed a report with the Senate in January that listed a net worth of at least $13 million and possibly more than $30 million — most stemming from Shepard’s extensive real estate interests.
“We’ve told everything we have to tell … an incredible amount of detail,” McCaskill said in a radio interview last month.
But McCaskill’s campaign conceded Friday they have not yet been given the all-clear by the Ethics Committee.
Earlier this year, Republican Senator Jim Talent made a point of publicly releasing his family’s tax returns. His campaign spokesman criticized McCaskill for not doing the same (McCaskill released her tax return but would not release Shepard’s).
Most of Shepard’s assets are real estate partnerships dotted about the United States, but one holding the committee asked about stands out: The Rural Housing Re-Insurance Co. of America Ltd., based in Hamilton, Bermuda. McCaskill reported the company has a value of between $250,001 and $500,000, but produces less than $201 in income.
Bermuda has strict secrecy laws, no tax on dividends or corporate income and few disclosure requirements, making it a favored place for the wealthy to put money.
Marsh wrote in an e-mail that Shepard owns less than 6 percent of the company, and that despite its high value, “the investment has never returned a dividend in the 20 years it has been in business.”
“That doesn’t pass the smell test,” scoffed Smith. “You can’t have an investment of that magnitude without getting more than a couple of hundred bucks from it. That doesn’t ring true with most voters.”
Such companies are a way to cut expenses because you’re essentially insuring your own holdings, said Mark Geoghegan, editor of Reinsurance magazine. They also are a popular investment vehicle because tax-free profits that would go to an insurance company go to you, and because you can generate tax-free investment income using the firm’s reserves.
Hat Tip K. Crouch