Washington, D.C. – Senate Finance Committee Chair Ron Wyden, D-Ore., and Senate Judiciary Subcommittee on Federal Courts, Oversight, Agency Action, and Federal Rights Chair Sheldon Whitehouse, D-R.I, sent a letter on Wednesday to an attorney representing Supreme Court Justice Clarence Thomas demanding that Thomas clarify whether he repaid any of the principal on the loan he received to purchase a luxury motorcoach. The letter also sought clarification of whether Thomas reported the forgiven debt on his financial disclosure report and as income on his tax return, which is required by law.
Previous investigation of this matter by the Finance Committee included a review of loan documents and correspondence between Thomas and the lender, Tony Welters. The Committee found evidence indicating that Thomas only made interest payments and the loan was forgiven before he paid any principal. After Senators Wyden and Whitehouse raised the prospect that Thomas may have failed to report the forgiven debt in violation of tax laws and ethics requirements, Thomas’s attorney responded with a brief letter stating that, “the terms of the agreement were satisfied.” He provided no new evidence of payments or disclosures or any explanation of what it meant for the agreement to be “satisfied.”
“On December 19, 2023, we invited Justice Thomas to clarify discrepancies between his public statements regarding the treatment of the loan, and the evidence obtained by the Committee. That letter offered Justice Thomas an opportunity to state clearly, in plain terms, how much in principal and interest on the loan he repaid to Welters. We also offered Justice Thomas an opportunity to clearly state how much of the loan was forgiven or discharged by Welters. Unfortunately, the response you provided on Justice Thomas’s behalf was a non-answer,” the Senators wrote. “Your client’s refusal to clarify how the loan was resolved raises serious concerns regarding violations of federal tax laws … At the moment, Justice Thomas has done absolutely nothing to address the perception that he may have failed to report hundreds of thousands of dollars in forgiven debt on his federal income tax returns and pay the income taxes owed.”
The full text of the new letter from Senators Wyden and Whitehouse is available here. The questions in the letter are as follows:
- What was the total amount in principal and interest on the loan repaid by Justice Thomas to Tony Welters? When was the last payment made?
- Were any payments of principal or interest made by other individuals? If so, please clarify how much was repaid by Justice Thomas and how much was repaid by any third parties (and who those third parties were).
- Was any portion of the principal on the loan canceled, forgiven or discharged by Tony Welters? If so, how much? Please also state how much of this canceled, forgiven or discharged debt was reported as taxable income by Justice Thomas on his federal tax returns, and the related income taxes paid by Justice Thomas for that tax year.
- If a tax return was later amended to include this canceled, forgiven or discharged debt, please provide the date on which the amended return was filed, the amount of the tax payment, and whether that tax payment was made by Justice Thomas out of his own funds or by any third parties (and who those third parties were).
- If any portion of the principal on the loan was canceled, forgiven or discharged by Tony Welters, why did Justice Thomas fail to disclose the canceled, forgiven or discharged debt on his financial disclosure report(s)?
A web version of this release is here.
