Tulsa, Oklahoma Billionaire, George Kaiser reportedly paid “zero” federal taxes for years. He is an Obama bundler and the major investor in the failed government-funded, solar panel manufacturer, Solyndra. After the Obama administration gave Solyndra $535 Million, we find we also paid the company’s legal bills of $2.4 Million (and from the report below, it seems the $2.4 Million may be in addition to the $535 Million). Recently we learned that George Kaiser and his Kaiser Foundation pre-empt the American taxpayer in bankruptcy court – something seen as unusual, maybe corrupt.
Billionaire George Kaiser is the chairman of Bank of Oklahoma (BOK) and the owner of Kaiser-Francis Oil Company. He reportedly bundled $250,000 for the Obama 2008 campaign. He is the major investor in Solyndra, and considering that the firm’s balance sheet was never healthy, yet the Obama administration granted the $535 Million loan, the loan may have been pay-back for Kaiser’s services to the Obama presidency. We call it ‘pay-to-play,’ don’t we?
Other Tulsa-area investors and investment entities among the hundreds with some stake in the company include Girasole Partners, HBA Holdings, Hilti, Lehighton Electronics, Lenox Investments LLC, Phil Frohlich, Rockport Capital Partners III, the Stacy Family Trust and StatSoft Inc.
But the Solyndra scandal is far from Kaiser’s first brush with political controversy. As the Sunlight Foundation’s Bill Allison reports today, Kaiser has become extraordinarily wealthy by taking advantage of the federal tax code in ways that some tax experts – including the IRS – believe to be illegal.
As Allison describes it in his Sunlight post today, “in one six year period, during which he increased his net worth enough to land him on the Forbes list of the 400 wealthiest Americans, Kaiser reported taxable income to the Internal Revenue Service just once, totaling $11,699–equivalent to a full-time hourly wage of $5.62.”
During the 1980s bust in the oil industry in Oklahoma and Texas, Kaiser bought up struggling energy companies whose losses provided him with tax deductions that effectively hid his own income.
As an example, Allison points to Kaiser’s purchase of Waterford Energy, “which had all of $7 million in assets and some $151 million in losses on its books. The losses were valuable–under the Internal Revenue Code, a company can use past losses as credits, known as net operating losses, to reduce their tax burden in profitable years.”
The IRS rejected the Waterford Energy losses. Kaiser went to court and the IRS settled for $3.7 Million (15 cents on the dollar). It is against the law to make acquisitions to “evade or avoid income taxes.”
As a Tulsan (which I am), it’s appalling that this man, known to be extraordinarily wealthy, would claim only an income under $12,000 in six years. Warren Buffet is said to owe $1 Billion in back taxes, and has cost taxpayers untold expense to fight Buffet in court over the years. Perhaps the value in these connections to Barack Obama is shedding transparency they did not promise and did not want.
Greta Van Susteran is reporting the legal firm is Wilson Sonsini, and their bill is $2.4 Million. She requested a copy of the Wilson Sonsini billing and was told it was “not a matter of public record,” even though taxpayer funding came from Obama’s Recovery Act and their are certain reporting requirements.
I asked for some research to be done to find the bill so that I could go over Wilson Sonsini’s legal bill. Here is the message I got back:
“…The actual legal bill that Wilson Sonsini submitted to Solyndra is not a matter of public record. Solyndra, as part of its Recovery Act reporting requirements, was required to disclose summary information about how the Recovery Act funds were spent, including the identity of the vendors, their DUNS number, the payment amount and a description of the product/service provided….”
This just is not right. Not a public record? We paid for it! We (taxpayers) get billed 2.4 million dollars for Solyndra’s legal bills (not to mention the about $535 loan!) and we can’t find out WHAT services were rendered??
However, in September, The Heritage Foundation reported that Solyndra hired a team of five high-powered attorneys to handle their bankruptcy “investigation.” The cost: $2,550 PER HOUR. Possible only because of taxpayer funding? The article also says Solyndra lobbyists include Congressman Steny Hoyer’s (D-MD) former aide and former chief-of-staff, as well as astronaut John Glenn and a Reagan administration attorney. The firm Wilson Sonsoni is not mentioned. It seems we may be paying two teams.
Read background on the government loan to Solyndra and George Kaiser here. More on a Kaiser/Solyndra connection serving on the board of Tonopah, one of the latest to reach into the pocket of taxpayers.