Thursday, June 28, 2007

Don't Ask, Don't Tell

Interim Councilman Henry Hooper faces nearly $400,000 in federal tax liens.

Posted By on Thu, Jun 28, 2007 at 4:00 AM

Two things are troubling about the selection of Henry Hooper to replace Rickey Peete on the Memphis City Council:

First, the IRS assessed nearly $400,000 in tax liens against Hooper between 2000 and 2005. Second, Hooper didn't volunteer this information and explain it to the council, and members didn't ask him about it.

Hooper, agent/owner of State Farm Insurance and Finance Agency and a former United States Secret Service agent, was chosen to replace Peete for the remainder of the term that expires at the end of this year. It's not clear yet whether Hooper will be a candidate in the October election.

Peete resigned shortly before pleading guilty in federal court last week to bribery charges. It is the second time Peete has been convicted of bribery in the performance of his public duties. He was indicted in December along with Councilman Edmund Ford. Ford has pleaded not guilty and is still on the council. Ford's unpaid MLGW bills have drawn federal scrutiny and taken up hours of council time.

If there was ever a time for full disclosure of potentially embarrassing money matters, this is it. With Memphis at the center of the Tennessee Waltz, Main Street Sweeper, and MLGW investigations, this is no time for don't ask/don't tell. Hooper, who ran for sheriff in 2002 and the Shelby County Commission in 1994, is no virgin. The City Council, which is rewriting its ethics code, well ...

The IRS assessed Hooper for $109,958 in taxes, interest, and penalties for 1998, $99,755 for 1999, $73,138 for 2000, and $113,112 for 2001. The assessments were in 2004 and 2005. The notice of a federal tax lien reads as follows:

"We have made a demand for payment of this liability, but it remains unpaid. Therefore, there is a lien in favor of the United States on all property and rights to property belonging to this taxpayer for the amount of these taxes."

In an interview Tuesday, Hooper said the civil dispute involves a business trust and deductions which the IRS did not allow. He said he has hired an attorney and taken the case to tax court in Cincinnati. He said the investigation began when the IRS looked into an illegal offshore trust in which he was not involved, but the same people who set up that trust also set up his trust. He is hopeful of a settlement.

"Our trust was not illegal, but they were not going to let us deduct everything we wanted to," he said.

He said he wasn't trying to hide anything from the City Council.

"I was not under any legal obligation to go into a personal tax matter," he said. "There has never been any question of my integrity at any time in my life. Now it becomes a question because somebody is trying to discredit me."

He said the tax lien is "totally different from" Ford's overdue utility bills because his tax issue is in court and there are no charges of favoritism.

On the resume Hooper submitted to the council, he lists his federal employment including the Secret Service for 24 years, six years with the Green Berets, and 22 years as an insurance agent and businessman. That was enough for council members. Jack Sammons said he learned of the tax lien after Hooper was chosen, but "it wouldn't have bothered me" because it is not unusual for businesses to have IRS disputes that drag on for several years. "It's sort of refreshing to be dealing with someone who has enough business to have a tax challenge," he said.

Councilman Carol Chumney, however, said the tax lien should have been disclosed and "would have influenced my vote."

The Secret Service, until 2003, was, like the IRS, a division of the U.S. Treasury. Hooper said he worked with IRS agents during his career.

Memphis politics is a forgiving business. Once you're in the club, it's a new day. It wasn't only the voters in his district and his colleagues who embraced and forgave Peete. He was chairman of the board of the Center City Commission for five years and also served on the board of the Riverfront Development Corporation.

After pleading guilty last week, Peete stopped to shake hands and make a brief statement in front of the news cameras. Then he grinned and waved and climbed into an SUV. If you weren't listening, it was hard to tell if he won or lost.

That was Rickey Peete. Henry Hooper is no Rickey Peete. He should take pains to make that clear.

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