Supreme Court Justice Clarence Thomas never paid back the full amount of a quarter-million-plus loan that financed his high-end RV, according to an investigation by Senate Democrats.
A report that Democratic members of the Senate Finance Committee released on Wednesday found that the Supreme Court justice, who has been the subject of multiple ethics questions this year relating to gifts from wealthy friends and associates, “never repaid” a friend’s $267,230 loan in full after using the money to purchase a high-end Prevost Marathon Le Mirage XL RV in 1999.
The New York Times first reported in August that Thomas’ friend Anthony Welters, a health care executive, provided the loan on terms that were very favorable: For five years, Thomas only had to pay off the interest, or around $20,000 annually. That time frame was later extended to 10 years.
However, the committee said, Thomas did not appear to have paid any of the principal of the loan. Documents provided to the committee suggested that the justice had never paid the loan in full, though the committee noted that it was possible other documents related to the loan existed. (The Times first reported the committee’s findings.)
Among the documents the committee reviewed were handwritten promissory notes for the loan, at an interest rate of 7.5%, and a bank check showing a single payment of $20,042.23 — the annual interest payment — on Dec. 21, 2000. Also included was a November 2008 note handwritten by Welters that indicated Thomas had only been paying interest on the loan and that Welters was not seeking further payments because he believed that the interest payments had exceeded the total purchase price of the RV.
However, if Thomas had paid the annual interest of $20,042 for nine years, he would have paid off approximately $180,000 — or $87,000 short of the total loan amount.
If the principal of the $267,000-plus loan was forgiven, that would have significant tax and ethics implications for the Supreme Court justice. The forgiven loan balance would count as taxable income for Thomas, who would then be required to report it on tax documents. The report also notes that Thomas did not disclose the discharged debt on his 2008 financial disclosure report.
“Justice Thomas should inform the committee exactly how much debt was forgiven and whether he properly reported the loan forgiveness on his tax returns and paid all taxes owed,” Sen. Ron Wyden (D-Ore.), the Finance Committee chair, said in a statement. “I have also directed the committee to share our findings with the Judiciary Committee to evaluate the ethics implications of this disclosure.”
A Supreme Court spokesperson did not immediately reply to HuffPost’s request for comment from Thomas.
AP Photo/Pablo Martinez Monsivais, File
In a statement to the Times, Welters said: “While I understand the attention given who this involves, the difference between what you’re comparing to and what happened here is that a friend lent another friend money. As anyone who has borrowed from or lent to family or friends knows, it’s simply not the same as a bank.”
Thomas’ relationships with wealthy, gift-giving benefactors have come under close scrutiny in recent months. In April, ProPublica reported on Thomas’ close relationship with billionaire and Republican donor Harlan Crow, finding that Crow had hosted the justice for extravagant trips and luxury vacations, all unreported on Thomas’ ethics disclosures. Since then, a number of other financial gifts have been revealed, including flights on private jets, Crow’s funding of private school tuition for Thomas’ nephew, and his purchase of a house where Thomas’ mother lived.
Thomas has said in response that the trips and flights were personal invitations from a friend and that he did not believe they had to be disclosed.
The revelations have intensified public calls to formalize an ethics code for the Supreme Court, an idea that legislators and even some members of the court have backed. While justices are required to disclose their financial interests and sources of income, there’s little transparency or oversight and few consequences if the rules are not followed.
Thomas’ RV is considered a luxury model with many customizable features, although Thomas reportedly purchased it secondhand. It also features heavily in the justice’s image of himself, with Thomas describing his usual summer vacation as driving on a cross-country road trip, parking at Walmart overnight.
“We get insulated from the rest of the world, if not isolated. And I kind of like that world. I like the part we fly over,” he said in a courtroom talk in 2019.
