The special Senate election between Massachusetts Congressman Ed Markey and private equity investor Gabriel Gomez took a familiar turn for the scandalous on Thursday, after Gomez's 2005 tax records surfaced in a front-page Boston Globe story about the candidate's Cohasset, Massachusetts house. The details are a bit dry, involving historical preservation societies and tax codes pertaining to charitable contributions, but the payoff for Gomez was quite real:
Gomez claimed a $281,500 income tax deduction in 2005 for pledging not to make any visible changes to the facade of his 112-year-old Cohasset home, a concession so valuable that it is classified as a charitable contribution under a federal law designed to protect historic homes. ... Five weeks after the Gomezes claimed the deduction, the Internal Revenue Service listed programs such as this — that involve the “contribution of a historic facade easement to a tax-exempt conservation organization” — as one of its “Dirty Dozen tax scams.”
In other words, Gomez tried to reduce his tax burden by several hundred thousand dollars by "donating" the fee associated with a preservation easement — an agreement not to modify historical buildings — which was already required by a local organization for his house. The IRS, understandably, looks down on this. And it's unlikely to help Gomez's polling. A WBUR poll published on Thursday places Gomez 6 points behind his opponent Edward Markey, 41-35.
The Gomez campaign has not yet responded to the report, which by highlighting the value of his home — and an obscure instrument to avoid paying more taxes — offers an undeniable parallel to Massachusetts candidates of years past. In 2002 then-gubernatorial candidate Mitt Romney admitted to retroactively amending his tax returns (on which he claimed a deduction available only to residents of Utah) in order to grant himself Massachusetts residency and thus eligibility to become Massachusetts Governor. In 2004, the wife of then-Massachusetts Senator John Kerry, ketchup heir Teresa Heinz, released her own tax returns under massive pressure from groups opposing her husband's run for President — an event Mitt Romney later misremembered when defending his decision not to release more of his tax returns. And in 2012 Senate candidates Elizabeth Warren and Scott Brown took the unusual step of simultaneously revealing their tax returns to the Boston Globe. Now Gomez is not quite the second-coming of Brown — other than in hoping to pull a Scott Brown in capturing the seat Brown won for the GOP in a special election of his own, only to lose it last fall — but his son-of-immigrants-former-Navy-SEAL storyline has made him a promising new face on the Republican national scene.
On the other side, Markey is no stranger to financial controversy himself. An October 1991 Boston Herald story accessed via LexisNexis indicated that Markey had a peripheral role in what became known as Rubbergate, a 1992 investigation involving several hundred House members who knowingly wrote and cashed bad checks tied to their official House banking accounts. According to the Herald, "Markey is one of the first House members to publicly disclose he wrote bad checks on his House account in the wake of a stunning General Accounting Office audit that revealed the practice."
This is not the first controversy to strike this year's Massachusetts race to replace John Kerry. Last week campaign officials sparred over an attack ad aimed at Gomez for defending, as an official spokesman, the 2012 documentary Dishonorable Disclosures, which questions President Obama's role in the capture and assassination of Osama bin Laden. (For a few seconds, the ad juxtaposed the faces of Gomez and bin Laden.)
Voting for the Massachusetts race begins on June 25 — giving plenty of time for Gomez to recover, and for Markey's camp to dig in some more.