A different set of rules

[michaeledward]

Please review this thread with an eye on my earlier thread, 'Is anyone out there STILL a Republican'.

A news story appeared last week, and was expanded upon this week about the Leavitt Family Foundation. Michael Leavitt is the Bush Administration head of the Department of Health and Human Services.

The Leavitt family has created a Type III charitable foundation.

The Leavitt family donates money to this charitable foundation, and receive benefits on their tax burder by doing so.

The charitable foundation, as part of its mission, works to provide housing for college students in need.

The housing for these needy college students is arranged in Leavitt family properties.

Therefore, the money the family gives to the foundation, circles its way back to the family as rental income.



It is believed that there is nothing about this that is illegal.

However, once a tax benefit is extended to an individual, one argument is that the charitable organization gets the use of those funds through the good graces of the American citizenry. In other words, by extending this tax benefit to the Leavitt family, each of us are being taxed more heavily to compensate for that benefit.

There are several other questions about how the Leavitt Family Charitable Foundation distributes money, apparently to benefit those with the name Leavitt.

See these articles.

http://www.sltrib.com/opinion/ci_4087165

http://www.washingtonpost.com/wp-dyn/content/article/2006/07/21/AR2006072100056.html

http://www.dmiblog.net/archives/2006/07/hhs_secretary_leavitts_unusual.html

 

[crushing]

Michael,

I've been just kind of following this story. Please explain "a different set of rules." What is the first set of rules and how is the different set different?

Thanks

 

[michaeledward]

crushing ... what do you think I mean?

Here is the short version.

When I give money to a charitable organization, I am unable to direct that money back to my personal benefit. Yet that is exactly what Mr. Leavitt and his family have done.

While that fact, in itself, is on the slimy side.

That Mr. Leavitt is the face and leader of the United States Department of Health and Human Services ... a department in the government that derives much of the good it is able to accomplish from the charitable donations of the citizens ... is beyond ironic.

 

[crushing]

I wasn't sure, that's why I asked.

Please don't misunderstand, I am not defending Mr Leavitt and the others involved. I think what they did is very unethical and has exposed a loophole, but I still don't understand the 'different sets of rules.'

Shall I assume it's your 'moral compass' that would prevent you from setting up such a scheme that many, including myself, would consider unethical and that's where the 'rules' come in?

From what I understand from the news reports, they didn't do anything illegal.

 

[michaeledward]

I wasn't sure, that's why I asked.

Please don't misunderstand, I am not defending Mr Leavitt and the others involved. I think what they did is very unethical and has exposed a loophole, but I still don't understand the 'different sets of rules.'

Shall I assume it's your 'moral compass' that would prevent you from setting up such a scheme that many, including myself, would consider unethical and that's where the 'rules' come in?

From what I understand from the news reports, they didn't do anything illegal.

The legality of what a Type III Foundation can do with its assests is quite clear, and it seems apparent that the Leavitt family did not take any actions outside what is legal. I believe I stated that in my first post.

I do not think a moral compass plays into this at all. Were I in the position to take advantage of this type of activity, it would seem to me that there is no reason not to take advantage of the laws that are on the books.

Ethically, the Leavitt Family Foundation is providing a service to undergraduate college students. That seems like a hell-of-a-nice thing to do. Those students need to live somewhere. The Leavitt family apparently owns property, and that they make those properties available to college students, at market rates, seems like a nice thing to do too. Sure, it would be nice if some other rental companies in the area benefited from the Leavitt Family Foundation's work with higher education housing ... but, I think, ethically, you're hard pressed to find a problem.

But, that doesn't mean that this arrangement still doesn't stink. Keep thinking about how you, personally, are going to benefit the next time you write a check to Public Television, the Salvation Army, or your local food pantry. I mean, outside of the good feelings.

 

[crushing]

The arrangement does stink, as I have made clear. It doesn't look like we disagree at all on this, other than I doubt I would do it, even if I put myself in a position to take advantage of it.

I still don't know what the 'different set of rules' is, or to whom they apply, which was my question in the first place. Maybe it doesn't matter.

 

[FearlessFreep]

I think my "different set of rules" he is implying either a) Republicans or b) members of this administration as being able to take advantage of situations that most other people would not

 

[michaeledward]

I think my "different set of rules" he is implying either a) Republicans or b) members of this administration as being able to take advantage of situations that most other people would not

Can you think of any others?

 

[Phoenix44]

Exactly what Barbara Bush did when she made a generous contribution for school children displaced by Hurricane Katrina, on the condition that the money be spent on scholastic software from her son Neil's company. She gets a nice tax deduction, and Neil's company gets a shot in the arm.

 

[michaeledward]

Exactly what Barbara Bush did when she made a generous contribution for school children displaced by Hurricane Katrina, on the condition that the money be spent on scholastic software from her son Neil's company. She gets a nice tax deduction, and Neil's company gets a shot in the arm.

Excellent Example Phoenix 44 !

I had forgotten about that.

So, while certainly, we could use FearlessFreep's sub-sets (Republican, Current Administration), there does seem to be other sub-sets that can be seen ... unless you count Grammie Bush as a member of the administration - which I don't. Although it is a safe bet she is a Republican.

I guess the subset I was think of is ... those who see all government as evil, but use it as a tool to enrich themselves or their friends.

You know, kinda like the Vice President's deferred payments from Halliburton. Or how about Donald Rumsfeld's holdings in the company that makes tamiflu? (whatever happened to that bird flu, anyhow?).

A different set of rules.