Thursday, March 08, 2007

Core Questions on DOT Story Remain Unanswered

There are some questions arising in the last few days about DOT secretary Frank Busalacchi's decision to send state attorneys to help resolve out-of-state tax disputes regarding Dennis Troha's trucking firms.

It's no surprise that this is being made into a political issue. It seems reasonable enough to believe that at least part of the reason the attorneys were sent is because of Troha's donations to the Doyle campaign.

After all, the last trucking firm known to get this type of treatment was Schneider National in 2001, when the state sent attorneys to Georgia to settle an out-of-state tax dispute for the Green Bay trucking giant.

And a quick look at campaign finance records shows that Schneider CEO Donald Schneider has been a major donor to Tommy Thompson, Scott McCallum, and a number of other GOPers since the 1990s (although the JS, WSJ, and other news outlets haven't seemed to notice that, yet).

McCallum, of course, was governor when the state sent an attorney to Georgia in 2001 to help settle Schneider's tax dispute, though much of the administration was probably still Tommy's, who would've just left in January of that year to become DHHS secretary.

It would be little surprise to me that the Schneider donations to Thompson/McCallum or those made to the Doyle campaign by Troha impacted the decision to send state attorneys to settle the out-of-state tax disputes. Any major business in the state is surely going to get heard on some level by the administration regardless, but I bet a little donor love can go a long way toward cutting through some of the red tape that otherwise might exist.

And a big wild card for the issue of whether anything blatantly improper was done is something mentioned in a WSJ article yesterday (emphasis mine):
Trucking companies pay taxes on the fuel purchased for their vehicles in various states as they drive across the country. Under a multistate compact, the home state for a given company, in this case Wisconsin, is responsible for auditing company reports and making sure the correct amount of taxes goes to each state in which the trucks are operating.
It seems to me that this multistate compact is a pretty big piece of the puzzle. WKOW in Madison also noted the compact, called the International Fuel Tax Agreement (IFTA), in a recent story, but important questions still remain.

What are the specific expectations for states participating in this compact when disputes arise? Do those expectations entail sending state resources out-of-state? Has any other state sent resources to Wisconsin or another state in the compact to help settle disputes? Has a company ever been denied state services pertaining to the compact? These are all rational questions, and I'm sure there are others, that our media should be answering.

The IFTA section on the DOT website gets the ball rolling on the basics of the compact, but more pertinent info on the issue of resolving disputes surely could be gained through a minimal amount of media digging.

Instead, much of the media has opted to engage in more speculation over the issue -- such as whether it's right for the state Senate to proceed with confirmation hearings for Busalacchi next Tuesday -- rather than spending time finding answers to the core questions of the story.

A cynic would almost think some media outlets believe it's more beneficial to leave those core questions unanswered -- stories about them are not nearly as enticing.

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12 Comments:

Blogger Russ said...

Seth
You are right that large campaign contributors have always received some form of preferential treatment.
Doyle however has taken it to a new level. The direct connection between Indian gaming contributors and Doyle are obvious.
The whole smelly mess brings the need for campaign finance reform to front and center.

March 08, 2007  
Blogger Seth Zlotocha said...

Russ,

You just think it's a new level because you don't like Doyle. It was all the same under Tommy, only some of the players have changed.

But we agree on the need for campaign finance reform. Passing SB 12 would be a good step in the right direction.

March 08, 2007  
Anonymous Anonymous said...

According to this morning's JS story, Schneider had not tax dispute to settle, it was merely assisting the state in how already-paid taxes were to be distributed. Unlike Troha who was getting special assistance from the state to reduce his unpaid taxes, Schneider was actually helping the state.

What makes this story different that Georgia Thompson is that Busalacchi demoted (for the same pay) Theil for putting out the open records request on time. Now Theil turns the tables and tells the press and the FBI what he knows about Busalacchi's direct involvement in the case.

When a Cabinet Secretary is directly involved in using state resources to benefit a campaign contributor, people start to get nervous. Seen Marotta in public lately?

March 09, 2007  
Blogger Seth Zlotocha said...

There is no evidence Troha was given "special assistance" in this case. That's my point. A major piece of actually finding evidence of impropriety, rather than just speculating about it, is looking into the IFTA compact. Why isn't the media doing that? I think it's because they're afraid what they find might deflate their story.

And let's not ignore that the JS story this morning also noted an email from the McCallum administration to one of Troha's lawyers with the following: "I am eager to assist you in securing any exemptions to which your client is entitled." Sounds like acting on behalf of a Wisconsin company in an attempt to reduce an out-of-state tax bill isn't all that uncommon. That may be related to the IFTA -- or it may be related to all of the money Troha gave Tommy when he was governor -- but we won't know for sure until the media pursues that lead further.

March 09, 2007  
Anonymous Anonymous said...

Until another company is shown to have had a DOT attorney travel on their behalf to reduce a tax burden, it absolutely is "special assistance."

DOT special counsel - Jambois - had his wife and daughter on the casino payroll. Troha arranged for the sweetheart deal. See here:

http://www.jsonline.com/story/index.aspx?id=270605

Again - no other company has ever received this same treatment. This is simply the way Diamond Jim does business...

March 09, 2007  
Blogger Seth Zlotocha said...

You have no idea if another company has ever been denied this type of service when it requested or needed it. Simply because it only happens once doesn't mean it's special or unethical. Special or unethical treatment is providing services to one company and denying those same services to another under the same circumstances. Again, looking into the IFTA would give a glimpse into the expectations that states have in resolving tax disputes for their home companies. And the fact is the McCallum administration, per the email sent to Troha's attorney, was getting set to do in 2002 exactly what the Doyle administration did in 2004.

March 09, 2007  
Blogger Dad29 said...

Seth, the Wisconsin DOT lawyer was engaged in attempting to REDUCE the interest owed by Troha & Co.--whereas w/Schneider it was a matter of allocations.

Troha owes a bunch of money--Schneider did not. Not a dime.

In effect, the State DOT was acting as Troha's defense lawyer in asking for reductions-in-interest.

March 09, 2007  
Blogger Seth Zlotocha said...

Dad29,

Anon brought your point up four comments ago. My response comes immediately afterwards.

March 09, 2007  
Anonymous Anonymous said...

I think your threshold of another company being denied the same service is a stretch. The fact is - most companies would never even think that the state would intervene on their behalf - for free nonetheless.

Expecting someone to come forward claiming they were denied this service is only valid if anyone ever actually asked. My guess is, nobody ever has.

The bigger point is, the DOT and Busalacchi have the burden of proof on them. Utilizing taxpayer dollars must be justified by those using the dollars, not the ones asking questions. Simply stating that there isn't a problem does not justify the use of taxpayer dollars.

The email from McCallum stating they were willing to work with Troha certainly does not imply that McCallums administration was going to provide a service to Troha that, up until now, it appears no other comapny has ever enjoyed.

You can spin all day - there just is no way to view this as anything other than special treatment.

March 09, 2007  
Blogger Seth Zlotocha said...

It's not a strech to think a company would ask the state for help if such assistance is an expectation of the IFTA -- which, again, brings us back to my point about the need to look into that agreement. We're not just talking about any business in Wisconsin here -- in which case you'd be right not to expect the question of state help to necessarily arise normally -- but instead we're talking about a company that's in a specific sector of the business world that's operating under a codified multistate compact that involves inter-state dealings on, among other things, tax issues. Do you actually think a business wouldn't ask for help from its home state if an out-of-state dispute arose and it was operating under such an explicit agreement?

And I'm not seeing your distinction between what the McCallum administration pledged to do and what the Doyle administration did. "I am eager to assist you in securing any exemptions to which your client is entitled," is the wording of the McCallum administration email. Since the DOT under Doyle is getting accused of assisting a Troha company in securing out-of-state tax exemptions -- exactly what the McCallum admininistration said it would do -- I'm not sure how you're drawing a distiction there.

In the end, I'm not saying there definitely wasn't special treatment given to Troha. What I'm saying is that hasn't yet been shown to be the case, in spite of the fact that a major piece of the puzzle is right there for the media to solve -- but they need to want to solve it first.

March 09, 2007  
Blogger Dad29 said...

OK, Seth.

The smell is overwhelming, but you're free to ingore it.

March 10, 2007  
Blogger Seth Zlotocha said...

As you're free to ignore the rational questions and facts that don't fit with your preconceived notions of how things just must be, Dad29.

March 10, 2007  

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