Capps caught again: Congresswoman fails to report more than half-million dollars in income

Matthew Boyle Investigative Reporter
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California Democratic Rep. Lois Capps has been caught failing to report income to the U.S. House of Representatives again – this time for leaving more than half a million dollars off her required congressional disclosure forms.

“From 1998 through 2006,” Chris Meagher of the Santa Barbara Independent newspaper reported, “Capps — in filings with the Legislative Resource Center, home to all public disclosure information filed by members of the House of Representatives — didn’t include income from two pensions she received, one from the State Teachers Retirement System and the Regents of the University of California.”

“Together, the income totaled $512,813. She later corrected the disclosure, saying the income from the two pensions was ‘inadvertently left off my disclosure form in past years.’”

Also, according to the Santa Barbara News-Press, Capps under-reported even more income: “In May 2009, the congresswoman notified the clerk of a ‘clerical error’ that resulted in the under-reporting of the asset value of two mutual funds on her 2007 financial disclosure form,” Ben Smithwick wrote for that paper. “Both funds, valued at between $15,001 and $50,000, were reported as being between $1,000 and $15,000 each.”

This is not the first time Capps has been in hot water over financial disclosures. In early August, The Daily Caller reported that Capps rented a room in her personal home to one of her congressional staffers, Jeremy Tittle, for years and did not report the income to the IRS for more than a decade, until 2012. Capps also withheld that information from the proper congressional authorities for five years, from 2001 until early 2006.

Back then, Capps spokesman Jeffrey Millman told TheDC that the error was corrected “immediately” after it was discovered.

In response to these new revelations, Millman told the Independent in Santa Barbara that these latest examples of non-reporting surfacing were “inadvertent reporting error[s].”

“Members of Congress do not have to list Social Security or thrift savings plan benefits, but they do have to list other pensions,” Millman said. “In this case, there was an inadvertent reporting error that Lois found on her own and immediately fixed many years ago. Her forms are properly filed and this is not a current issue. Instead of Mr. Maldonado attempting to distract voters, his time would be better spent paying the $4.2 million he still owes in federal back taxes.”

Millman wasn’t immediately available to answer TheDC’s questions on the likeliness of repeat financial disclosure violations, but he promised to answer at a later time.

So far, Capps’ troubles have involved her federal taxes — she hasn’t released her California tax returns.

The scandal surrounding Capps’ non-reporting may have impacted her re-election chances. Her GOP opponent, former California Lt. Gov. Abel Maldonado, is up by one point in his latest internal poll. That poll – which was released on Oct. 8 – showed Maldonado with a 45 percent to 44 percent lead over Capps. Before this scandal broke, Capps was widely expected to easily win re-election.

Maldonado campaign spokesman Kurt Bardella told TheDC that these new reports are just “the latest in a troubling pattern that has emerged where Congresswoman Capps hides or under-reports her income.”

“First, it’s discovered that Congresswoman Capps failed to report income to the IRS that she received from her own employee living in her own house,” Bardella said. “Now, it’s come to light that for more than ten years, the congresswoman failed to disclose more than $500,000 in income she was receiving from two pensions while also under-reporting the value of assets she had in two mutual funds. Ultimately in a campaign you have to define what you’re for. That’s why Abel Maldonado has spent his time engaging this district in a conversation about ending bailouts, creating jobs, lowering gas prices and leveling the playing field with China. What has Lois Capps been talking about? A standard that apparently, she has repeatedly failed to meet.”


UPDATE, 2:07 a.m.:

In a phone interview, Capps spokesman Jeffrey Millman initially refused to answer “yes or no” when asked if Capps will release her state-level tax returns.

“I answered your question,” Millman insisted, before claiming that Capps has, in fact, correctly reported everything in her California returns.

When asked whether Capps would release those documents publicly, so voters can trust that she has accurately amended her California forms and paid all taxes on the income, Millman said: “If asked by a credible journalist, we will release them.”

When this reporter asked Millman if that meant he considered this reporter “not a credible journalist,” he replied: “yes.” When asked why he thought so, Millman could come up with no reason other than: “Because you’re not a credible journalist.”

Millman also couldn’t point to a single thing this reporter or The Daily Caller has printed that he thinks is incorrect, even when asked. Instead, he deflected: “Well, first of all, you haven’t printed anything.”

This reporter then reminded Millman that TheDC printed the first article that caught his boss not reporting income, but he made it clear he wanted to harp on semantics: “It didn’t print, sir. It didn’t print at all.”

This reporter responded: “It didn’t print in a paper. It ran online. So, what, are you saying, the Huffington Post isn’t credible either?”

Millman continued: “Oh, you mean print, like from a computer printer? Oh, that’s different. Maybe you did print it.”

Millman dodged further questions and refused to answer when pressed to explain why he thought this reporter and TheDC don’t represent a “credible media outlet.”

When asked for an example of a “credible media outlet,” Millman couldn’t name one. He simply repeated: “If requested, we will release them to a credible media outlet.”

After TheDC changed the subject and asked Millman why anyone should believe Capps’ claim that her failure to report more than $500,000 in income was an innocent “inadvertent error,” he hung up the phone after claiming TheDC was “yelling” at him.

In a follow-up email after the phone call, Millman wrote: “You act like Jerry Springer.  I don’t feel it’s appropriate for you to yell at me or interrupt me.”

UPDATE, 4:07 a.m.:

Millman is back again. Capps’ spokesman has discovered a tweet this reporter posted back in August, just after the first story in this saga broke. In the tweet, which was a response to somebody else tweeting out TheDC’s article on the Capps situation, this reporter said: “Yeah, she’s in trouble. :)”

Millman told TheDC by email he thinks the tweet proves this reporter is “rooting against” Capps, in hopes she will lose her bid for re-election in November. When TheDC pointed out that the prediction Capps was “in trouble” was accurate — Capps fell behind her Republican challenger by one percentage point in a recent poll, after initially appearing to be unbeatable — Millman stumbled.

“The emoticon gives you away,” Millman concluded.

Millman would not explain whether the Capps campaign believes “emoticons,” or digital smiley faces, carry some hidden political message. The spokesman also declined to point to any poll that contradicts the one showing Capps trailing her rival.

“I’d be willing to discuss our polling off the record with you, as I have with other reporters,” Millman offered.

Only hours earlier, Millman had refused to cooperate with TheDC’s inquiries, because he did not believe the site is “credible.”

When asked whether he had flip-flopped on the issue, Millman flatly replied, “Nope.”

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