The Tax Court has ruled that an Ohio congressman owes the federal government up to $180,000 in back taxes, interest and penalties on what the court said were bribes from mobsters.
But Rep. James A. Traficant Jr. (D-Ohio), who has denied any wrongdoing, is not deterred by the heavy weight of debt. He still is running for president, a spokesman said.
Traficant, now in his second term representing Youngstown, plans to appeal last week's Tax Court ruling that he must pay taxes on $108,000 he was given by two organized-crime factions during his successful 1980 race for sheriff of Mahoning County. Interest and a 50 percent penalty for fraud will bring his tax bill to about $180,000 from the civil liability case.
A spokesman said Traficant does not have the money to pay the government if he loses his appeal, but the congressman still plans an appearance at a gathering of New Hampshire Democrats in Amherst this weekend to push his fledgling campaign. Traficant announced formation of an exploratory committee last month and has made one trip to New Hampshire, site of the first presidential primary.
The court decision against Traficant has generated a flood of support, principally from those who agree with Traficant's oft-stated view that the Internal Revenue Service terrorizes ordinary taxpayers, according to Dan Gosney, who chairs Traficant's presidential committee.
"We got 500 letters just this morning," said Gosney, who is chairman of the Columbiana County (Ohio) Democratic Party. "I'm going to be here till midnight answering them."
In his decision, Tax Court Judge B. John Williams Jr. ruled that Traficant received $60,000 from a Pittsburgh organized-crime faction ($55,000 of which the court said was not taxable) and $103,000 from a similar Cleveland-based organization. Both sets of contributions -- neither was reported to Traficant's campaign bookeepers -- were in exchange for Traficant's promise not to interfere with various gambling and other illegal activities, according to the opinion.
Traficant was acquitted in 1983 on charges of criminal bribery stemming from the same incidents, which were brought to light in two cassette tapes made by one of the figures involved, Charles Carabbia. Traficant also signed a document in 1981 that the court later called a confession. It said that he had accepted money "with the understanding that certain illegal activities would be allowed to take place in Mahoning County after my election."
In the criminal and tax trials, Traficant denied any wrongdoing. He disputed the validity of the tapes and the document, said he had received less than the IRS contended and argued that any money he did receive was not income to him but contributions to his campaign. He also said he held $10,000 of the money for use in a "sting" operation against one of the crime factions.
Traficant argued his own case in both the tax and criminal courts, prompting IRS attorneys to suggest during the tax trial that he ask himself questions when he appeared on the witness stand, according to the Youngstown Vindicator newspaper. Williams denied the request.
In the decision, Williams agreed with Traficant on only one issue: $55,000 of the money Traficant received from the Pittsburgh faction was not taxable because Traficant transferred it to the Cleveland faction in hopes of concealing from the Pittsburgh group the fact that he was receiving money from both sides.
The court ruling apparently will not have any immediate impact on Traficant's position in Congress. The House ethics committee is required only to investigate cases in which a sitting representative is convicted of a criminal offense that carries a term of imprisonment of at least one year. The penalty against Traficant is a civil one.
Traficant earlier this year introduced legislation that would curb IRS' authority to investigate and prosecute taxpayers. The bill, which a press release said was "the result of months of in-depth research," has no cosponsors and has yet to come before the House Ways and Means Committee.
Traficant, who was not available for comment yesterday, said after the Tax Court decision that he was "no Gary Hart" and would not pull out of the presidential race. Last week, in fact, he called on the other seven Democratic hopefuls to concede and withdraw.
Apparently, however, he has not caught fire in New Hampshire. Only 12 Democrats showed up at his first appearance, near Nashua.