McInnis tax returns only fuel calls for greater transparency

According to partial tax returns reviewed by the Colorado Independent Monday, Republican gubernatorial candidate Scott McInnis has earned nearly $2.9 million since leaving Congress in 2005 and joining the law firm Hogan & Hartson. He has paid federal income taxes of just over $680,000, for an income tax rate of 23.6 percent.

Although campaign Communications Director Sean Duffy said the bulk of the McInnis income comes from Hogan & Hartson, the returns demonstrate that, like Democratic rival Denver Mayor John Hickenlooper, in most years, most of McInnis’s income appears on line 17 of his 1040s, which is where income from partnerships is reported. From 2005 to 2008, line 17 income for McInnis ranged from just over $400,000 to just under $600,000. In 2006, he also reported capital gains of nearly $600,000, which Duffy said was his share of the profit from the sale of some commercial real estate he had an interest in.

McInnis declined to share his Schedule As, which list charitable contributions. The 1040 forms do list itemized deductions but those are not restricted to charitable donations. In two years, McInnis showed deductions of less than 5 percent of income. One year, the amount was just under 12 percent. In 2007, it was almost 25 percent. Without more information from the candidate, there is no way to know how much of these deductions are charitable contributions.

Hickenlooper has given an average of around 17 percent of income to charity over the past 20 plus years.

By Monday afternoon, Duffy was keenly aware of the controversy beginning to swirl around McInnis’s returns. News media and activist groups were calling on McInnis to stop hedging and release more information. Progressive online group ProgressNow was calling not only for returns but for lists of clients McInnis has lobbied for and for him to unseal his divorce court records.

The controversy has been fuled in part by the contrast on the matter of financial disclosure in the approaches taken by Hickenlooper, a millionaire restaurant-pub owner, and McInnis, a millionaire lawyer-lobbyist.

When weeks ago the candidates were asked if they would provide ten years of tax returns to the media, Hickenlooper agreed, and days later produced more than 20 years of returns to a small group of reporters. He hauled up boxes of paper from the basement. He allowed reporters to take copies with them for review. He also spent about 45 minutes talking about his returns, essentially giving a financial life story in the process.

McInnis, on the other hand, first said he would not share his returns, then changed his mind, sort of. He has released four years worth to an attorney’s office, where reporters have been invited to come look at them but not take copies away for review. McInnis has also so far refused interviews on the subject. “He’ll be happy to talk to you when he has a chance,” Duffy said Monday.

The story gained traction this week when the Colorado Independent and other outlets reported on a Tax Day interview McInnis gave to KCOL radio when he was first asked to release his returns, now standard practice for office seekers. He said he had no intention of releasing them. “I’m not going to invite myself to my own beating,” he said.

Columnists and bloggers surmised McInnis has something to hide but Duffy said the comment has been misinterpreted, that as a partner at Hogan and Hartson, McInnis’s income is reported on a K1 form, which shows the income of every partner in the firm, and that if McInnis released this form, he would be exposing all of his partners, all over the world, to public scrutiny, essentially stripping them of their privacy. He says the “beating” McInnis would take would be from his partners, not from the fact that his tax returns are embarrassing to the candidate in any way.

Duffy also addressed the matter of charitable giving, a topic raised in light of Hickenlooper’s record of generosity. McInnis declined to provide any information about charitable giving but Duffy explained that “the vast majority of [the McInnis family] giving is to individuals and families. Scott and Lori hear about someone in need and they try to help.”

He said McInnis not long ago shot an elk, had it dressed, and gave the meat to a family that needed a little help.

Even before the current flap over tax returns, you could hardly mention McInnis and charity in the same sentence without raising eyebrows.

In 2004, when McInnis decided not to seek re-election to Congress, he had received roughly $1.3 million in campaign donations. A staff member reported that McInnis wanted to give a large portion of that money to charity, especially charities involved in cancer. In the end, however, he gave most of the money to other candidates or groups supporting candidates. Of the money he did give to charity, most went to support a wilderness area named after himself.

That led to an appearance on the conservative Dan Caplis and Craig Silverman radio show, where things got testy, and McInnis said “I’d be happy to kind of match my contributions to the community against either one of you, for example, or against the governor or against any of my opponents.”

This week he got the chance to do just that, and he blinked.

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Scot Kersgaard has been managing editor of a political newspaper, editor and co-owner of a ski town newspaper, executive editor of eight high-tech magazines (where he worked with current Apple CEO Tim Cook), deputy press secretary to a U.S. Senator, and an outdoors columnist at the Rocky Mountain News. He has an English degree from the University of Washington. He was awarded a fellowship to study internet journalism at the University of Maryland's Knight Center for Specialized Journalism. He was student body president in college. He spends his free time hiking and skiing.

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