Thomas lawyer disputes Senate Democrats' claim on loan forgiveness

An attorney for Supreme Court Justice Clarence Thomas is disputing Senate Democrats’ claim that his client did not pay back a “significant portion” of a loan used to purchase a luxury motorcoach.

Senate Finance Committee Chair Ron Wyden (D-Ore.) published a memo Wednesday on findings looking into a loan agreement between Thomas and Tony Welters, which was first reported by The New York Times in August. The committee staff reviewed documents related to the loan and determined Thomas “did not repay a significant portion of the loan principal” and paid only interest on the $267,230 debt.

The memo claimed the documents the committee reviewed, which were provided by Welters, suggested the loan for the motorcoach was forgiven. However, a lawyer for Thomas said in a statement that is inaccurate.

“The loan was never forgiven. Any suggestion to the contrary is false. The Thomases made all payments to Mr. Welters on a regular basis until the terms of the agreement were satisfied in full,” Elliot Burke said in the statement.

When reached for further comment, Wyden doubled down on the findings and called on Thomas to provide evidence to the committee that backs up his attorney’s statement. 

“The committee’s investigation is clear: The person who loaned Justice Thomas $267,000 provided numerous documents indicating that a substantial portion of that debt was never repaid,” Wyden said in a statement.

“If Justice Thomas disputes that conclusion he has an obligation to provide proof to the committee. Carefully worded statements from high-priced lawyers are not a substitute for facts,” he added.

The memo conceded that more information concerning the loan may exist and that its information is based on what documents were provided to the committee.

“While additional documents pertaining to the loan agreement may exist and provide more clarity to the agreement, none of the documents reviewed by Committee staff indicated that Thomas ever made payments to Welters in excess of the annual interest on the loan,” it said.

According to a handwritten note on Supreme Court stationery on Dec. 6, 1999, Thomas and his wife, Ginni Thomas, said they agreed to repay Welters the $267,230 loan with an interest rate of 7.5 percent per year. The findings stated the money was supposed to be repaid in five years.

The memo stated Thomas made at least one payment of $20,042.23 in 2000, which roughly equals the interest on the loan. In 2004, an addendum to the agreement extended the loan’s due date to 2014.

Welters later told Thomas in a handwritten note in 2008 that he would no longer seek additional payments because he thought the justice “had paid interest greater than the purchase price of the bus,” according to the committee’s findings.

However, nine years of payments only on the annual interest rate would roughly amount to $180,380, which is significantly below the loan principal.

The memo also said forgiven or canceled debt counts as income for tax purposes, noting Thomas did not include forgiven debt on his 2008 financial disclosures.

Wyden said Wednesday he will share the findings with the Judiciary Committee.

“Today the committee has the answer to one of the pressing questions raised by reporting about his arrangement with Justice Thomas — was the loan ever repaid? Now we know that Justice Thomas had up to $267,230 in debt forgiven and never reported it on his ethics forms,” Wyden said in a statement Wednesday.

“Justice Thomas should inform the committee exactly how much debt was forgiven and whether he properly reported the loan forgiveness on his tax returns and paid all taxes owed,” he said.

Thomas has publicly discussed traveling around in a motorhome. A 2001 clip of him touring a C-SPAN school bus shows him saying he had driven his own for “about a year and a half.” And a clip of him speaking in a documentary, flagged by ProPublica earlier this year, said he preferred RV parks and Walmart parking lots to beach vacations.

Thomas has faced scrutiny for months after reporting from ProPublica revealed he received multiple luxury trips from GOP megadonor Harlan Crow without reporting them on financial disclosure forms. A separate report by ProPublica later found Thomas also failed to disclose a real estate deal he made with Crow in 2014.