Previously: Senator Claire McCaskill (D): media conference call on plane issues

“…I’m disappointed in myself that this mistake was made. But I have done an awful lot on accountability and transparency and ultimately the reason this happened was not because of the Republicans. It was because this was a public record. And this was a public record, um, that, that the flights were taken. It’s a public record on my PFD, my personal financial disclosure, that I owned part of the plane. It’s a public record that the government paid the money. Um, and I think that, that that is why this happened. And that’s a good thing. The transparency part of this is a good thing. I am being held accountable like I should be. And so should everyone else…”

The transcript of the media question and answer portion of this afternoon’s conference call with Senator Claire McCaskill (D):

…Question: …The issue of the plane first came up in two thousand six. Um, now these, my question is, if this came up in two thousand six why did it take four years for you to I guess check out some of this stuff at least to make sure that, um, going forward things would be done right tax wise? I mean, the issue didn’t stick in two thousand six, um, who knows, I mean, but, Republicans are getting a lot of play out of it in the last few weeks this time. And apparently, you know, there is this misstep with the taxes. Uh, why was this not looked into when it first became a political issue?

Senator Claire McCaskill (D):  I think, honestly I’m kicking myself, but, I think because they were throwing so much on the wall at that point, um, trying to allege that a lot of things, uh, were wrong that weren’t wrong. And, frankly, in two thousand six we didn’t owe any property taxes on this plane. We didn’t but the plane until two thousand six and the taxes would not have been due until the following year…

…Question: So, now, second, uh, on the, on the other side of the ledger, uh, there has been some, uh, contention that actually you’re using your personal plane even though you did assess, I mean, did use your, uh, office account to pay for some of it that’s it’s cheaper for the public for you to do that than, um, let’s say, the way Bond was doing it. Are you gonna end up actually costing the taxpayers more by going to a different system, you sell the plane?

Senator McCaskill: Well, the first thing I’m gonna do is drive as much as possible. There are times when you’re trying to, to, um, respond to a disaster in the state, when there is, um, a limited amount of time and you’re trying to move around the state that charter flights may be necessary. Um, but, I will tell you I kept track of my charter costs every single year I’ve been in the Senate while I’ve been focusing on making sure I didn’t spend all of my office budget I also focused on those costs. And I spent less in four years on charter flights than Senator Bond spent in one year. So, clearly we were being very careful with the way we spent the taxpayer’s money. I will continue to do that. But, the plane is one of those you’re darned if you do and you’re darned if you don’t. If you save the taxpayers’ money by using your own plane you’re subject to the criticism that you’re using public dollars to pay for your private airplane. If you don’t use your airplane for public flights, uh, you’re accused of overcharging the taxpayers by not using the cheapest transportation available. So, in this instance, I think the problems surrounding this, um, frankly, are just, the, the laws here are complex on planes, there’s different laws in every state, uh, there are complex political laws and FEC laws about use of planes, so, my goal is to buy a ticket that has a boarding pass in coach as often as I possibly can and when I, when I, when I’m in Missouri, to drive as often as I possibly can, and, if that’s not an option, to use charter flights as infrequently as possible.

Question: …in, in St. Louis City we all have to pay property tax on our, our own private vehicles so I’m sure a lot of people who hear about this may be scratching their heads wondering how someone could purchase an airplane and then just not have the state find out where that airplane was going to be located and, and thus, you know, account for the proper, uh, uh, personal property tax on this issue. So, I mean, how does something like that fall through the cracks? It would seem like it should, it just happens automatically.

Senator McCaskill: Well, it’s very straightforward. Um, you must license your car or your truck or your boat with the state. You must be licensed. An airplane must be licensed with the FAA. So there is no licensing that’s required by the county, the city, or the state for an airplane. So, that, that means it’s entirely a self reporting mechanism. And, um, I don’t want to, uh, cast aspersions anywhere else, but, I’m just saying that it’s self reporting, So, if you don’t know about it or if you chose not to or any other option it, there is no bill that comes. For, like for your car, the bill comes you gotta go get it licensed. And they know that you have it and they track you down. In this the self reporting didn’t occur. We had, had hangar space in Illinois previously and there is no personal property tax in Illinois. So, I might point out that if we were trying to evade personal property taxes and we knew about it we certainly wouldn’t have moved it from Illinois to Missouri.

Question: …Uh, the, the group or the, the LLC that owns the plane, Timesaver LLC, is incorporated in willing, Wilmington, Delaware. Um, Delaware obviously has a reputation for, uh, for being good for business. Um, was, was incorporating the plane in, in Delaware and effort by you or your husband or your tax attorneys to avoid paying any personal property tax? Delaware does not have a personal property tax.

Senator McCaskill: No, because the, frankly, um, having the plane owned in Delaware would not in any way negate the necessity of paying the personal property tax in Missouri. Uh, this was a mistake. It should have been reported to Missouri, it was owed in Missouri, it will be paid in Missouri today. Delaware is used by most plane companies, I believe, and by most planes, I think aviation lawyers recommend it, because it is a very common jurisdiction for aviation law. And, it is, I think, um, I don’t know if it’s nine out of ten or eight out of ten airplanes are registered there. But, registering in Delaware did not relieve, um, uh, the plane from the obligation of paying the personal property taxes in Missouri. If it had we wouldn’t be on this phone call right now.

Question: …I, in, in terms of your decision to try and sell the plane is that because you don’t ultimately want to continue paying the sales tax and the property taxes on it or because of the publicity that this has gotten?

Senator McCaskill: It’s just been more trouble than it’s worth. It sounded really good, um, but it’s very expensive and it is, um, complicated. Every time you’ve got to figure out, okay, am I gonna do, uh, uh, official, am I gonna do personal, am I gonna do political? How much is official? How much is personal? How much is political? How do we divide it up? I think it does complicate things for the public, that we own the plane. Because on the one hand, are we enriching ourselves by using the plane? On the other hand, are we taking advantage of the fact that we own the plane. It’s just too complicated. Um, you know, frankly, um, it’s, it’s just as convenient in many ways for us to hangar the plane in Illinois. If we really wanted to hold on the plane and not pay personal property tax all anybody has to do is move the plane to Illinois. Nobody’s trying to evade taxes here. That’s why the sales tax was paid fifty five months in a row to the State of Missouri with full information about the
plane and, and, and who owned the plane. And that this was in fact a Missouri company.

Question: …I want to go back to the Truman Days stuff. You, uh, indicated that, uh, you, you found another flight, eight events, uh, the Truman Days in Kansas City and a subsequent fact finding speech the next day and you, you said it represented  eight percent. Eight percent of the eighty-eight thousand you repaid?

Senator McCaskill: Oh, no, no, no, no. On one trip, okay, on one trip where I began and did a number of locations and a number of official events. Um, I did a, a water meeting in Springfield, I did a press conference in Kansas City, I did the office opening in Columbia. Of that trip the Truman Days speech represented eight percent of my time on that trip. In other words, what I was trying to explain is under the rules that would probably be considered de minimus and you wouldn’t even have an obligation to talk about it. But, I wanted to be clear that I had looked at every single trip and other than the big mistake in Hannibal the only other one that came close to even being worthy of acknowledging that there could have been anything political on the trip was in fact that Truman Days speech which represented a very small fraction of that particular trip.

Question: And, and you mentioned a subsequent Kansas City fundraiser the next day. [crosstalk][inaudible]

Senator McCaskill: Correct, I stopped by a fundraiser the next morning after I’d had a breakfast with the mayor, uh,  which was an official breakfast.

Question: …Um, obviously this all came forward whenever Republicans were, um, trying to dig up information on you. Do you feel like this has and will, uh, compromise your, your bid for reelection?

Senator McCaskill: You know, I don’t know. I know that I tried to handle this like I’ve handled everything else, as forthright as I could, as honestly as I could. Um, it is, um, I’m disappointed in myself that this mistake was made. But I have done an awful lot on accountability and transparency and ultimately the reason this happened was not because of the Republicans. It was because this was a public record. And this was a public record, um, that, that the flights were taken. It’s a public record on my PFD, my personal financial disclosure, that I owned part of the plane. It’s a public record that the government paid the money. Um, and I think that, that that is why this happened. And that’s a good thing. The transparency part of this is a good thing. I am being held accountable like I should be. And so should everyone else. We should have the same transparency for foreign travel, um, that’s paid for with taxpayer dollars. So, uh, the people of Missouri will make up their mind on this. I have a feeling the Republicans will try to, many, many times over the next eighteen months, try to make this about, um, the fact that my husband has been very successful in business and has lots of different corporations and lots of different companies. And I’m sure they’ll try to make, uh, there to be another, uh, something else. Um, but in this instance, in all fairness to the Republicans, I made this mistake. And I’m being accountable for the mistake. And I am very happy that I’ve convinced my husband to sell the plane.

Question: …Um, one of the things Republicans are talking about is they’re talk about your two, two thousand seven personal financial disclosure that shows income for Timesaver. And they’re saying, and raising questions about that. Can you talk about that a little bit?

Senator McCaskill: Well, um, the, first of all, the word income, uh, does not mean profit. Um, it’s an imprecise term. Do they mean revenue? Do they mean income? Or do they mean profit? And those are not necessarily interchangeable terms. Um, the, the depreciation was not figured in that figure and I can assure you, I can assure you that this plane has not been a profitable endeavor. It, all you have to do is look at the value of the plane and the number of flights that were reimbursed by public dollars and I think anyone, um, that has basic rudimentary math skills would understand this certainly was not a profitable adventure by virtue of the less than twenty thousand dollars a year on average that the government paid, uh, for chartering the plane when I was on a limited number of official business trips.

Question: Can I just follow up with another question? Um, related to the previous question about, you know, the campaign next year. You’ve, in the Senate, you’ve built your reputation over the past, over your first term as someone who looks, a critic, uh, of efforts, government secrecy and excessive spending in contracts and bad contracting. Do you think this is gonna create an, a problem for you in that regard?

Senator McCaskill: Well, um, yeah. [laughter] Um, I, sure, I mean this, this is not good. Um, I am, I am, uh, this is, obviously, I’ve been sick to my stomach for four days that this happened. And I can’t, I’m gonna, you know, I really do feel like a lot of people are gonna feel. How in the world, you know, they got this big, you got this big business and there is, they’re, they’re, they’re wealthy and how did they not self report this airplane? And, um, somebody made a mistake and I made a mistake by not checking to make sure that somebody hadn’t made a mistake. The sales tax was done perfectly. Uh, every month according to the law. And I am glad of that because I think it does show the public that nobody was trying to hide the airplane.

Staff: Last question.

Question: …You mention that the plane was moved from Illinois to, um, to St. Louis County and, and I think there’s actually two planes here, one that was, the plane that was originally reported by Politico last week and I guess there’s a new plane since then. Can you tell me, you know, if in fact there was more than one plane and also, I guess, it sounds like you moved it from downtown St. Louis airport to Sprit of St. Louis.

Senator McCaskill: I moved from down, first of all, I didn’t move this plane. Um, we had hangar space in Illinois for a previous airplane.

Question: Okay.

Senator McCaskill: And, and. Um, the previous airplane, I used to work downtown in, when I was the Auditor. And it was more convenient, um, for, uh, to use the Illinois, uh, hangar. Um, when I was no longer working downtown as frequently and knew I wasn’t gonna be working there on a permanent basis anymore ’cause I was either not gonna be Auditor anymore or I was gonna be a United States Senator , uh, the decision was made to move, uh, the, the then the Pilates airplane which is the one that, uh, we’ve, that we’re talking about today, the decision was made to hangar it in St. Louis. So, um, that, there was no personal property tax in Illinois and obviously, um, I’m not, I don’t know if that’s the reason why this mistake was made or not.  But, if there was going to be an aggressive attempt to evade taxes it seems to me that, um, it would have been pretty simple for us to keep the plane in Illinois where this tax is not even owed. And by the way it’s not owed in Kansas either.  

Question: And, and so the new plane, um, was moved, if, if the old plane was at downtown St. Louis and the new one was, was hangared at, uh, Spirit of St. Louis?

Senator McCaskill: Correct.

Question: And when did you buy that new plane?

Senator McCaskill: Oh, I want to say, I, I don’t have the record sitting here in front of me, but I want to say it was June of oh-six.  Uh.

Staff: [crosstalk][inaudible] It was July of Oh-six.

Senator McCaskill: July of oh-six.

Question: July of oh-six. Okay.

Staff: Thanks everyone for joining today…

Senator McCaskill: Thank you, guys.

“….I have convinced my husband to sell the damn plane…I can tell you I will not be setting foot on the plane ever again….”

This afternoon we received a notification that Senator Claire McCaskill (D) would be holding a media conference call on the issues surrounding the use of her plane. The transcript of Senator McCaskill’s opening remarks follows:

Senator Claire McCaskill (D): Thanks everybody. I know that you all are aware that, uh, several days ago, uh, ten days ago, maybe more, it became, um, I became aware that the perception of me chartering a flight that I had an ownership interest in had the appearance of impropriety in terms of using public funds. I, as you know, we refunded that money immediately to the government and then we discovered, um, because of the public records that are available, that there was one flight that was taken for purely political purposes. Clearly the money had already been paid back, but I acknowledged at the time that there was, this was a big mistake and indicated, um, that I apologized for it and acknowledged the mistake. At that point in time then I realized that that kind of mistake had been made, uh, the former auditor in me wanted to take a really close look at everything surrounding this plane. So I began a thorough review of the plane and all of the flights that have been taken and all of the documentation surrounding the plane. And this is, these are some of the things that I found as a result of this review…

…First, as to political use, I wanted to closely examine every flight that was paid for with public money to determine if there had been any other errors where there had been money paid from the public coffers for any political activity. I examined all eighty-nine of those flights. And other than the flight that we have previously acknowledged was a mistake we are unable to find any other political activity on any of those flights, with one slight exception. There was one flight that involved eight different official events and I realize that in the middle of those official events I went by Truman Days in Kansas City, uh, and gave a speech, and that the following morning I stopped by a fundraiser in Kansas City. We believe that that represented about eight percent of that trip, uh, and frankly, um, that eight percent, even though I believe under the rules that’s, that’s considered de minimus, uh, obviously initially that should have been caught.

All of the money has been repaid to the public funds and we will be releasing for you, uh, all of the purposes of those trips and the official events that took place because I think it’s very important that since I initially used public money that the public have a right to inspect those.

I then, um, looked at some of the, uh, other political issues surrounding flights that the government did not pay for. We are trying to turn over every stone in regards to its use and how it was billed. This includes having campaign lawyers look at all of our flights to make sure that I have given all the inkind contributions that are necessary when the plane was used for political purpose and it wasn’t reimbursed by the campaign. There were many instances where the plane was reimbursed by the campaign. There are some instances where it was not and we are determining if in kind contributions from me do need to be filed or any other amendments would need to be filed in that regard.

I then turn to taxes. And, I first looked at sales tax knowing that these flights were, uh, money was being paid for these flights to the, the company that owns the plane regardless of whether I was flying on the plane personally or in official capacity or politically. But first I wanted to look at the sales tax records. I examined the sales tax records, wanted to make sure that they had been paid, in fact, I found that every month for fifty-five months the sales tax has been paid to the state, uh, to account for the state sales tax as well as the county sales tax. That total amount that has been paid in on sales tax is thirty-eight thousand eight hundred dollars. And we will provide you today all the copies of the sales tax remittance that accounts for every month that the sales tax was paid.

Finally, I have discovered that even though we have paid the taxes to the state for sales tax, obviously showing no attempt to hide the plane, I have discovered that the property taxes, the personal property taxes on the plane have not been paid. I have learned that Missouri is one of a minority of states that require personal property taxes be paid on airplanes that are hangared in the state and that those taxes are due to the county. There should have been a reporting to the county of the existence of this airplane since it has been hangared in St. Louis County. Because it was never declared to the county there was never a bill sent and there was never a bill paid.

There are people I could blame for this. But, I know better. As an auditor I know that I should have checked for myself. I take full responsibility for the mistake. I should have checked the documentation. I should have been asking the questions. I shouldn’t have assumed that someone was doing it.

According to the estimates that I am able to calculate by publicly available information the taxes that are owed are as follows:  for two thousand and seven, seventy-two thousand seven hundred and eighty nine dollars and seventy-four cents; for two thousand and eight, seventy-four thousand six hundred and ninety-eight dollars and fifty three cents; for two thousand and nine, sixty-nine thousand three hundred and ninety-four dollars and thirteen cents; in two thousand and ten, seventy thousand four hundred and one dollars and one cent. There will clearly be additional interest and late fees will be charged on those taxes. There is also a possibility that some of those years the taxes will be less because there is an entitled, in Missouri law, it, that you can allocate the miles from, flown in state and out of state, we may be able to allocate miles for the last year of those years. And I’d be happy to answer more questions about that, um, but to be on the safe side we are going to send in checks today to the St. Louis County Director of Revenue in the amounts that I just specified. And if in fact we have overpaid, um, that [garbled] be fine. Uh, if, and, and, those taxes can be applied to the taxes we’ll owe at the end of this year. If in fact, um, uh, we, we, uh, and obviously we have to calculate, and we’ll even try to calculate before we’re told what the interest and penalties are. Uh, typically this is a three step process. You send in the report to the assessor, the assessor then has you fill out documentation to go to the state tax commission, the state tax commission makes an estimate and it is sent back. In this instance I thought it was more important, since I discovered this literally, um, just a matter of a few days ago that we go as quickly as possible and try to acknowledge the mistake up front and get the money in as quickly as possible that has been owed.

I want to reiterate, um, that there is no attempt to evade the plane because the State of Missouri, um, Sunset Cove, has filed remittances every single month on sales tax. It, it, this is just a mistake which, as I said, I take responsibility for.

Let me finally say, I have convinced my husband to sell the damn plane. He has hired a broker and I can tell you I will not be setting foot on the plane ever again. Uh, I know what people are gonna think about this ’cause I know exactly what I would think. How in the world does something like this happen? Ultimately, the problem is, I didn’t do what I should have done. I should have been the one to take responsibility and check and make sure that it had been done properly. And, and that it was handled with the appropriate documentation. Uh, and I am being very open about my failure to do that, um, and hope that the fact that we have done this review and determined, um, that these taxes wer
e not paid, while some were paid that were supposed to be paid, there were others that were not paid. And with that, I’ll be happy to answer your questions…

The transcript(s) of media questions and Senator McCaskill’s answers will follow in subsequent post(s).