Spotlight on easements
Grand jury probe should lead to tougher penalties for lawbreaking
Rocky Mountain News
Published June 20, 2008 at 12:05 a.m.
Some real estate appraisers, property owners and land trusts have manipulated tax credits available from Colorado's conservation easement program in ways that seem downright criminal.
So we welcome Wednesday's decision by Attorney General John Suthers asking a statewide grand jury to look into the more questionable deals. An independent probe is essential.
A grand jury can subpoena witnesses and compel testimony; the AG would not have that authority for this investigation. Subpoena powers will help the grand jury unravel any scams.
The probe should publicly highlight the worst abuses. Exposing obvious loopholes should prod state lawmakers to close those gaps.
No single agency has direct oversight of easement credits, which have drained more than $274 million from state coffers since 2000. Articles in the Rocky have uncovered a host of dubious transactions, some involving what looks like excessive appraisals and multiple tax credits claimed from the same parcel of land.
For some people the temptation to game the system must have been irresistible. It was possible to collect millions in tax credits without drawing any attention. With little risk of getting caught, pushing the limits may have seemed a gamble worth taking.
Indeed, the penalties for illegally cashing in easements are little more than a slap on the wrist - low-level misdemeanors which carry modest fines and minimal jail time, if any.
To be sure, the grand jury might discover evidence of conspiracy, tax fraud or securities fraud - offenses that carry much stiffer penalties. And for months the IRS has conducted its own probe of easement deals that could violate federal tax laws.
If those wider offenses aren't prosecuted, don't count on stiff sentences for those who illegally manipulated easements.
Another reason to welcome the grand jury's independence: Tax attorney Rodney Atherton, now under investigation by the Colorado Supreme Court for potential ethics violations related to the easement program, is likely to get a look.
A Rocky investigation of a land trust he organized found that Atherton got two open-space agreements on land he owned in Jefferson County and that these deals led to $360,000 in state tax credits for the attorney and his wife.
Atherton may have attracted attention because the state Republican Party is a client of his law firm Zakhem Atherton. Suthers is Colorado's highest-ranking GOP official.
Michael Huttner of ProgressNowAction called for Suthers to recuse himself from the investigation, claiming Suthers had "a conflict of interest with one of his major contributors."
Atherton is hardly a "major contributor," since he did not give Suthers any money for his 2006 campaign. And while Atherton's law partner John Zakhem gave $900 to Suthers' campaign, Atherton did not join the firm until 2007. The most direct link Huttner can make is a contribution from Atherton to Gov. Bill Owens' 2002 re-election campaign.
Huttner's allegation is ludicrous. We have no reason to question Suthers' independence.
Besides, if Suthers wanted to protect Atherton, or any Republican, why wouldn't he take charge of the investigation, so he could cherry-pick who was scrutinized and who was left alone?
We trust the grand jury probe will be thorough, giving lawmakers plenty of ammunition to stiffen the penalties for looting public coffers and abusing a program meant to conserve valuable open space.
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June 20, 2008
1:54 a.m.
Suggest removal
clyde writes:
It's all perfectly legal. The law was written specifically to allow this kind of dealing. Dig a little deeper and find out how the authors of this law have benefitted.
June 20, 2008
11:12 a.m.
Suggest removal
Joseph writes:
I do not know who wrote the Editorial title Spotlight on easements dated June 20, 2008. I do not trust the validity of this editorial, even though this is a great country in which such editorials are granted certain freedom. First it is clearly the opinion of one person as this person says that something should be done about something that seems downright criminal. Can you image how many of you would be in prison, if this criterion were being used in the courts? I certain am glad editors of this particular newspaper are not our judge, aren’t you? Is it not clear to the readers of this editorial that the issue of conservation easements is not really a criminal issue, they are tax issues in where certain people have tried to take advantage of them. Does this make them seem like criminals? What you are actual seeing is that in this year there is apparently extreme political feelings as to what party should be in power. The Democratic press running the Rocky Mountain News and the sister company, The Denver Post, are well involved in trying to run down every Republican who is running for office with this type of editorial. So what can you do about it, stop buying their papers and stop advertising in them. If you do not then you are a Democrat and want the Democrats to run this country, of course you must keep in mind the Democrats are in control of our Congress and their ratings right now are worse than the President's. So it would appear the Democratic candidates are not any better than anyone else. I am certain you now can see that this is a political answer to a political editorial. Do not believe that the editorial is for your good, unless of course, you are a Democrat running for office.
June 28, 2008
8:26 a.m.
Suggest removal
greenleaf writes:
Joseph,
With all respect my friend, I would have to say that this editorial isn't bashing Republicans. It actually is defending the AG, John Suthers against partisan attack and saying: "Huttner's allegation is ludicrous. We have no reason to question Suthers' independence.".
Unlike you, I see balance in the Rockies editorial stance. Take for example today's editorial on the "big oil Bob" campaign ads targeting Schaffer. In that editorial, they are crying foul against Udall and the League of Conservation voters.
Regarding your comment: "Is it not clear to the readers of this editorial that the issue of conservation easements is not really a criminal issue, they are tax issues in where certain people have tried to take advantage of them Does this make them seem like criminals?".
Yes Joseph, it does make them seem like criminals. Tax fraud is a criminal offence. If this comes to trial and the individuals are found guilty, they could and should have serious prison sentences. The tax money they allegedly stole belongs to all of the taxpayers of the state of Colorado.
You also state that the Democrats are running congress and have a worse approval rating than the president's own abysmal rating. That's true as far as it goes. However, the rating isn't assigned to the party in power but to the entire congress including Republicans and Independents. Democrats control the senate by 1 vote and the house by a narrow margin. So I think it is a little misleading to imply that the low approval rating for congress should fall on what is only by the slenderest of margins a Democratic congress. The country and the electorate have every right to be unhappy with the president and congress. We have had corruption, cronyism, scandal, avoidance of inconvenient issues and "bridges to nowhere" for far too many years. We haven't been well served from the top to the bottom. Personally, this old independent is looking forward to some heads "rolling" this November.