The IRS Sprang a Leak
Plus: Donald Trump's creative accounting, those sneaky vegans, brain drain, and more...
Big thief On Friday, the Department of Justice charged 38-year-old government contractor Charles Littlejohn with having stolen private tax information from the IRS, which he then leaked to journalists.
The outlets he leaked to were ostensibly ProPublica and The New York Times, though the DOJ did not specify. In June 2021, ProPublica's Jesse Eisinger, Jeff Ernsthausen, and Paul Kiel published a "vast cache" of private IRS information, revealing the tax burdens—or strategies used to minimize such burdens—of some of the wealthiest Americans, including Donald Trump, Elon Musk, Jeff Bezos, Carl Icahn, Warren Buffett, and Michael Bloomberg.
Littlejohn worked as an IRS contractor from 2017 to 2021. The indictment claims he stole tax information from as far back as 15 years ago. IRS information is not supposed to be made public without the individual's consent, and this breach made clear that the agency's protection of people's personal information was not up to snuff. (I've reported on the agency's bad behavior a bunch over the years, if you need more reasons to hate them.) The breach also "renewed calls by Democrats to enact a so-called wealth tax that would prevent billionaires from using creative financial strategies to lessen their tax burdens," adds The New York Times.
"The government has a fundamental obligation to protect the confidentiality of Americans' sensitive information, whether it be tax records or healthcare records," said Ken Griffin, a hedge fund manager whose records were part of the leak and is now suing the IRS. Littlejohn faces up to five years in prison.
Gaetz vs. McCarthy Yesterday, Rep. Matt Gaetz (R–Fl.) brought forth a resolution declaring the speakership vacant, a clear sign of antagonism toward House Speaker Kevin McCarthy (R–Calif.). The resolution will, over the course of the next few days, force a vote, meaning members of the House must decide on whether McCarthy will remain in leadership. Only two other speakers have been removed over the House's 234-year history.
"It is becoming increasingly clear who the speaker of the House already works for, and it's not the Republican conference," said Gaetz, accusing McCarthy of making a "secret deal" with President Joe Biden to pass the stopgap measure which allowed the federal government to remain funded until mid-November in lieu of a shutdown.
Rep. Matt Gaetz (R-Fla.) followed through with his pledge to trigger a vote to oust Speaker Kevin McCarthy (R-Calif.) on Monday evening, kicking off a complicated process that will determine McCarthy's fate.
Here's a guide to five ways in which it could play out.… pic.twitter.com/k2dxVG2jWC
— The Washington Post (@washingtonpost) October 3, 2023
Fantasy world Last week, Judge Arthur Engoron handed New York Attorney General Letitia James a huge victory in the state's civil case against Donald Trump, ruling that the real estate magnate and former president committed fraud by overvaluing his business assets. "In defendants' world: rent regulated apartments are worth the same as unregulated apartments; restricted land is worth the same as unrestricted land; restrictions can evaporate into thin air…and square footage subjective," Engoron wrote. "That is a fantasy world, not the real world."
Though Engoron conceded that square footage can sometimes be overvalued by mistake, generally falling in the realm of 10-20 percent, Trump's properties were in some cases inflated by 200 percent, which strains credulity.
But that ruling dealt with only one of the seven total claims that James had brought against Trump. Yesterday, the first day of the trial—which will deal with the remaining six—started. Previously, Engoron had "revoked Mr. Trump's licenses to operate his New York properties," but now the attorney general is seeking more from Engoron, "asking that he impose the $250 million penalty and that the former president be permanently barred from running a business in New York," reports The New York Times. The trial will determine Trump's penalty, both in terms of fines and in terms of the degree to which he will be allowed to continue to do business in New York real estate.
"The substance of Mr. Trump's defense is that his annual financial statements were merely estimates, and that valuing real estate is more art than science," reports The New York Times. "The banks to which Mr. Trump submitted his statements, his lawyers argued, were hardly victims: They made money from their dealings with Mr. Trump and did not rely on his estimates."
Scenes from New York:
In May 2021, Chef Daniel Humm of Eleven Madison Park announced he would no longer permit animal-derived ingredients to be used in his kitchen. "We offer three menus, all of which are 100% plant-based. Our main dining room tasting menu is nine to ten courses for $365 per guest" while "the 6-course menu is $285 per guest," offers their website.
As a staunchly pro-meat individual, and an appreciator of New York's fine dining scene, this thread making the rounds on Twitter/X brought me great joy:
I'm at 11 Madison Park and our first course is this tomato, this is about to be the most expensive joke ever pic.twitter.com/R1DdQzuJvj
— Supreet (@supreetkay) September 29, 2023
The best part is not the hefty price tag for tomatoes, tofu, and sunflower; the best part is the hidden meat room, where up until relatively recently, diners who had booked private experiences still had beef, lobster, foie gras, and sturgeon available to them. Or possibly the fact that the massive price tag did not go down at all over the course of the restaurant's pivot to vegan (in fact, it went up, after reports criticizing worker pay surfaced).
To me, this is all very New York: outwardly posturing as morally superior but still raking it in from big chunks of cow in an even more exclusive setting. Brilliant.
QUICK HITS
- Innovation news:
This is a wearable, flexible, real-time estrogen monitor. Tracks estrogen levels in sweat. Estrogen goes up during ovulation as it should.
It's Happening. https://t.co/EV9JJONhQT
— Sarah Constantin (@s_r_constantin) September 28, 2023
- U.K. government bans phones in schools.
- Washington is hurtling toward a massive debt crisis, writes (must-follow) Brian Riedl.
- A sad anniversary:
One year for each finger on both hands.
Today ends a full decade in prison.
I sometimes fear I'll spend the rest of my life behind concrete walls and locked doors. But I have no one else to blame. It's my poor choices that led me here.
All I can do now is pray for mercy.
— Ross Ulbricht (@RealRossU) October 1, 2023
- Rep. Jamaal Bowman (D–N.Y.) had his staff circulate talking points to fellow Democrats defending his pulling of the fire alarm while voting on this weekend's stopgap bill, which was passed to avoid a government shutdown. The prepared talking points are next-level incredible. A sampling: "I believe Congressman Bowman when he says this was an accident. Republicans need to instead focus their energy on the Nazi members of their party before anything else."
- The Machinery of Freedom turns 50.
- Checking in on Hollywood, y'all OK?
"What should the minimum number of servers in a restaurant be?"
"That's an absurd question—I have no idea. Haven't you read Hayek? Let the market figure it out."
"OK. What should the minimum number of writers for a 14 episode TV show be?"
"Six." pic.twitter.com/zFC3DFYWCa
— Chris Freiman (@cafreiman) October 2, 2023
- ICYMI: Coverage of Donald Trump's very strange California GOP Convention speech by Reason's Christian Britschgi, who reported live from the event.
- "The choice was not between Elon Musk founding PayPal and Tesla in South Africa or in the United States," writes Cato's Alex Nowrasteh on brain drain. "The choice was between Paypal and Tesla being founded in the United States or never being founded at all in South Africa."
- Is Russia testing a nuclear-powered missile?
