Editore"s Note
Tilting at Windmills

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July 10, 2009
By: Hilzoy

O, What A Tangled Web We Weave

From the NYT:

"Senator John Ensign's wealthy parents gave almost $100,000 to his former lover and her family, ostensibly out of concern for their welfare and as part of a "pattern of generosity," his lawyer disclosed Thursday.

A statement by his lawyer, Paul Coggins, on behalf of the Mr. Ensign, a Republican from Nevada, said that in April 2008 the senator's parents each gave $12,000 apiece to Cindy Hampton, her husband, Doug, and two of their children in the form of a single check for $96,000.

"The payments were made as gifts, accepted as gifts and complied with tax rules governing gifts," the statement read. Under federal tax regulations, $12,000 is the most that a person can receive as a gift from any one person without having to declare or pay taxes on it."

I'm trying to imagine how the conversation between Sen. Ensign and his parents went. Senator Ensign is 51, old enough, I would have thought, to take care of his own problems. Is he in the habit of asking his parents for nearly a hundred thousand dollars? Why on earth didn't his parents do the sensible thing and tell him to deal with his problems himself? It's one thing to be prepared to bail your kids out when they are struck by meteorites, or get a serious illness, or something similarly unpredictable and costly. It's quite another to spend several times the US median income to get him out of a situation that he ought to have had the good sense never to get into.

I'm not sure which is more extraordinary: that Sen. Ensign had so little self-respect that he was willing to ask his parents for help for this, or that his parents actually agreed.

$96,000 is a lot of money. Interestingly, it is precisely the amount you can give as a gift without having to report it to the IRS, multiplied by eight: one gift of $12,000 from each parent to Ensign's lover, her husband, and two of their children. I wonder what the IRS will make of that? I certainly hope that neither of the parents has made use of their children's money, or done anything else to suggest that this was all one big gift split up to avoid paying gift tax, or (more likely) having to report the gift. It's bad enough asking your parents to cough up $96,000 to cover up your indiscretions; asking them to violate the tax code and risk prison is a whole lot worse.

On the other hand, if the $96,000 was all one big gift, then I don't have to feel so bad for the one Hampton child who mysteriously got no gift at all. (There are three. I believe the oldest is 19.) If the gifts were genuine, it might be hard to explain to that third child why his or her siblings just got $24,000 from Mommy's lover's parents while s/he got nothing at all, not to mention why Mommy's lover's parents suddenly started feeling so generous.

All these fascinating family conversations to imagine. So much easier to do things the straightforward way: don't have affairs, and if you do, deal with them yourself, by legal means.

Hilzoy 1:30 AM Permalink | Trackbacks | Comments (37)

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Comments

Sen. Ensign's parents obviously did such a bang-up job raising their son to be an upstanding citizen of sound moral character, that perhaps they felt themselves partly responsible and guilty, and tried to make amends.

Or maybe they're both just as morally vapid and ethically challenged as their kid, and the entire family stands as living testament to what can eventually happen when several generations of first cousins are allowed to inter-marry.

Posted by: Donald from Hawaii on July 10, 2009 at 1:54 AM | PERMALINK

Now the news is out maybe they can get the money back by claiming extortion. Then we can have the whole sordid affair strung out in the press while they fight over it.

And shouldn't the Hamptons have tithed that to their church? You know, keep that gate to heaven open?

Posted by: nothere on July 10, 2009 at 2:07 AM | PERMALINK

Well, it's like they always say: "The family that pay(ola)s together, stays together."

Or something like that.

At least that's what they always say in Republikhanistan....

Posted by: S. Waybright on July 10, 2009 at 2:12 AM | PERMALINK

I suspect that it was Ensign's money, laundered through his parents so as to avoid suspicion.

Posted by: ACS on July 10, 2009 at 2:16 AM | PERMALINK

Hilzoy, I almost hate to write this. You are usually a bright light. But the real story is that the Democrats don't agree amongst each other what to do next with Waxman-Markey, health care, Guantanamo (and "security" generally), and everything else. With their 60 vote veto-proof majority they have come close to filibustering all the current legislation by bickering among themselves. It doesn't matter if Ensign is "irregular", "toast", or a criminal. He's irrelevant, unless he is a previously unreported swing vote on some important issue.

Well, not quite "everything". I expect a solid majority confirming Judge Sotomayor. She also is a "bright light".

Posted by: MatthewRMarler on July 10, 2009 at 2:18 AM | PERMALINK

Even MRM is wondering why Political Animals fiddle while Rome burns. How effing sad.

Posted by: Disputo on July 10, 2009 at 2:36 AM | PERMALINK

This was really a $96k gift to Sen. Ensign as it was for his benefit. It should have been taxed.

Posted by: ODB on July 10, 2009 at 3:18 AM | PERMALINK

It should be noted that Sen. Ensign's father sold his share of the Mandalay Bay Casino for around $300 million in 2003. Why are the filthy rich even allowed near politics?

And if there's anything truly important in this (& the Sanford mess as well) it's the role of "C Street," or "The Family," in both of these affairs.

Posted by: M. Bouffant on July 10, 2009 at 4:19 AM | PERMALINK

I can imagine the conversation went something like this:

"Mama...Papa... If I give you $96,000 in cash will you write a check out to my mistress and her angry, disclosure-happy family so they won't ruin my career? Please and thank you? You can keep the cash in a safety deposit box and I promise no one will ever know - politicians are rarely investigated!"

Posted by: Limbaugh's Diabetes on July 10, 2009 at 4:40 AM | PERMALINK

"Oh, what a tangled web we weave,
When FIRST we practice to deceive.." -Walter Scott

"But, when we've woven for some while,
How vastly we improve our style.."- Lord Acton

Posted by: MR Bill on July 10, 2009 at 6:08 AM | PERMALINK

Here's hoping I never again read the words [shudder]"Mommy's lover" [/shudder] in print on this or any other website.

Posted by: howie on July 10, 2009 at 7:30 AM | PERMALINK

In the Days of Yore, when private pecadillos became public scandal, a gentleman did the Right Thing.

Usually in private, with a small caliber revolver. . .

Posted by: DAY on July 10, 2009 at 7:38 AM | PERMALINK
He's irrelevant, unless he is a previously unreported swing vote on some important issue.
I'd be more impressed with M. Marler's screed if it didn't have the implicit assumption that one's attention is so scarce it must be spent all on one thing. Yes, there's a lot to get done, and yes, the Democrats aren't moving forward as fast as many would like. If they convene hearings and appoint a special prosecutor and talk incessantly about Sen. Ensign, then there'll be ground for complaint. But to merely note interesting aspects and discuss them?

It's hard to make the case that this post reflects a diminution of Hilzoy's prolific output. Do you really think Hilzoy has stopped writing about, say, health care while "distracted" by writing this post? Or is it just possible that someone could have many interests and the intellectual capacity to follow several threads at once?

Or is it possible that you're just a concern troll worried that the Republicans have found themselves with another cheating, morally decrepit self-righteous hypocrite on their hands?

Posted by: Bernard Gilroy on July 10, 2009 at 7:44 AM | PERMALINK

"Which leads me to suppose the fact is
We really ought to get more practice."

Phyllis McGinley (I'm pretty sure)

Posted by: Matt W on July 10, 2009 at 7:45 AM | PERMALINK

It's nauseating to notice the role of the mistresses husband in all this . There is a name for men who make a living out of women's favors. What's the name for someone who profits, and keeps on profiting, off of HIS WIFE's favors?

Posted by: portia on July 10, 2009 at 7:53 AM | PERMALINK

Sorry, I'm just casting the movie: Eugene Pallette and Billie Burke for Dad and Mom, getting the news from Gig Young.

Posted by: Steve Paradis on July 10, 2009 at 8:03 AM | PERMALINK

O, What A Tangled Web We Weave

I've always preferred:

O, what a tangled web is made
When first we practice to get laid.

Posted by: chrenson on July 10, 2009 at 8:05 AM | PERMALINK

How times have changed in the casino industry in Vegas - Hush money paid, today, whereas, in Benny Binyon's day, the Hamptons would have been taken on a one way trip to the desert.

Posted by: berttheclock on July 10, 2009 at 8:18 AM | PERMALINK

What to Ensign's parents get from having a son for senator? Maybe that has a much higher monetary value than the hush money they paid out?

These people are in government to help themselves and their cronies, not for the public good.

Posted by: bakho on July 10, 2009 at 8:22 AM | PERMALINK

Eugene Palette? How apt - He was as rabid an anti-communist as the founder of The Family, who supports Ensign. And Billie Burke did lose her money in the market crash in '29, ala the debacle of today.

However, Hear, Hear to the posting of Bernard Gilroy.

Posted by: berttheclock on July 10, 2009 at 8:26 AM | PERMALINK

related fake news

SUB-ROSA NEWS


ENSIGN PARENTS DONATE TO SANFORD PARAMOUR

Michael Ensign, father of embattled Senator John Ensign, disclosed today that he and his wife had made gifts to the mistress of South Carolina Governor Mark Sanford. The gifts, in the form of travelers checks in $12,000 increments, had been mailed to Argentine reporter Maria Bellen Chapur and her family.

Mr. Ensign explained that the gifts were just part of the pattern of generosity that had earlier led them to offer gifts to videographer Rielle Hunter, whose affair with Senator John Edwards had engendered so much sympathy on their part.

While well known for its philanthropy, the Ensign family has apparently turned down the request from the city of Los Angeles to help pay for the extra security needed for the Michael Jackson memorial.

homer www.altara.blogspot.com

Posted by: altara on July 10, 2009 at 8:41 AM | PERMALINK

Oh what a scrambled egg we leave
When first we practice to conceive.

Posted by: MK Murray on July 10, 2009 at 9:28 AM | PERMALINK

What's the name for someone who profits, and keeps on profiting, off of HIS WIFE's favors?

Kevin Federline? David Gest? Nick Lachey?

Posted by: Just Dropping By on July 10, 2009 at 9:28 AM | PERMALINK

This a (poorly) disguised $96K gift, which should have been taxed. But more importantly, it is a crime to intentionally structure a transaction or series of transactions either to avoid this tax, or IRS reporting requirements.

Posted by: MLE on July 10, 2009 at 9:38 AM | PERMALINK

I would guess the 19 year old child didn't get the gift money -- s/he is old enough that the parents couldn't control it, and so would have not value to the Hamptons.

Posted by: FredW on July 10, 2009 at 10:13 AM | PERMALINK

So, if the parental Ensigns are so generous, are there records of them writing $12,000 checks to other 'family friends', or were the Hamptons the only ones? Do they have a habit of raining money on people in non-declarable amounts? Excessive tips to the gardener? Anything that might suggest it wasn't a pay-off for silence, given in a tax-evading fashion?

Posted by: biggerbox on July 10, 2009 at 10:15 AM | PERMALINK

Is it better to commit perjury like Bill Clinton?

Posted by: Luther on July 10, 2009 at 10:50 AM | PERMALINK

Imagine! A frat-boy style Replutocan Senator being bailed out of a bind with a girl *by his parents*! You'd think this was a 19 year old kid, but no a wealthy Senator in his 50s.
Ensign really looks pitiful.

Posted by: N e i l B on July 10, 2009 at 10:54 AM | PERMALINK

Not much will come of it because Democrats are too whipped to actually enforce the law against anyone that might actually put up a fight.

Those "gifts" however, are very problematic. The IRS defines the term gift. Generally speaking, it is a "voluntary transfer of property to another made gratuitously and without consideration."

A more precise definition is a "payment is a gift if it is made without conditions, from detached and disinterested generosity, out of affection, respect, charity or like impulses, and not from the constraining force of any moral or legal duty or from the incentive of anticipated benefits of an economic nature."

Those payments fail on so many levels. They were not made out of charity or like impulses, nor respect or affection. They were made at best due to a moral obligation to "repay" the Hamptons for the harm that was caused, to the extent one can translate the psychological harm of an affair into monetary terms, but more likely as a financial incentive to refrain from damaging public disclosure, a.k.a. hush money. Sadly, it did not work, but that might be because Ensign continued the affair after he said he would stop, or because the Hamptons were so strained for cash they needed more.

But on a purely legal plane, the payments place everyone in legal jeopardy. One, they appear to be clearly bundled to avoid the payment of gift taxes by the donor, which itself is illegal and punishable with stiff fines (nothing compared to a $300m estate though). This type of bundling is often done by drug dealers that deposit less than $9,0000 dollars in bank accounts because that is the threshold level above which banks are obliged to notify the federal government of cash deposits to avoid money laundering.

Two, the payments whether bundled or not were not made out of detached and disinterested generosity. They fail on that level as well. There was a quid pro quo.

Three, the donees, the Hamptons, would need to pay taxes on the money because it was made in exchange for a thing of value, silence. It was income.

Four, since the payment was not a gift, and given by the parents, a good case can be made that Ensign violated campaign finance laws by laundering payments to the Hamptons through his parents so as to avoid federal reporting requirements. Not being an expert in campaign finance law I cannot say with any certainty if any reporting requirements were violated. However, it is doubtful that a person, with the means to make such payments himself would launder those payments through a third party unless they were trying to avoid some form of required federal disclosure law.

Finally, if the "severance" payment to Mrs. Hampton came from federal funds and was not related to her employment (can you even give severance payments to federal employees? Good question) then someone is in hot water for authorized the use of public funds to compensate another for actions unrelated to their official duties.

But IOKIYAR. So nothing will come of it but some bad press.

Posted by: coltergeist on July 10, 2009 at 11:45 AM | PERMALINK

So much easier to do things the straightforward way: don't have affairs

As Steve McNair would no doubt say, if he were still with us: you could have stopped there, Hillzoy.

Posted by: commie atheist on July 10, 2009 at 11:50 AM | PERMALINK

Ensign's only 51???? SERIOUSLY??? He looks closer to 60-

Posted by: Carol on July 10, 2009 at 12:00 PM | PERMALINK

Gilroy: Or is it possible that you're just a concern troll worried that the Republicans have found themselves with another cheating, morally decrepit self-righteous hypocrite on their hands?

I don't understand what a "concern troll" is, but I am kind of sorry I wrote what I did. There is value in nailing Sen. Ensign's political coffin solidly closed. Exposing Republican buffonery has value.

I do think, though, that Steve Benen and Hilzoy ought to devote some serious time to analysis of the fractures within the Democratic Party, since they have the most power. This "concern" of mine with the Democratic fractures developed when the Democrats did not immediately pass the Kennedy-McCain immigration reform upon their majority being sworn in Jan 2007. Then President Bush, like current President Obama, supported it. Now that they have the filibuster-proof majority, the immigration reform can pass in about a week, right? Don't they all agree that it's the right thing to do? If not, why not?

Posted by: MatthewRMarler on July 10, 2009 at 6:17 PM | PERMALINK

The tax code is specifically written to allow (straight) married people to "split" their gifts, so that part's OK.

If the IRS were to look into this, it wouldn't on be Ensign's parents' side, as if this was NOT a gift, there would be no tax consequences to them.

However, if the Hamptons did something in return for this money, they are the ones with tax problems, and there is a bunch of tax law on what is and is not a "gift."

BTW, the Hamptons also have to be careful to segregate their kids' "gifts" as there is something called 'The Universal Gift to Minors Act." I don't know, tho, if Nevada has adopted it. If not, maybe that's why there was no check to the child who is no longer a legal minor.

Posted by: Sarah Barracuda on July 10, 2009 at 9:11 PM | PERMALINK

Good analysis coltergeist.

But re "to the extent one can translate the psychological harm of an affair into monetary terms," all these people ARE Republicans, after all.

To them everything worthwhile can be measure in monetary terms. Money is all, it's the only thing worth working for, it's the only value to be applied to anything, and it's the only measuring stick worth using. He who dies with the most money wins. And it was obvious from listening to Hampton that his biggest gripe with Ensign is that he lost his phoney baloney job over this affair. That he lost INCOME and the potential to earn even more.

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