More NY Times Hypocrisy, Attacking Lauder for Using Tax Loopholes It Employs As Well
Ira Stoll dissected the Times' latest outburst of 'sheer hypocrisy masquerading as journalism,' a Sunday front-page attack on the tax-shelter practices of Ronald Lauder, in a Monday post at the New York Sun website - 'Owners of New York Times Used Tax Loopholes the Paper Scored Ambassador Lauder for Using.'
A decade ago Stoll established Smarter Times, an influential blog of New York Times criticism, before becoming editor of the right-of-center newspaper The New York Sun. The Sun is only an online product now, but Stoll is keeping his hand in Times criticism. In his latest post, Stoll summarized the philanthropic work of Lauder, wealthy heir to the Estee Lauder fortune, then noted how:
...according to the Times, Mr. Lauder is the poster boy for 'how the wealthy take advantage of the system' through what the Times calls, disapprovingly, 'tax avoidance techniques.'
The game the Times and its reporter, David Kocieniewski, are up to is clear at the start of the article, with this false dichotomy: 'A handful of billionaires like Warren E. Buffett and Bill Gates have joined Democrats in calling for an elimination of the breaks, saying that the current system adds to the budget deficit, contributes to the widening income gap between the richest and the rest of society, and shifts the tax burden onto small businesses and the middle class. Republicans have resisted, saying the tax increases on the wealthy would harm the economy and cost jobs.'
This is just flat out-false, in at least three ways. First, Warren Buffett and Bill Gates have not called for eliminating the charitable tax break. In fact, they are using the tax break to avoid paying taxes on tens of billions of dollars more than Ronald Lauder has through his charitable activities, which, while vast, are themselves dwarfed by the assets of the Bill and Melinda Gates Foundation, funded by Mr. Gates and Mr. Buffett. Second, if anyone has been calling for the elimination or reduction of special tax breaks in favor of a flatter, simpler system, it's not been Democrats, but Republicans like Rick Perry, Steve Forbes, and Herman Cain. And third, eliminating the special breaks doesn't necessary require 'tax increases on the wealthy' - one could have revenue-neutral tax reform that lowers rates for everyone while broadening the base.
What's really galling, though, is that in nearly every instance, the 'tax avoidance techniques' and other supposed sins for which the Times mauls Mr. Lauder are also engaged in by the family that owns the New York Times.
The Times complains of Mr. Lauder that, 'His vast holdings … are organized in a labyrinth of trusts, limited liability corporations and holding companies, some of which his lawyers acknowledge are intended for tax purposes.'
After printing details from a recent NYT Co. proxy statement showing how it was doing the same thing its newspaper is criticizing Lauder for, Stoll summarized:
The Times family has trusts, too, just like Ronald Lauder! It also has a limited liability company - Marujupu LLC, named for Marian, Ruth, Judith, and 'Punch' Sulzberger....The Times complains about Mr. Lauder's charitable giving. But it makes no mention of the Sulzberger Foundation, Inc., a tax-exempt private foundation headquartered at the same address as the New York Times Company. The foundation's latest tax return shows it with assets of $35 million and reports that it paid Marujupu LLC a $440,387 'management fee.'
Times Watch has detailed other examples of the paper's 'do as I say, not as I do' attitude toward personal finance. Economics reporter/columnist Gretchen Morgenson reported in a year-in-review piece on January 1, 2006: "Greed was on display throughout 2005 as throngs of executives pocketed pay that was even greater than the previous year's. To hear them talk, they deserved the amounts because - are you sitting down? - they enhanced shareholder value. Never mind that many of their companies' stocks ended the year lower than where they began it."
The New York Observer reported that same week: 'A year ago - on Jan. 3, 2005 - Times stock closed at 47.2. On Jan. 3, 2006, the stock was trading at a day's low of 26.16.'
Does that mean that Times bigwigs like Publisher Arthur Sulzberger Jr. didn't pocket any additional pay? Not exactly, the Observer noted:
According to Times sources, the yearly bonuses - given to section editors and selected senior staff - can be equivalent to 20 percent of their salary or even more. Mr. Keller's memo informed the senior staff that the 2005 bonuses, which will be issued in February, will be lower than the potential maximum. So the real surprise to staffers was, instead, the generous holiday handouts on the paper's 14th floor. In addition to [Times chief executive Janet] Robinson's 74,000 shares of free Class A stock, publisher Arthur Sulzberger Jr. received 30,000 shares, worth a bit less than $800,000, plus stock options worth about $4.1 million….The news of executive stock gifts rankled some Times newsroom staffers, who are still smarting from the paper's layoffs, hiring freeze, reduced expense policy and - most galling - the cancellation in December of The Times' 15 percent discount for employees on stock purchases.
In August 2007, Eduardo Porter, Times economics reporter turned editorial board member, described Mexican media mogul Carlos Slim as a "thief" and "robber baron.' Yet in 2009, that same robber baron gave the NYT Co. a $250 million loan, and became in the eyes of publisher Arthur Sulzberger Jr. (pictured above) "a very shrewd businessman with an appreciation for great brands."
- Clay Waters is Editor of the MRC's TimesWatch site.