Politics & Government

Democrats, Williams continue to spar over decision not to release tax returns

FRANKFORT — Republican David Williams has refused in his race for governor to make public his tax returns. He maintains that no other candidate for Kentucky's highest office has disclosed so much personal financial history, primarily through forms required of state legislators.

But a check of Williams' financial disclosure forms required by the Legislative Ethics Commission for lawmakers suggests that more information can be found on tax returns.

Consider Williams' 2002 individual federal income tax returns, made public recently in records about his 2002 divorce proceedings.

In those returns, Williams listed $5,313 in miscellaneous income from gambling.

That was about 12 percent of his adjusted gross income, which was $44,228.

But Williams' 2002 statement of financial disclosure, filed Feb. 12, 2003, with the Legislative Ethics Commission, did not list gambling as a source of income.

The omission strengthens the argument that Williams should release his tax returns, said state Democratic Party Chairman Dan Logsdon in an email.

"Instead of offering Kentuckians transparency about his financial past, Sen. Williams has offered nothing but excuses," Logsdon said. "Now that we have learned he failed to come clean about his finances and his gambling on his legislative financial disclosures, now more than ever Sen. Williams must release his tax returns and stop keeping Kentuckians in the dark."

Williams, a Burkesville attorney and president of the state Senate since 2000, said he did not list gambling as a source of income on his legislative disclosure form because he thought that was not required.

"Sources of income for legislative ethics reporting purposes refer to regular streams of income from business or profession," he said.

John Schaff, general counsel for the ethics commission, said the question has never come up whether a legislator should report income from gambling.

"The commission has never issued an informal or formal opinion on whether that could be considered as a source of income. But it's an interesting question," Schaff said.

The state law — Kentucky Revised Statutes 6.787 — that says what sources of income should be listed on the forms does not mention gambling.

Schaff said legislators are given a sample form to guide them on what information they should include on their financial disclosure forms filed each year.

The guide's section dealing with "Sources and form of gross income of the filer," lists salary from profession, salary from the state, income from any business, dividends, capital gains from IRA and profit on sale of real estate.

There is no language in the commission's guide that disclosures should only be about recurring income. The example from the agency suggests that even one-time sources of income — such as sale of land — should be listed.

Legislators often call to ask about listing other sources of income but no call has ever been received about gambling as a source of income on any financial disclosure form with the Legislative Ethics Commission, Schaff said.

Williams' divorce records provided details about Williams' gambling winnings and losses from 1999 to 2002. He has long acknowledged he used to gamble at casinos.

Documents in the divorce showed Williams claimed gambling losses of $36,147 from 1999 to 2002.

Also, Williams' 2002 tax returns reported his wife's occupation as a teacher.

In her deposition filed in 2003 divorce records, she stated she earned $63,000 as an assistant superintendent with the Cumberland County School District and had worked with the district for 21 years.

But Williams did not list her source of income as a teacher in his financial disclosure with the ethics commission.

Williams said he did not because his wife and he separated in 2001. "I derived no benefit from her income during this disclosure period."

Both later remarried.

The Democrats' cry that Williams release his tax returns given that certain information was not found on his disclosure form to the ethics commission has not moved him to change his mind.

"No," Williams said. "My disclosures as a legislator and as a candidate for governor represent the most thorough personal financial picture of any candidate for governor in the history of Kentucky.

"There is more publicly available information about my personal finances over a longer period of time than there has ever been about either of my opponents."

Williams said his opponent, Gov. Steve Beshear, "can spend the rest of this campaign obsessing over meaningless issues, but I plan to deal with what really matters — creating jobs and getting our state's finances in order.

"I think voters will take notice of which candidate is talking about issues in this race and which one avoids talking about the issues dominating discussions around kitchen tables across the state."

Legislative disclosure records have a short life span.

The ethics commission destroys legislators' disclosure forms after five years with two exceptions.

If a legislator leaves the General Assembly for any reason or if a legislative candidate is not elected, those financial disclosure records must be destroyed after three years.

Schaff said he did not know why that provision was included in the original 1993 law.