Friday, February 20, 2009

No Surprise: WaPo Distorts Per Diem Tax Issue; UPDATE: The Role of the Juneau Mansion Renovations in the Per Diem Saga

Scroll down for updates!

I'm sure most readers here are already familiar with the latest Palin smear - the issue of income tax on per diem payments. This was the subject of not one, but two huge threads on Hot Air yesterday.

James Grimaldi of the Washington Post published an article in today's edition titled "Palin Now Owes Taxes on Payments for Nights at Home, State Rules". The article distorts the issue and omits key facts.

First of all, the headline itself is a distortion. Palin never claimed per diem "for nights at home" - she's never claimed any reimbursement for lodging when she stayed in Wasilla. She only ever requested per diem for meals when working away from her official duty station in Juneau.

The article also omits a key fact in this story - it was Governor Palin herself who ordered the review of the tax policy. This fact was even admitted by the Anchorage Daily News' top Trig Truth researcher, Lisa Demer, in the ADN's article on this story:

"At the Governor's request, we reviewed the situation to determine whether we were in full compliance with the pertinent Internal Revenue Service regulations," [state administration commissioner Annette] Kreitzer wrote. "As a result of this review, we determined that per diem needs to be treated as income, requiring a revision of W-2 forms for any affected employees." (emphasis added)

Mr. Grimaldi may be contacted via this form. The ombudsman for the Washington Post, Mr. Andy Alexander, may be contacted at

UPDATE: Another shocker - derangement on the op-ed page of the ADN. The unsigned editorial contains this gem:

Alaskans don't know if she owes or has paid taxes on the clothes and grooming services she received during her vice-presidential campaign.

Say what? What color is the sky in Pat Dougherty's world? As a commenter on the editorial notes: "Get real ADN. Do movie stars pay income taxes on their grooming and costumes on a set? Certainly not! ADN, get a clue."

My only consolation is that the ADN is fading fast. The excellent blog McClatchy Watch has the stock value for their parent company dropping to 50 cents a share.

UPDATE by Ramrocks:

A "legislative insider" called into the Eddie Burke radio show this evening to explain the role that the renovations of the governor's mansion played in the per diem story. He said that the 90-something year old mansion was greatly in need of repairs in order to make it serviceable as a chief executive's home (i.e., able to function as a venue for hosting dinners, receptions, etc., as well as be habitable for a family with children).

With all of these renovations underway, the governor could have forced the state to pay for her lodging (in a hotel or an apartment) in Juneau or in Anchorage. Instead she lived in her house in Wasilla and saved the state thousands of dollars by only requesting meal per diems. That's right. She asked for meal per diems, not lodging per diems. And she didn't claim any per diems for her kids or her husband, though she was legally entitled to.

her post-election interview with the ADN, Gov. Palin noted the role the renovations played in per diem requests:

Q. One of the things that came up during the campaign is that you charge the state per diem for time spent here in Wasilla. Is that something you are going to continue to do?

PALIN: We've always followed the law and fully disclosed all that. The choice there in many months of the Juneau mansion being re-plumbed and all the improvements being made in the infrastructure of the Juneau house, where we weren't going to be there anyway. Knowing that in the end it would have cost the state more money to do what other governors had done and that is either charge the state for hotel rooms. Or the state rents you an apartment like they did for Governor Murkowski. We said no, we just won't sell our house, knowing that we're going to spend quite a bit of time here, especially those months where the remodels were taking place in the governor's mansion. And we would disclose my per diem, we wouldn't try to hide it ... trying to go above and beyond, not accepting any per diem for the kids or Todd at all, they've lived outside of the governor's house. Trying to follow the rules and doing what is legal and ethical and full disclosure.

The ADN's Alaska Ear column also noted the extensive renovations going on at the governor's mansion just before the Christmas open house last December:

When the Palins moved in there were all of a sudden lots of leaks and stuff cause a real family was living there.

The open house has been a tradition for 93 years, with two years off during World War II, said Erica Fagerstrom, the residence manager.

She was happy the home was in shape for the thousands of guests. The mansion has undergone extensive plumbing renovations.

"This place was a construction zone three weeks ago," she said.

In October 2007, the Juneau Empire ran a photo story on the renovation work:

Workers are replacing the 95-year-old building's antiquated plumbing system and are generating lots of dust as they remove old pipes. The first phase of construction is scheduled to be completed in December. The second phase will be done next year.

So, there you have it, folks. Case closed.

Update by VO: Hey, JR - did you know that in 1967, Nancy Reagan refused to live in the Governor's Mansion in Sacramento, calling the place a fire trap? The Reagans moved into their own place and converted the mansion into a museum.

JR: I think the Trumans also faced a similar situation when moving into the White House. New Jersey may have a crappy governor, but we have the best governor's mansion:

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