Minnesota GOP officials, donors torn over Trump tax returns

WASHINGTON – Intense new scrutiny of Republican Donald Trump's tax returns is revealing a deep divide among local GOP leaders in an election year that is testing allegiance to the party's presidential nominee.

Former Minnesota Gov. Arne Carlson, a Republican, is criticizing Trump for refusing to release his tax returns, saying the issue directly affects national security. He said voters have the right to know if he has financial ties to foreign countries.

"It started out on the level of transparency and tradition; then it was that he doesn't pay any taxes, well we know now that's true; maybe he doesn't give to charity, well we know that's true, too," Carlson said. "That's embarrassing."

Trump's refusal to make his tax returns public has blossomed into a central issue in the campaign, with a range of polls showing voters saying he should release his tax records. Trump has refused to do so, saying he's been advised not to while he is being audited by the Internal Revenue Service.

The criticism reignited this weekend after the New York Times published tax records it obtained showing that Trump declared a $916 million loss on his 1995 income tax returns, a loss so large it could have allowed him to legally avoid paying any federal income taxes for up to 18 years.

The records revealed only a tiny look into Trump's finances, but they brought the issue back to the forefront in the final weeks of an extraordinary presidential campaign.

Former New York mayor Rudy Giuliani and New Jersey Gov. Chris Christie, Trump's top surrogates, fanned out across the Sunday political shows to defend their candidate — though they did not dispute the Times' findings, nor has Trump's campaign.

Christie, who chairs Trump's presidential transition project, proclaimed on "Fox News Sunday" that "this is actually a very, very good story for Donald Trump. What it shows is what an absolute mess the federal tax code is, and that's why Donald Trump is the person best positioned to fix it," Christie said. "There's no one who's showed more genius in their way to move around the tax code and to rightfully use the laws to do that."

At the first presidential debate in late September, Democratic nominee Hillary Clinton suggested Trump was refusing to release his tax returns so voters would not know "he's paid nothing in federal taxes." When she pointed out that Trump had once revealed to casino regulators that he had paid no federal income taxes, Trump said: "That makes me smart."

Republican megadonor and media mogul Stanley Hubbard called Trump's decision to keep his tax returns private a personal one and said voters "don't give a hoot."

Several of Minnesota's GOP leaders, particularly those facing re-election, have refused to speak on the issue at all.

Neither GOP Rep. Erik Paulsen nor Rep. John Kline responded to requests for comment on this story. When reached, the state's GOP party chair, Keith Downey, didn't want to talk about it, either.

"I won't weigh into that," Downey said of Trump's tax returns. "We're so focused on our state level races, we have enough going on."

Trump is the only presidential candidate since the 1970s who hasn't released his tax returns.

The GOP nominee said he made more than $600 million last year and that voters can look at the financial disclosures required by the Federal Election Commission to seek the office of the president. But financial disclosures don't show the candidate's tax rate, and they do not disclose foreign investments. They also don't say whether the candidate has donated to charity.

Four years ago, GOP candidate Mitt Romney released his taxes, which showed he and his wife made $42 million the year before and paid 14 percent in federal taxes. They donated $1.75 million to charity. Last year, President Obama made an adjusted gross income of $477,000 and paid $93,000 in federal taxes — a 19 percent rate.

President Richard Nixon was the last presidential candidate who didn't release his tax returns during the campaign, though he did release them after his re-election in 1972 to quell some controversy at the time surrounding his financial affairs. This started a tradition of releasing them before Election Day. Minnesota's Hubert Humphrey did not release his taxes in 1968, according to PolitiFact.

Clinton has disclosed nearly four decades of tax returns. Both candidates for vice president, Democrat Tim Kaine and Trump's running mate, Mike Pence, have released their tax returns.

Carlson, who has endorsed Clinton for president, criticized GOP leaders who aren't pressuring Trump to release his returns.

"It's absolutely stunning that Republican officeholders are silent," Carlson said. "May I say it's inexcusable."

Tax returns have played a role in local races, too. DFL Gov. Mark Dayton released his tax returns earlier this year — even though he is no longer seeking office — as an act of solidarity with Clinton.

In past elections, Republicans demanded Dayton, a department store heir, release more information about his family trust, which the GOP alleged was set up in a way to skirt paying taxes. Dayton has strongly denied the accusations.

Jeff Johnson, a 2014 GOP gubernatorial candidate, released his returns during the race. Now a Trump supporter, Johnson called on the nominee to release his returns because "transparency is important."

But Johnson added, "Donald Trump's problems don't hold a candle to Hillary Clinton's."

"I think she has bigger problems with transparency than he does, even though he should release his tax returns," Johnson said.

Richard Painter, a law professor at the University of Minnesota, called the issue among the most important of the campaign.

Painter, a chief White House ethics lawyer for GOP President George W. Bush from 2005 to 2007, said he wants to know whether Trump is earning income from foreign countries and what kinds of federal tax loopholes he may be utilizing. Painter noted that when Bush nominated a candidate for a federal post, Senate Republicans at the time always insisted on seeing a job candidate's tax returns before holding a confirmation hearing.

"People are entitled to know this," he said. "[Trump's] economic proposals focus almost exclusively to changes in the tax code; well, what are those proposals and how are his taxes affected by these proposals?"

Hubbard, CEO of Hubbard Broadcasting and one of Minnesota's largest political donors to mostly Republicans, called the Trump tax return controversy much ado about nothing.

"I don't think people really care, just the media cares," he said. "If he's doing something illegal, then they would have charged him or gone after him. … He could have $250,000 or a million dollars, I don't care. It's none of my business. I don't show my tax returns."

Allison Sherry • 202-383-6120