FN Herstal Firearms banner

1 - 1 of 1 Posts

630 Posts
Discussion Starter #1
DNC host's tax-free gas evaporates
Angry reaction brings a halt to use of city pumps
By Daniel J. Chaconand Kevin Vaughan, Rocky Mountain News

Originally published 03:43 p.m., July 22, 2008
Updated 12:13 a.m., July 23, 2008

The committee hosting the Democratic National Convention has used the city's gas pumps to fill up and apparently avoided paying state and federal fuel taxes.

The practice, which began four months ago, may have ended hours after its disclosure. An aide to Mayor John Hickenlooper released a statement Tuesday evening saying that Denver 2008 Host Committee members would pay market prices for fuel and would also be liable for all applicable taxes.

However, Public Works spokeswoman Christine Downs told City Council members just hours before that host committee members were fueling up at the city pumps. The city does not pay taxes on the fuel for its fleet, and Downs said the host committee would not either.

The disclosure brought immediate scrutiny. Colorado Attorney General John Suthers said the practice "would seem" to be illegal and referred the matter to the state Department of Revenue.

Nonprofits, such as the host committee, are subject to state and federal gasoline taxes, according to the Department of Revenue.

The issue arose during the regular weekly meeting of Hickenlooper and City Council members. Downs requested authorization for a contract so the Public Works Department could be reimbursed by the host committee for use of "fueling facilities, fuel and car washes."

Downs said the contract with the host committee started in March and that $9,700 in fuel and services had been purchased from the city so far. But the committee has yet to be billed. The city anticipates $466,125 in total revenues from the contract, Downs said.

City Councilman Charlie Brown raised the question of whether the host committee would be paying fuel taxes, and Downs said it wouldn't.

"There's something there that just doesn't seem right to me because, in a sense, you're saying then that the officials who pass the laws are not willing to live by them," said Councilwoman Jeanne Faatz.

Hickenlooper said the practice isn't unique to Denver.

"I do know for a fact that they're doing the same exact thing in Minneapolis," Hickenlooper said, referring to the city that along with St. Paul is hosting the Republican National Convention.

But Teresa McFarland, a spokeswoman for the Minneapolis-St. Paul host committee, said its members are getting their gas at public pumps.

"We're not getting a tax break on fuel," she said. "That's not the setup at this end."

In Colorado, consumers pay 40.4 cents per gallon in state and federal fuel taxes.

"We're a nonpartisan, nonprofit committee, but certainly, if the city feels that taxes are applicable, we will pay those, too," said Chris Lopez, spokesman for the host committee. "So we would pay all applicable taxes on any of the fuel."

The host committee, which is responsible for raising money to put on the convention, is using the city's pumps "for safety and security reasons," Lopez said.

"We know the gas is not tainted," he said. "We use it as a safety and security measure."

Hickenlooper said GM is "loaning" the host committee vehicles and he expects a large number to be hybrids. It wasn't clear Tuesday whether host committee members are using those loaners or their personal vehicles.

Dick Wadhams, chairman of the Colorado Republican Party, said the city's arrangement with the DNC host committee was "appalling."

"I'm hoping this is not the first of many stories about how Colorado taxpayers are apparently subsidizing the Democratic convention," Wadhams said.

After the meeting, Faatz said it was wrong for the DNC host committee to get a tax break.

"I am just troubled by not having the payment of taxes for what I consider to be a privately funded party, and that's what the host committee is: it's a private organization," she said.

"If you've got a 14-gallon tank, on the average, that's about $5.66 that they don't have to pay for fill up," Brown said.

Brown also questioned the need for car washes.

It also wasn't clear Tuesday whether the Department of Revenue will investigate.

"We can't talk about any individual taxpayer's circumstance," said department spokesman Mark Couch. "Tax-exempt organizations are not exempt from fuel taxes, so a nonprofit group is not exempt from fuel taxes. As to the individual circumstance involved here, we'd have to look into it and investigate to make any kind of determination."

Denis Berckefeldt, spokesman for Denver Auditor Dennis Gallagher, said Hickenlooper's administration has been guilty in the past of doing business before a contract is executed.

"Is it unusual that it happens?" he asked. "No, because they do stuff like this. Do we like it? No."

In January 2006, Gallagher complained to Hickenlooper in a letter about the "ongoing problem related to work being performed on behalf of the city before a contract for that work has been fully executed and properly signed."

At that time, Gallagher wrote, an examination of 999 contracts found that in 790 cases - 79 percent - work began before the contracts were "fully executed."

"We would have a problem with this because they're clearly selling fuel to the host committee without a fully executed contract," Berckefeldt said. "We have a real serious issue at the auditor's office with the city doing business with anyone without a contract."
1 - 1 of 1 Posts