The Many Mysteries of Brett Kavanaugh’s Finances

0

President Donald Trump’s Supreme Court nominee, Brett Kavanaugh, listens to a question during the third round of questioning on the third day of his Senate Judiciary Committee confirmation hearing.Jacquelyn Martin/AP Photo

Before President Donald Trump nominated Brett Kavanaugh to the Supreme Court, he had a lot of debt. In May 2017, he reported owing between $60,004 and $200,000 on three credit cards and a loan against his retirement account. By the time Trump nominated him to the high court in July 2018, those debts had vanished. Overall, his reported income and assets didn’t seem sufficient to pay off all that debt while maintaining his upper-class lifestyle: an expensive house in an exclusive suburban neighborhood, two kids in a $10,500-a-year private school, and a membership in a posh country club reported to charge $92,000 in initiation fees. His financial disclosure forms have raised more questions than they’ve answered, leading to speculation about whether he’s had a private benefactor and what sorts of conflicts that relationship might entail. 

No other recent Supreme Court nominee has come before the Senate with so many unanswered questions about his or her finances. Partly that’s because many of Kavanaugh’s predecessors were a lot richer than he is. Chief Justice John Roberts, for instance, had been making $1 million a year in private practice before joining the DC Circuit as a judge. The poorer nominees had debts, but explainable ones, such as the $15,000 Sonia Sotomayor owed to her dentist. Neil Gorsuch came the closest to financial scandal when he disclosed that he owned a mountain fishing lodge in Colorado with two men who are top deputies to the billionaire Philip F. Anschutz, who had championed Gorsuch’s nomination. 

Kavanaugh’s finances are far more mysterious. During his confirmation hearing last week, he escaped a public discussion of his spending habits because no senator asked about it. But on Tuesday, Sen. Sen. Sheldon Whitehouse (D-R.I.), a member of the Senate Judiciary Committee, sent Kavanaugh 14 pages of post-hearing follow-up questions, many of which involved his finances. On Thursday, Kavanaugh supplied answers, but he dodged some of the questions and left much of his financial situation unexplained.

A number of the questions Whitehouse sent to Kavanaugh dealt with the house he bought in tony Chevy Chase, Maryland, in 2006 for $1.225 million. Kavanaugh would have needed $245,000 in cash for the traditional 20 percent down payment on the house. But in 2005, when his nomination to the DC Circuit was pending, Kavanaugh reported a total net worth to the Senate of about $91,000, which reflected a mere $10,000 in the bank and $25,000 in credit card debt. According to his financial disclosure forms before and after the purchase of his house in 2006, Kavanaugh’s liquid assets and bank balances never totaled more than $65,000, and those balances didn’t decline after the purchase of the house. 

Whitehouse wanted to know why. He wrote, “The value of assets reportedly maintained in your ‘Bank of America Accounts’ in the years before, during, and after this purchase never decreased, indicating that funds used to pay the down payment and secure this home did not come from these accounts. Did you receive financial assistance in order to purchase this home?”

In his responses, Kavanaugh didn’t answer the question directly. He indicated that he took out a loan against his retirement fund to help make the down payment. But the year before he bought the house, he indicated on his financial disclosure form that the total value of that account was only $70,000. Loans through the Thrift Savings Program, the federal government retirement plan against which Kavanaugh borrowed money, are capped at the value of the account or 50 percent of the vested balance. For Kavanaugh, that wouldn’t have been nearly enough to cover the down payment on his house, even if he’d put down only 10 percent. (He also noted that he paid back the loan with paycheck deductions.)

Other questions from Whitehouse addressed Kavanaugh’s unusual debt history. Not long after Trump nominated him, the Washington Post reported that since joining the DC Circuit Court of Appeals as a judge in 2006, Kavanaugh had run up a significant amount of debt that often appeared to exceed the value of his cash and investment assets. His debts on three credit cards as well as a loan against his retirement account totaled between $60,000 to $200,000 in 2016, according to his financial disclosure forms. The next year, his debts vanished. When he appeared before the Senate Judiciary Committee last week for his confirmation hearing, his financial disclosure form listed no liabilities aside from his $815,000 mortgage. His disclosures don’t show any large financial gifts, outside income, or even a gambling windfall, as Sotomayor’s had when she hit the jackpot at a Florida casino in 2008 and won $8,283.

The White House didn’t fully address how Kavanaugh managed to incur all that debt and then pay it off in a matter of months on his federal judge’s salary of $220,600 a year. (His wife left the workforce in 2010 and returned in 2015, when she took a part-time, $66,000-a-year job as the town manager in their village of 225 homes.) A spokesman told the Post in July that Kavanaugh had used his credit cards to purchase Washington Nationals season tickets and playoff game tickets for himself and friends, who later paid him back. The White House also said some of the debt came from home improvements. 

Whitehouse was looking for a better answer as to how a man who has spent most of his professional life working in public service managed to pay off so much debt so quickly without draining his other savings accounts. (Kavanaugh worked in private practice for only about three years, in between stints at the office of the independent counsel during the Clinton administration.) In his written questions to Kavanaugh, Whitehouse asked how many seasons’ worth of Nationals tickets he’d purchased, which friends he’d bought them for, what sort of home improvements he’d made, and where the debt repayment money came from.

Kavanaugh elaborated on some of those answers in his response to Whitehouse this week. Of the large credit-card debts, he explained:

I am a huge sports fan. When the Nationals came to D.C. in 2005, I purchased four season tickets in my name every season from 2005 through 2017. I also purchased playoff packages for the four years that the Nationals made the playoffs (2012, 2014, 2016 and 2017.) I have attended all 11 Nationals’ home playoff games in their history. (We are 3-8 in those games.) I have attended a couple of hundred regular season games. As is typical with baseball season tickets, I had a group of old friends who would split games with me. We would usually divide the tickets in a “ticket draft” at my house. Everyone in the group paid me for their tickets based on the cost of the tickets, to the dollar. No one overpaid or underpaid me for tickets. No loans were given in either direction.

He also told Whitehouse that the $1.225 million house he’d bought in 2006 was basically a fixer-upper. He included a long list of repairs he’d made on it—everything from replacing the HVAC system to mold removal—that accounted for the bulk of the rest of his debt. “Maintaining a house, especially an old house like ours, can be expensive,” he wrote.

Whitehouse also asked about Kavanaugh’s membership in the Chevy Chase Club, which he joined in 2016. In his responses to a Senate questionnaire before his confirmation hearing, Kavanaugh made the club sound like a basic rec center, writing, “The Chevy Chase Club is a recreational club. We joined because the club has an outdoor hockey rink and a girls ice hockey program, and because of its gym and sports facilities.”

But the Chevy Chase Club is a lot more than a gym. Whitehouse noted in his questions that the club’s initiation fee is reportedly $92,000, plus more than $9,000 in annual dues. The private country club founded in 1892 is so elite that a neighborhood Realtor once told the Guardian that “you can be a CEO, a billionaire, but you can’t get in.” Its website offers no insight as to how someone might go about joining—it’s by invitation only. But the website does outline the dress code: no jeans, no collarless shirts, and hats must be worn “visor forward.” Any guest hoping to play tennis with a member must appear on the court dressed only in white.  

As recently as 1976, the club refused to admit Jewish and African American members. In 2011, a reporter from the Telegraph wrote of the club, “Order a cocktail at the Chevy Chase country-club and you’ll step back into ante-bellum Savannah. The blacks wait on Wasps, showing all the deference expected of them. You won’t find many Cohens either, lounging on the well-kept lawn.”

Whitehouse wanted to know how someone with less than $65,000 in the bank came up with the initiation fee to join the club. Did someone help him? And if so, who? Kavanaugh wrote in his response that he paid the full price to join the club, as well as the annual dues, with no discounts. Befitting a club member, he declined to say exactly how much that initiation fee was.

As part of the document dump leading up to Kavanaugh’s confirmation hearing, a lawyer for the Bush administration released an email from Kavanaugh’s time working in the White House. It appeared to be part of a conversation with some school buddies discussing a weekend reunion in Annapolis. Kavanaugh wrote, “Apologies to all for missing Friday (good excuse), arriving late Saturday (weak excuse), and growing aggressive after blowing still another game of dice (don’t recall). Reminders to everyone to be very, very vigilant w/r/t confidentiality on all issues and all fronts, including with spouses.”

The email prompted Whitehouse to ask Kavanaugh whether some of his debts might relate to a gambling addiction. He asked whether Kavanaugh participates in a regular poker or dice game, and even whether he ever ran up any gambling debts in the state of New Jersey, former home to casinos owned by Trump. “Have you ever sought treatment for a gambling addiction?” he also asked.

Aside from a few low-stakes blackjack hands played in his twenties, Kavanaugh responded that he’s not a gambler and never has been.

His answers leave many questions as to where the nominee found the cash to buy his house and to pay off his debts last year. He acknowledged that in 2014, he received a lump-sum payment—which Whitehouse estimated at $150,000—as part of a settlement in a class action filed by federal judges seeking back pay for cost-of-living increases denied by Congress. The payment wasn’t included on his financial disclosure form because, he wrote, the instructions exempt reporting pay from the federal government. Kavanaugh also indicated that his income had increased from teaching gigs at Harvard, his wife’s return to the workforce after many years at home, and a pay raise. 

But reading between the lines of his answers to Whitehouse, it’s clear that Kavanaugh has gotten a substantial amount of financial help from his parents, in-laws, or other family members. (Kavanaugh had a privileged, private-school upbringing as the son of a Washington lobbyist for the cosmetics industry and a state prosecutor.) “We have not received financial gifts other than from our family which are excluded from disclosure in judicial financial disclosure reports,” he wrote.

Kavanaugh wouldn’t be the first Supreme Court nominee or justice to receive a windfall from his parents.  Both Justice Samuel Alito and Justice Elena Kagan inherited money from parents who had died, but unlike Kavanaugh, they disclosed the estate transfer on their federal forms. The White House has worked hard to frame Kavanaugh as a mainstream fellow who, just like ordinary American dads, loves sports and drives the carpool. Publicly disclosing the extent to which his parents or in-laws may be subsidizing his high-end lifestyle probably could undermine that portrayal.

The Senate Judiciary Committee will vote on Kavanaugh’s nomination on September 20. 

This article originally appeared here via Google News