On August 14, the New York Times ran a front-page smear of Congressman Darrell Issa, who has been a nuisance to the Obama administration in his capacity as Chairman of the House Oversight and Government Reform Committee. The Times article, by Eric Lichtblau (who relied on the goofball far-left site ThinkProgress for research assistance) was titled A Businessman in Congress Helps His District and Himself. Lichtblau’s theme was that Issa has wrongfully used the powers of his office to advance his own business interests:
Even as he has built a reputation as a forceful Congressional advocate for business, Mr. Issa has bought up office buildings, split a holding company into separate multibillion-dollar businesses [Ed.: This was later corrected to “multimillion-dollar,” as Lichtblau apparently doesn’t know the difference between a million and a billion], started an insurance company, traded hundreds of millions of dollars in securities, invested in overseas funds, retained an interest in his auto-alarm company and built up a family foundation.
As his private wealth and public power have grown, so too has the overlap between his private and business lives, with at least some of the congressman’s government actions helping to make a rich man even richer and raising the potential for conflicts.
An explosive allegation, if true, but it turned out to be entirely fabricated by Lichtblau and the Times. Lichtblau offered three bits of “evidence” in support of his attack on Issa. Two of them proved to be completely false and have been corrected. Altogether, the Times has now issued three corrections to Lichtblau’s smear–a severe embarrassment, obviously. But the paper has now dug in its heels, and has refused to correct any of the remaining ten errors that have been charged by Issa’s office. Assistant Managing Editor Dean Baquet wrote a condescending letter to Congressman Issa, in which he blamed others for the paper’s multiple errors and refused to make any further corrections.
Lichtblau’s article burned with resentment against Issa on the ground that the Congressman was a successful businessman and is, therefore, wealthy. Lichtblau’s grievance must lie in the fact that Issa earned his money, unlike such Democrats as Ted Kennedy (inherited) and John Kerry (married). This was one of the three instances that Lichtblau offered to support his accusation of corruption:
In one 2008 sale, months before the stock market crashed, his family foundation earned $357,000 on an initial investment of less than $19,000 — a return of nearly 1,900 percent in just seven months, the foundation reported to the Internal Revenue Service. It reported acquiring the security, then known as AIM International Small Company Fund, at a cost basis representing a tiny fraction of the market value.
We don’t expect New York Times reporters to know anything about business, but this is ridiculous. A 1,900% profit in seven months? Are you kidding? And buying securities for “a tiny fraction of the market value”? Where do I sign up? Lichtblau wrote an absurdity, and apparently didn’t understand how silly his charge was. In his letter to Congressman Issa, Baquet admitted that Lichtblau’s reporting was 100% wrong–the foundation actually sold the fund in question at a loss–but whined that the paper’s article relied on an IRS filing by Issa’s charitable foundation:
[T]he “incorrect form” you cite was filed by your own foundation with the I.R.S. (http://bit.ly/q6ERUk). We accurately reported the data found on page 16 of the I.R.S. filing. We are aware of no addendum or subsequent filing that would have corrected what you present as errors in the filing, and as I’m sure you’re aware, non-profit foundations are required to attest to the accuracy of their filings.
You can see the Issa Family Foundation’s IRS filing for 2008 here. The return includes two pages of records of securities transactions. This is a screen shot of the portion of the return that Lichtblau relied on:
The mutual fund is Invesco International Small Company A. Note, in the screen shot above, that the number of shares purchased is equal to the cost basis. In other words, the form reports that the fund was bought at $1 per share. This was obviously a clerical error by Issa’s CPA or someone in his office, who failed to multiply the number of shares bought by the purchase price. If Eric Lichtblau had done two minutes worth of research, he would have found that the Invesco International Small Company A fund cost more like $20 a share in April 2007:
But maybe Lichtblau did do that much research. He wrote, “It reported acquiring the security, then known as AIM International Small Company Fund, at a cost basis representing a tiny fraction of the market value.” Of course, no one can buy securities for a “tiny fraction of [their] market value.” A neutral observer, looking at the Issa Family Foundation tax return, would note that the number of shares bought, 18,789, equaled their purchase price–roughly 1/20 of their value–and concluded that it was most likely clerical error on the part of an accountant. But not Eric Lichtblau, and not the New York Times! They were too anxious to smear Darrell Issa to draw the obvious conclusion, and assumed that somehow–God knows how–the foundation persuaded a seller to part with his Invesco shares for 1/20 of their value. That kind of absurdity is what happens when people who know nothing about business try to write about it.
But Eric Lichtblau brought yet another level of blindness to his attempt to smear Darrell Issa. He accused the Issa Family Foundation of sharp dealing (or lucky investing, or something, he never actually said what) based on a clerical error. But how would a normal person view the Issa Family Foundation? Follow the link to the foundation’s tax return. A normal person would look at that return and see that Issa and his wife Katharine have contributed more than $24 million of Issa’s hard-earned money–in case you didn’t know it, Eric, businessmen work a great deal harder than reporters–to a foundation whose earnings are expended for charitable purposes. This screen shot from the tax return shows that from 2003 through 2007, in ever-increasing amounts, Darrell and Katharine Issa contributed a total of around $4 million to charity through their foundation:
The return’s itemization of charities to which the Issa foundation contributed in 2007 goes on for two pages: $16,000 to the AIDS Walk/Marathon, $20,500 to the American Diabetes Association, $25,000 to the Armed Forces Foundation, $10,500 to the Boys & Girls Clubs of Vista, $2,750 to the Breast Cancer Research Foundation, $25,000 to Easter Seals–the list goes on and on. Eric Lichtblau was so blinded by partisan rage that he looked at the Issa Family Foundation’s tax return, spotted a clerical error by their accountant, and said “Aha! Looks suspicious! Issa is enriching himself!” No, you moron–he is giving his money away.
Is there anyone in the world more blinded by prejudice than a reporter for the New York Times? I hope not. More to come on the Times scandal tomorrow.