Did Mike Thompson Sell His Bailout Vote?

(October 13, 2008)

I have previously reported that the California member of the U.S. House of Representives from the north coast first voted against the "bailout" [really an emergency measure to thaw frozen credit markets) [See Mike Thompson Votes Against Credit Restoration Package (September 29, 2008)]. Then, like many members of Congress, he switched his vote to Yes on a bill that had been stuffed with goodies designed to get those extra votes [See Mike Thompson Votes for Credit Restoration Package (October 3, 2008)].

The Santa Rosa Press Democrat, not usually known for investigative reporting or saying anything critical of Democratic Party politicians, ran a story saying a $100 million tax break that had previously been sought by Mike Thompson appeared in the final bailout vote he voted for. Thompson denied any connection, but the break had been sought by out-of-state donors to his campaign.

The tax break was for capital improvements to auto racing tracks. In the long run it is a wash because it works by accelerating the depreciation expenses the tack owners can claim. Homeowners can take a similar depreciation allowance (but not as fast a racetrack owners). By speeding up the timing of the allowance, taxes are lowered in the short run, but are higher once the depreciation allowance is run through.

Specifically, Thompson received about $14,000 in from executives of International Speedway Corp., which is on record with the Federal Election Commission. You can also look at Thompson's campaign donations at Mike Thompson Campaign Contribution at Open Secrets.

Even if the Thompson was influenced by the campaign donations and did insert the tax break into the bailout bill (some other member of the House could have inserted it; for instance, the actual Representative of the Florida donors), it was not necessarily illegal. It is illegal to do a tit-for-tat campaign donation: I will do X if you give my $Y. However, Mike picks up around $2 million in donations per election cycle, so almost anything he does could benefit a some donor. Much of Mike Thompson's campaign contributions come from the real estate, forestry, and vineyard & wine industries.

See Sweetener Did Not Sway Thompson Bailout Vote (Santa Rosa Press Democrat, October 10, 2009)