Line between opportunist, traitor may be U.S. border

April 19, 1995|By ROGER SIMON

To the U.S. government, Michael Dingman and the other "yacht people" are traitors.

"It seems to me that one could kind of characterize them as economic Benedict Arnolds," Leslie Samuels, assistant secretary for tax policy at the Treasury Department, said.

The yacht people are fabulously wealthy Americans who renounce their citizenship and move to countries like the Bahamas or Ireland in order to avoid paying U.S. taxes.

Some of them were born in other countries, became U.S. citizens, and are now going back to their native lands.

Michael Dingman, however, was born in America, is the son of a Baltimore native, and attended the University of Maryland. But after a lifetime as a U.S. citizen, Dingman signed a one-page oath last year that stated: "I hereby absolutely and entirely renounce my United States nationality together with all rights and privileges and all duties of allegiance and fidelity."

Dingman, 63, now lives in the Bahamas, where he pays no personal income taxes.

Democrats in Congress have denounced Dingman and the other yacht people, and a few weeks ago tried to close the tax loophole under which they profit. But Republicans in the House of Representatives blocked the attempt.

While Dingman has been a Wall Street shaker and mover for decades, he is a household name in only one American locale: the University of Maryland, where in 1988 he gave $2 million to the business school to create the Michael D. Dingman Center for Entrepreneurship.

"He is by far our major benefactor," Charles Heller, the center's director, told me. "His endowment is our largest single source of revenue. He's been extremely generous to us. People do things for personal reasons. I can't question what he does."

Rudolph Lamone, the former dean of the College of Business and Management, who obtained the gift from Dingman, said of Dingman's renunciation of his citizenship: "It's a very difficult issue and a very, very personal issue. You call it a tax option; he says he likes the Bahamas."

Which is not to say Dingman will ever forget College Park.

"I had a spectacular time while I was in school here," Dingman said in 1988 when he made one of his rare trips to the campus. "In fact, I had way too good a time here."

While the university's press releases always refer to Dingman as an "alumnus," Dingman dropped out in 1953 in order to go to work for a flagpole company.

The university rectified this in May 1989, however, by awarding Dingman an honorary doctor of science degree. By that time, Dingman had given more than $3 million to the university, including a million dollars to the Washington Journalism Review (now the American Journalism Review), which is published by the College of Journalism.

"There were no strings attached," said Frank Quine, director of development for the college. "He is not on our board. I just know him as a very impressive person, garrulous, easy to talk to."

Although my request to interview Dingman, made through his New Hampshire aerospace company, is still pending, Dingman seems to have stopped cooperating with press profiles in the late 1980s.

At that time, he was portrayed as hard-driving, brilliant, charming and self-promoting. He liked fast German cars, antique American motorcycles, yachts, model trains, and the building of multimillion-dollar homes. ("It's the building I enjoy," he said, "not the finished house.")

He was also generous to members of his own corporate class, giving managers large salaries and stock options. But Business Week also described the "ruthless wage-slashing" he conducted at one of his Wyoming mining plants, where he cut wages nearly 50 percent for some workers.

"Unions launched bitter strikes at two plants last year," the magazine reported in 1987, "but they backed down when [Dingman's company] threatened to fire the strikers."

When I asked Heller to describe the personal qualities that account for Dingman's success, he said: "He can really spot opportunities and exploit them."

Which may be an understatement:

Even though Dingman has renounced his U.S. citizenship, his aerospace company gets more than $22 million a year in U.S. government contracts.

FRIDAY: Why Dingman did it.

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