Loophole

CHESAPEAKE, Va. -- This and next week's columns take two views of one river, the Elizabeth, which forms Norfolk's harbor and branches through the bay watershed's southeast corner.It is the story of an ironic coupling of environmental ruin and promise, of land and water, and of our continuing inability to treat them as a connected watershed, despite a bay restoration predicated on that approach for some two decades.Next week we will look downstream, at perhaps the first truly wise management of the bay's critically important oyster stocks in well over a century.

NEWARK, N.J. -- Jon Corzine, 52, grew up on a farm in Willie's Station, a suburb, so to speak, of Taylorville in central Illinois. He warmed the bench for the University of Illinois basketball team, graduated Phi Beta Kappa, earned a University of Chicago masters of business administration degree, wheedled an entry-level job from Goldman Sachs in 1975, profited from Ronald Reagan (public debt is a boon to bond traders), and in 1994 became chief executive officer.After losing a power struggle within the firm, he retired this year with $300 million and time on his hands.

Republicans in the General Assembly said yesterday they want to close a loophole that Senate Democrats hope to exploit to steer unlimited amounts of campaign money to candidates they support.The 31 incumbent Democrats, led by Senate President Thomas V. Mike Miller, have created the Maryland Democratic Senatorial Committee -- a so-called "slate" -- in an attempt to raise and shift hundreds of thousands of dollars to candidates who might need it, particularly nine incumbents targeted by the GOP.Under Maryland election law, a candidate is limited to transferring $6,000 through his or her campaign committee to any other committee.

Senate President Thomas V. Mike Miller has found an apparent loophole that permits him to avoid disclosing which candidates his "super-slate" of Democratic senators is supporting with $240,000 in direct-mail spending.In a campaign finance report filed Friday, the Maryland Democratic Senatorial Committee showed the slate has spent $240,000 of the $643,334 it has collected on payments to a direct-mail company, Sheingold Associates of Sacramento, Calif.The slate has been controversial since the Senate president formed it last year to defend Democratic control of the upper chamber of the General Assembly.

Dr. Thomas W. Fauntleroy Jr. is convinced that a lawyer's mistake cost him and his family almost $1 million in inheritance taxes.But when the family sued the lawyer, their suit was thrown out because of a little-known legal loophole: When it comes to wills, you have to be the one who hired the lawyers to sue them.Even if it is obvious that the lawyer's negligence shortchanged the heirs, they are out of luck, according to a May 21 ruling from the Maryland Court of Appeals. The Fauntleroys and other plaintiffs have asked the court to reconsider its ruling, but it's not known when the seven-member panel will act on the appeal.

ONE OF THE most resilient home real estate loopholes in the federal tax code survived another attempt on its life last week. House legislators agreed Nov. 6 to drop a provision from the "fast track" trade bill package that would have ended the right of homeowners to pocket any income -- without limit -- that they earn when they rent out their houses for 14 days or less during the course of a year.The 14-day loophole has been high on the hit list of tax reformers and budget-balancers for more than two decades.

What Bill calls a tax cut is a loophole.J. C. Watts for Veep!A criminal defendant in U.S. court here cast evil spells on hostile witnesses and the feds are helpless. There is no law against it.The people have spoken. Benazir is history.Tracks prefer slots to horses because they don't consume hay.Pub Date: 2/05/97

When is a tattoo like a Rembrandt painting?When Baltimore County zoning commissioner Lawrence E. Schmidt says so.In a 1993 decision, Schmidt ruled that tattoo parlors are covered by a zoning provision that permits a residential art salon as an accessory to a residence in a business zone.Such a salon is defined as "a portion of a dwelling unit used for the exhibition and sale of original works of art." It is meant to define an in-house art gallery.This ruling -- and a conclusion by the zoning commissioner that there is no difference between "the work of the great masters" and a tattoo artist "other than a matter of taste and the surface (canvas or skin)"

SHOULD state legislators and their aides be given unlimited power to say or do anything they wish on behalf of a constituent? Should lawmakers libel, slander, defame or interfere with business contracts without fear of civil lawsuits? Apparently, members of the Maryland General Assembly think that is a worthy idea. They are pushing through two bills that would greatly expand their immunity rights -- to the potential detriment of other citizens and businesses.Under current law, legislators have blanket immunity for anything they say in the house chambers or in committee meetings.

A PHYSICIAN serving as the medical director of a managed care company has vast power over patients. Does your primary care physician think you need gall bladder surgery? You better hope the medical director agrees.Despite all this power, there is no way to hold these physicians accountable for their professional judgments. And unless the House Environmental Matters Committee agrees to consider a bill passed by the Senate earlier this week, that egregious loophole in Maryland law will remain in place.

With an apparent compromise reached last week over the location of a new arena at Towson University, is it possible Baltimore County's town-gown relations are now smooth as a silk suit? Of course not, and unhappy campus neighbors have the usual suit-slinging suspects to blame - lawyers. If there's one thing that sets homeowners in campus-area communities on edge, it's the proliferation of homes leased to students and concerns over trash, late-night parties, noise and the like. Because of a legal loophole, the county's ability to regulate such properties recently took a serious hit. Last month, a hearing officer ruled that county law limiting to two the number of unrelated adults living in a rental property couldn't be applied to a group of four TU students living in a Towson Park townhouse.

Developer Edward St. John learned an expensive lesson recently about Maryland's campaign finance laws. Turns out it's against the rules to have third parties (in this case, his vice presidents) make campaign donations with the understanding they'd be reimbursed. Funny how the law can frown upon circumventing statutory limits on individual contributions. For this bit of knowledge, Mr. St. John is paying a $55,000 fine and has agreed to contribute another $55,000 to the nonprofit College Bound, which helps pay college expenses for underprivileged students.

Political campaign giving is an area fraught with ethical and legal complications, even when the gifts are perfectly legal. For example, under state law, a corporation or person can't give more than $4,000 in each election cycle to one candidate. Yet that rule is commonly and easily evaded by donors to candidates from both political parties. The same people simply create more than one legal business entity and have each one make separate contributions. It is a loophole that Montgomery County State Sen. Brian Frosh has sponsored legislation to close year after year, to no avail.

A former Roman Catholic priest who was convicted in 2006 of sexually abusing a student at Calvert Hall College High School 20 years earlier will not be required to register as a child sex offender due to a loophole in state law, which legislators unsuccessfully sought to address this year. Jerome F. Toohey Jr., who was permanently removed from the ministry this week, completed an 18-month jail sentence last year for abuse that had occurred in the late 1980s. He is not required to register because of the time lag between his offense and his conviction.

In tracing the source of guns used in Baltimore crimes in 2006 and 2007, city police kept running into a usual suspect - the Valley Guns shop in Baltimore County. It didn't matter that owner Sanford Abrams' license had been revoked in 2004. A loophole in federal law allowed him to sell off his inventory as a private collector - without any regulation. That's the kind of loophole that makes a mockery of reasonable laws aimed at keeping guns out of criminals' hands. Mayor Sheila Dixon and other big-city mayors brought their concerns about the so-called fire sale loophole to a congressional committee yesterday.

When Pam Longenecker purchased an $80 fur-trimmed jacket for her daughter, she assumed the fur was fake. "Nowhere on the label did it say real fur," said Longenecker, who is morally opposed to wearing fur. "So we said, `It's cute, let's buy it.'" But the fur turned out to be real, most likely from a raccoon dog, an animal indigenous to East Asia. And because of a loophole in the current fur-labeling law, Longenecker's situation might be far from unusual. A bill that came before the House Economic Matters Committee last week aims to close that loophole.

This year marks the 25th anniversary of what many corporate executives, the politicians who cater to them and some professional journalists like to present as Exhibit No. 1 in their case that Maryland is an anti-business state. The events of 1982 were cited again this week as the special session of the state General Assembly grappled with taxes and some sorry wimps on a certain Senate committee refused to close a multimillion-dollar loophole in Maryland corporate tax law. (We don't want to get the suits upset, see. We don't want them taking their companies out of state.

Climbing to the roof of a downtown Baltimore restaurant with a view of the city's skyline and inner-city neighborhoods, Gov. Martin O'Malley vowed yesterday to close corporate "loopholes" that he said allow large companies to avoid paying millions of dollars in state and local taxes each year. "Businesses that benefit from our state's services must be willing to invest in those services with their tax dollars, so that everyone is paying their fair share," O'Malley said. The Democratic governor said the state should close a "glaring loophole" that allows large corporations to avoid real estate recordation and transfer taxes - a levy typically equal to 2 percent of sale prices.

The average taxpayer should be fuming over the recent legislative audit of the Maryland Department of Assessments and Taxation. Not because of the various oversights or recordkeeping problems the auditors uncovered. Those are correctable. Not so the legal loophole that has allowed owners of multimillion-dollar commercial properties to dodge taxes that the rest of us routinely pay. And the problem is getting worse. Here's how it works. Back in the 1990s, lawmakers decided to allow commercial property to be held in limited liability partnerships or corporations as a way to protect individual investors from personal liability in the event of civil actions.

ATLANTA -- Kids love superheroes because they're invincible, brave, all-powerful. Children can suspend disbelief to look up in the sky for Superman or around the corner for Wonder Woman. Teenagers are enamored of a TV series called Heroes, which revolves around young people with - you guessed it - superpowers. But it's more than a little disconcerting to hear that so many adults also believe in superheroes. They must. Why else would they insist that the best way to prevent carnage of the sort that occurred last week at Virginia Tech is to put guns into every available hand?