The Secret Words
You Bet Your Life was the post-World War II vehicle that provided Groucho Marx with a career apart from his brothers and introduced him to a generation of viewers too young to remember him from his stage or film work. The interview-quiz show, featuring the famous $100 bonus paid to any contestant who said the "secret word" (displayed on a cartoonish stuffed duck that dropped from above if a contestant uttered the word of the day) debuted on radio in 1947, aired on both radio and television through 1960, and continued on television only for its final season in 1960-61  all in all, an amazing fourteen-year run for a quiz show with a tiny budget, a plain set, and a small jackpot (even by 1950s standards).   Although You Bet Your Life was structured to make it appear as though every show was completely ad-libbed by Groucho (who issued a steady stream of impromptu questions, off-the-cuff remarks, and cutting put-downs to contestants he had met only moments earlier), a good deal of preparation went into each episode. Potential contestants were selected and interviewed in advance, scripts for each week's show were prepared by writers and reviewed by Groucho, and the comedian used a mechanical teleprompter to read his lines during the recording of the program. (In early telecasts of You Bet Your Life, Groucho can be seen reading off sheets of paper propped up in front of him on something resembling a music stand.) It was true, however, that Groucho didn't actually meet the contestants until they walked onstage, and he certainly had plenty of latitude to depart from the prepared gags and questions (as did the contestants), with the result that much of the show's banter was indeed improvised on the spot. About a hour's worth of material was recorded for each half hour program so that flubs, uninteresting segments, and any troublesome or offensive remarks by Groucho could be edited out. The most notable remark of Groucho's You Bet Your Life years, that one that has gone down in legend as one of pop culture's most notorious comeback quips, supposedly occurred when Grouch was interviewing a Mrs. Story, a contestant with a remarkably large number of children (a number that varies anywhere from 10 to 21 in different tellings of the legend): GROUCHO: "Why do you have so many children? That's a big responsibility and a big burden." MRS. STORY: "Well, because I love my children and I think that's our purpose here on Earth, and I love my husband." GROUCHO: "I love my cigar, too, but I take it out of my mouth once in a while." But did Groucho really say this, or is it a remark that (like so many other infamous quips) originated elsewhere and was later attributed to the notable figure deemed most likely to have said it?   Since You Bet Your Life was taped in advance, heavily edited, and not aired live, this remark (if it truly occurred) would certainly have been cut from the finished program as too offensive for the standards of the times; so we can state definitively that (claims to the contrary notwithstanding) nobody ever actually heard it broadcast. If Groucho had really made this quip, the only people who would have heard it would have been the people present during the recording of the program (i.e., the cast, crew, contestants, and studio audience). So, did Groucho in fact utter this risqu remark, even if his bon mot never made it onto the airwaves? The one person who would undoubtedly know the truth is Groucho himself, and he maintained in a 1972 interview with Roger Ebert for Esquire magazine that he never said it: I got $25 from Reader's Digest last week for something I never said. I get credit all the time for things I never said. You know that line in You Bet Your Life? The guy says he has seventeen kids and I say: "I smoke a cigar, but I take it out of my mouth occasionally"? I never said that. This debate really should end here, based on a complete lack of evidence that Groucho ever said any such thing, coupled with his unequivocal statement affirming that he did not (and Groucho had no motive to disclaim one of the most famous lines associated with his celebrity if he really had said it). Instead, the legend persists in large part because misinformation about it is propagated over and over. Take, for example, the following account, presented as a first-person telling in a 1976 book often touted as a Groucho Marx autobiography, The Secret Word Is Groucho: Wherever I go, people ask me about a remark I purportedly made to Mrs. Story. Folklore about the encounter has been so broadly disseminated that it has been variously described as occurring with a mother having any number from ten to thirty children. The story, however, is not apocryphal. It did happen. "Why do you have so many children?" I asked Mrs. Story. "That's a big responsibility and a big burden." "Well," she replied, "because I love children, and I think that's our purpose here on earth, and I love my husband." "I love my cigar too," I shot back, "but I take it out of my mouth once in a while." That kind of remark can have one of two reactions. It will either cause a sharp intake of breath at having crossed some forbidden frontier or it will bring the house down. The studio audience loved it, but the people out there in Radioland never got a chance to react. The exchange was clipped out by Dwan, the house censor. But even though Groucho is credited as the primary author of The Secret Word Is Groucho, it isn't really an "autobiography." The book was actually put together in the waning years of the comedian's life by freelance writer Hector Arce, who ostensibly obtained input from Groucho; and it's unlikely that Groucho's declining health and memory allowed him to contribute much (if anything) to the finished work, leaving Arce to rely on secondary sources. Arce consulted various personnel associated with You Bet Your Life in producing the book; almost certainly one (or more) of those people proffered the "cigar" story as true to Arce, who rewrote it in Groucho's voice and inserted it into the book, unaware that his subject had denied it just a few years previously. Arce's account doesn't sound like Groucho's speaking or writing style at all, and it presents a Groucho who has suddenly "remembered" details he was previously unfamiliar with in his Esquire few years earlier (i.e., he's corrected the gender of the person he was addressing from male to female, he now recalls the contestant's name, and he's fixed the wording of the remark from "I smoke a cigar, but I take it out of my mouth occasionally" to the pithier "I love my cigar too, but I take it out of my mouth once in a while"). While the 1972 Esquire interview in which Groucho discussed this quip unideniably contained Groucho's own words, the same can't be said for what was presented in Arce's book.  The Secret Word Is Groucho account quoted above also has Groucho asserting that the purported exchange with Mrs. Story was "clipped out by Dwan, the house censor." Groucho of course would have known that Robert Dwan was not a "house censor"; he was one of the producers who worked on You Bet Your Life for its entire run, staging the weekly performances and supervising the editing of each episode for broadcast. In his own book about the program (As Long As They're Laughing: Groucho Marx and You Bet Your Life), Dwan wrote: Last summer in Maine, a respectable New York dealer in rare books sidled up to me and said, conspiratorially, "Is it true Groucho made that crack about his cigar?" I knew immediately what he meant. For a long time, I, too, believed it was a figment of the mass libido. But, after discussions with my late partner, Bernie Smith, I am convinced that it did happen. I now believe that Groucho said it, but that he didn't mean what the dirty joke collectors think he meant. That remark, taken at its burlesque show level, was simply not his style. But outside of that studio audience and the 200 people who laughed that night, no one else ever heard that joke, because the exchange was never broadcast. It was never heard beyond the confines of NBC Studio C in Hollywood, and yet the story has spread to become an underground legend. This account is even more curious: Robert Dwan, the man who was onstage for every performance of You Bet Your Life and who supervised the editing of the show, didn't remember hearing Groucho make such a remark, yet he came to "believe" the legend was real because someone else told him so many years after the fact. And although Dwan noted that he consulted "20 volumes of the original scripts" and a "collection of acetate recordings of the unedited performances and tapes of the edited broadcasts" and four reels of 16mm film consisting of "the funniest and most audacious of the sequences which we were required to delete from the broadcasts as being unsuitable for viewing in the 1950s" in the preparation of his book, he made nary a mention of turning up anything supporting the "cigar" story. Steve Stoliar, who worked as a secretary in Groucho's household during the last few years of the comedian's life, also made an affirmative case for this legend in his 1996 book, Raised Eyebrows: My Years Inside Groucho's House: You may have heard about a legendary line concerning a certain cigar that Groucho was alleged to have uttered during one program. Some say it never happened; others swear they've seen it on TV. As it turns out, the truth is somewhere inbetween. One of the unexpected pleasures of spending time with the people behind the scenes was getting to the bottom of this infamous incident. For the record, it was [You Bet Your Life head writer] Bernie Smith who provided us with the details. To our amazement, Bernie had kept a chart throughout the life of the show, in which he had meticulously recorded the names of the contestants, what the secret word was and how much they ended up winning. There was, it seems, a sign painter named Mr. Story who lived in Bakersfield, California. He and his wife had what was reputed to be the largest family in America. Originally there were twenty-two children, but three had died. During the first season of "You Bet Your Life," when it was broadcast on radio only, the Story family was bused in from Bakersfield to be contestants on the show. After a bit of small talk, the conversation went like this: Groucho: "How many children do you have?" Mrs. Story: "Nineteen, Groucho." Groucho: "Nineteen?! Why do you have so many children? It must be a terrible responsibility and a burden." Mrs. Story: "Well, because I love my children  and I think that's our purpose here on Earth  and I love my husband." Groucho: "I love my cigar, too, but I take it out of my mouth once in a while!" The studio audience went wild, but director Bob Dwan ordered the exchange deleted before it could be aired because it was obviously too racy for 1947 sensibilities. So the Story story is true, but anyone who claims to have seen that program is either mistaken or lying because it occurred three years before the show's 1950 television debut and it was edited out of the radio show before anyone but the studio audience had a chance to hear it. Unfortunately, no copies of that legendary outtake are known to have survived. Although the imagined dialogue between Groucho and the female contestant is lifted directly from The Secret Word Is Groucho, this account does at least introduce some detail to the story (e.g., a specific number of children, the hometown of the contestants, the father's occupation, the year of the interview) indicating actual research rather than mere repetition of legend. As we'll see shortly, however, some of this detail is inaccurate. The most recent presentation of the "cigar" legend we're aware of is the background booklet enclosed with the 2003 DVD release You Bet Your Life: The Lost Episodes (a collection of some of the show's preserved TV episodes), which contained the following information about an audio bonus feature included on one of the discs: In December 1950 DeSoto distributed a twelve inch 78rpm recording featuring highlights from You Bet Your Life and a holiday message from Groucho to their dealers. The nine minute recording includes an excerpt from Groucho's November 17, 1947 radio interview with Mr. and Mrs. Story of Bakersfield, California, the parents of twenty children. This interview has become legendary for a portion of it that never aired. Groucho: "Why do you have so many children? It must be a terrible responsibility and a burden." Mrs. Story: "Well, because I love my children and I think that's our purpose here on Earth, and I love my husband." Groucho: "I love my cigar, too, but I take it out of my mouth once in a while." Considering how many people have claimed to have seen or heard that exchange over the years it would seem likely that it must exist somewhere. But of the ninety-nine radio episodes of You Bet Your Life that aired prior to the show's television debut, fewer than half of them survive. And the show with Mr. and Mrs. Story is not among them. The famous exchange would certainly have been edited out anyway. The brief clip from Season's Greetings from DeSoto  Laughs with Groucho is all that remains of this episode. And the only people who witnessed that legendary moment were in the studio audience that fateful night in 1947. (Note that the imagined dialogue between Groucho and Mrs. Story is lifted directly from the book The Secret Word Is Groucho, another indication that it came from someone associated with the You Bet Your Life program and not Groucho himself.) It is true that Marion and Charlotte Story of Bakersfield, California, the parents of twenty children, were once featured as contestants on You Bet Your Life. According to announcer George Fenneman's introduction, Mr. and Mrs. Story were selected to participate because the producers thought it would be interesting to go through the audience and find the couple with the largest number of offspring for Groucho to interview, and as the parents of twenty children (not nineteen, as stated in Raised Eyebrows), Mr. and Mrs. Story qualified for that honor. (Since You Bet Your Life was a well-planned show that interviewed and prepped its contestants in advance, Mr. and Mrs. Story likely appeared on the program by invitation and were not merely present in the audience by happenstance, with George Fenneman's introduction of them probably stretching the truth a little to create an exaggerated sense of spontaneity for the listening audience.) It is also true that this interview took place during You Bet Your Life's days as a radio-only program (it didn't begin airing on television in addition to radio until October 1950); so even if the "cigar" quip had sprung from this encounter, anyone who now claims to have seen Groucho make the remark on television is clearly mistaken.   As usual, however, the DVD booklet's account is rife with misinformation. A complete audio recording of (the broadcast portions of) Marion and Charlotte Story's appearance on You Bet Your Life does indeed exist (and is linked below). Moreover, that recording couldn't possibly date from 17 November 1947, as claimed, because Groucho can be heard making promotional references to DeSoto-Plymouth, who did not become sponsors of You Bet Your Life until partway through the 1949-50 season. (External evidence indicates this recording actually dates from the broadcast of 11 January 1950, the first show aired after DeSoto-Plymouth took over sponsorship of You Bet Your Life from Elgin-American.)  What do we find in this recording? It does not include anything like the infamous "cigar" quip, Groucho's only mention of stogies coming when he inquires of Mr. Story, "With each new kid, do you go around passing out cigars?" ("I stopped at about a dozen," Mr. Story responds.) And for those who would claim that the "cigar" remark was indeed uttered by Groucho but excised from the aired version of the show, we note that none of the claimed dialogue ancillary to that remark is present in the recording, either: Groucho does not ask Charlotte Story why she has so many children, neither Mr. nor Mrs. Story professes to thinking that having children is "our purpose here on Earth," nor does Mrs. Story proclaim that she loves her husband. As we touched on earlier in this article, it's a common phenomenon of urban legendry that amusing stories involving clever repartee often retroactively place words into the mouths of the famous people deemed most likely to have said them. Sometimes, however, the designated mouths don't really match up with the words assigned to them. Johnny Carson's image has long been saddled with the claim that he made a risqu remark to a cat-carrying starlet on the Tonight Show, even though he was never known for employing that sort of crude sexual humor in his TV talk show host role. Likewise, although it might seem that no one would fit a sexual double entendre involving a cigar better than Groucho Marx, even You Bet Your Life producer Robert Dwan acknowledged (as quoted above) that it was too burlesque and not really Groucho's style. It was the kind of dirty put-down Groucho might blurt out in private, but not to a kindly couple on a national radio program. Groucho's style on You Bet Your Life was typically much gentler, as exemplified by the following exchange made under similar circumstances (i.e., when he questioned a female contestant who came from a family of seventeen children): remark Groucho: How does your father feel about this rather startling turn of events? Is he happy or just dazed? Daughter: Oh, my daddy loves children. Groucho: Well, I like pancakes, but I haven't got closetsful of them ... It's not inconceivable that the infamous "cigar" quip might have originated with this very exchange, when someone later misremembered or deliberately "naughtied up" the dialogue to better fit Groucho's public image and changed "pancakes" to "cigar." NOTE: Various "blooper" records purport to offer an "actual recording" of Groucho's remark. However, those record makers typically employed recordings they made themselves using sound-alikes in order to "re-create" events for which no actual recording existed (in most cases because the events were apocryphal ones that never took place). blooper  Brooks, Tim and Earle Marsh. The Complete Directory to Prime Time Network TV Shows.
New York: Ballatine Books, 1999. ISBN 0-345-42923-0 (p. 1138-1139). Dunning, John. On the Air: The Encyclopedia of Old-Time Radio.
New York: Oxford Univ. Press, 1998. ISBN 0-19-507678-8 (pp. 732-734). Dwan, Robert. As Long As They're Laughing: Groucho Marx and You Bet Your Life.
Baltimore: Midnight Marquee, 2000. ISBN 01-887664-36-X (p. 129). Ebert, Roger. "A Living Legend, Rated R." 
Esquire. July 1972 (p. 143). Kaltenbach, Chris. "Also 20 Years Dead: Groucho."
The Baltimore Sun. 19 August 1997 (p. E1). Kanfer, Stefan. Groucho.
New York: Vintage Books, 2000. ISBN 0-375-70207-5. Marx, Groucho and Hector Arce. The Secret Word Is Groucho.
New York: G.P. Putnam's Sons, 1976. ISBN 0-399-11690-7 (pp. 43-44). Stoliar, Steve. Raised Eyebrows: My Years Inside Groucho's House.
Los Angeles: General Publishing, 1996. ISBN 1-881649-73-3 (pp. 124-125).
In July 2019, an $80 coupon began making the rounds on Facebook for the ALDI grocery store chain. These shared posts were the latest iteration of the common "free coupon" or "free gift card" scams that frequently plague social media and have also preyed on shoppers of chains such as Kroger and Target: Kroger Target  A different scam coupon offer also circulated with the ALDI logo in December 2015, advertising a "get 40% off all purchases in store" promise. Another displayed what appeared to be a free coupon for "$60 off a minimum $70 purchase", and even one for $75 off:  "Aldi has a coupon for $60 off a minimum $70 purchase. Aldi has verified this is a scam, but people are sharing it all over facebook." These coupons are not legitimate, as ALDI themselves noted on their Facebook page:  These coupon offers are a form of survey scams that direct victims to either a survey on an website not owned by ALDI, or what looks like a Facebook page for ALDI. The survey pages nor the Facebook page have any affiliation with the company, despite being adorned with the ALDI logo. Both instruct people to share the bogus ALDI coupon offer on their Facebook timelines and submit comments about it:  This page instructs shoppers to follow these "two simple steps" in order to get their coupons. Once the steps are completed, however, users are not greeted with information explaining how to claim their coupons. Instead, they're asked to take a brief survey that entails providing personal information such as home address, telephone number, e-mail address, and date of birth, and are required to sign up for credit cards or enroll in number of subscription programs in order to obtain their "free" gift cards:  A version of the scam also surfaced in May 2016, and another later in 2018. ALDI responded to frustrated consumers on Facebook:  In June 2017, a version of the scam touting discounts in honor of ALDI's purported anniversary also appeared on Facebook: "HEY FRIENDS CHECK THIS OUT!!!!!Aldi is giving Free $75 Coupon to Everyone to celebrate 103rd Anniversary!Each Person (1)- Go & get yours!ALDI-COM.COM" However, attempting to visit the linked domain (ALDI-COM.com) led to a "deceptive site ahead" warning and not to ALDI's official web site:  If you frequently use Facebook, there is a good chance that you'll run into one of these survey scams again. A July 2014 article from the Better Business Bureau lists key factors for identifying fraudulent Facebook posts: article "Dont believe what you see. Its easy to steal the colors, logos and header of an established organization. Scammers can also make links look like they lead to legitimate websites and emails appear to come from a different sender. Legitimate businesses do not ask for credit card numbers or banking information on customer surveys. If they do ask for personal information, like an address or email, be sure there's a link to their privacy policy. When in doubt, do a quick web search. If the survey is a scam, you may find alerts or complaints from other consumers. The organization's real website may have further information. Watch out for a reward that's too good to be true. If the survey is real, you may be entered in a drawing to win a gift card or receive a small discount off your next purchase. Few businesses can afford to give away $50 gift cards for completing a few questions." All in all, trying to claim that "free" deep discount ALDI coupon is likely going to end up costing you a lot more than you'll save. Patterson, Emily.  "Customer Survey Scam Lures Victims with Gift Card." 
  Better Business Bureau.  4 July 2014. 10 July 2019: This story has been updated with a scam offer appearing on Facebook that promises $80 off at ALDI. "Smart gals know what it takes to be confident around a masher," reads a vintage-looking magazine as making the social media rounds since mid-2017. rounds What does it take to be confident, according to this print advertisement? A .38 caliber Colt Cobra snub-nose revolver  "for that strange, depraved creep who won't leave you alone."  Here's an example of the ad via Twitter: For that strange depraved creep who wont leave you alone #advertisement pic.twitter.com/tnnTT5HFCH #advertisement pic.twitter.com/tnnTT5HFCH  PANTHERA ? (@Panthera156) March 28, 2018 March 28, 2018  The copy goes on with its pitch as follows: Some lunkheads just won't go away. You change your schedule, you wear a hat, you even try the old false beard gag, but no, he's still there  breathing through his mouth, leering at your bosom with those droopy, lifeless fish eyes. Face it girls, there are times when subterfuge isn't enough  you may need to take fast action, FAST! That's why a girl couldn't find a finer new friend than the Colt Cobra .38 Snub Nose. You'll enjoy the modern styling as you draw it from your purse. You'll sense the velvet smoothness of the action as you cock the hammer. You'll appreciate the crispness of the trigger pull, designed with your long nails in mind, as you fire again and again. Although the overall appearance of the ad is convincing at first glance, the closer one looks the more preposterous its content reveals itself to be. The image is a parody of 1950s advertising, but a number of inconsistencies and anachronisms stand out. The magazine named in the lower righthand corner, for example  "Ladies Life & Household," it's supposedly called  never existed (or if it did, every trace of it has been expunged from modern records). The handgun's finish is described as "Colt's beautiful pacifier blue"  an obvious satirical reference to 1950s gender role stereotypes (if Colt ever manufactured a "pacifier blue" firearm, no examples of it exist to be found today). The pistol shown in the illustration, allegedly a Colt Cobra .38 (the same kind of revolver Jack Ruby used to kill JFK assassin Lee Harvey Oswald in 1963), appears to be a different model altogether. The image matches up fairly closely to one we found in a mid-1970s ad for a Colt Detective Special (third series, introduced in 1973): Colt Cobra .38 Colt Detective Special   And what about that leering creep? The face of the "mouth-breathing lunkhead" with "droopy, lifeless fish eyes" who serves as the villain of the tableau shows unmistakable signs of digital tampering. It isn't just the eyes that droop:    From all of the above it makes sense to suppose that there was an existing scanned image, most likely of another vintage ad, that served as a template for the Colt Cobra parody. A reverse-image search provided instant confirmation that that is the case  the Colt Cobra ad is a reworking of a full-page advertisement for Gleem Toothpaste that appeared on page 110 of Life magazine on 11 February 1957: advertisement   Image credit: SenseiAlan / Flickr SenseiAlan / Flickr Trask, Mike.  "From Jack Ruby to Las Vegas: A Gun's Trajectory."
  Las Vegas Sun.  11 March 2008. In October 2022, Facebook users copied and pasted posts that claimed, "Facebook will start charging this summer." The copy-and-paste posts, which we refer to as copypasta, claimed that the news was "official" and that the posts had been "signed" by the users, a word that was sometimes misspelled as "signal." The posts claimed the news had even been broadcast "on TV." However, this was nothing more than a repeated iteration of a long-running Facebook hoax. copypasta To be clear, Meta has never announced any plans to charge Facebook users money in order for them to be able to use the platform. We found no shortage of these posts being copied and pasted in mid-October. A search for "Facebook will start charging this summer" returned a seemingly endless number of results. a seemingly endless number of results The copy-and-paste post usually read something like this, with the time changed in some posts depending upon when the user shared the text:  It's official Signed at 10:33. It's even passed on TV. Facebook will start charging this summer. If you copy this to your wall your icon will turn blue and your Facebook will be free for you. Please pass this message, if not your icon will be deleted. P.S. this is serious, the icon will turn blue (Copy and paste to your wall) Mine really turned blue. After the "Facebook will start charging this summer" text, some of the posts that we found then continued by including words from previous iterations of this same hoax: continued Don't forget tomorrow starts the new Facebook (akanew name, META) rule where they can use your photos. Don't forget the Deadline is today!!! I do not give Facebook or any entities associated with Facebook permission to use my pictures, information, messages or posts, both past and future. With this statement, I give notice to Facebook it is strictly forbidden to disclose, copy, distribute, or take any other action against me based on this profile and/or its contents. The information: The violation of privacy can be punished by law NOTE: Facebook is now a public entity. All members must post a note like this.If you prefer, you can copy and paste this version. If you do not publish a statement at least once it will be tacitly allowing the use of your photos, as well as the information contained in the profile status updates.DO NOT SHARE. Copy and paste.Their new algorithm chooses the same few people - about 25 - who will read your posts.Therefore:Hold your finger down anywhere in this post and "copy" will pop up. Click "copy". Then go to your page, start a new post and put your finger anywhere in the blank field. "Paste" will pop up and click pasteThis will bypass the system. We previously debunked this rumor in 2009, then published another story about it in 2020. The version of the hoax that uses the words "this summer" had apparently been going around since at least 2011. debunked this rumor in 2009 another story since at least 2011 Despite being well over a decade old, Facebook users often share various posts that ask others to copy and paste the text, as if doing so would establish precautionary measures against a future development. ask others to copy and paste the text However, as Jerry once told Kramer on the "Seinfeld" TV series, "I don't know if what you have here constitutes a legally binding document." told Huberman, Bond. "Is Facebook Charging a User Fee?" Snopes.com, 22 May 2020, https://www.snopes.com/fact-check/is-facebook-charging-a-user-fee/. Huberman, Bond, and David Emery. "Snopestionary: What Is Copypasta?" Snopes.com, 19 Sept. 2021, https://www.snopes.com/articles/369246/what-is-copypasta/. Mikkelson, David. "Is Facebook Implementing User Fees?" Snopes.com, 31 Dec. 2009, https://www.snopes.com/fact-check/facebook-implementing-user-fees/. ---. "Will Posting This Notice Stop Facebook from Making Your Posts Public?" Snopes.com, 4 June 2012, https://www.snopes.com/fact-check/facebook-posts-made-public/. Tim. "Its Official...Signal at 12:20 It Even Passed on Tv. Facebook Will Be Charging This Summer - Viral Hoax!"Facecrooks, 3 July 2011, https://facecrooks.com/Internet-Safety-Privacy/Its-official-signal-at-1220-it-even-passed-on-tv-Facebook-will-be-charging-this-summer-Viral-Hoax.html. U.S. Senate candidate George Allen says he put the brakes on rising college costs when he was governor from 1994 to 1998.Before I was governor, tuition was skyrocketing, and we stopped that, Allen said in a May 25 debate between four candidates seeking the GOP Senate nomination. We capped, and then we froze college tuition.Allen won the Republican primary on June 12 and will face Democrat Tim Kaine this fall. They are seeking to replace Democrat Jim Webb, who is not seeking a second Senate term.We wondered if the Allen administration really did put a lid on tuition. Allen, while making this claim, shared credit with the Democratic-controlled legislature that served with him.Dan Allen, a senior adviser to the campaign, pointed us to aJuly 2011 reportfrom the State Council of Higher Education for Virginia.The study said that during the early 1990s, colleges and universities increased tuitions by double digits annually to compensate for state funding cuts made by the General Assembly and then-Gov. Doug Wilder to help balance the budget during a recession.Wilder, in his final budget proposal made during an improving economy in December 1993, urged the General Assembly to cap tuition and instructional fee increases for in-state students at 5 percent during the 1994-95 school year and 4 percent during 1995-96.Allen, who took office in January 1994, successfully urged the General Assembly go a step further and cap the increases at 3 percent during each of the next two school years.In 1996, as SCHEV notes,  Allen and the General Assembly froze tuition and instructional fees entirely. The action did not apply to a number of other mandatory college costs, such as fees for athletic programs, health services and campus transportation. Lawmakers eased some of the burden on colleges by appropriating an additional $200 million for higher education.The Richmond Times-Dispatch in January 1998 reported that a strong economy during Allens term allowed him to finance the tuition freeze. State tax revenues grew by about 45 percent during his tenure.Allen, in his farewell budget, recommended freezing tuition through 2000. His successor, Republican Jim Gilmore, rolled back tuition and instructional fees by 20 percent for in-state students.When Allen arrived in the governors mansion during the 1993-94 academic year, the average tuition and instructional fees for full time, in-state undergraduate students at four-year colleges was $2,518,according to SCHEVs historical tables.That rose to $2,717 in the 1995-1996 academic year and stayed at that level through 1997-1998, the last academic year of Allens term.Using inflation-adjusted figures based on 1992 dollars, the report shows the amount of tuition and instructional fees went  from $2,383 in the 1993-94  academic year down to $2,320 in 1997-98. Even when other mandatory fees that were not subject freeze are added in, the college costs remained flat after being adjusted for inflation.Costs at two-year colleges showed the same trend: in-state tuition and instructional fees at those institutions were basically flat during Allens term.Our rulingAllen said that, as governor, he stopped soaring tuition costs by implementing a tuition freeze.Allen and the General Assembly did impose a freeze after tuition had risen sharply during the early 1990s recession. Allen had leeway to cap tuitions because a healthy economy during his term allowed lawmakers to increase state appropriations to colleges and universities.We rate Allens claim True. While the debate over the compromise tax agreement proposed by President Barack Obama has focused mostly on Bush's income tax cuts and whether they ought to be extended to wealthy Americans, the issue of estate taxes has also become a sticking point for some legislators.Under the plan, the estate tax rate would be set at 35 percent, with an effective exemption of $5 million.Many Republicans had hoped to do away with the estate tax altogether, and Democrats last year had proposed a higher rate: 45 percent on the value of estates over $3.5 million.The compromise has ruffled feathers on both sides of the aisle. Sen. Jim DeMint, R.-S.C., for example, said he would not support the plan because he considered the estate tax compromise a tax increase. We ruled that claimBarely True.Meanwhile, Sen. Bernie Sanders, an independent from Vermont and a self-described democratic socialist, sent out amessage via Twitteron Dec. 13, 2010, saying that under the estate tax plan, 99.7% of American families will not pay 1 nickel in an estate tax. This is not a tax on the rich, this is a tax on the very, very, very rich.According to ananalysis by the nonpartisan Tax Policy Center, Sanders is correct.The Tax Policy Center estimated that about 99.7 percent of estates were exempt from the estate tax in 2009 when the first $3.5 million of an estate was exempt. Even fewer people would be subject to the tax if the threshold is increased to $5 million, as proposed in the compromise tax plan.Under the compromise plan, less than 2/10 of 1 percent of estates would be subject to the estate tax next year, said Bob Williams of the Tax Policy Center. That means more than 99.8 percent would be completely exempt.The Tax Policy Center estimates that about 3,600 estates would be subject to the tax under the $5 million threshold. Those 3,600 estates would have to pay an estimated $11.4 billion in estate taxes under the compromise tax plan.Estate tax rates have fluctuated through modern history. In 2001, President George W. Bush signed a plan to gradually reduce the estate tax from 55 percent to 45 percent, while at the same time increasing the exemption value from $1 million in 2002 to $3.5 million in 2009. The estate tax disappeared altogether in 2010.But the Bush plan only had a 10-year window because Republicans didn't have the votes at the time to permanently abolish the estate tax. It passed the Senate under budget reconciliation, which requires only a simple majority of 51 votes but which also limited it to a 10-year shelf life. Barring a new tax agreement, the rate was set to revert next year to a 55 percent rate with an effective exemption of $1 million.Last year, Democrats proposed a plan to permanently set the estate tax rate at 2009 levels -- 45 percent on the value of estates over $3.5 million. But the plan never reached a vote in the Senate. Had that plan gone through, the Tax Policy Center estimates it would have subjected 6,460 estates to a tax (bring in an estimated $18.2 billion). If no tax plan passes, and the rate goes back to 55 percent on the value of estates over $1 million, an 43,540 estates would have to pay (bringing in an estimated $34.4 billion next year).Sanders was correct that in 2009, when the effective exemption was $3.5 million, about 99.7 percent of all estates were exempt and didn't pay anything. The compromise plan -- which would set effective exemption at $5 million -- would push the number of exempted estates even higher, so that more than 99.8 percent of estates would not pay anything. We rate Sanders' comment True. Claim:  Drunk Chairman of the Federal Reserve lets loose in a bar about how bad the U.S. economy truly is.  Example:  [Collected on the Internet, August 2011]  Drunken Ben Bernanke Tells Everyone At Neighborhood Bar How Screwed U.S. Economy Really Is SEWARD, NE   Claiming he wasn't afraid to let everyone in attendance know about "the real mess we're in," Federal Reserve chairman Ben Bernanke reportedly got drunk Tuesday and told everyone at Elwood's Corner Tavern about how absolutely fucked the U.S. economy actually is. Bernanke, who sources confirmed was "totally sloshed," arrived at the drinking establishment at approximately 5:30 p.m., ensconced himself upon a bar stool, and consumed several bottles of Miller High Life and a half-dozen shots of whiskey while loudly proclaiming to any patron who would listen that the economic outlook was "pretty goddamned awful if you want the God's honest truth." "Look, they don't want anyone except for the Washington, D.C. bigwigs to know how bad shit really is," said Bernanke, slurring his words as he spoke. "Mounting debt exacerbated  and not relieved  by unchecked consumption, spiraling interest rates, and the grim realities of an inevitable worldwide energy crisis are projected to leave our entire economy in the shitter for, like, a generation, man, I'm telling you." [Remainder of the article here] here  Origins:  If anyone were truly in the know about the state of the U.S. economy, it would be the Chairman of the Federal Reserve, Ben Bernanke. However, folks shouldn't give any credence to the story quoted above, because it originates with The Onion, an American news satire organization that has been publishing spoofs based on current events since the late 1980s. (Long before it had a web presence, The Onion was a newspaper.) Ben Bernanke The Onion Other Onion articles of approximately the same vintage: Obama Turns 50 Despite Republican Opposition Despite Danny DeVito A Lot Taller, Thinner In Person DeVito Windows Opened On Both Coasts In Effort To Create Transcontinental Cross-Breeze Windows Barbara "onion peals" Mikkelson Last updated:  4 August 2011 In 1975, photographer Garry Gross took several nude photographs of a 10-year-old Brooke Shields that were later published in a Playboy publication called Sugar and Spice. This series of photographs has been the source for controversy for decades. But many internet users were blissfully unaware of the images until one appeared in a meme featuring a photograph of Playboy founder Hugh Hefner and passed around on social media:   The girl in the background of this meme is indeed a naked 10-year-old Shields, and the photograph was truly published by Playboy. Although this meme may have given some viewers the impression that the image appeared in Playboy magazine itself, the picture was actually featured in the Playboy Press publication Sugar and Spice. The above-displayed photograph is one of many that Gross took with the consent of Shields' mother, Teri Shields, in 1975. In 1981, with Sugar and Spice out of print and Shields' profile on the rise, Shields sued Gross, arguing that the photographer should not be allowed to continue to profit from the images, and that the photographs would cause her irreparable harm.  sued The lawsuit was dismissed in a 4-3 decision by the New York State Supreme Court. Justice Edward Greenfield stated that the pictures were "not erotic or pornographic" except to "possibly perverse minds," and that while the images might cause Shields personal embarrassment, they did not constitute "irreparable harm" as Shields' profile had risen in the years since the photographs were taken. decision Greenfield also criticized Shields' mother for trying to "have it both ways," saying the actress had starred in provocative roles in movies such as Blue Lagoon and Pretty Baby:  Wed, Nov 11, 1981  6  The News Leader (Staunton, Staunton, Virginia, United States of America)  Newspapers.com  Wed, Nov 11, 1981  6  The News Leader (Staunton, Staunton, Virginia, United States of America)  Newspapers.com Here's an excerpt from a contemporaneous article published by the Washington Post: Washington Post Washington Post: It was Mom who decided six years ago to let Gross take pictures of her nude daughter for a book, published the next year by Playboy Press, called "Sugar and Spice." Then a funny thing happened to little Brooke: she burst out of her cocoon and turned into a great big star, just like that. Suddenly the pictures acquired a new and alluring value; and suddenly Brooke and Mom decided that, with the book out of print, Gross had no business peddling the pictures anywhere else, even though Mom had signed a release for them. So they went to court, where Justice Greenfield ruled against them. He said that the pictures were "not erotic or pornographic" and that Brooke would not suffer irreparable damage if they were republished; he ruled that Gross had not violated the terms of the release. And so long as he was at it, Justice Greenfield delivered himself of a tidy lecture on the subject of stage motherhood. He described Teri Shields as "a concerned mother"; he said she lived not merely "for" her daughter but also "through" her. He said that her behavior was "maternally protective and exploitative," that she wanted "to have it both ways" by representing Brooke as "sexually provocative and exciting while attempting to preserve her innocence." An appellate court overturned the decision, but in 1983 the original verdict was upheld. upheld This wasn't the only time these nude images of Shields were at the center of a controversy. In 2009, artist Richard Prince, known for "reproduction" photography, used one of Gross' images of Shields for an artwork entitled "Spiritual America." The photograph was set to be displayed at the Tate Modern Gallery, but it was removed after Scotland Yard suggested that it might violate London's obscenity laws. violate Associated Press.  "Judge Lambasts Actress' Mother."
  11 November 1981. Higgins, Charlotte and Vikram Dodd.  "Tate Modern Removes Naked Brooke Shields Picture After Police Visit."
  The Guardian.  30 September 2009. Yardley, Jonathan.  "Sugar and Spice and Not Nice."
  The Washington Post.  16 November 1981. Gambardello, Joseph.  "Judge Scolds Brooke Shields' Mother for Exploiting Daughter."
  UPI.  11 November 1981. Turner, Christopher  "Sugar and Spice and All Things Not So Nice."
  The Guardian.  2 October 2009. Several similar items have been circulated during or since the 2008 U.S. presidential election, all suggesting (without evidence) that Barack and Michelle Obama, both of whom obtained licenses to practice law in Illinois, were forced to give up those licenses in order to avoid having them revoked through disciplinary actions or criminal prosecution. In fact, neither of the Obamas gave up their law licenses because they were facing disciplinary actions or criminal charges: Barack Obama  Editor of the Harvard Law Review  Has No Law License? I saw a note slide across the #TCOT feed on Twitter last night that mentioned Michelle Obama had no law license. This struck me as odd, since (a) she went to school to be a lawyer, and (b) she just recently held a position with the University of Chicago Hospitals as legal counsel  and that's a pretty hard job to qualify for without a law license. But being a licensed professional myself, I knew that every state not only requires licensure, they make it possible to check online the status of any licensed professional. So I did, and here's the results from the ARDC Website: She "voluntarily surrendered" her license in 1993. Let me explain what that means. A "Voluntary Surrender" is not something where you decide "Gee, a license is not really something I need anymore, is it?" and forget to renew your license. No, a "Voluntary Surrender" is something you do when you've been accused of something, and you "voluntarily surrender" you license five seconds before the state suspends you. Here's an illustration: I'm a nurse. At various times in my 28 years of nursing I've done other things when I got burned out; most notably a few years as a limousine driver; even an Amway salesman at one point. I always, always renewed my nursing license  simply because it's easier to send the state $49.00 a month than to pay the $200, take a test, wait six weeks, etc., etc. I've worked (recently) in a Nursing Home where there was an 88 year old lawyer and a 95 year old physician. Both of them still had current licensures as well. They would never DREAM of letting their licenses lapse. I happen to know there is currently in the Indiana State Prison in Michigan City Indiana an inmate who is a licensed physician, convicted of murder when he chased the two burglars who entered his home and terrorized his family into the street and killed them. (And I can't say I blame him for that, either.) This physician still has an active medical license and still sees patients, writes prescriptions, etc all from inside the prison. And he renews his medical license every two years, too. I tried looking up why she would "Voluntarily surrender" her license, but Illinois does not have it's 1993 records online. But when I searched for "Obama", I found this: "Voluntarily retired"  what does that mean? Bill Clinton hung onto his law license until he was convicted of making a false statement in the Lewinsky case and had to "Voluntarily Surrender" his license too. President Barack Obama, former editor of the Harvard Law Review, is no longer a "lawyer". He surrendered his license back in 2008 possibly to escape charges that he "fibbed" on his bar application. This is the former editor of the Harvard Law Review who doesnt seem to give a crap about his law license. Something else odd; while the Search feature brings up the names, any searches for the Disciplinary actions ends quickly. As in, Too Quickly. Less than a half-second quickly on a Search Engine that can take five seconds to Search for anything. As in, "there's a block on that information" kind of thing. So we have the first Lawyer President and First Lady  who don't actually have licenses to practice law. There's more to this story, I'm sure. I'll let you know when I find it. Such claims are false ones, based on misreadings of information about license status and erroneous interpretations and assumptions about such information, as detailed below: I saw a note slide across the #TCOT feed on Twitter last night that mentioned Michelle Obama had no law license. This struck me as odd, since (a) she went to school to be a lawyer, and (b) she just recently held a position with the University of Chicago Hospitals as legal counsel  and that's a pretty hard job to qualify for without a law license. This lead-in was wrong on two counts: Michelle Obama does in fact have a license to practice law in Illinois (it is currently on inactive status), and she did not hold a position as legal counsel with the University of Chicago Hospitals (rather, she worked at that institution as Executive Director for Community Affairs and then Vice President for Community and External Affairs). None of her job duties at the University of Chicago Hospitals required her to have an active law license. worked She "voluntarily surrendered" her license in 1993. Let me explain what that means. A "Voluntary Surrender" is not something where you decide "Gee, a license is not really something I need anymore, is it?" and forget to renew your license. No, a "Voluntary Surrender" is something you do when you've been accused of something, and you "voluntarily surrender" you license five seconds before the state suspends you. This passage was also wrong: Michelle Obama did not "voluntarily surrender" her law license; she requested that her license be placed on "inactive" status. The difference is crucial: a lawyer who has surrendered his law license has given it up and therefore no longer has a license, while a lawyer who has gone on inactive status still holds a valid law license but is not currently engaged in any professional activities that require it to be active. At various times in my 28 years of nursing I've done other things when I got burned out; most notably a few years as a limousine driver; even an Amway salesman at one point. I always, always renewed my nursing license  simply because it's easier to send the state $49.00 a month than to pay the $200, take a test, wait six weeks, etc., etc. I've worked (recently) in a Nursing Home where there was an 88 year old lawyer and a 95 year old physician. Both of them still had current licensures as well. They would never DREAM of letting their licenses lapse.  A lawyer's holding active license status can entail a number of obligations, both financial and otherwise: paying bar association fees, carrying malpractice insurance, taking continuing legal education classes, etc. Therefore, it is not uncommon for lawyers who are not in practice (i.e., do not appear in court or counsel clients) and do not expect to return to practice in the near future to request that their licenses be placed on inactive status in order to avoid these ongoing obligations. Reactivating an inactive law license is a fairly easy procedure, as noted in the Volokh group blog for law professors: Volokh The fact that someone who doesn't actually practice law, and is unlikely to practice law, voluntarily retires is hardly a sinister signal: It costs money to be a member of the bar, and if you're not going to practice, it may make sense to retire. Nor does this somehow undermine claims that he's a lawyer; a retired lawyer is still commonly called a lawyer  as an indication of what he has studied, and his general professional field  even if he is no longer a member of the bar. The bar record says that [Michelle Obama] is "Voluntarily inactive." This is even more common for lawyers who don't need a bar card, such as many lawyers who don't appear in court or counsel clients other than [their] employer. Being an active status lawyer costs more money than being inactive, and it requires one to do Continuing Legal Education classes, unless one is in certain jobs for which the CLE requirements are waived. The difference in bar fees, for instance, is why I myself was inactive in 2001. Moreover, it's pretty easy to switch back to active status should one need to do that. The following passage included the erroneous implication that Barack Obama also gave up his law license to avoid disciplinary action: "Voluntarily retired"  what does that mean? Bill Clinton hung onto his law license until he was convicted of making a false statement in the Lewinsky case and had to "Voluntarily Surrender" his license too. President Barack Obama, former editor of the Harvard Law Review, is no longer a "lawyer". He surrendered his license back in 2008 possibly to escape charges that he "fibbed" on his bar application. This passage was similarly incorrect: Barack Obama did not "surrender" his law license. Like his wife, Barack Obama had no need for an active law license for the work in which he was engaged, so in February 2007 (after announcing his candidacy for the presidency) he chose to have his law license placed on voluntarily inactive status, and after becoming president he opted to change his status to voluntarily retired. Neither of the Obamas was irrevocably stripped of a law license through the action of "surrendering" it. James Grogan, deputy administrator and chief counsel for the Attorney Registration and Disciplinary Commission of the Supreme Court of Illinois, affirmed that the Obamas were "never the subject of any public disciplinary proceedings," and the Illinois State Bar Association continues to list Barack and Michelle Obama as Honorary Members of that organization. list Something else odd; while the Search feature brings up the names, any searches for the Disciplinary actions ends quickly. As in, Too Quickly. Less than a half-second quickly on a Search Engine that can take five seconds to Search for anything. As in, "there's a block on that information" kind of thing. The above passage was also not true. Information about the statuses of both Barack and Michelle Obama's licenses is readily retrievable, both show no record of any disciplinary actions or pending proceedings, and the elapsed time for searches we performed on their information was comparable to that for searches on information about other names in the Illinois ARDC database.   (The "Malpractice Insurance" section of Michelle Obama's license information which included a notation about her being on "court ordered inactive status" was not, as commonly misinterpreted, an indication of any wrongdoing on her part. That terminology was used simply because prior to the end of 1999, the Illinois ARDC rules required "a proceeding in the Court for any voluntary transfer to inactive status, whether because of some incapacitating condition or solely as a matter of the lawyer's preference because the lawyer would not be practicing law.") rules So we have the first Lawyer President and First Lady  who don't actually have licenses to practice law.  This was hardly remarkable or suspicious: neither of the Obamas held a currently active law license because neither President of the United States nor First Lady was a position that required one. This statement was also inaccurate in referring to the Obamas as the "first Lawyer President and First Lady," as both Bill and Hillary Clinton held law degrees and engaged in legal work prior to the former's election to the presidency. Announced in April 2021, U.S. President Joe Bidens American Families Plan is an ambitious proposal that aims to expand Americans' access to childcare and education and increase the number of women in the workforce. The plan is to fund all of this through more taxes on higher-income earners and increased reporting requirements of banks that could potentially yield more tax revenue. These reporting requirements have caught the ire of a number of banks that took issue with this less widely known section of the plan. Announced reporting A Facebook post by FNB Community Bank claimed: The Biden administration has proposed requiring all community banks and other financial institutions to report to the IRS on all deposits and withdrawals through business and personal accounts worth more than $600 regardless of tax liability. This indiscriminate, comprehensive bank account reporting to the [Internal Revenue Service (IRS)] can soon be enacted in Congress and will create an unacceptable invasion of privacy for our customers. Facebook post   Another screenshot shared by our readers expressed similar concerns:   The Independent Community Bankers of America (ICBA) even began a campaign, calling on communities to send a letter to Biden to prevent this so-called intrusive proposal": began a campaign, Tell Congress: Don't Let IRS Invade My Privacy The Biden administration is proposing requiring financial institutions report to the IRS all transactions of all business and personal accounts worth more than $600. This is an unprecedented invasion of privacy. In order to knock down this intrusive proposal, please send this letter to your representative and senators immediately. We looked up the proposal itself, and it does require more robust reporting of transactions across business and personal accounts. The proposal, which aims to go into effect after Dec. 31, 2022, states: proposal This proposal would create a comprehensive financial account information reporting regime. Financial institutions would report data on financial accounts in an information return. The annual return will report gross inflows and outflows with a breakdown for physical cash, transactions with a foreign account, and transfers to and from another account with the same owner. This requirement would apply to all business and personal accounts from financial institutions, including bank, loan, and investment accounts, with the exception of accounts below a low de minimis gross flow threshold of $600 or fair market value of $600. We begin by explaining some of the more technical terms in this proposal. A "de minimis threshold" is broadly defined as the amount of a transaction that has such a small value that accounting for it would be unreasonable. We spoke to Visiting Assistant Professor of Tax Law at New York University, Nyamagaga Gondwe, who explained, "It is the amount below which the [IRS] would argue isn't worth investigating. It's the difference between your company giving you a $5 card to Subway, versus traveling on a private jet on your company's dime. [The latter] is worth reporting." In this case, "gross flow" refers to the aggregate inflows and outflows of cash from bank accounts. In sum, the current proposal stipulates that an aggregate amount of less than $600 worth of cash flowing into and out of accounts is not worth reporting.  defined gross flow The "fair market value" refers to the amount people are willing to pay for an asset in the open market. In this case, Gondwe argued, the use of the term could possibly refer to the changing market value of transactions more than $600 that may occur in foreign currency transactions.  refers to The ICBA claims that the proposal will make banks report "all transactions" above the limit, but this is misleading. While it is true that the IRS will have more information on cashflows above $600, that doesnt mean they will have all the information pertaining to all transactions. The Center for American Progress (CAP) points out that banks will only be providing aggregate numbers to the IRS after each year  gross inflow and gross outflow  and not individualized transaction information. This reporting requirement would also extend to peer-to-peer payment services like Venmo, but wouldnt require people to report any additional information to the government. According to The Wall Street Journal, financial institutions must already report interest, dividends, and investment incomes to the IRS, and the IRS can get other information through audits. Center for American Progress extend Wall Street Journal audits According to Marie Sapirie of Tax Notes, a publication focused on tax news, a parenthetical to the proposal indicates that there is some flexibility on raising the minimum account balance/inflow/outflow above $600. Tax Notes parenthetical The Tax Notes report also states that the treasury department estimated this form of reporting would raise $463 billion over the 10-year budget window, making it the third largest revenue raiser proposed in the budget. The aim is to target businesses outside of large corporations that carry out gross underreporting of their income in the amount of $166 billion per year. According to the proposal: Requiring comprehensive information reporting on the inflows and outflows of financial accounts will increase the visibility of gross receipts and deductible expenses to the IRS. Increased visibility of business income will enhance the effectiveness of IRS enforcement measures and encourage voluntary compliance. Tax Notes aim Banks claim this would be an invasion of consumer privacy, with the ICBA saying it would allow the government to monitor account information. However, CAP analysts Seth Hanlon and Galen Hendricks argue, Only the prior years total inflow and total outflow would be reported on annual forms. No one would say that the IRS monitors you on your job because it receives a W-2 from your employer with your total wages every January. saying argue Another challenge not mentioned in the ICBAs consumer alert is the higher costs this reporting proposal may place on banks. In May 2021, a coalition of banking associations wrote a letter to the U.S. Senate Committee on Finance, arguing that they already give a lot of data to the IRS, and that this would impose additional costs on their systems: consumer alert wrote a letter The costs and other burdens imposed to collect and report account flow information would surpass the potential benefits from such a reporting scheme. New reporting would appear to require material development costs and process additions for financial institutions, as well as significant reconciliation and compliance burden on impacted taxpayers. For example, reporting total gross receipts and disbursements would require a new reporting paradigm for depository institutions, which necessitates system changes to collect the information. On the flipside, Sapirie wrote for Tax Notes, the benefits of such a reporting proposal may be difficult to come by: Tax Notes Increasing the amount of information flowing into the IRS would not in itself lead to increased enforcement, and it might come with added challenges. [Former IRS Commissioner Charles O.] Rossotti acknowledged that the IRS today cannot use all the information it already receives, and significant areas of noncompliance are barely addressed, so more reporting alone will not solve the problem. It would almost certainly have a deterrent effect for taxpayers contemplating evasion, but the extent of that effect is unclear, and it might be insufficient to justify the costs to financial institutions and the federal government of implementing such a large new reporting regime. But CAPs analysis argues that this will help prevent tax evasion, while also providing more funding to enhance data security for consumers: CAPs analysis Additional funding would go to enhancing data security. Even at present, the IRS data security is already much better than the financial industry, with only very rare and limited breaches compared to the exponentially bigger data breaches from financial institutions. Second, the reporting of information flows only from financial institutions to the IRS and not in the other direction, as some earlier proposals had called for.  [...] The Biden administrations bank reporting proposal is a critical element of the Build Back Better agenda. It gives the IRS some visibility into opaque forms of income that disproportionately accrue to high-income individuals. Despite fearmongering from bank lobbies, the proposal protects taxpayers privacy while simply requiring banks to provide basic, aggregated information about flows. That enables the IRS to select audits in a more efficient and equitable way so that the vast majority of taxpayers will be less likely to be audited. And by deterring and helping catch tax cheats, the proposal raises substantial revenue for the Build Back Better agenda, which provides critical investments to increase economic opportunities for American families and communities. On Oct. 12, 2021, Speaker Nancy Pelosi defended the proposal in response to a question from a reporter, who said, "[Banks] are concerned about the tracking of transactions that are greater than $600, Americans are starting to get worried about this. Do you think [this] is going to stay in the Reconciliation Bill?"  defended "With all due respect, the plural of anecdote is not data," Pelosi said. "Yes, there are concerns that some people have. But if people are breaking the law and not paying their taxes, one way to track them is through the banking measure. I think $600  that's a negotiation that will go on as to what the amount is. But yes."     Whatever the impact of this proposal is, it does require additional reporting of certain bank transactions, just not in the way the above banks are portraying it. As such, we rate this claim a Mixture. A Scorecard for Reconciliation, Round 2. Tax Analysts, https://www.taxnotes.com/featured-analysis/scorecard-reconciliation-round-2/2021/09/10/783l0?highlight=biden. Accessed 15 Sept. 2021. Community Banks Must Engage Customers on New IRS Reporting Mandates. ICBA, https://www.icba.org/newsroom/blogs/main-street-matters---advocacy/2021/08/19/community-banks-must-engage-customers-on-new-irs-reporting-mandates. Accessed 15 Sept. 2021. Consumer Alert from ICBA. ICBA, https://www.icba.org/bank-locally/consumer-alert-from-icba. Accessed 15 Sept. 2021.Digging Into the Bank Info Reporting Plan. Tax Analysts, https://www.taxnotes.com/tax-notes-today-global/information-reporting/digging-bank-info-reporting-plan/2021/08/30/777dx. Accessed 15 Sept. 2021. Fair Market Value (FMV). Investopedia, https://www.investopedia.com/terms/f/fairmarketvalue.asp. Accessed 16 Sept. 2021. "General Explanations of the Administrations Fiscal Year 2022 Revenue Proposals." Department of the Treasury, May 2021, https://home.treasury.gov/system/files/131/General-Explanations-FY2022.pdf. Accessed 15 Sept. 2021. Gross Cash Flow Definition. Law Insider, https://www.lawinsider.com/dictionary/gross-cash-flow. Accessed 16 Sept. 2021. Hanlon, Seth, and Galen Hendricks. Bank Tax Reporting Is a Critical Component of Bidens Build Back Better Agenda. Center for American Progress, 14 Sept. 2021, https://www.americanprogress.org/issues/economy/news/2021/09/14/503821/bank-tax-reporting-critical-component-bidens-build-back-better-agenda/. Accessed 15 Sept. 2021. ICBA Urges House Panel to Reject IRS Monitoring Plan. Default, https://www.icba.org/newsroom/news-and-articles/2021/09/09/icba-urges-house-panel-to-reject-irs-monitoring-plan. Accessed 15 Sept. 2021. Jagoda, Naomi. Pelosi Defends IRS Bank-Reporting Proposal, Says Specifics Open to Negotiation. The Hill, 12 Oct. 2021, https://thehill.com/policy/finance/576362-pelosi-defends-irs-bank-reporting-proposal. Joint Trades Statement for the Record: Senate Subcommittee on Taxation and IRS Oversight Hearing Entitled: Closing the Tax Gap: Lost Revenue from Noncompliance and the Role of Offshore Tax Evasion." 10 May 2021, https://bpi.com/wp-content/uploads/2021/06/Joint-SfR-Senate-Finance-Subcommitte-Hearing-on-Closing-the-Tax-Gap-051021.pdf. Accessed 15 Sept. 2021. Rubin, Orla McCaffrey and Richard. Biden Tax Plan Leans on Banks to Help Find Unreported Income. Wall Street Journal, 29 Apr. 2021. www.wsj.com, https://www.wsj.com/articles/biden-tax-plan-leans-on-banks-to-help-find-unreported-income-11619701380. Accessed 15 Sept. 2021. Tankersley, Jim, and Dana Goldstein. Biden Details $1.8 Trillion Plan for Workers, Students and Families. The New York Times, 28 Apr. 2021. NYTimes.com, https://www.nytimes.com/2021/04/28/us/politics/biden-american-families-plan.html. Accessed 15 Sept. 2021. "When Is a Minimal Fringe Benefit Not So Minimal?" https://www.wolterskluwer.com/en/expert-insights/when-is-a-minimal-fringe-benefit-not-so-minimal. Accessed 16 Sept. 2021. Oct. 14, 2021: Added Pelosi's comments on the proposal. Democratic congressman Beto O'Rourke of Texas came to national prominence in 2018 through his high-profile campaign to unseat incumbent Republican U.S. senator Ted Cruz. During the course of his campaign, the Democratic candidate has been confronted with various claims and allegations about himself and his family. One such meme, entitled "'Beto' Reality Check," was shared widely on Facebook in August 2018:A spokesperson for O'Rourke's campaign described the meme as "factually incorrect in countless ways" and largely referred us to several existing news reports about the allegations. The following is our breakdown of the five sections contained in the meme.O'Rourke adopted the name "Beto" to appeal to Latino voters: The meme claimed:NOT HISPANIC"Robert O'Rourke" became "Beto" for his political campaigns and on the ballot, a tactic that gives the false impression he's Latino, misleading voters in a state with many Hispanics.In fact, O'Rourke was known as "Beto" long before he entered political life, although his birth name is Robert and he appears to use both first names interchangeably. (For example, his July 2018 Federal Election Commission "Statement of Candidacy" lists his name as "Robert Beto O'Rourke.")O'Rourke told CNN that his parents referred to him as Beto "from day one," and that it "just stuck." Others have noted that the name is likely derived from a pronunciation of the Spanish "Roberto," and O'Rourke himself described it as "a nickname for Robert in El Paso." (According to the U.S. Census Bureau, around 78 percent of El Paso county residents listed themselves as being of Mexican heritage in 2016.)O'Rourke's family is of Irish heritage. According to the New York Times, his family "came over from Ireland four generations ago to work on the railroad." His father Pat O'Rourke was a prominent El Paso County official during the 1980s.A 1986 article about Pat O'Rourke in the El Paso Times referred to his then 14-year-old son as "Beto O'Rourke." In 1999, six years before O'Rourke ran for El Paso city council, the same newspaper referred to "web site designer Beto O'Rourke" in a short article about his I.T. business Stanton Street Design.After checking the archives of the El Paso Times, we found multiple references to "Beto O'Rourke" between 1986 and 2004, when O'Rourk was either a child or a businessman and had never run for political office.In March, the campaign of O'Rourke's Republican opponent, Ted Cruz, launched a radio jingle that poked fun at the name "Beto" and included the following lyrics: "I remember reading stories/Liberal Robert wanted to fit in/So he changed his name to 'Beto'/And hid it with a grin ...":FIRST LISTEN: our new 60-second statewide radio ad introducing our liberal opponent, Congressman Robert ORourke, to Texas voters.Help #KeepTexasRed: https://t.co/PVsiCtbbyL #CruzCrew #TXSen pic.twitter.com/OxK61gZ0ek Ted Cruz (@tedcruz) March 7, 2018The next day, O'Rourke posted a photograph of himself as a young boy, wearing a sweater with the nickname "Beto" stitched into it, establishing that, contrary to false accusation, he did not "change his name" for political reasons:pic.twitter.com/1IO1dgmCkv Beto O'Rourke (@BetoORourke) March 7, 2018O'Rourke used his father's connections to avoid trial for two felonies: UNPROVENThe meme claimed:FELONY ARREST RECORDAs an adult in his mid-20s, O'Rourke was caught breaking into the University of Texas El Paso. Charged with breaking and entering and burglary, he mysteriously avoided trial. A few years later, arrested for drunk driving, he again walked with a "deal." Being the song of a powerful, politically connected County Judge apparently has benefits. O'Rourke dismisses his felony convictions as "youthful pranks" and "mistakes"; it's old news, move along, nothing to see here.O'Rourke has indeed been arrested for burglary and drunk driving, a history which he has discussed several times over the course of his political career, as his spokesperson told us: "While charges were dismissed, this is something that Beto has always publicly addressed -- during his initial run for the city council, his run for Congress, in profiles written about him, during dozens of interviews, and at town halls across the state during this campaign."In a 27 August 2018 op-ed for the Houston Chronicle and  San Antonio Express-News, O'Rourke himself wrote:Twenty-three years ago I was arrested for attempted forcible entry after jumping a fence at the University of Texas at El Paso. I spent a night in the El Paso County Jail, was able to make bail the next day, and was released. Three years later, I was arrested for drunk driving -- a far more serious mistake for which there is no excuse.According to El Paso county jail records, O'Rourke was arrested for attempted burglary on 19 May 1995, when he was 22 years old. He was released from custody the same day. Court records show that the prosecutor dropped the charge in February 1996.O'Rourke was also arrested for driving while intoxicated on 27 September 1998, the day after his 26th birthday. He completed a "misdemeanor diversion program" (namely "DWI school") in October 1999, and the charge was dropped.In August 2018, the Houston Chronicle and San Antonio Express-News cited police reports, including a witness account, which suggested that the incident leading to O'Rourke's DWI arrest was relatively serious and involved a collision with another vehicle and a possible attempt by O'Rourke to leave the scene:State and local police reports obtained by the Chronicle and Express-News show that ORourke was driving drunk at what a witness called a high rate of speed in a 75 mph zone on Interstate 10 about a mile from the New Mexico border. He lost control and hit a truck, sending his car careening across the center median into oncoming lanes. The witness, who stopped at the scene, later told police that ORourke had tried to drive away from the scene. O'Rourke recorded a 0.136 and 0.134 on police breathalyzers, above a blood-alcohol level of 0.10, the state legal limit at the time.In the case of his DWI arrest, O'Rourke did not face prison time because he completed an alternative adjudication program. It's not clear why the attempted burglary charge was dropped in 1996 (we asked the O'Rourke campaign about this but didn't receive a response to that particular question in time for publication). However, we could find no evidence that O'Rourke's father had any role in either case, nor did the meme offer any evidence.Congressman O'Rourke's father Pat was the El Paso County judge until 1986 -- a kind of chief executive of the county's governing body, the Commissioners Court -- so he had not held office for nine years by the time of his son's attempted burglary arrest.O'Rourke violated 'insider trading' laws: The meme claimed:INSIDER TRADING VIOLATIONSAfter being sent a memo specifically prohibiting investment in Twitter's IPO [initial public offering], O'Rourke made a tidy one-day profit on it. When uncovered by a government watchdog, he quickly turned himself in. This violation of the STOCK Act (Stop Trading on Congressional Knowledge) is apparently a habit, as there are several other instances of this behavior; he characterizes them as mistakes.Despite the meme's claim, O'Rourke has never been charged with, or convicted of, violating any laws related to insider trading, including the STOCK Act, which bars members of the U.S. Congress from benefiting from financial transactions made on the basis of information they received in their capacity as members of Congress.But this section of the meme does contain elements of truth in that -- after the matter was brought to light by a third party -- O'Rourke reported his potential violation of rules to the House Ethics Committee (for stock transactions he maintained were executed by his broker without his knowledge), and the matter was resolved without any charges being brought against him:U.S. Rep. Beto ORourke alerted the House Ethics Committee that he might have violated a new law restricting members of Congress from engaging in certain stock transactions.It is the first case to come before the committee involving a 2012 law that prohibits members of Congress from participating in initial public offerings, or IPOs, other than what is available to members of the public generally, said Melanie Sloan, executive director of the Committee for Ethics and Responsibility in Washington, a watchdog group.ORourke, a Democrat whose district covers a portion of western Texas, reported the possible violation after Legistorm, an online news site that tracks congressional issues, informed him that his Nov. 15 disclosure saying he participated in the Twitter IPO earlier in the month might indicate a violation of a 2012 law called the Stop Trading on Congressional Knowledge Act, or STOCK Act.The freshman congressman also reported that, through his stockbroker, he participated in six other initial public offerings this year. In an interview, ORourke said he didnt see a Nov. 5 memo from the House Ethics Committee warning members of Congress about participating in IPOs.On 27 November 2013, O'Rourke wrote on Facebook that the ethics committee had informed him they would consider the issue resolved once he sold off any remaining shares that he bought during any IPOs, and sent the U.S. Treasury a check equal to the amount he earned in profits from those IPO-related shares:Upon receiving the letter from the Committee today I instructed my broker to sell all remaining shares, which he did. I then sent a check for the full amount of the profit from all IPO trades this year to the U.S. Treasury by overnight mail. Copies of the trades and the check have been sent to the Ethics Committee.I apologize to the House of Representatives and to the people I represent for not exercising due diligence. I will be much more thorough in the future concerning financial transactions and do my best to ensure that I am in full compliance with all rules covering members of Congress.Records filed with the Clerk of the House of Representatives show that O'Rourke bought between $1,000 and $15,000 worth of shares in Twitter on 7 November 2013 (the first day the company was traded on the stock market), before selling off between $1,000 and $15,000 in shares later that day.Records also indicate that on 27 November 2013, O'Rourke again sold off between $1,000 and $15,000 worth of Twitter shares "pursuant to the recommendations made by House Ethics Committee in a letter from 11/27/13."A condom full of "white powder" was found in O'Rourke's father's car: trueThe meme claimed:FATHER'S DRUG SCANDALO'Rourke's father, while county judge, had a 2-way radio installed in his Jeep. Installers discovered a condom packed with a "white powder" concealed in his vehicle and called police. Much to the dismay of investigating officers, the Captain on duty, a friend and political ally of O'Rourke, flushed the evidence down the toilet and dropped the charges. The Captain was subsequently suspended and tried for tampering with evidence.This section of the meme relates to incidents which took place in 1983, when Beto O'Rourke was 10 years old, and which had absolutely nothing to do with him.Nevertheless, it's true that in February 1983, El Paso County Sheriff's Captain Willie Hill told two police officers to get rid of a condom full of white powder which they had found in Pat O'Rourke's car while they were installing a radio in it. The officers suspected the powder to be heroin or cocaine, but the substance was never tested to determine its true nature.Hill was temporarily suspended but was reinstated after being acquitted on a misdemeanor charge of evidence tampering. (The prosecutor had earlier dropped a charge of misconduct against him.) Hill testified that he made a snap decision about the discovery of the powder, which he strongly suspected had been planted there to embarrass or undermine either O'Rourke or one of the officers installing the radio.O'Rourke and Hill were friends, as O'Rourke (then county judge) told the El Paso Times: "Because he's a good man, it would be an injustice if Willie were to suffer grievous consequences from this whole episode. You have an honest and honorable man implicated by pure fluke. And that's just damn right not fair."O'Rourke was involved in a family business that was prosecuted for tax violations: The meme claimed:FAMILY BUSINESS FEDERALLY PROSECUTEDO'Rourke's family business "Charlotte's Furniture," a store "Beto," his mother and sister are involved with, was charged in 2010 with altering records to avoid IRS reporting. Investigators found they accepted cash payments, in one instance over $630,000 from an unnamed individual (that's a LOT of furniture)! Found guilty on 15 counts, the sentence was a $250,000 fine and 5 years' probation. Around the time O'Rourke announced as a senate candidate, the business was shuttered and its records became unavailable. O'Rourke passes the prosecution off as a "mistake"; it's been covered, move along, nothing to see here.The meme got the basic facts right about the federal tax case against Charlotte's, but it falsely claimed that Congressman O'Rourke was personally "involved" in the company. He was not.In 2010, Charlotte's Inc., an El Paso furniture store company started by O'Rourke's grandmother in 1951, was convicted of "structuring transactions to evade reporting requirements, a tax-related felony. The company was charged as a corporate entity, but the Congressman's mother, Melissa O'Rourke, acted as its authorized representative.The company pled guilty to accusations that it had restructured transactions in order to present relatively large cash payments as having been made in installments of less than $10,000. Anti-money laundering provisions of U.S. law require that a business reveal the identity of any individual who makes a cash payment above that threshold.In total, Charlotte's and its employees illegally restructured $630,000 in payments, all from one customer, in this way between May 2005 and October 2006. The identity of that customer is not known. U.S. District Court judge Kathleen Cardone gave a sentence of five years' probation and a $500,000 fine, with $250,000 of that suspended.In 2017, Melissa O'Rourke announced that she intended to close down the business but denied the decision was connected to her son's U.S. Senate campaign or the 2010 conviction.According to Texas Comptroller of Public Accounts records for 2017, Congressman O'Rourke had no formal role with Charlotte's Inc., whose directors were Melissa O'Rourke and the Congressman's sister Charlotte O'Rourke.Records for 2005 and 2006 (when the I.R.S. reporting violations took place) as well as 2010 (when the conviction happened) show that Congressman O'Rourke had no formal role with the company at those times, either.The Congressman is part owner of the property where Charlotte's was located. According to O'Rourke's 2013 congressional financial disclosure, his mother gifted him an ownership stake worth between $1 million and $5 million in Peppertree Square, a shopping center on North Mesa St. in El Paso.However, his part ownership of the Peppertree Square property (which does not appear to entail any management function in any of the businesses located there) did not accrue until 31 December 2012, more than six years after the conclusion of the I.R.S. reporting violations at Charlotte's.  One such meme, entitled "'Beto' Reality Check," was shared widely on Facebook in August 2018: meme   A spokesperson for O'Rourke's campaign described the meme as "factually incorrect in countless ways" and largely referred us to several existing news reports about the allegations. The following is our breakdown of the five sections contained in the meme. The meme claimed: NOT HISPANIC "Robert O'Rourke" became "Beto" for his political campaigns and on the ballot, a tactic that gives the false impression he's Latino, misleading voters in a state with many Hispanics. In fact, O'Rourke was known as "Beto" long before he entered political life, although his birth name is Robert and he appears to use both first names interchangeably. (For example, his July 2018 Federal Election Commission "Statement of Candidacy" lists his name as "Robert Beto O'Rourke.") Statement O'Rourke told CNN that his parents referred to him as Beto "from day one," and that it "just stuck." Others have noted that the name is likely derived from a pronunciation of the Spanish "Roberto," and O'Rourke himself described it as "a nickname for Robert in El Paso." (According to the U.S. Census Bureau, around 78 percent of El Paso county residents listed themselves as being of Mexican heritage in 2016.) CNN noted listed O'Rourke's family is of Irish heritage. According to the New York Times, his family "came over from Ireland four generations ago to work on the railroad." His father Pat O'Rourke was a prominent El Paso County official during the 1980s. New York Times A 1986 article about Pat O'Rourke in the El Paso Times referred to his then 14-year-old son as "Beto O'Rourke." In 1999, six years before O'Rourke ran for El Paso city council, the same newspaper referred to "web site designer Beto O'Rourke" in a short article about his I.T. business Stanton Street Design. article article After checking the archives of the El Paso Times, we found multiple references to "Beto O'Rourke" between 1986 and 2004, when O'Rourk was either a child or a businessman and had never run for political office. In March, the campaign of O'Rourke's Republican opponent, Ted Cruz, launched a radio jingle that poked fun at the name "Beto" and included the following lyrics: "I remember reading stories/Liberal Robert wanted to fit in/So he changed his name to 'Beto'/And hid it with a grin ...": FIRST LISTEN: our new 60-second statewide radio ad introducing our liberal opponent, Congressman Robert ORourke, to Texas voters. Help #KeepTexasRed: https://t.co/PVsiCtbbyL #CruzCrew #TXSen pic.twitter.com/OxK61gZ0ek #KeepTexasRed https://t.co/PVsiCtbbyL #CruzCrew #TXSen pic.twitter.com/OxK61gZ0ek  Ted Cruz (@tedcruz) March 7, 2018 March 7, 2018  The next day, O'Rourke posted a photograph of himself as a young boy, wearing a sweater with the nickname "Beto" stitched into it, establishing that, contrary to false accusation, he did not "change his name" for political reasons: pic.twitter.com/1IO1dgmCkv pic.twitter.com/1IO1dgmCkv  Beto O'Rourke (@BetoORourke) March 7, 2018 March 7, 2018  The meme claimed: FELONY ARREST RECORD As an adult in his mid-20s, O'Rourke was caught breaking into the University of Texas El Paso. Charged with breaking and entering and burglary, he mysteriously avoided trial. A few years later, arrested for drunk driving, he again walked with a "deal." Being the song of a powerful, politically connected County Judge apparently has benefits. O'Rourke dismisses his felony convictions as "youthful pranks" and "mistakes"; it's old news, move along, nothing to see here. O'Rourke has indeed been arrested for burglary and drunk driving, a history which he has discussed several times over the course of his political career, as his spokesperson told us: "While charges were dismissed, this is something that Beto has always publicly addressed -- during his initial run for the city council, his run for Congress, in profiles written about him, during dozens of interviews, and at town halls across the state during this campaign." In a 27 August 2018 op-ed for the Houston Chronicle and  San Antonio Express-News, O'Rourke himself wrote: op-ed Twenty-three years ago I was arrested for attempted forcible entry after jumping a fence at the University of Texas at El Paso. I spent a night in the El Paso County Jail, was able to make bail the next day, and was released. Three years later, I was arrested for drunk driving -- a far more serious mistake for which there is no excuse. According to El Paso county jail records, O'Rourke was arrested for attempted burglary on 19 May 1995, when he was 22 years old. He was released from custody the same day. Court records show that the prosecutor dropped the charge in February 1996. records records O'Rourke was also arrested for driving while intoxicated on 27 September 1998, the day after his 26th birthday. He completed a "misdemeanor diversion program" (namely "DWI school") in October 1999, and the charge was dropped. arrested In August 2018, the Houston Chronicle and San Antonio Express-News cited police reports, including a witness account, which suggested that the incident leading to O'Rourke's DWI arrest was relatively serious and involved a collision with another vehicle and a possible attempt by O'Rourke to leave the scene: cited State and local police reports obtained by the Chronicle and Express-News show that ORourke was driving drunk at what a witness called a high rate of speed in a 75 mph zone on Interstate 10 about a mile from the New Mexico border. He lost control and hit a truck, sending his car careening across the center median into oncoming lanes. The witness, who stopped at the scene, later told police that ORourke had tried to drive away from the scene. O'Rourke recorded a 0.136 and 0.134 on police breathalyzers, above a blood-alcohol level of 0.10, the state legal limit at the time. In the case of his DWI arrest, O'Rourke did not face prison time because he completed an alternative adjudication program. It's not clear why the attempted burglary charge was dropped in 1996 (we asked the O'Rourke campaign about this but didn't receive a response to that particular question in time for publication). However, we could find no evidence that O'Rourke's father had any role in either case, nor did the meme offer any evidence. Congressman O'Rourke's father Pat was the El Paso County judge until 1986 -- a kind of chief executive of the county's governing body, the Commissioners Court -- so he had not held office for nine years by the time of his son's attempted burglary arrest. judge governing body The meme claimed: INSIDER TRADING VIOLATIONS After being sent a memo specifically prohibiting investment in Twitter's IPO [initial public offering], O'Rourke made a tidy one-day profit on it. When uncovered by a government watchdog, he quickly turned himself in. This violation of the STOCK Act (Stop Trading on Congressional Knowledge) is apparently a habit, as there are several other instances of this behavior; he characterizes them as mistakes. Despite the meme's claim, O'Rourke has never been charged with, or convicted of, violating any laws related to insider trading, including the STOCK Act, which bars members of the U.S. Congress from benefiting from financial transactions made on the basis of information they received in their capacity as members of Congress. STOCK Act But this section of the meme does contain elements of truth in that -- after the matter was brought to light by a third party -- O'Rourke reported his potential violation of rules to the House Ethics Committee (for stock transactions he maintained were executed by his broker without his knowledge), and the matter was resolved without any charges being brought against him: violation U.S. Rep. Beto ORourke alerted the House Ethics Committee that he might have violated a new law restricting members of Congress from engaging in certain stock transactions. It is the first case to come before the committee involving a 2012 law that prohibits members of Congress from participating in initial public offerings, or IPOs, other than what is available to members of the public generally, said Melanie Sloan, executive director of the Committee for Ethics and Responsibility in Washington, a watchdog group. ORourke, a Democrat whose district covers a portion of western Texas, reported the possible violation after Legistorm, an online news site that tracks congressional issues, informed him that his Nov. 15 disclosure saying he participated in the Twitter IPO earlier in the month might indicate a violation of a 2012 law called the Stop Trading on Congressional Knowledge Act, or STOCK Act. The freshman congressman also reported that, through his stockbroker, he participated in six other initial public offerings this year. In an interview, ORourke said he didnt see a Nov. 5 memo from the House Ethics Committee warning members of Congress about participating in IPOs. On 27 November 2013, O'Rourke wrote on Facebook that the ethics committee had informed him they would consider the issue resolved once he sold off any remaining shares that he bought during any IPOs, and sent the U.S. Treasury a check equal to the amount he earned in profits from those IPO-related shares: wrote Upon receiving the letter from the Committee today I instructed my broker to sell all remaining shares, which he did. I then sent a check for the full amount of the profit from all IPO trades this year to the U.S. Treasury by overnight mail. Copies of the trades and the check have been sent to the Ethics Committee. I apologize to the House of Representatives and to the people I represent for not exercising due diligence. I will be much more thorough in the future concerning financial transactions and do my best to ensure that I am in full compliance with all rules covering members of Congress. Records filed with the Clerk of the House of Representatives show that O'Rourke bought between $1,000 and $15,000 worth of shares in Twitter on 7 November 2013 (the first day the company was traded on the stock market), before selling off between $1,000 and $15,000 in shares later that day. filed Records also indicate that on 27 November 2013, O'Rourke again sold off between $1,000 and $15,000 worth of Twitter shares "pursuant to the recommendations made by House Ethics Committee in a letter from 11/27/13." indicate The meme claimed: FATHER'S DRUG SCANDAL O'Rourke's father, while county judge, had a 2-way radio installed in his Jeep. Installers discovered a condom packed with a "white powder" concealed in his vehicle and called police. Much to the dismay of investigating officers, the Captain on duty, a friend and political ally of O'Rourke, flushed the evidence down the toilet and dropped the charges. The Captain was subsequently suspended and tried for tampering with evidence. This section of the meme relates to incidents which took place in 1983, when Beto O'Rourke was 10 years old, and which had absolutely nothing to do with him. Nevertheless, it's true that in February 1983, El Paso County Sheriff's Captain Willie Hill told two police officers to get rid of a condom full of white powder which they had found in Pat O'Rourke's car while they were installing a radio in it. The officers suspected the powder to be heroin or cocaine, but the substance was never tested to determine its true nature. Hill was temporarily suspended but was reinstated after being acquitted on a misdemeanor charge of evidence tampering. (The prosecutor had earlier dropped a charge of misconduct against him.) Hill testified that he made a snap decision about the discovery of the powder, which he strongly suspected had been planted there to embarrass or undermine either O'Rourke or one of the officers installing the radio. being acquitted O'Rourke and Hill were friends, as O'Rourke (then county judge) told the El Paso Times: "Because he's a good man, it would be an injustice if Willie were to suffer grievous consequences from this whole episode. You have an honest and honorable man implicated by pure fluke. And that's just damn right not fair." El Paso Times The meme claimed: FAMILY BUSINESS FEDERALLY PROSECUTED O'Rourke's family business "Charlotte's Furniture," a store "Beto," his mother and sister are involved with, was charged in 2010 with altering records to avoid IRS reporting. Investigators found they accepted cash payments, in one instance over $630,000 from an unnamed individual (that's a LOT of furniture)! Found guilty on 15 counts, the sentence was a $250,000 fine and 5 years' probation. Around the time O'Rourke announced as a senate candidate, the business was shuttered and its records became unavailable. O'Rourke passes the prosecution off as a "mistake"; it's been covered, move along, nothing to see here. The meme got the basic facts right about the federal tax case against Charlotte's, but it falsely claimed that Congressman O'Rourke was personally "involved" in the company. He was not. In 2010, Charlotte's Inc., an El Paso furniture store company started by O'Rourke's grandmother in 1951, was convicted of "structuring transactions to evade reporting requirements, a tax-related felony. The company was charged as a corporate entity, but the Congressman's mother, Melissa O'Rourke, acted as its authorized representative. felony The company pled guilty to accusations that it had restructured transactions in order to present relatively large cash payments as having been made in installments of less than $10,000. Anti-money laundering provisions of U.S. law require that a business reveal the identity of any individual who makes a cash payment above that threshold. restructured provisions In total, Charlotte's and its employees illegally restructured $630,000 in payments, all from one customer, in this way between May 2005 and October 2006. The identity of that customer is not known. U.S. District Court judge Kathleen Cardone gave a sentence of five years' probation and a $500,000 fine, with $250,000 of that suspended. sentence In 2017, Melissa O'Rourke announced that she intended to close down the business but denied the decision was connected to her son's U.S. Senate campaign or the 2010 conviction. announced According to Texas Comptroller of Public Accounts records for 2017, Congressman O'Rourke had no formal role with Charlotte's Inc., whose directors were Melissa O'Rourke and the Congressman's sister Charlotte O'Rourke. records Records for 2005 and 2006 (when the I.R.S. reporting violations took place) as well as 2010 (when the conviction happened) show that Congressman O'Rourke had no formal role with the company at those times, either. Records The Congressman is part owner of the property where Charlotte's was located. According to O'Rourke's 2013 congressional financial disclosure, his mother gifted him an ownership stake worth between $1 million and $5 million in Peppertree Square, a shopping center on North Mesa St. in El Paso. disclosure However, his part ownership of the Peppertree Square property (which does not appear to entail any management function in any of the businesses located there) did not accrue until 31 December 2012, more than six years after the conclusion of the I.R.S. reporting violations at Charlotte's. O'Rourke, Robert Beto.  "Statement of Candidacy."
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  The El Paso Times.  4 August 2017. Correction [4 September 2018]: This article has been updated to more accurately describe the role of El Paso County judge.