Hollywood actor Rob Lowe has alleged that an elected member of the state’s Board of Equalization used a slur about Jewish people during a private meeting over a tax dispute last year.
Lowe’s attorney also informed board officials that he may sue BOE member Jerome Horton for a disparaging remarks in press release made following the board’s Feb. 23 split decision to lower the income tax Lowe owes on a $25 million Montecito home sale in 2005.
“Theirs is a misrepresentation of the facts, I am a lifetime supporter of Israel and related issues, this is only about my vote against them,” Horton said in an email to The Sacramento Bee Monday night. Fiona Ma, who replaced Horton last week as the board’s chair, said she wasn’t present at the Lowe meeting last summer, but “if (Horton) did that, he should apologize, for starters.”
The hubbub about Horton’s alleged comments and public remarks is just the latest in a string embarrassing events to hit the Board of Equalization, which collects $60 billion annually in state sales and use taxes, fuel, alcohol, and tobacco taxes and hears state income tax appeals.
As first reported by Bloomberg BNA, Lowe alleged in a Feb. 24 email to board members that Horton had asked him and his wife, Sheryl Berkoff, if she “Jewed down” contractors who built their house. Berkoff is Jewish.
“Appalled, we asked him to explain his comment,” Lowe said in a copy of the email acquired by The Bee. “He doubled down, saying ‘C’mon. You know what I’m saying. Did you Jew them down? You must have.’”
According to the email, Lowe’s tax attorney Mark Bernsley and members of Horton’s staff were present when the remarks were allegedly made.
Lowe also wrote that he would inform the Anti-Defamation League of Horton’s alleged comments while “weighing other options to combat this virulent and unapologetic anti-Semitism in the people of California’s Board of Equalization.”
Bernsley also sent a letter to a board official warning that the Lowes might sue Horton for his comments and a subsequent email and press release that accused them of receiving “a gift of public funds” and are reviewing “whether BOE staff or facilities were used to communicate the comments.”
“It essentially asserts that the Board’s ultimate conclusions were wrong and Mr. Lowe got away with underpaying his taxes,” Bernsley wrote to Ma’s office.
The Board of Equalization’s members are unique as the only elected tax board in the nation. State law allows them to meet privately with appellants to talk over their tax appeals before the full panel takes action.
The Lowe email followed a 3-2 vote by the board that reduced the taxable profit on his family’s home sale, despite a lack of records to justify some deductions. The lower figure saves the celebrity couple $514,000 after a decade of debate with the state.
Diane Harkey and George Runner, both Republicans, voted with Democrat Ma to cut Lowe’s tax burden. Yvette Stowers, Democratic Controller Betty Yee’s surrogate on the board, sided with Horton, who is also a Democrat.
After losing the vote, Horton fired off emails and then a press statement that criticized his colleagues for making a “gift of public funds to one of our most affluent citizens. I love Rob Lowe’s movies, but not enough to gift him $514,000 of California’s taxpayer dollars.”
Bernsley said in his email that he will file to have the board rehear the case to affirm its decision – minus Horton.
“Because Mr. Horton may now become a defendant in a lawsuit, and has an apparent (if not obvious) bias, I ask that he be precluded from any further deliberations concerning the Lowes,” Bernsley wrote.
The Lowe story is the latest in a string of events that have exposed political rifts among its leaders and ineptitude in its operations. An audit last year revealed that the agency’s accounting is deeply flawed.
Not long after that, news reports revealed that Horton asked donors to contribute more than $730,000 to nonprofit organizations with ties to his wife. While such donations at the request of board members are legal, the reports prompted Ma to back a bill that would ban entities or individuals with business before board from making such behests for 12 months before and after a board adjudication. The law also would apply the same standard to regular political contributions to board members.
The measure bitterly divided the board. Harkey said last week that if passed, the measure would put the board “in a ditch.”
Meanwhile, Horton called for a closed meeting to discuss a significant case the board lost in court. He had to walk back the idea after The Bee noted that such a meeting would violate state law.
And last week, during the same session in which it split on the Lowe case, the board ended Horton’s five-year run as chairman and installed Ma after rejecting Horton’s choice, Harkey. That vote, like the Lowe decision, was split 3-2.