S. Donald Sussman, the wealthy fiance of U.S. Rep. Chellie Pingree, is having a hard time keeping a low profile.
The New York Times published a story Monday about Sussman’s behind-the-scenes funding of a hedge fund ostensibly owned and run by women.
The arrangement “may have been designed to mislead a number of observers, from the tax authorities to the (Securities and Exchange Commission) to entities wishing to invest in women-owned businesses,” wrote Judge Richard J. Sullivan of the U.S. District Court of the Southern District of New York, in a ruling in August on a case involving a contract dispute between Sussman and Pacific Alternative Asset Management Co.
A lawsuit filed by Sussman led to a countersuit by Pacific Alternative Asset’s founding partners. The judge’s ruling left Sussman – who in 2000 contributed $2 million in seed money to $10,000 put up by Jane Buchan and her three partners – owning a 40 percent stake in the hedge fund’s parent company.
“This was a personal and passive investment in a fledgling company,” said a statement from Sussman’s attorney. “Donald has never played a role in the management and operations of the company.”
Sussman also was the focus of a story posted Friday on the website of the conservative Weekly Standard opinion magazine based in Washington, D.C., questioning his residency and whether he continues to claim tax breaks under a program designed to aid economic development of the U.S. Virgin Islands.
According to the assessor’s office in North Haven, Sussman bought a 165-acre farm on the Penobscot Bay island in September 2008 and an adjacent parcel of 55 acres in January 2009. He paid property taxes last year in excess of $84,000 and paid taxes this year of $100,000.
Pingree maintains the home on North Haven that she bought in 1994. During a debate on WGAN radio Tuesday morning, Pingree said she urged Sussman to move his primary residence to Maine “if we’re going to put our lives together.”
Sussman’s primary residence – defined under tax law as where someone is physically present for at least 183 days in the year – had been in the Virgin Islands, a U.S. territory with a federally approved economic development program that allows wealthy individuals to effectively pay an income tax rate of 3.5 percent.
Beginning in 2009, according to a statement from his attorney, Jeffrey A. Schantz, Sussman shifted his primary residence to Maine and has since paid “millions of dollars in income tax to the State of Maine.”
He continues to maintain a home in the Virgin Islands, along with an apartment in New York and a home in Washington, but “as of 2009, Mr. Sussman has not qualified for, nor has he claimed any, income tax benefits under the United States Virgin Islands Economic Development Program.”
Schantz also said Sussman’s company in the Virgin Islands remains listed as an economic development program participant because the program grants benefits for 10 years.
Reached by phone this morning in Japan, Sussman said, “I don’t think I have anything further to say.”
Pingree addressed the controversy over her use of Sussman’s private jet four years after strongly objecting to – as the voice of an ethics watchdog group – members of Congress flying aboard corporate jets.
“First, you look at my voting record,” she said Tuesday morning on WGAN. “Nothing has changed. I still think we should have the toughest laws on Wall Street that we could possibly have. I voted for that. I voted for tax increases for the wealthiest people in this country.”
She said she continues to stand by what she said in 2006 as head of Common Cause.
“If you’re taking a trip with a lobbyist or someone who’s attempting to influence your vote, that should be against the rules, and it is,” she said Tuesday. “But when it’s your fiance and the only thing he can influence me on is what we’re having for dinner? And remember, I’m not on that plane very often, but when I am, it doesn’t cost the taxpayer a thing.”
Staff Writer Glenn Jordan can be contacted at 791-6425 or at: gjordan@pressherald.com
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