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To: Interested Parties

From: Tom Kise


RE: Gillibrand Misleads Voters
In a recent television ad, Sen. Kirsten Gillibrand attacked Joe DioGuardi with misleading
information regarding his past. I have included the facts below.

CLAIM:
A former congressman turned lobbyist

FACT:
After leaving Congress, DioGuardi worked to end the genocide of Albanians in the former
Yugoslavia. He traveled from safe house to safe house collecting documents that revealed the
gruesome realities that were occurring; he shared these with Congress, and thereby qualifies as
a lobbyist.

GILLIBRAND FACT:
While DioGuardi was fighting genocide, Gillibrand was working as a lawyer to help Philip Morris
cover up the fact that tobacco products can cause cancer. She maintains strong ties with Big
Tobacco.

• “More than half of her legal career was spent at the New York firm of Davis, Polk, which
defended Philip Morris against criminal fraud and perjury charges stemming from
testimony by its executives before Congress. Gillibrand was a key player on the high-
powered team of Big Tobacco lawyers that spent years trying to prevent the release of
documents that showed that the top company executives unquestionably knew when
they pushed cigarette use that nicotine was addictive, its dosages could be manipulated,
and it caused cancer. She and the team also focused on preventing anti-tobacco
lawyers from getting company documents, including research on nicotine.” (Raymond
Hernandez and David Kocieniewski, “As new Lawyer Senator Was Active in Tobacco’s Defense,” New York Times, March
26, 2009.)

• When she left Davis, Polk and went to David Boies’s firm, Altria followed her as a client.
(Dick Morris and Eileen McGann, “2010 Take Back America: A Battle Plan”)

• Altria (formerly Philip Morris) gave $20,500 to her campaign in the 2007-08 election
cycle. (Dick Morris and Eileen McGann, “2010 Take Back America: A Battle Plan”)
• When Gov. David Patterson was considering appointing Gillibrand to fill Hillary’s seat,
David Boies (her former boss whose firm still represents Altria) and his son each made a
$25,000 contribution to Patterson. (Wayne Barrett, “Wayne Barrett: Is Gillibrand too Republican to Replace
Clinton,” VillageVoice.com, January 22, 2009.”)

CLAIM:
A record of wasteful government spending, special interest junkets and trips.

FACT:
Joe fought to cut spending and increase accountability in Congress as president of Truth In
Government. During his time in Congress, Joe used his experience as a CPA to push for reforms
to the government budgeting system to reduce spending, cut waste, and increase
accountability. Joe recommended ending wasteful duplicative practices in the 200 government
agencies by adopting uniform accounting systems. Joe also fought to change the government’s
current cash-basis (one-year) accounting system to an accrual system – which businesses are
required to use. He sponsored legislation to create a chief financial officer within the Treasury
to increase oversight of U.S. government spending. As President of Truth in Government, Joe
has worked to strengthen our country’s financial foundation by promoting accountability and
transparency in Congressional spending and reporting.

 In 1986, Joe Introduced The Federal Financial Management Improvement Act, Which
Would Have Established A Chief Financial Officer Of The U.S. Government. (H.R. 4495,
Introduced 3/25/86)

 Joe Pushed For The Implementation Of GAO Recommendations On Improving The


Government’s Budget And Accounting Principles. “The federal government should
adopt uniform accounting principles to replace some 200 separate, antiquated systems
it now uses, and create a chief financial officer to oversee the entire financial picture,
according to a report released Thursday [by the General Accounting Office]. ‘Getting this
GAO report is really important because it confirms our worst fears,’ said Rep. Joseph
DioGuardi, R-N.Y. … DioGuardi and Rep. Larry Craig, R-Idaho, released the report at a
news conference. … Among the report's recommendations: Create a federal chief
financial officer within the Treasury Department who would have the power to oversee
and direct the financial management, accounting and budget systems of the federal
government; … Change from the current cash-basis (one-year) accounting system to a
long and short term, or accrual, system; Adopt uniform accounting systems in every
department and major agency, replacing the more than 200 systems now in use.” (“Get
Rid Of Cash-Based Accounting in U.S. Government, GAO Says,” The Associated Press, 7/15/88)

GILLIBRAND FACT:
During her time in the U.S. Senate, Gillibrand has voted for a number of wasteful spending
projects, including the $787 billion stimulus package which failed to reverse the economic crisis
or rising unemployment rates. Since the stimulus package passed, 125,000 jobs have been lost
in New York.

 Senator Gillibrand Voted In Favor Of The Democrats’ Massive Stimulus Bill That
Allowed AIG To Distribute Huge Bonuses With Taxpayer Dollars. (H.R. 1, CQ Vote #64: Adopted
(thus cleared for the president) 60-38: R 3-38; D 55-0; I 2-0, 2/13/09, Gillibrand Voted Yea)

 The “Stimulus” Bill Totaled $787 Billion In Spending, The Equivalent Of More Than
$2,580 For Every Man, Woman And Child In The United States. (William Branigin, Shailagh
Murray and Paul Kane, “Senate Begins Voting on Economic Stimulus Bill,” The Washington Post, 2/13/09; U.S. Census
Bureau Website, www.census.gov, Accessed 2/13/09)

 New York Has Lost 125,200 Jobs Since The Stimulus Was Passed. (U.S. Bureau of Labor
Statistics, www.bls.gov, Accessed 9/21/10)

 Senator Gillibrand Voted In Favor Of The FY2009 Omnibus Spending Bill. (H.R. 1105, CQ Vote
#96, Motion agreed to 62-35: R 8-32; D 52-3; I 2-0, 3/10/09, Gillibrand Voted Yea)

 Taxpayers For Common Sense Identified More Than 8,500 Earmarks In The Omnibus
Worth $7.7 Billion. “Taxpayers for Common Sense (TCS) has been going through the
omnibus to pull together a total number of earmarks and dollar amount. TCS found
8,570 disclosed earmarks worth $7.7 billion. When you add the $6.6 billion in disclosed
earmarks that were in the three FY09 spending bills that passed in the fall (Defense,
DHS, MilCon/VA) you end up with $14.3 billion worth of disclosed earmarks in FY09.”
(Taxpayers For Common Sense Website, www.taxpayer.net, Accessed 3/9/09)

CLAIM:
DioGuardi was caught cheating on his taxes.

FACT:
The year prior to the IRS filing against DioGuardi, the treatment of commodity spreads – which
was a practice that was commonly used and recommended by leading accountant firms during
the 1970s – was amended. When his family filed their taxes that year, the updated law was not
realized.

• At That Time, Taxpayers Were Subject To A Punitive Top Tax Rate Of 70 Percent – And
Joe Sought To Protect His Family From Over-Taxation By The Federal Government. In
the 1970s, taxpayers were subject to a punitive top tax rate of 70 percent, which hurt
job creation and economic growth. The tax system was broken, and like many
Americans, Joe took steps to reduce his tax burden and protect his family.
o “Suppose you are one of the lucky ones. Last October, you bought 1,000 shares
of the new gene-splicing stock Genentech at $35 a share and sold it $80 on the
first day it was offered to the public. You made a killing: a $45,000 profit in a
matter of hours. But you have to share most of it with Uncle Sam. If you are in
the top tax bracket, the government will claim 70 percent, and you'll get to keep
only $13,500. … A commodity tax straddle can convert ordinary income that's
taxed at 70 percent into a long-term capital gain taxed at 28 percent and also
delay the tax liability for a year or more.” (The Washington Post, 12/21/80)

• The Challenge To The DioGuardi Tax Return Was The Result Of A New Ruling Issued By
The IRS That Changed The Treatment Of Commodity Spreads – It Had Not Been A
Longstanding Tax Law. The IRS challenged the DioGuardi family tax return in 1978. In
the previous year, the IRS issued a ruling changing the way it treated certain commodity
futures trades and would no longer accept a tax deduction for losses sustained on those
trades. (The Washington Post, 12/21/80)

GILLIBRAND FACT:
Sen. Gillibrand cheated the American people when the policies she helped develop (i.e.,
subprime mortgages) at the Department of Housing and Urban Development prompted the
housing meltdown. Then, when the market crashed, her family profited about $40,000.

 Gillibrand once touted her work on the New Markets Initiative in HUD. “During the
Clinton Administration, she served as Special Counsel to the Secretary of Housing and
Urban Development (HUD), Andrew Cuomo. Gillibrand played a key role in furthering
HUD’s Labor Initiative and its New Markets Initiative…” (“The New York State Pipe Traded Would
like to Congratulate Kirsten Gillibrand in Winning the New York State Congress Seat!” NYSPipeTrade.org, Febraury 9,
2007.)

 The “New Market Initiative” was subprime mortgages. They required Fannie Mae and
Freddie Mac to increase the number of loans purchased involving low-income
borrowers who couldn’t afford the mortgages they were being offered. The borrowers
who were given subprime mortgages are now the ones who are facing foreclosures
today.

o Jon Corzine described the New Markets Initiative as this during a Senate hearing
in 2001: “*HUD+ has transformed itself by launching new market initiatives;
integrating lower-income communities into the free market and creating
renewal initiatives that spur private sector investment in both urban and rural
communities. HUD has also helped America reach its highest homeownership
rate ever – 67.7 percent – and in the process helped African-American and
Latino households attain record levels of homeownership.” (“Opening Statement of
Senator Jon Corzine (D-NJ),” April 25, 2001, Banking.Senate.gov,
http://banking.senate.gov/01_04hrg/042501/corzine.htm.)
o “Entitled ‘Highlights of HUD Accomplishments 1997-1999,’ the document
chronicles the ‘accomplishments under the leadership of Secretary Andrew
Cuomo… Secretary Cuomo established new Affordable Housing Goals requiring
Fannie Mae and Freddie Mac – two government-sponsored enterprises involved
in housing finance – to buy $2.4 trillion in mortgages in the next 10 years. This
will mean new affordable housing for about 28.1 million low- and moderate-
income families. The historic action raised the required percentage of mortgage
loans for low- and moderate-income families that the companies must buy from
the current 42 percent of their total purchases to a new high of 50 percent – a 19
percent increase – in the year 2001.”
(“How government stoked the mania,” Wall Street Journal, October 3, 2008.”)
• The Gillibrands made about $40,000 off of the housing crisis. Jonathan Gillibrand
(Kirsten’s husband) bought “put” options in subprime lenders like Countrywide,
IndyMac, Downey Financial, Bank United Financial, and Accredited Home Lenders. In
other words, they were betting that the subprime market (which Kirsten helped create)
would collapse, helping their family yield a profit. That year, the Gillibrands made about
$40,000 in capital gains, making most of it by exploiting the desperate home loan
situation. (“Financial Disclosure Statement,” OpenSecrets.org, http://pfds.opensecrets.org/N00027658_2007.pdf.)

CLAIM:
He even voted himself his own congressional pay raise.

FACT:
The vote cited in Gillibrand’s ad was an omnibus spending bill worth over a half trillion dollars.
During the floor debates, DioGuardi did vote for the elimination of the 3 percent pay increase
for Congress, which passed and became part of the omnibus bill. As a fiscal conservative,
however, DioGuardi voted against the big-spending bill even though it included an amendment
that would eliminate a 3 percent pay increase for Congress. When Congress did receive a pay
raise, DioGuardi chose to donate his to charity.

 In 1987, Joe Refused To Accept A $12,100 Congressional Pay Raise. “Here, state by
state, are 12 senators and 56 representatives who have refused to accept a $12,100 pay
raise, according to a survey by consumer advocate Ralph Nader. … New York: Reps.
Joseph DioGuardi and George Wortley, Republicans.” (The Associated Press, 4/1/87)

 Joe Donated His Raise To Charity. “Those donating their raises to charity, Nader said,
are: … Joseph DioGuardi, R-N.Y. …” (United Press International, 4/1/87)

 Joe Voted For The Amendment To Eliminate The 3 Percent Pay Raise. “To motion to
recommit H J Res 395, Fiscal 1988 Continuing Appropriations, with instructions to report
it back with an amendment providing for a reduction in discretionary outlays and
prohibiting a pay increase for members of congress.” (H. J. Res. 395, RC Vote #436, Passed: 236-177,
12/3/87, DioGuardi Voted Yea, http://www.govtrack.us/congress/vote.xpd?vote=h1987-436)

 The Bill Cited In The Gillibrand Attack Ad Is A Massive $587 Billion Omnibus Spending
Bill. “House action on a giant $587 billion package financing the government for the rest
of the fiscal year shows how difficult it will be for Democrats and Republicans to join
forces to cut the federal deficit. By a 248-170 vote driven mostly by Democrats, the
House sent the spending bill to the Senate on Thursday, providing money for domestic
and military spending for the 1988 fiscal year, which began Oct. 1. … But in a long day of
debate and votes on the bill and several amendments, Republicans and a few
Democrats sought to block the measure, arguing that even more deficit-cutting was
needed. On final passage, 225 Democrats and only 23 Republicans voted for the bill. …
The spending measure combines the 13 annual appropriations bills that are supposed to
be enacted before the start of each fiscal year. The government is operating on
temporary financing legislation that expires Dec. 16.” (Alan Fram, “House Passage Of Spending Bill
Inches Congress Toward Deficit Cut,” The Associated Press, 12/4/87)

 Joe Voted Against The Half-Trillion Spending Bill. (H. J. Res. 395, Fiscal 1988 Continuing
Appropriations, RC Vote #437, Passed: 248-170, 12/3/87, DioGuardi Voted Nay,
http://www.govtrack.us/congress/vote.xpd?vote=h1987-437)

 The Bill Included An Amendment To Eliminate A 3 Percent Pay Raise That Had Been
Scheduled For Lawmakers. “The lawmakers' work on the bill was complicated by votes
on a series of amendments that caused flareups all day long. Among them were: A 236-
177 vote that ordered the bill be reshaped later to requirements of the deficit-reduction
accord. The same vote eliminated a 3 percent pay raise that had been scheduled for
lawmakers, federal judges and top government officials.” (Alan Fram, “House Passage Of Spending
Bill Inches Congress Toward Deficit Cut,” The Associated Press, 12/4/87)

GILLIBRAND FACT:
In reality, it was Gillibrand who voted to raise congressional pay.

 Just Last Year, Senator Gillibrand Voted To Kill Legislation To End Automatic Pay Raises
For Members Of Congress. (S.Amdt. 621 to H.R. 1105, RC Vote #95: Failed: 52 – 45, 3/10/09, www.senate.gov,
Gillibrand Voted Yea)