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Clintons’ Host Has Big Tax Bill

September 1, 2000

SKANEATELES, N.Y. (AP) _ The builder playing host to President Clinton and Senate candidate Hillary Rodham Clinton this weekend in this upstate New York resort village has an outstanding state tax bill of almost $1 million, officials said Friday.

A tax warrant against Thomas B. McDonald, a copy of which was obtained by The Associated Press, was issued in October 1999.

According to the warrant, McDonald owed the state $771,662 in unpaid income taxes for 1997 and about $145,000 in interest and penalties as of October. Interest on the tax bill has grown since then: the total now stands at $938,357.48, said Marc Carey, a spokesman for the state Department of Taxation and Finance.

``This is obviously one of our more significant personal income tax delinquencies,″ Carey said.

McDonald’s lawyer, Paul Predmore of Syracuse, said the builder also has an outstanding federal income tax bill for that year. Predmore, citing taxpayer confidentiality, refused to say how much the federal tax bill was for.

Presidential spokesman Joe Lockhart said the White House has known about McDonald’s tax problem since last year.

``People from time to time have issues with either the IRS or the state and they generally get resolved,″ Lockhart said.

Hillary Clinton’s Republican opponent in the New York Senate race, U.S. Rep. Rick Lazio, was quick to seize on word of McDonald’s tax problems, using it to highlight the first lady’s recent move into the state.

``Everybody knows Mrs. Clinton has never paid a dime in income taxes to New York state,″ said Lazio spokesman Michael Marr. ``I guess this is what Mrs. Clinton means by tax credits for upstate New York.″

The Clinton campaign fired back Friday by releasing campaign contribution filings showing that Lazio had accepted a total of $5,000 since 1995 from Long Island contractor Frank Stubbolo. On Thursday, the Long Island newspaper Newsday reported that Stubbolo and his brother Ken Stubbolo have a long history of debts, delinquent tax payments and misrepresentations of their qualifications.

The Stubbolos have won some $37 million in state and Nassau County contracts and subsidies, Newsday reported.

``This is another example of Rick Lazio’s hypocrisy,″ Clinton campaign spokesman Howard Wolfson said Friday of accepting money from Frank Stubbolo. ``He should make sure his own house is clean before throwing more mud at Hillary.″

Predmore said McDonald had filed his 1997 tax returns in a timely fashion and was not disputing his tax liability, a situation the lawyer said stemmed from ``a real estate investment he was in from the boom years″ that went bad and left McDonald with the large tax bill.

``He did not have the liquid resources to pay it and that’s what he’s contending with,″ the lawyer said.

McDonald is a builder in the Syracuse area who has constructed office buildings and other major projects in New York State.

``Since filing the return, he has been working with the taxing authorities to get the thing resolved ... We don’t want to get into the specifics of it _ it’s a personal matter _ but it’s a complicated issue and these things often take months if not years to resolve,″ Predmore added.

Thomas and Cathy McDonald turned over their sprawling home on the shores of Skaneateles Lake just west of Syracuse to the Clintons for five days last year. For this year’s shorter stay, the Clintons planned to arrive at the home Friday evening and leave on Saturday evening for their own home in Westchester County just north of New York City.

McDonald is a friend of Terence McAuliffe, who grew up in Syracuse and is one of President Clinton’s biggest fund-raisers.

During their stay this year, the Clintons are scheduled to attend several fund-raising events for Hillary Clinton’s Senate campaign. They may also visit the State Fair on Saturday.

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