Stephanie Mencimer

Stephanie Mencimer

Reporter

Stephanie works in Mother Jones' Washington bureau. A Utah native and graduate of a crappy public university not worth mentioning, she has spent the last year hanging out with angry white people who occasionally don tricorne hats and come to lunch meetings heavily armed.

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Stephanie covers legal affairs and domestic policy in Mother Jones' Washington bureau. She is the author of Blocking the Courthouse Door: How the Republican Party and Its Corporate Allies Are Taking Away Your Right to Sue. A contributing editor of the Washington Monthly, a former investigative reporter at the Washington Post, and a senior writer at the Washington City Paper, she was nominated for a National Magazine Award in 2004 for a Washington Monthly article about myths surrounding the medical malpractice system. In 2000, she won the Harry Chapin Media award for reporting on poverty and hunger, and her 2010 story in Mother Jones of the collapse of the welfare system in Georgia and elsewhere won a Casey Medal for Meritorious Journalism.

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Will Darkened Polling Stations Impact Key Vote in Pennsylvania?

| Sat Nov. 3, 2012 10:08 AM PDT

Hurricane Sandy left large swaths of Pennsylvania without power this week, and heading into Tuesday's election as many as 300 polling stations were still in the dark on Friday afternoon. Many of those stations are reportedly in critical Bucks County. Once a Republican stronghold, the county went for Obama in 2008, and it has become increasingly Democratic. But in an indication of its key role in the election, GOP challenger Mitt Romney has decided to make a last-minute visit to Bucks County on Sunday, suggesting that he believes he can possibly win the rich trove of electoral college votes of a state long considered solidly blue. To win Pennsylvania, Romney has to win Bucks County.

News of Romney's visit—and the $12 million worth of ads that the GOP has aired in the state in the past several days—comes at a time when many people in the county have remained without power, as many as 50,000 as of Friday afternoon. There've been varying reports about the number of polling stations that are affected and vague plans from elections officials as to how they'll handle those outages come Tuesday. Republican Gov. Tom Corbett has made restoring power to voting precincts a high priority behind hospitals and other critical infrastrure. The state has extended absentee ballot deadlines in many places, including Bucks County, to give voters more time. And state officials have said they don't expect any voting problems: Voting machines apparently can run on batteries for at least a few hours, and FEMA has reportedly offered to supply generators to run voting machines.

Romney's Mormon Background May Shape His Anti-FEMA Stance

| Mon Oct. 29, 2012 2:39 PM PDT

With Hurricane Sandy tearing up the eastern seaboard, Mitt Romney has been taking some knocks for his suggestion during a GOP primary debate in June 2011 that the Federal Emergency Management Agency should be shuttered in favor of letting the states and the private sector take responsibility for disaster response. Liberals criticized Romney's comments as just another example of how he and Paul Ryan would tackle the national debt by cutting needed services. But when it comes to dealing with disasters, Romney's view of the government's role may be shaped by something other than Republican orthodoxy—his experience as a sixth-generation Mormon.

In 2007, Romney gave what was then known as his "Mormon speech," in which he aimed to reassure voters that his faith would not prevent him from representing people of all religions. After the speech, I wrote a story lamenting that Romney hadn't spoken more about some of his church's strengths, most notably its ability to respond in a crisis, which in many cases has indeed been superior to efforts launched by the government, including during Hurricane Katrina. From that story:

The church's self-reliance dogma extends beyond the average family basement to the community at large. For instance, it runs Bishop's Storehouse Services, a network of regional warehouses that became well known during the Great Depression. When disaster strikes, church elders spring into action to distribute the goods through a welfare organization whose efficiency has been compared by some writers to the German Wehrmacht.

I grew up in Utah and have seen this phenomenon first hand. In the spring of 1983, after record levels of snow melted in the nearby mountains, City Creek flooded and threatened major parts of Salt Lake City. On a Sunday morning, as the water started to rise, the church quickly mobilized thousands of people to make sandbags to save critical parts of downtown (and, of course, the church infrastructure). We watched with amazement as the volunteers literally diverted the floodwater onto State Street, a major thoroughfare (where people later went fishing). The efforts were so successful that state officials estimated that they prevented 1,400 acres of land from flooding and $140 million in water damage.

More recently, the church went into high gear during Hurricane Katrina in a performance that put the federal government to shame. Before the storm made landfall, the LDS church in New Orleans safely evacuated all but about seven families out of about 2,500 local members, largely because the church had created an automated telephone emergency warning system that alerted all its members, instructing them to get out of town and telling them where to go.

Two days before the storm made landfall, while FEMA was floundering, the church dispatched 10 trucks full of tents, sleeping bags, tarps to cover wrecked roofs, bottled water, and 5-gallon drums of gas from its warehouses to New Orleans and other hard-hit areas. The supplies were distributed in an orderly fashion to people who desperately needed them.

Rather than downplay his religion, Mitt could spotlight the aspects of his church that reflect basic Republican values of self-sufficiency and the primacy of the private sector. After all, if disaster strikes, who will really care whether the Book of Mormon puts the Garden of Eden in Missouri? What matters is that if Romney ends up in the White House, his God will no doubt tell him to dispatch the trucks before the hurricane strikes.

The problem, of course, with Romney's projecting Mormon Church experience onto federal disaster management policy is that the LDS Church is sui generis. Their admirable model for self-reliance and disaster aid works only because the church is a unique, well-oiled, and tightly networked organization with members who will mobilize on command, as they did when Salt Lake flooded in the 1980s. There's no reason to believe, for example, that the state of Louisiana would have handled Hurricane Katrina any better if it had been left to its own devices.

Even in Utah, where Mormons have amply demonstrated their ability to respond to a crisis, the state has recognized that it can't rely solely on volunteer efforts to protect its residents. The current governor, Gary Herbert, a Republican, has requested federal disaster aid for several state crises. Federal funds have helped shore up the state's infrastructure to mitigate flooding, among other things, so there's more between residents and potential flood waters than just the sandbags of the Saints. But whether a President Romney would come around to the view of his supporters in Utah is anyone's guess.

Romney's Charitable Trust—Not Very Charitable

| Mon Oct. 29, 2012 10:03 AM PDT

When Mitt Romney has come under fire for employing aggressive tax avoidance strategies that have reduced his federal tax rate to one lower than most middle-class Americans pay, his defenders have often pointed to his generous charitable donations as proof that he has contributed his fair share. The argument has never been especially compelling, given that a lot of his charitable contributions went to his own family foundation, which then gave money to such worthy causes as the Heritage Foundation or the George W. Bush library. But today Bloomberg Bloomberg added a new wrinkle to the story, reporting that Romney has taken advantage of a complicated—and now mostly outlawed—charitable trust to defer and avoid paying capital gains taxes on some of his earnings.

Using the Freedom of Information Act, Bloomberg smartly requested the tax returns of a charitable trust set up by Romney in 1996, which have never been publicly released. (The trust is separate from both the Romneys' family trust and foundation.) The documents reportedly show that Romney used a loophole to essentially rent the tax-exempt status of a nonprofit—in this case, that of the Mormon church—to lower his tax rate while not actually giving much money to the charity itself. Bloomberg explains:

When individuals fund a charitable remainder unitrust, or "CRUT," they defer capital gains taxes on any profit from the sale of the assets, and receive a small upfront charitable deduction and a stream of yearly cash payments. Like an individual retirement account, the trust allows money to grow tax deferred, while like an annuity it also pays Romney a steady income. After the funder’s death, the trust’s remaining assets go to a designated charity. 

Congress restricted the loophole just a year after Romney set us his trust to require that at least 10 percent of the trust's initial investment remain for the charity at the end of the trust's life. The Romney trust was projected to leave 8 percent to the nonprofit, which would have made it illegal under the new law, but according to Bloomberg, existing trusts like Romney's were grandfathered into the law.

Setting up the trust, worth between $750,000 and $1.25 million in 2001, enabled Romney to take an upfront deduction for his charitable donation to the trust, while also earning annual payments worth 8 percent of the trust's assets. Unlike much of his own portfolio, Romney's charitable trust investments have been very conservative. (It's now just all cash.) As a result, according to Bloomberg, the trust earned only $48 last year, while paying out nearly $37,000 to the Romneys. Meanwhile, the principal, which goes to the charity upon Romney's death, has been dwindling as a result of those payouts, down to $421,000 in 2011. According to Bloomberg:

The current investing strategy favors the Romneys over the charity because they get a guaranteed payout, said Michael Arlein, a trusts and estates lawyer at Patterson Belknap Webb & Tyler LLP.

"The Romneys get theirs off the top and the charity gets what's left," he said. "So by definition, if it's not performing as well, the charity gets harmed more."...

If the CRUT maintains the same investing strategy, assets will continue to shrink, said Jerome M. Hesch, a tax and estate planning attorney at the law firm Carlton Fields. The trustee acted prudently in protecting against losses during a stock market decline, he said.

Nevertheless, "what's going to go to charity is probably close to nothing," Hesch said.

The Bloomberg story provides yet another example of Romney relying on every tax avoidance scheme in the book to shield his fortune—and in this case, using his church in the process. He should be glad this scoop is likely to got washed away in the hurricane coverage this week.

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