Dick Wadhams #1

Dick Wadhams was a spokesperson for Senator William Armstrong.  Armstrong was on the Board of Governors of the Council for National Policy.

Tucked away in the Senate tax bill is an amendment offered by William Armstrong (R-Colo.) that would grant an exclusive multimillion-dollar break for eight investors, including a wealthy Oklahoma media executive who is a former business associate of Armstrong.

The Armstrong amendment -- one of 175 special transition rules that were inserted into the tax measure last month with no public hearings or debate -- would preserve preferential capital-gains tax treatment for one firm, Cimarron Coal Co.

Cimarron Coal was based in Colarado.  It was owned by eight investors.  One of them was Edward L. Gaylord a media magnate who owned among other holdings "The Daily Oklahoman newspaper, the Grand Ole Opry in Nashville, 10 radio and television stations and a 30 percent interest in the Texas Rangers Major League baseball team."

In the course of Senate debate, Howard Metzenbaum (D-Ohio) attacked the Armstrong amendment as a "far-out amendment" that granted a "special privilege" to unidentified investors.  Armstrong justified his provision by claiming that it granted tax equity to the investors, and he did not disclose who they were at the time.  The amendment passed 68 to 31.

According to Armstrong's financial disclosure form, the Colorado senator received more than $100,000 in capital gains and interest income last year from Gaylord's family-owned company, Oklahoma Publishing Co. Armstrong sold the now-defunct Colorado Springs Sun newspaper to the Gaylord firm in 1977. Dick Wadhams, the senator's press secretary, said the income represented the final payments from Gaylord to the senator on the sale in August of 1985.

Wadhams said Armstrong no longer has any financial relationship with Gaylord. While the senator is a friend of Gaylord through the newspaper sale and was "aware" of Gaylord's interest in Cimarron Coal Co., Armstrong did not sponsor the tax break at his request or for his benefit, Wadhams said. "This was based on the equity of the case for Cimarron Coal that was brought to him," said Wadhams. "It had nothing to do with who was involved and that's all there is to it."

As part of an effort to eliminate loopholes, the Senate bill was intended to eliminate loopholes by ending the special treatment of capital gains, which had been taxed at a maximum of 20 percent.  A lower maximum tax rate was established for all income of 27 percent. But Armstrong amendment allowed the Cimarron Coal to continue to receive the special 20 percent tax rate indefinitely on royalty income they receive from a strip mine in northeast New Mexico.

According to the article, the Joint Committee on Taxation submitted an estimate indicating that the Treasury would lose $2 million during the next five years from the tax break.  William Diss, Cimarron's accountant, estimated that it could be more than $4 million.  The exact amount depended upon the amount of coal mined.

Diss also offered as rationale justifying the break that Cimarron had a fixed-price contract for the coal that had anticipated the 20 per cent rate. 

As a sidenote, the Armstrong amendment was cosponsored by David Boren (D-Okla.).  Edward L. Gaylord's father, Edward K. Gaylord, contributed $500.00 to Boren in 1989.  Edward K. was the founder and publisher of the Daily Oklahoman newspaper.

The Gaylords are not just a wealthy family, they are an empire worth billions.  Their political contributions and influence are huge.

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