Clarence Thomas and the Mystery of the Missing Book Royalties
Pay Dirt is a weekly foray into the pigpen of political funding. Subscribe here to get it in your inbox every Thursday.
When Supreme Court Justice Clarence Thomas released a 2021 Kindle and Audiobook version of his best-selling 2007 memoir, a powerful longtime friend pitched in to juice the sales.
But even with that boost—which The Daily Beast reported came from conservative dark money mastermind Leonard Leo—the sales apparently didn’t take. At least, that’s according to Thomas’ 2021 financial disclosure, which listed no royalty income.
His most recent disclosure, which Thomas filed with an extension in August and covers the 2022 calendar year, doesn’t list royalties, either. In fact, Thomas hasn’t reported any royalty income since 2008, the year after the release of My Grandfather’s Son, a No. 1 New York Times bestseller that earned the justice what at the time was a stunning $1.5 million advance.
While that 14-year streak may sound absurd, there are a few explanations, ranging from scandalous to banal. But judicial ethics experts tell The Daily Beast that even the most benign and plausible explanation—that the memoir simply hasn’t sold enough copies to “earn out” beyond his huge advance—raises ethics concerns that apply to the justices more broadly.
Today, it’s common for Supreme Court justices to land lucrative book deals. Several justices have reaped seven-figure windfalls, including Amy Coney Barrett ($2 million advance), Ketanji Brown Jackson ($3 million), Sonia Sotomayor ($3.1 million), and Neil Gorsuch (at least $650,000 for a 2019 book, with a $250,000 partial advance on a new work).
But in this department, the famously private and reticent Thomas was the trendsetter. The $1.5 million advance on royalties from HarperCollins towered over the previous book deals given to his peers on the bench. It was also the first major personal windfall for Thomas, who The New York Times reported was still one of the poorest justices even after the advance. He remains one of the poorest members to this day, though the largesse from a network of conservative billionaire friends has funded a lifestyle far out of that league.
Ethics rules require justices to disclose any advances and royalties they receive above $200. Retired Justice Stephen Breyer’s final financial disclosure, covering 2022, includes $2,418.98 in royalty income from Penguin Random House, in addition to royalty income of $150,000 and about $42,000 from other works. On the same form that Gorsuch reported his initial $250,000 installment, he included $308.44 in royalties from a 2009 academic work; last year, that book earned him $277.57.
Still, Thomas has gone 14 years without reporting any royalties on a memoir that topped the charts—one which the reclusive conservative promoted in part with a speaking tour and major interviews, including reliable sales engines like “60 Minutes” and “The Rush Limbaugh Show.”
Last week, ProPublica reported that those promotional efforts also extended to at least one private gathering with wealthy people who have had interests before the Supreme Court—a previously unreported 2008 Federalist Society dinner hosted by billionaire conservative Charles Koch.
Legal experts told The Daily Beast it’s possible that Thomas—whose financial disclosures have repeatedly been shown to be variously opaque, erroneous, and incomplete over the years—has handled his royalty income in a way that might not require disclosure.
Stephen Gillers, a leading expert in legal ethics at New York University, told The Daily Beast that if Thomas gave his rights away, he wouldn’t have to disclose his royalties.
“It is possible of course that Thomas has assigned all royalties to someone else, in which case they are no longer income,” Gillers told The Daily Beast.
Gillers noted that this would not hold true if a judge or justice still owns the copyright but decides to assign a royalty payment to another person, in which case “the payment is still income to the judge.” But if someone else owns the rights, then Thomas wouldn’t be required to disclose his book’s royalties, nor would he be required to disclose that he’d given them away. (Gillers noted that such a move could carry gift tax implications.)
However, the copyright page on Thomas’ 2021 Kindle release indicates that the rights were at that point still in his name.
Virginia Canter, chief ethics counsel for watchdog Citizens for Responsibility and Ethics in Washington, theorized that Thomas could have donated the royalties to another entity, such as a charity.
“Another possibility is that he assigned the rights to his wife’s consulting firm,” Canter said, referencing Ginny Thomas’ company, Liberty Consulting, which has previously received nonpublic payments from Leo, according to The Washington Post. “He only has to report that she received income, but he doesn’t have to report the amount.”
Canter noted that if Thomas is donating the proceeds to a charity, he should disclose that information, along with any possible tax deduction, “because then you can understand why he’s not reporting the royalties.”
- She added that it’s “critical” to know whether Thomas or his wife has received payments, pointing to the raft of recent reporting about the couple’s entanglements with wealthy benefactors.
- Those benefactors include Leo, whose private PR company, CRC Advisors, promoted the 2021 Kindle release of Thomas’ memoir, along with a number of other ventures exalting Thomas. Prior to that point, the memoir appears to not have been available for public purchase in ebook form, according to internet and retailer searches.
“Leo was facilitating all of these events, and Thomas’s participation in them, and some of them apparently involve the promotion of the book,” Canter said. “If he’s tapping into that network of dark money groups to purchase the books and they’re the same dark money groups presenting arguments to the court, it looks like Thomas is beholden to Leo and those supporters and the grounds for recusal in those cases are strengthened.”
But it’s possible that Thomas’ reporting in this regard has been accurate. In fact, it’s the most likely explanation: The book has not sold enough copies to generate royalty income in excess of his $1.5 million advance—also known as “earning out.”
The Daily Beast sent questions to a number of people and entities for this article, including Thomas associates, the Supreme Court, and his publisher, HarperCollins.
A HarperCollins spokesperson replied that the company “does not comment on authors’ advances or any financial matters pertaining to their books.” The Supreme Court press office did not respond to emailed questions, which The Daily Beast also requested be forwarded to the justices mentioned in this report.
One source, however, did tell The Daily Beast that the book apparently still has not earned out. We could not independently verify that information.
Royalty calculations are notoriously tricky, and depend on contractual details that are often unknown to the public. For instance, Thomas’ royalty rate isn’t public information, and the book’s price has dropped over the years—though it is still selling.
- That number bumps up against the magic 250,000 “earning out” mark floated earlier this year by Fix The Court’s Gabe Roth, a judicial reform advocate who has testified as an expert before the House and Senate.
If the book in fact still hasn’t earned out, some ethics experts argue that would point to a larger and ongoing concern about the justices generally.
Kathleen Clark, a legal ethics expert at Washington University-St. Louis School of Law, said that exorbitant advances—that aren’t justified by sales—could be seen as a gift.
“One of the problems with the Court having financial transactions like book advances is that in theory those advances may not reflect the commercial value of the book, and appear as a windfall for the justice,” Clark said. “It raises the specter of an advance that is actually something like a gift.”
Gillers, of NYU, agreed.
“A big advance that a publisher could not reasonably expect to recoup in sales is really a gift and should be reported, or at least understood, as such,” he said, noting that justices must report all gifts outside the category of personal hospitality.
Clark pointed to the sky-high deals that justices have landed after Thomas’ deal, noting that the authors would appear to have little hope of recouping those amounts. But she also observed some irony in the fact that this specific imbalance was recently invoked in defense of Justice Sotomayor, who this summer was reported to have encouraged her staff to promote her memoir.
At the time, the Associated Press cited a “person close to Sotomayor” arguing that she wasn’t using her staff to put money back in her pocket, because her book had not earned out—and was in no danger of ever doing so. In order to generate royalties beyond her $3.1 million advance, the person said, Sotomayor would have to first sell “hundreds of thousands of additional books, more than double the purchases to date.”
Sotomayor declined to recuse herself in two cases involving copyright infringement issues with her publisher, Penguin Random House. (Gorsuch, who has the same publisher, also did not recuse from the second case after he joined the court.)
The Supreme Court declined to hear either case on appeal, and in both instances the publisher ultimately won in a lower court.
“Sotomayor’s defense is problematic, not exculpatory,” Clark said. “It suggests that a publisher arranged to give her an advance that would have exceeded what the book could have earned, which is evidence of an advance not justified by the sales.”
The first installment on Sotomayor’s advance—$1.175 million—came in 2010, two years after Thomas reported his final payment.
Charles Geyh, an expert in judicial conduct at Indiana University’s Maurer School of Law, concurred that an unrealistic advance is “essentially a gift,” telling The Daily Beast that “it would seem that the compensation the justices are receiving is a special deal for them in their capacity as justices.”
- According to the code, judges may receive outside compensation subject to restrictions. Among them, that compensation “should not exceed a reasonable amount nor should it exceed what a person who is not a judge would receive for the same activity.”
Danielle Caputo, counsel for legal ethics with nonpartisan watchdog Campaign Legal Center, pointed back to Leo, whose Kindle promotions would have nudged the book closer to that magic number where sales would once again put money in Thomas’ pocket.
- “That raises questions, understandably, about those strong personal relationships and ties, and where Thomas may not recuse himself from cases that may involve Leo,” Caputo told The Daily Beast.
- “It leads the public to wonder whether this creates some sense of impropriety, and whether the justice will be favorable to one party over the other.”
Her group’s chief concern, she said, is that the Supreme Court has no way to deal with these questions beyond the reporting requirements in place—requirements which Caputo, like all the experts interviewed for this article, believes are inadequate.
“This isn’t such a narrow question for other branches of government,” Caputo said, noting that members of the House must secure approval from the ethics committee for their book contracts.
“There can be a process in SCOTUS to better address these kinds of questions,” she said. “There needs to be a better process.”
The post Clarence Thomas and the Mystery of the Missing Book Royalties appeared first on The Daily Beast.
__________________________________________________________________
No comments:
Post a Comment