Tax fraud - 17 April 1992

The 15th of April is an ominous date on the American calendar. It's the deadline for filing your income tax on the earnings of the previous year. I think I ought to say income taxes, plural would be better, but we'll come to that. Everybody, every American citizen pays federal, that is national tax, and everybody includes Americans living abroad for any reason, so you may have noticed that American actors who live in Italy or Spain or some other place in Europe, are doing it because they are gainfully employed there – unlike some of my former good friends, British actors – they are not in Switzerland to avoid British taxes.

For Americans there is no tax haven, in Switzerland or Timbuktu or any other place. I believe the United States is only one of two countries that are so heartless in this matter. I said income tax had better be called income taxes, plural, because most states also levy a state – that is a California, a Michigan, a New York state – tax. I'm not talking about rates, what we call property tax, but income tax. If you live in New York City, alas, there is still a third, the city income tax which is a set fraction of the state tax. It's as if you were a Londoner and paid first a national income tax, then a Middlesex income tax, then a City of London income tax. It's too painful and I won't go on.

This 15 April however will be memorable and go down in the books, certainly in the books of social history because of the sin – the guilt of a single taxpayer or tax delinquent. A woman, a very rich woman, a very attractive, funny, powerful woman. Her name is Leona Helmsley. She was, she is the owner of the majority stock in a small chain of what are known as luxury hotels, the most famous of which is there just off Madison Avenue, in the 50s, the Helmsley. By lavish and florid advertising, Mrs Helmsley managed in the space of about half a dozen years, to establish her name in the public mind and her likeness in the public view and her view of herself as a sort of radiant monarch. She called herself the Queen of the Helmsley empire and she had enough style and good looks to manage it without seeming too ridiculous.

Something over four years ago, I believe at the end of 1987, a grand jury began to sit in the matter of Mrs Helmsley's income taxes. On 14 April 1988, on the very eve of tax day, Mrs Helmsley was indicted for tax fraud. The main charge was of furnishing a mansion in Connecticut for her personal use and charging off hundreds of thousands of dollars in expenses to her hotel chain, making her and her husband tax delinquents to the tune of $1.7 million. She was brought to trial the following year. The wheels of American justice grind exceeding small and slow.

In 1989 and on the 30 August she was convicted. She at once hired a new batch of lawyers and began the equally laborious and serpentine business of an appeal. However sentencing was set for December 1989 and in that month she was sentenced to four years in prison. Now in most countries I think the sentencing is followed, as in a Perry Mason film, by the bustling of the defendant into custody and there an end. But in this country, when you have a politically powerful and/or very rich defendant, the sentencing is practically the firing of the starting gun and the long-distance race to a reversal of the verdict.

Pending her elaborate and voluminously stated appeal, Mrs Helmsley was set free on millions of dollars bail. Throughout 1990 and 1991, her case went to a State Appeals Court, was dismissed, finally on to the United States Supreme Court which saw no reason to overturn the verdict. Appeals to the Supreme Court must always relate to, not the wrongdoing of a person or a firm or the superiority of federal law over state law, it's always about the denial or violation of the rights of an individual, as set down in the Constitution, What possible Constitutional ground could Mrs Helmsley appeal on?

Well, she declared in detailed affidavits that she had heart trouble, that prison would endanger, perhaps ruin, her health, So what's the Constitution say about that? Well, Article 8 of the Bill of Rights says that a court may not impose excessive bail, excessive fines nor may it inflict, here's the key phrase, cruel and unusual punishment. The Supreme Court refused to hear the case, in effect upholding the conviction. Outside the court, her constitutional lawyer wryly remarked that the punishment might be cruel but it was not unusual. Then after exactly four years from the indictments being handed down, four years of, as you can guess, emotional turmoil and the expenditure of millions of dollars in lawyers' fees, the last judge, demonstrating a fine sense of irony, some people said sadism, set last Wednesday, income tax day, for the surrender of Leona Helmsley, since her conviction known to the tabloids as the Queen of Mean.

Even then, in the week between the drop of the last gavel and her being taken away, she tried a final appeal. We, we the public, gathered that she simply couldn't credit the reality that she, Leona Helmsley, was actually going to go to jail. She offered to hand over all her hotel holdings, the entire empire, to the city of New York, to house the homeless. That would have made the world's media. Her lawyers announced, quite gravely, she has offered to solve the city's problem of the homeless single-handedly. The mayor's office was asked about this and his press officer said it had been broached before this week, but never went anywhere because the assumption was it was between the judge and Mrs Helmsley. Later on however, a lawyer of spokesman for Mrs Helmsley said that she had never made a firm offer. It was, he said, more of a metaphor in bargaining, than a concrete proposal, thus giving a final ludicrous twist to the current buzzword, metaphor, which incidentally rarely means metaphor – it usually means fable, symptom, sign, symbol. I guess an older spokesman have said that Mrs Helmsley was making the offer in a Pickwickian sense.

So, even on Tuesday, four years to the day of her indictment, her lawyer made what had to be the desperate, positively final plea, He went before the United States Court of Appeal for the Second District. You may wonder whom can you possibly appeal to under the law once the United States Supreme Court has spoken. Well the series of first appeals winding up in the Supreme Court, were against the conviction. When she'd lost there, the lawyers settled down to appeal the sentence and the last word of the last judge had been to order her to surrender on the 15th to a Federal Medical Centre in Lexington, Kentucky. Why so far afield and why a medical prison? Well Mrs Helmsley's pleas about her frail health had weighed sufficiently to have her sent to a federal prison designed to provide medical hospital care for females who are known to be, in one way or another, physically sick – 40% of the women at this prison need special care.

Yet, even when this order had been issued, Mrs Helmsley's lawyer argued on Tuesday most poignantly, that she was in a deteriorating cardio-vascular condition, that her imprisonment would amount to a death sentence, not only for her, but for her old husband, who was convicted along with her of tax fraud, but was at the time found to be incompetent for trial. Mrs Helmsley is plainly devoted to him and has been taking care of him ever since he became chronically ill, which was before the grand jury sat down, more than four years ago. Her lawyer also told the Appeals Court that Mrs Helmsley has received death threats from a pseudo-Nazi, so-called Aryan brotherhood – Mrs Helmsley is Jewish – to be carried out once she was imprisoned.

It's difficult to imagine what other compassionate, even persuasive lengths Mrs Helmsley's lawyers could have gone to. The lawyers made one last gasp. Could not Mrs Helmsley be confined, either in a Connecticut prison or one in Phoenix, Arizona, where her ailing husband could live close by? But it was all to no avail. The pleas concerning Mrs Helmsley's health had already been taken up and allowed for the federal authorities mainly, in sending her to the only federal prison that has extraordinary medical provisions for invalid women. So, before dawn on Wednesday, Mrs Helmsley left New York in her private jet, flew to Kentucky, drove to Lexington Gaol, what we now call a correctional facility, took on her prison blue shirt and trousers, retained only her gold wedding ring. For a week or so she will have an exhaustive medical and psychological examination, then she will settle to her routine, become one inmate of a 32-bed dormitory. The lady warden remarked simply that Mrs Helmsley's considerable experience in running the Helmsley hotels "might qualify her to mop floors and wash bed sheets". As always in this country, the sentence does not define the actual length of confinement. Though she's supposed to be there for four years, she could be paroled in August of next year.

Out of the whole four years of her indictment, trial, appeals, from the vast literature of the affidavits the depositions, the court's transcripts, one sentence alone has survived in the popular memory, I can't say that the jury was more impressed by this sentence than another but everybody on the outside was and it's now an item of American folklore. The fatal sentence, spoken by Mrs Helmsley to a maid or housekeeper and reported by the woman at the trial, the fatal sentence, which I believe more than millions of words of testimony, doomed her, was: taxes, only little people pay taxes.

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