The Romneys, their Dancing Horses and a Fraud Trial

Everyone has jumped in to say something about Rafalca, the Romney’s contender for the 2012 Olympics. The Romneys are rich and they run their hobby as a company, meaning that their spending on dressage is public domain information, so of course when it was widely reported that they were claiming $77,000 in tax deductions on Rafalca’s care, a lot of finger wagging ensued. Literally in satirist Stephen Colbert’s case: he ragged the Romneys and the “blue collar sport” of “fancy horse dancing” while waving a foam-finger and swigging beer. The US Equestrian Foundation responded in good humour:

The thing is, the gleeful anti-Romney reports missed two things. One is the facts in the “tax deduction”. The other was a far greater headache for both the Romneys and Jan Ebeling, her trainer and Rafalca’s rider. Slate took the time to actually look into the tax bill:

The way this works is that the Romneys, the Ebelings, and Beth Meyers have together formed a corporate entity called “Rob Rom Enterprises LLC,” which owns Rafalca and pays for his upkeep. The Romneys reported $77,731 in “passive losses” related to their investment in Rob Rom Enterprises, but of that their account only deemed $50 to be actually eligible for deduction. The forms don’t explain the thinking behind that, but it’s probably because losses from your horse corporation can’t be used to offset unrelated income. If Rafalca had brought in more money, then Rafalca’s care and feeding expenses could be deducted from that income, but in 2010 Rob Rom Enterprises doesn’t seem to have had much income.

As writer Matthew Iglesias points out, what they’re actually hoping to do is offset those expenses against earnings in the further future – ie from any stud career that Rafalca might have (given artificial reproduction methods I guess she could have a lot of foals). Yglesias draws on NYC Southpaw’s legwork, which you can read in detail here.

What about the other story on the Romneys and dressage? That’s the one that bears more investigation. It was settled last September and Anne Romney is no longer involved, but it featured disturbing allegations about the Romneys’ business partners, the Ebelings – with whom, of course, the Romneys continue to work. Karen sent me this piece from BuzzFeed by Rosie Gray:

Romney and her trainers sold the horse, Super Hit, in 2008 for $125,000. And Super Hit had what a prominent veterinarian described as a staggering quantity of drugs in its system at the time of its examination before being sold, according to a toxicology report that’s part of the lawsuit over the horse’s condition.

The lawsuit, which was mentioned in a New York Times story last month, was filed in 2010 by a woman in San Diego who had bought Super Hit from Romney and her trainers, Jan and Amy Ebeling. The woman, Catherine Norris, sued Romney for fraud after the horse allegedly proved physically incapable of performing as a dressage horse.

Steven Soule, who has been the US Equestrian Team’s vet since 1978, testified that he had never seen a horse “administered so many different medications at the same time.” As Super Hit had a foot defect that allegedly meant it was unable to perform as advertised as a dressage horse it was implied that it had been heavily doped to conceal its health problems and pass it off as a sportshorse. The New York Times reported last month:

Lawyers for Mrs. Romney and the Ebelings argued that the buyer was aware of the defect, a condition disclosed by a veterinarian who conducted a prepurchase exam, and denied any effort to deceive her. They pointed out that she continued to ride the horse, named Super Hit, for more than a year after the purchase in 2008.

Last September, on the eve of a jury trial, Mrs. Romney was dropped from the lawsuit before it was settled out of court, according to the Romney campaign. “The lawsuit was frivolous,” said Gail Gitcho, a Romney spokeswoman. Lawyers for the Ebelings did not return calls.

One thing is certain: the suit has done nothing to shake Mrs. Romney’s faith in Mr. Ebeling, who continues to enjoy her support.

UPDATE: The Romneys are no longer claiming Rafalca’s care as a business expense.

Published by Susanna Forrest

Writer Amazons of Paris, The Age of the Horse and If Wishes Were Horses.

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