Posted on Fri, Dec. 02, 2011
last updated: December 02, 2011 07:44:07 AM
WASHINGTON — U.S. Rep. Steven Palazzos transfer of his Biloxi accounting firm to his wife -- done to satisfy House ethics rules -- is drawing scrutiny in a published report that questions the timing of the move, its legality under Mississippi law and a mysterious political action committee that has now vanished from the companys website.
Roll Call, a publication that covers Capitol Hill, said in a report published Thursday that the transfer of Palazzo & Co. -- due to House rules restricting outside income -- was problematic because state law requires that certified public accounting firms such as Palazzos can only be owned by CPAs. The congressman is one, but his wife, Lisa Palazzo, is not.
According to the publication, the firm changed its website as reporters on its popular column Heard on the Hill looked into the company ownership.
After HOH began asking about the CPA situation this week, the firms website was changed. Lisa Palazzo is now identified as the firm administrator, and the site removed references to Steven Palazzo as the sole proprietor, reported Roll Call.
The article noted that the secretary of state site listed Palazzo as the Registered Agent for the firm. The Sun Herald confirmed Thursday that the state continues to list Palazzo as the registered agent.
Palazzo spokesman Hunter Lipscomb said that the effective date of the transfer of ownership was May 26, 2011. The secretary of states office did not return several phone calls requesting comment.
Since elected to Congress, Congressman Palazzo has not been engaged in the services provided by the business and has not received any compensation from the company, said Jamie Miller, Palazzos chief of staff, in a statement to the Sun Herald.
The firms services have been provided by professionals, and the structure, ownership and services of the firm were changed in order to comply with the conflicting requirements of the house ethics rules and Mississippi law.
The firm, which specializes in tax accounting services for expatriates living abroad, also offered a PAC to promote expatriate tax breaks, although it disappeared from the site after reporters questioned it. And a contribution the publication made on the website was acknowledged by an electronic receipt saying You sent a payment ... to Steven Palazzo.
In a statement to the Sun Herald, Miller said, The PAC referenced in the Roll Call story is a dormant and inactive organization that did not raise any contributions until the Roll Call reporter contributed $25 dollars. The FEC rules require an organization to register and report as a PAC after it has raised $1,000 or more in contributions or spent more than $1,000. As of the date of the article, the organization did not satisfy either threshold.
The Sun Herald confirmed that the FECs campaign guide sets a $1,000 reporting minimum.
In his financial disclosure filing with the U.S. House, Palazzo reported that he earned $199,912.90 in 2010 from the accounting firm, which he valued at between $500,000 and $1 million. He cites a spouse salary from Palazzo & Co. PLLC, as well, but under the amount, filed N/A. While the term often means Not Applicable, Lipscomb said he could provide no further details or if Lisa Palazzo drew a salary.