Columnist Jeff German: Gingrich briefed on meal tax battle with IRS

Saturday, May 2, 1998 | 4:44 a.m.

JEFF GERMAN is a senior investigative reporter. His column also appears in the Las Vegas SUN on Tuesdays and Thursdays. He can be reached at 259-4067 or on the Internet at german@lasvegassun.com

HOUSE Speaker Newt Gingrich comes to town today with a good idea of what's on the political plate of thousands of Las Vegas casino workers.

The speaker has received a copy of the menu from Rep. Jim Gibbons, R-Nev., who has been cultivating labor ties in his re-election bid.

Gibbons sent Gingrich a letter last week alerting him to the Culinary Union's fight with the IRS over a plan to tax workers for free meals casinos have been providing them on the job.

The IRS proposal stems from a Sept. 30 U.S. Tax Court ruling in a case involving the Boyd Gaming Corp. The court ruled that the free meals essentially were taxable income and no longer could be deducted by casinos.

"This ruling will have a devastating effect on these hard-working people and the Nevada gaming industry, as well as the potential of the entire hotel-motel industry nationwide," Gibbons wrote Gingrich. "Further, this is an egregious example of the IRS trampling the rights of United States' workers."

In recent weeks, it has become fashionable on Capitol Hill to bash the IRS during well-publicized hearings to overhaul the tax collection agency.

Gingrich is a believer in IRS reform.

And Gibbons is hoping it will give the speaker more reason to support the plight of the Las Vegas casino workers and thousands more across the country.

The Culinary Union is hungry to quash the meal tax threat, which could mean a loss of as much as $300 a year to each of its more than 40,000 members. Casinos also will lose hundreds of thousands of dollars in payroll deductions.

"There's no justification for it," John Wilhelm, the international Culinary Union's secretary-treasurer, said Friday. "It's an outrage."

Wilhelm confirmed the Culinary Union, which has locals in every major city, soon will go national with its fight against the IRS.

"This is a national issue for hotel workers," Wilhelm said. "The IRS has made it absolutely clear that if it gets this on in Las Vegas, it's going to get it on nationally."

Nevada Sens. Harry Reid and Richard Bryan are doing their part in the proliferating battle.

On Friday, they introduced legislation in the Senate to bar the IRS from taxing the free meals.

"It is time we all ask the IRS to leave the service workers alone," Reid told his colleagues. "They are already paying their fair share."

Wilhelm tried last week to arrange a meeting today between Gingrich and Las Vegas casino workers so the workers could explain how the additional tax will affect their pocketbooks.

By Friday, Wilhelm had not received a response.

Gibbons, however, expected to have better luck discussing the meal tax with Gingrich today, as the speaker embarks on a series of fund-raising events for the Nevada Republican Party and his own "Monday Morning" political action committee.

That's assuming, of course, that Gibbons has time to talk to the speaker.

Gingrich has a busy day of fund-raising planned at Sheldon Adelson's Sands Expo & Convention Center.

It all gets underway about 4:30 p.m. with a high-powered event for Gingrich's own PAC.

Then, for $2,500 a couple, VIPs can enjoy cocktails, a buffet and a private briefing on national issues with the speaker from 5:30 p.m. to 6:30 p.m. Donors also get to pose for a photo with Gingrich and receive a signed copy of his new book, "Lessons Learned the Hard Way."

Those of lesser means in the Republican Party can spend $500 to join the photo session and book-signing after the speaker's briefing at 6 p.m.

Rank and file Republicans will get to hear Gingrich speak at a rally for $25 a piece from 7 p.m. to 8:45 p.m.

The speaker's visit comes on the heels of a renewed push by another influential Republican on the Hill, Rep. Frank Wolf of Virginia, to do away with soft money campaign contributions to political parties.

Wolf, a leading gambling critic, has aimed his latest assault at the casino industry, which has been stepping up its soft money contributions to the Republican and Democratic national committees.

Judging by Gingrich's crammed fund-raising schedule today, it's a safe bet to assume he doesn't share Wolf's opinion.

Gibbons and thousands of Las Vegas casino workers are hoping he shares their opinion about the IRS.

They're hoping the speaker will help them take the bite out of the meal tax plan.

* It was one of those bad back days for Aaron Russo.

At least that's the explanation GOP gubernatorial candidate gives for parking his BMW in a handicap space at University Medical Center last Monday.

"My back was killing me," Russo says. "I was in such pain."

Parking in a handicap space without a permit is not the crime of century. It is, however, insensitive and not gubernatorial.

But then, that probably wasn't the biggest thing on Russo's mind last week, as he drove into UMC's parking lot for a high-level meeting to get out of a political jam he had created for himself.

Following the hour-long meeting, Russo agreed to organize an alternative medicine conference next month without UMC as a co-sponsor.

UMC's top dog, Bill Hale, made it clear to Russo at last week's meeting that the taxpayer-funded hospital is prohibited by law from associating with a political candidate.

Russo is charging as much as $550 to attend the symposium. The money is going directly into his pockets, but he insists it's not an attempt to raise funds for his campaign.

As for the handicap parking flap, UMC workers don't have much compassion for Russo's back problems. They say it's no excuse for violating the law.