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OAKLAND — Revelations on Monday that Mayor Ron Dellums and his wife Cynthia appear to owe at least $239,000 in back taxes have, in many respects, left more questions than answers: How did the Dellumses get into the tax trouble? How do they plan to get out? What are the political consequences?
Dellums has said little on the matter and was mum Tuesday except for releasing a statement saying, "We owe taxes. The matter is being dealt with and will be resolved in short order."
On Oct. 14, the Internal Revenue Service placed a lien on property owned by the Dellumses, saying the couple owed $239,000 in taxes, interest and penalties for levies that were not paid in 2005, 2006 and 2007.
The tax troubles open fresh problems for a mayor already viewed by many as a kind of lame duck. Dellums has not said whether he plans to run for re-election in 2010.
"I was surprised," said Robert Smith, a professor of political science at San Francisco State who has followed Dellums' tenure as mayor. "I think his ability to lead the city of Oakland had been pretty diminished anyway. This certainly doesn't help."
Dellums was elected mayor in 2006 and took office in January 2007. Before he launched his mayoral campaign in 2005, he worked as a lobbyist. In 2005, Dellums' firm, Dellums & Associates, received $90,000 in lobbying income — far less than the $370,000 the firm was paid in 2004, according to the nonpartisan Center for Responsive
Dellums left the firm after deciding to run for mayor. The lien notice shows that the Dellumses owe $124,199 in federal income taxes, interest and penalties from 2005; $66,554 from 2006; and $48,247 in 2007.
Though lobbying income was down in 2005, Dellums earned significantly more, sources said, as a lobbyist than he does as mayor even given a raise he received shortly after taking office.
Dellums' city pay increased from an annual salary of $115,372 to $183,397 by vote of the City Council in early 2007. Cynthia Dellums works as an unpaid adviser to the mayor.
Dellums' lifestyle is often described as "lavish" and he is known for his impeccable suits and his frequent trips — often to lobby for federal tax dollars on Oakland's behalf — on the city's dime.
He has chosen his words carefully this week.
"We owe taxes," he said after a public safety town hall meeting Monday night. "The issue is being dealt with, and there is a plan that we have laid out, and it will be dealt with as expeditiously as possible. Period."
He was asked: Why weren't the taxes paid in the first place?
"I told you that it's being dealt with," he repeated. "We owe taxes. It's now being dealt with, and it will be dealt with expeditiously. Period. "... P-E-R-I-O-D."
Jesse Weller, an IRS spokesman, declined to comment Tuesday because of tax-privacy laws. Dellums' office declined Tuesday to discuss the couple's plan to repay the taxes, what property they own or Ron Dellums' pension from his years in Congress.
When Dellums was a candidate for mayor, City Councilmember Ignacio De La Fuente, his strongest opponent for the post, pressed Dellums to release his tax returns. He did not.
Charles Pine, a member of Oakland Residents for Peaceful Neighborhoods and a frequent critic of Dellums, wondered how long the mayors' tax issues might have been kept under wraps if Pine had not found the lien notice recently.
Pine said he looked Dellums up "on a lark" at the Alameda County Clerk-Recorder's Office when he was there on unrelated business.
"We wouldn't even know about it today if it hadn't been for an accident," Pine said. "There's been no disclosure, and it's been going on since 2005."
Pine said that Dellums should consider resigning. One local tax attorney found it a surprise that the Dellumses' tax problems had escalated to a point where the IRS put a lien on their property.
"It's interesting that someone in his position would not be receiving really good tax advice," said Kristin Pace, a partner at Fitzgerald Abbott & Beardsley in Oakland. "There could be lots of reasons why he didn't file on all the income, but it is surprising to me that a person of his stature would find himself in this position. "... They send these envelopes that say 'Certified: open immediately,' and it's hard to miss it."
Public records show that the Dellumses do not own any property in Oakland. It is thought they rent the home they live in on Skyline Boulevard. The couple owns at least one piece of property, a home near Georgetown in Washington, D.C., in Cynthia Dellums' name and it is assessed at $1.5 million, records show.
Staff writers Thomas Peele, Sean Maher and Chris Metinko contributed to this story. Reach Kelly Rayburn at 510-208-6435.
