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66327900
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Correspondence – August 1982 (5)
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66327900
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Correspondence – August 1982 (5)
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Records of the White House Office of the Deputy Chief of Staff (Reagan Administration)
Michael K. Deaver's Correspondence Files
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66327900
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1985-12-31
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1981-01-01
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WITHDRAWAL SHEET Ronald Reagan Library Collection Name DEAVER, MICHAEL: FILES Withdrawer 5 KDB 7/19/2005 File Folder CORRESPONDENCE - AUGUST 1982(3) FOIA F01-107/01 Box Number 7619 MCCARTIN 49 DOC Doc Type Document Description No of Doc Date Restrictions NO Pages x3 MEMO PAT BYE TO CLEARANCE CENTER 1 8/11/1982 B6 144 (INCLUDES SOCIAL SECURITY NUMBERS) 21 1 LETTER M. DEAVER TO DOUGLAS MORROW 1 8/10/1982 B6 open 145 32 MEMO CRAIG FULLER TO DEAVER RE 1 8/4/1982 B6 2/28/11 146 DOUGLAS MORROW RESPONSE Freedom of Information Act - [5 U.S.C. 552(b)] B-1 National security classified information [(b)(1) of the FOIA] B-2 Release would disclose internal personnel rules and practices of an agency [(b)(2) of the FOIA] B-3 Release would violate a Federal statute [(b)(3) of the FOIA] B-4 Release would disclose trade secrets or confidential or financial Information [(b)(4) of the FOIA] B-6 Release would constitute a clearly unwarranted Invasion of personal privacy [(b)(6) of the FOIA] B-7 Release would disclose information compiled for law enforcement purposes [(b)(7) of the FOIA] B-6 Release would disclose information concerning the regulation of financial institutions [(b)(8) of the FOIA] B-9 Release would disclose geological or geophysical Information concerning wells [(b)(9) of the FOIA] C. Closed in accordance with restrictions contained in donor's deed of gift. MICHAEL K. DEAVER deur al Thank you injury fa the wonderful much. end at the give. your hospitality and that of the when members of schuraclo wont he soon forgotten information. It was a hare and migue mann Thanks. like THE WHITE HOUSE WASHINGTON Mr. Alan H. Nichols The Nichols Law Corporation Atkinson-Nichols Landmark Bldg. 1032 Broadway San Francisco, CA 94133 8-10-82 THE NICHOLS LAW CORPORATION ATTORNEYS AT LAW AREA CODE ATKINSON-NICHOLS LANDMARK BUILDING 415 ALAN H. NICHOLS 1032 BROADWAY TELEPHONE STEVEN J. DOI 775-8200 DANIEL RAPAPORT SAN FRANCISCO, CALIFORNIA 94133 DOUGLAS S. CHAN August 4, 1982 Card Michael K. Deaver White House Washington DC 20500 Dear Michael: Just a note to thank you again for joining us at Silverado Squatters. You certainly made a contribution to the camp during your short stay. In fact you produced the best (and latest) "Tumbling Tumbleweed" I have heard for a long time. I didn't get a chance to do it but wanted to thank you on behalf of everybody in the country for the important service you are performing for us all. Let me know if I can ever help. Best regards, a Alan H. Nichols AHN:lb THE WHITE HOUSE WASHINGTON 8-10-82 Dear Mr. Morrow: The President told me that he spoke with you yesterday, and that you are progressing well after open-heart surgery. I am still trying to sort out your questions about Senate Bill 2225. I think Treasury's argument that the direct revenue effect of permitting artists to deduct the fair market value of their works contributed to charity would be relatively small, as you suggest. However, Treasury's primary concern with this proposal is not one of revenue but of tax policy. In Treasury's view, the tax law should apply to all taxpayers equally. If S. 2225 were enacted, artists would receive better treatment than other income producers who contribute their services or inventory to charity. Creating a special rule for artists will lead to demands by other taxpayers for similar treatment which it will be difficult for Congress to justify denying. Treasury believes that the rule which should apply to all taxpayers is the current law rule that limits the deduction for contributions of inventory-type property to the cost of producing such property. This general rule produces the same tax benefit as if the donor sold the property for its full value and gave the proceeds to charity. Absent this rule, most if not all of the economic consequences of making the gift would be borne by -the Government. Don Regan has said that you would be welcome to meet with him or the members of his staff responsible for this area to further discuss these issues. I will be happy to arrange a meeting at your convenience when you are back on your feet. Sincerely, Mike Michael K. Deaver Assistant to the President Deputy Chief of Staff Mr. Douglas Morrow 1155 North Brand Boulevard Glendale, California 91202 THE WHITE HOUSE KO WASHINGTON Before 9 send August 4, 1982 this - whats his condition? MEMORANDUM FOR MICHAEL K. DEAVER FROM: CRAIG L. FULLER Cras m SUBJECT: Douglas Morrow Response As requested, we have had the attached response developed for the second letter from Mr. Morrow. For whom should it be prepared in final form? The President MKD CLF First para President told me that that yourst he spoke with you The and open program surgeng to sort pill out yours. questions Im still about trying Senate Reguding DRAFT PRESIDENTIAL RESPONSE Thank you for writing me concerning a possible 204 misunderstanding with respect to the revenue effect of legislation which would permit a larger tax deduction than permitted under current law for contributions by taxpayers of their original art work, memorandums and letters contributed to charity. 1 thuik g argument validat Treasury recognizes the direct revenue effect of permitting artists to deduct the fair market value of their works contributed to charity would be relatively small, as you suggest. However, Treasury's primary concern with this proposal is not one of revenue but of tax policy. In Treasury's view, the tax law should apply to all taxpayers equally. If S. 2225 were enacted, artists would receive better treatment then other income producers who contribute their services or inventory to charity. Creating a special rule for artists will lead to demands by other taxpayers for similar treatment which it will be difficult for Congress to justify denying. Treasury believes that the rule which should apply to all taxpayers is the current law rule that limits the deduction for contributions of inventory-type property to the cost of producing such property. This general rule produces the same tax benefit as if the donor sold the property for its full value and gave the proceeds to charity. Absent this -2- rule, most if not all of the economic consequences of making the gift would be born by the government. Don Regan has said that you would be welcome to meet with him or the members of his staff responsible for this area to further discuss these issues. I'll he happy to alreage Sincerely, a mater at your convenince when gerer back on your feet. Charitable Contribution of Art Work, Manuscripts, Historical Papers, etc. by Originator FACT SHEET Prior to the Tax Reform Act of 1969, a taxpayer who contributed appreciated property to charity could deduct the fair market value of the property even though the appreciation was never subject to tax. This was true whether or not the property was a capital asset. Thus, an artist could contribute his work or a President or an academic could contribute his papers to charity and get a charitable contribution deduction for the fair value of the property contributed. The pre-1969 Act law led to a number of problems. 1. Individuals in the high income tax brackets were able to obtain greater benefits from making charitable contributions of property than from selling the property. This was particularly true with respect to property which would be taxed at regular income tax rates (50 called ordinary income property) as opposed to the more favorable capital gains rates (capital assets). 2. It is very difficult to value property such as presidential papers and art work, and there was general concern that the charitable contribution provisions were being abused. o To address these problems, Congress modified the law in 1969 to provide that the deduction for charitable gifts of ordinary income property would be limited to the amount it cost the taxpayer to produce or acquire the property. Congress also excluded from the definition of a capital asset letters, memorandums and similar property held by a taxpayer whose personal efforts created the property or for whom the property was created. The 1969 Act directly affected gifts by artists of their own work, since this property is inventory or ordinary income property in their hands. o Under the 1969 Act, an artist's income tax deduction for works of the artist's creation contributed to charity is generally limited to the amount of money spent by the artist in creating the work. Thus, an artist donating art work to charity is in the same position as if he had sold the works and contributed the after-tax proceeds to charity. Donation of letters of memorandum by the originator are treated similarly. o There have been a number of proposals which would permit artists to deduct the fair market value of their works contributed to charity. o Treasury is opposed to these proposals for the following reasons: 1. We believe the approach taken by the 1969 Act is correct. It is also consistent with the treatment of other income producers. For example, a physician who works half a day in a hospital without pay does not get a charitable contribution deduction. The physician's income is unaffected, just as if he earned $500 for his services and donated a like amount to charity. 2. If artists are given special treatment, it would be difficult to rationalize denying special treatment to other income producers. 3. In many cases, art work, letters and memorandum would be extremely difficult to value and permitting a deduction based on fair market value could easily be subject to abuse. DOUGLAS MORROW June 30, 1982 Dear Mr. President: Re: the tax deductibility of donations of significant materials, I have checked with various authorities in this field. Not one of them can understand or reconcile the figures Secretary Regan gave you (tens of billions of dollars of revenue effect) with the figures their studies have developed. Is it possible that whoever briefed Regan on this may have un- wittingly confused this proposed legislation with some other pro- posed legislation that is in the hopper back there? It is possible that there may be a proposed bill back there that is similar to AB2698 in California, which attempted to make deductible the donation of personal services to charitable insti- tutions by persons over 55. This could lead to massive abuse and loss of substantial revenues. Happily, it has failed. And if something similar is in the hopper back there it, too, should be beaten. I mention this possibility of confusion because in your letter to me of 5/3 you refer to the contribution of goods or services to charity. The legislation we're talking about only relates to signifi- cant books, works of art, manuscripts, notes, letters, memoranda, etc., which by reason of their unique literary, artistic, scienti- fic, cultural, historical, etc., significance have a special im- portance to research and study, and a clearly established value in the marketplace. The three bills addressing this problem to which I referred in my memo of 4/15 had a total estimated revenue effect of 45 million dollars. (These three bills have been consolidated into one bill, S2225.) The Presidential Task Force On The Arts And Humanities, which strongly recommends this legislation, estimates the revenue effect at no more than 5 million annually. It is likely that the actual amount, according to experts in the field, would fall somewhere between those two figures, 5 to 45 million dollars annually. But tens of billions of dollars? No way, on this legislation. I am no less concerned about possible abuse than you are. But I am assured by experts on these matters that there are ample safe- guards against abuse. And the proponents of this amending legis- lation would support any additional safeguards to prevent abuse. R.R. -2- 6/30/82 The Congress should be encouraged to correct their mistake of 1969. And you should run point in this encouragement SO you can get credit for it from the academic and cultural communities. You need something like this to help counteract the distorted per- ceptions of you the media have induced,- that you don't care about or are insensitive to the academic and cultural communities and God knows what else! You have a lot more important things occupying you right now. If there is anything I can do to help get the facts straightened out, with Regan or whomever, just say the word. But, in any event, I hope, upon investigation and confirmation of what I've described, you' 11 visibly support this legislation. With affectionate regards to you and Nancy. Sincerely, PRESIDENTIAL TASK FORCE ON THE ARTS AND HUMANITIES First Tax Recommendation: Donations of Works by Creators The 1969 amendment to the tax code governing charitable gifts of creative works by artists, writers and composers should be amended as follows: 1. that the creators of these works shall receive the same tax treatment, as a result of the charitable contribution of such work, available to a collector or other donor giving a purchased work or manuscript; 2. that the value of the contribution shall be governed by the most recent arms-length sale, by the creator, or a comparable work, or by another appropriate appraisal mechanism. Current tax law allows the creator of a work who donates the work to a charitable institution to deduct only the value of the materials that were used in creating the literary, musical, or artistic work. A donor who is not the creator may deduct the fair market value of the work. Donations of works to institutions such as museums and libraries by living artists and authors have been substantially reduced since this provision was instituted. The dispersion of collections of creators' works has had a deleterious effect on the availability of research materials for scholarly activity. There are three immediate benefits from this proposal. First, museums and libraries will be able to acquire works of art without cost. Second, artists and authors will be able to choose the institutions where their best work will be displayed. Third, the public will benefit from the presence in public institutions of the works of living artists and writers. Furthermore, since the Internal Revenue Service now has a panel which monitors the value of artistic works for tax purposes, and as the revenue loss for similar legislative proposals has been estimated at no more than $5 million annually, such a modest change in the tax code appears reasonable. * Report to the President, Presidential Task Force on the Arts and Humanities, October 1981, p. 20. THE WHITE HOUSE CONFERENCE ON LIBRARY AND INFORMATION SERVICES Resolution B-5: Tax Incentives for Donations of Authors and Artists WHEREAS, prior to the Tax Reform Act of 1969 (PL 91-172), an author or artist who donated his or her literary, musical or artistic compositions or papers to a library or museum could take a tax deduction equal to the fair market value of the items at the time of the contribution, and WHEREAS, since 1969 such deductions have been limited to the cost of the materials used to produce the compositions, and donations to libraries have been severely reduced, and WHEREAS, an entire generation of literary papers may be lost to future scholars through lack of an incentive to donate them to libraries, and WHEREAS, restoration of a tax incentive would contribute to the equitable tax treatment of authors and artists and would increase public access to and preservation of the Nation's literary and artistic legacy, THEREFORE BE IT RESOLVED, that the United States Congress enact legislation restoring a tax incentive for authors and artists to donate their creative works to libraries and museums.* Approved in General Session, November 19, 1979 *Information for the 1980's: Final Report of the White House Conference on Library and Information Services, 1979, p. 57. RESOLUTION ON LITERARY, MUSICAL, AND ARTISTIC DONATIONS TO LIBRARIES WHEREAS prior to the Tax Reform Act of 1969 (PL 91-172), an author or artist who donated his or her literary, musical or artistic compositions or papers to a library or museum could take a tax deduction equal to the fair market value of the items at the time of the contribution, and WHEREAS since 1969 such deductions have been limited to the cost of the materials used to produce the composition, and WHEREAS since 1969 donations of manuscripts and papers from authors and other figures to libraries have been severely reduced, and WHEREAS libraries, in their present precarious financial condition, are rarely able to compete successfully for manuscripts on the open market, and WHEREAS an entire generation of literary papers may be lost to future scholars through lack of an incentive to donate them to libraries, and WHEREAS restoration of the tax deduction would contribute to the equitable tax treatment of authors and artists and would increase public access to and preservation of the nation's literary and artistic legacy; THEREFORE BE IT RESOLVED, that the American Library Association go on record in support of legislative measures which would help restore a tax incentive for authors and artists to donate their creative works to libraries and museums, and BE IT FURTHER RESOLVED, that the American Library Association supports the restoration of the pre-1969 tax deduction equal to the fair market value of literary, musical or artistic compositions or papers at the time donated by the creator to a library or museum. Adopted by the Council of the American Library Association Dallas, Texas, June 28, 1979 CALIFORNIA STATE UNIVERSITY, NORTHRIDGE Northridge, California 91330 SPOTHITAMON 1955 UNIVERSITY LIBRARIES May 13, 1982 Mr. Douglas Morrow 1155 North Brand Boulevard Glendale, Ca. 91202 Dear Mr. Morrow: Prior to 1969, a full fair market value tax deduction could be taken for the donation of any literary, musical or artistic composition to a charitable institution. In 1969 the tax law was changed specifically to prevent elected officials from taking advantage of this privilege. Caught up in this change was the ability of artists, musicians and writers to use the deduction, although collectors who purchase such items and later donate them to qualifying charities can still take the full deduction. Since then, donations of contemporary literary and musical manuscripts to academic and research libraries have declined markedly, as I have documented in several surveys (which I am including for your reference). I've heard on several occasions that the Office of the Treasury feels that if a bill giving artists, composers and authors tax credit were passed, then one would have to give tax credit to people who donate personal services to tax exempt charities (for example, physicians). I would remind you that for the most part, pro bono acts by people such as MDs, no matter how laudable, are usually one-time acts and are not very susceptible to careful record-keeping and "paper trails". In the instance of artists, authors and composers, the donated work rests in the institution for all time and for all scholars the country over to use. I think that this is a gift substantially different from donated services. I believe I have discussed with you a California Assembly Bill which deals with people over the age of 55, who donate personal services to charitable institutions. I feel that this is a totally different type of donation than what we've been discussing, and would cost a substantial sum in tax revenues. This bill is identified as AB 2698, and I have learned only this morning that it has failed. The Treasury Office has also in the past expressed concern about artists, composers and authors making inflated claims for the value of their works. You may be interested to know that the Page 2. Letter to D. Morrow 5/13/82 IRS has policies and procedures that address themselves to this problem. A claim of market value can be rejected by the IRS before or after consultation with an expert or panel of experts in the field of the disputed work. (The IRS has many names on file, and most prominent museum and special collection curators have served in this capacity.) The IRS also has available to it handbooks listing museum/special collection curators. I would be happy to forward a list of these books to your attention if you so desire. In any event, it is the donor who is forced to prove the market value of a creative work, not the IRS. If a difference of opinion still exists between the IRS and the donor following the review by the expert (s), the donor then has the option of taking the matter to a federal district court or to the Federal Tax Court in Washington, D.C. , according to an IRS Legal Officer whom I consulted a short time ago. In both instances, the courts rely upon panels of experts in the field of the manuscript or art. I believe that this procedure gives both the IRS and the country reasonable protection. If you would like to speak to someone who has served in the capacity of an expert, for both manuscripts and art works, you may contact: Jake Zeitlan Zeitlan & Ver Brugge 815 N. La Cienega Blvd. Los Angeles, Ca (213) 655-7581 or Jean-Luc Bordeaux (former Director of the Norton Simon Museum) Professor of Art History California State University, Northridge Northridge, Ca. 91330 (213) 885-2192 There are numerous reference materials and sale catalogs which are available to experts and to the IRS that can be used to make appraisals and market value judgements. (The Sotheby- Parke Bernet Catalogs are an example). Finally, to bring you up to date on the status of the laws in the Senate which seek to give tax credits to artists, authors and composers, I'd like to report that the 3 bills which we have discussed have been consolidated into a single piece of legislation sponsored by the Senators concerned. The bill is S.2225, and I am enclosing a copy for your reference. In addition, you will find enclosed copies of the testimony which I have offered to two subcommittees of the Senate Finance Committee, in 1979 and in 1981, and another copy of each of my books on the subject of implications of the tax reform act. Page 3. Letter to D. Morrow 5/13/82 Please feel free to call me with any further questions, or for clarification on any points made in this correspondence. As the Director of a large academic library, and a Trustee of the Universities' Art Gallery, I am appreciative of your efforts in this area, and am pleased to be of some assistance to you. Respectfully yours, Norman E Janis Norman E. Tanis Director of University Libraries NET:bh P.S. I am enclosing a copy of my Vita, in the event that anyone questions you about my credentials. NET II 2 1 income and capital thain property) is amended by additional : at 2 the end thereof the following new paragraph: 3 "(5) SPECIAL RULE FOR CERTAIN CONTRIBU- PTTU CONGRUSS 20 S: KNOW 4 TIONS OF LITEBARY, MUSICAL, OR ARTISTIC comro- 5 BITIONS.- To the Inten 11: venue Code of 19.1 In remove rtain limitations on charitable contributions of certain items. 6 "(A) IN GENERAL.- In the case of a charita- 7 ble contribution of any literary, musical, or and tic 8 composition, any letter or memorandum, or simi- IN THE SENATE OF THE UNITED STATES 9 lur prop rty, if such property WDS created by the MARCH 17 1. gislative day. FROM No. 20. 1962 " 11A1 N introduced the following bill; which " MM read twice and referred to 10 personal efforts of the taxpayer making such con- the Committee on Finance 11 tribution, the amount of such contribution shall be 12 the fair market value of the property contributed 13 at the time of such contribution and no reduction A BILL 14 in such amount shall be made under subparagraph To amend the Internal R. venue Code of 1954 to remove 15 (A) or (B) of paragraph (1). certain limitations on charitable contributions of certain items. 16 "(B) CERTAIN CONTRIBUTIONS BY PUBLIC I He it cruch / Inj the Senate and House of Representa- 17 OFFICIALS.-Subpuraaph (A) shall not apply in 2 these of the United States of America in Congress ussembled, 18 the case of any charituble COI tribution' of any 3 Phat this Act may he ted PH the "Artist's Tax Equity and 19 letter, memorandum, or similar property which 4 Donation Act of 1982". 20 was written, prepared. or produced by or for an 5 SEC. 2. CHARITABLE CONTRIBUTIONS OF CERTAIN ITEMS 21 individual while such individual was an officer or 6 CREATED BY THE TAXPAYER. 22 employee of the United States or of any State (or 7 Subsection (e) of section 170 of the Internal Revenue 23 political subdivision thereof) if the writing, prepa- 8 Code of 1954 (relating to certain contributions of ordinary 24 ration, or production of such property was related 25 to, or arose out of, the performance of such 1 8 1718 IN (The above is being retyped, because it will not photocopy due to lightness of print) 3 1 individual's duties as such an officer or 2 employee". 3 SEC. 3 EFFECTIVE DATE 4 The amendment made by section 2 shall apply to contri- 5: butions made after December 31,1981." 0 [JOINT COMMITTEE PRINT] DESCRIPTION OF TAX BILLS (S. 649, S. 851, and S. 852) RELATING TO THE TAX TREATMENT OF ARTISTS SCHEDULED FOR A HEARING BEFORE THE SUBCOMMITTEE ON ESTATE AND GIFT TAXATION OF THE COMMITTEE ON FINANCE ON NOVEMBER 10, 1981 PREPARED FOR THE USE OF THE COMMITTEE ON FINANCE BY THE STAFF OF THE JOINT COMMITTEE ON TAXATION These 3 bills leave been consolidated into our bill 5225,-attached S THE WHITE HOUSE WASHINGTON CABINET AFFAIRS STAFFING MEMORANDUM close of business, DATE: July 27, 1982 NUMBER: 072830CA DUE BY: Monday, August 2 SUBJECT: Correspondence to the President from Douglas Morrow ACTION FYI ACTION FYI ALL CABINET MEMBERS Baker Vice President Deaver State Clark Treasury Darman (For WH Staffing) Defense Attorney General Harper Interior Jenkins Agriculture Gray Commerce Labor HHS HUD Transportation Energy Education Counsellor OMB CIA UN USTR CCCT/Kass CCEA/Porter CEA CCFA/Boggs CEQ CCHR/Carleson OSTP CCLP/Uhlmann CCNRE/Boggs REMARKS: Please review the attached correspondence and prepare a draft response for the President's signature. Thanks. RETURN TO: Craig L. Fuller Becky Norton Dunlop Assistant to the President Director, Office of for Cabinet Affairs Cabinet Affairs 456-2823 456-2800 :10 DEPARTMENT THE THE TREASURY OFFICE OF THE SECRETARY OF THE TREASURY WASHINGTON. D.C. 20220 1789 August 3, 1982 MEMORANDUM FOR THE HONORABLE CRAIG L. FULLER ASSISTANT TO THE PRESIDENT FOR CABINET AFFAIRS Subject: Response to Douglas Morrow I have reviewed the letter the President has received from Douglas Morrow and have forwarded it to John E. Chapoton, Assistant Secretary (Tax Policy). A draft response to Mr. Morrow is also attached. Mr. Morrow is asking the President to support S. 2225, a bill which would permit artists to deduct the fair market value of their works contributed to charity. S. 2225 would also permit taxpayers, other than public offi- cials, to deduct the fair market value of their letters and memorandums contributed to charity. The law in this area and Treasury's concern with respect to this proposal are summarized in the fact sheet which was sent to the President on April 30 and which I have attached for your convenience. In requesting the President's support for S. 2225, Mr. Morrow emphasizes that the revenue effect would be small. We do not yet have a revenue estimate on S. 2225. However, we can say that the revenue effect of permitting artists to deduct the fair market value of their works contributed to charity would be small, as Mr. Morrow suggests. To permit taxpayers other than public officials to deduct the fair market value of letters and memorandums contributed to charity could significantly increase the revenue effect of this proposal, depending upon the types of documents which would qualify for the deduction. Moreover, S. 2225 represents a major exception to the general rule that taxpayers may only deduct the cost of inventory contributed to or services performed for chari- ty. The more exceptions that are made to this general -2- rule, the more difficult it becomes to deny similar treat- ment to other income producers, such as doctors, lawyers, or anyone who volunteers services or donates inventory to charitable organizations. If these further exceptions were made, the revenue effect would be enormous. Both Secretary Regan and John E. Chapoton have again indicated they would be happy to meet with Mr. Morrow to further discuss these issues. x David L. Chew Executive Assistant to the Secretary Attachments THE WHITE HOUSE WASHINGTON August 4, 1982 MEMORANDUM FOR MICHAEL K. DEAVER FROM: CRAIG L. FULLER Crab SUBJECT: Douglas Morrow Response As requested, we have had the attached response developed for the second letter from Mr. Morrow. For whom should it be prepared in final form? The President MKD CLF DRAFT PRES-IDENTIAL RESPONSE Thank you for writing me concerning a possible misunderstanding with respect to the revenue effect of legislation which would permit a larger tax deduction than permitted under current law for contributions by taxpayers of their original art work, memorandums and letters contributed to charity. Treasury recognizes that the direct revenue effect of permitting artists to deduct the fair market value of their works contributed to charity would be relatively small, as you suggest. However, Treasury's primary concern with this proposal is not one of revenue but of tax policy. In Treasury's view, the tax law should apply to all taxpayers equally. If S. 2225 were enacted, artists would receive better treatment then other income producers who contribute their services or inventory to charity. Creating a special rule for artists will lead to demands by other taxpayers for similar treatment which it will be difficult for Congress to justify denying. Treasury believes that the rule which should apply to all taxpayers is the current law rule that limits the deduction for contributions of inventory-type property to the cost of producing such property. This general rule produces the same tax benefit as if the donor sold the property for its full value and gave the proceeds to charity. Absent this -2- rule, most if not all of the economic consequences of making the gift would be born by the government. Don Regan has said that you would be welcome to meet with him or the members of his staff responsible for this area to further discuss these issues. Sincerely, MEMORANDUM THE WHITE HOUSE WASHINGTON August 11, 1982 TO: ANNE HIGGINS FROM: Mr. Deaver's office - Pat Bye SUBJECT: Request for Office Coverage Mr. Deaver requests that his office be covered during the absence of the regular staff traveling with the President to California during the month of August and the first week in September. Arrangements have been made and confirmed with Ann DeLuca for coverage August 19, 20 and the 23rd and with Gail Ledwig for coverage August 24th thru the 27th. Coverage from August 30th thru September 3rd is required and will be worked out by Gail Ledwig with possible assistance from your staff if needed. Thank you. WITHDRAWAL SHEET Ronald Reagan Library Collection Name Withdrawer DEAVER, MICHAEL: FILES KDB 7/19/2005 File Folder In FOIA CORRESPONDENCE - AUGUST 1982 (3) F01-107/01 MCCARTIN Box Number 7619 49 DOC Document Type No of Doc Date Restric- NO Document Description pages tions x3 MEMO 1 8/11/1982 B6 144 PAT BYE TO CLEARANCE CENTER (INCLUDES SOCIAL SECURITY NUMBERS) Freedom of Information Act - [5 U.S.C. 552(b)] B-1 National security classified information [(b)(1) of the FOIA] B-2 Release would disclose internal personnel rules and practices of an agency [(b)(2) of the FOIA] B-3 Release would violate a Federal statute [(b)(3) of the FOIA] B-4 Release would disclose trade secrets or confidential or financial information [(b)(4) of the FOIA] B-6 Release would constitute a clearly unwarranted invasion of personal privacy [(b)(6) of the FOIA] B-7 Release would disclose information compiled for law enforcement purposes [(b)(7) of the FOIA] B-8 Release would disclose information concerning the regulation of financial institutions [(b)(8) of the FOIA] B-9 Release would disclose geological or geophysical information concerning wells [(b)(9) of the FOIA] C. Closed in accordance with restrictions contained in donor's deed of gift. THE WHITE HOUSE WASHINGTON August 12, 1982 Dear Bruce: Thanks for your recent letter regarding the President meeting with your editorial board at a future date. We can't do it on this trip, but will certainly keep you in mind for the future. Thanks, too, for sending the copy of Adweek's article about The Daily News. It was most interesting, and you have apparently done an excellent job. Sincerely, MICHAEL K. DEAVER Assistant to the President Deputy Chief of Staff Mr. Bruce Winters Editor/Executive Vice President Daily News 14539 Sylvan Street Van Nuys, CA 91411 dear Brise DAILY NEWS not on this 14539 SYLVAN STREET VAN NUYS, CALIFORNIA BRUCE WINTERS EDITOR / EXECUTIVE VICE PRESIDENT peep 91411 this you But in (213) will TELEPHONE wind 997-4357 28 July for 1982 the fature. Dear Mike: I know this request does not fall into your baili- wick, but your help would be appreciated. Since we regard ourselves as the second newspaper in Los Angeles (Brand X is number one), we feel snubbed because the boss has visited with two other editorial boards but not our own. Seriously, we have changed considerably since the Green Sheet days and even Lyn, the old grouch, singled us out as among the ten best overlooked news- papers. (I wonder if he was putting us on? See attached.) Anyway, do you think a meeting with our editorial board could be squeezed into the president's schedule on one of his next trips west? We would be honored to have him, and I do not have to tell you that our circulation area--from Glendale to Thousand Oaks--contains a slug of Reagan supporters. Thanks for any help with this project. Best Goe personal regards, Michael K. Deaver Assistant to the President Deputy Chief of Staff The White House Washington, D.C. 20500 Page N.R. 40 ADWEEK April 1982 NEWSPAPER REPORT umbed to a similar fate. in neighboring Raleigh or Greensboro. But outside of the Kansas City Star and Times, Today the paper appears to be making a no one can accuse the Observer of laziness. It they [the Harris Group] run the best paper comeback-"appears," because it is too ear- took on the cotton industry and state and in Kansas." ly to tell where its current redefinition will federal regulators in a series entitled Harris supplements its local and wire- take it. But the changes have been distinct "Brown Lung: A Case of Deadly Neglect" originated copy with offerings from an intra- enough to convince most of ADWEEK's ad- and won a bookcase full of awards. company news wire that feeds features and visers-from "Lou Grant" to Lyn Nofziger "The Observer took on the biggest indus- columns to its holdings. But Buzbee said lo- and Jody Powell-that the Sun is not get- try in its state, a courageous decision which cal coverage keeps the News's readers com- ting the recognition it deserves. alienated a powerful economic and political ing back. And they work off their feelings It is, however, a paper that always has force in the Carolinas," said the judges for about its editorial page by "writing a lot of lived somewhat of a schizophrenic existence. the Roy W. Howard Public Service Awards. lovely letters," he noted. "We print five or The Sun has fought unfair comparisons that Mark Ethridge III, The Charlotte Ob- six letters to the editor every day, which is a judged it alongside such larger institutions server's managing editor, said going that ex- fair number for a paper this size." as The Washington Post, against which it tra mile is a trademark that has made the pa- The News has paid a price for its aggres- competes only to a minor degree in the na- per "a good place to work" and a powerful siveness. In 1960, when it endorsed John F. tion's capital. force. The Observer has a circulation of Kennedy over Richard Nixon, several thou- The result is that The Sun often has been 170,000, which Ethridge said is healthy and sand outraged Kansans canceled their sub- overlooked for what it is-a Baltimore pa- growing. scriptions. They've come back. Circulation per, a paper that stands out on its own as a And he has equal praise for the paper's now stands at 45,000. state or local paper that retains a tradition of owner, Knight-Ridder, and its "terrific excellence that perhaps has become clearest staff-folks who could, by and large, go to since the closing last year of The Washing- larger papers-a bunch of very excellent ton Star, which netted the Sun such talent journalists. But they like living in a good, Daily News as political columnists Jack Germond and Sunbelt, growing city." Jules Whitcover and Supreme Court veter- CIRCULATION: 144,000 an Lyle Denniston. One of The Sun's major changes has been The Hutchinson News Murphy, brought in last year as the newspa- per's first outsider publisher. The timing of Because of post office practices and cities- Murphy's arrival may have been providen- within-a-city like Beverly Hills and Santa CIRCULATION: 45,000 A month after he took over, the Star Monica, it's hard to play the geography closed in Washington, creating a void in the gaine in the West's giant megalopolis, Los Maryland suburbs that he quickly moved to Angeles, without a scorecard. Given those fill with what he called his "Maryland" news- Conservatism runs strong through the problems, pity might ordinarily be in order paper. heart of Kansas. And publishing an aggres- for the Los Angeles Daily News, the little But he quickly asserts that the Sun's sive, liberal-leaning newspaper in the most paper with the big name. Its mail is ad- scramble to regain the respect it once had as conservative part of one of the country's dressed to Van Nuys, it shares a market the paper of H.L. Mencken, whose portrait most conservative states hardly seems the with the Los Angeles Times, the journalistic hangs in the anteroom of Murphy's office, way to win friends and influence people. In leviathan of the West, and, to make matters goes beyond the Star's demise. "This paper its 110 years, The Hutchinson News has worse, not too many years ago the Daily simply has made a commitment to quality," learned that lesson. It has made its share of News was still being given away as a lowly he said. "Some of it had to do with the Star, enemies-but won its share of respect in the shopper. but much of it is related to the development process. These were hardly auspicious beginnings. of new features and new talent that have It was not all that long ago when Robert But in the course of the last year or SO the just made this a better newspaper." Dole, then a rising political star and today Daily News has evolved into a quality daily one of the real powers of the U.S. Senate, paper that should cry out at the top of Page denounced the News as "the prairie One in billboard fashion: "Watch this space The Charlotte Observer Pravda." Dole since has made up with his for further development." former nemesis at the News, John McCor- It is, more than any other paper on AD- mally. But the paper's present editor, Rich- WEEK's list, an industry comer. It won high CIRCULATION: 170,000 ard Buzbee, points with pride to the legacy praise from ADWEEK's judges-not because left by those attacks. The News, he said, of its potential for taking on the Los Angeles "has a heritage of an unusually candid and Times(there is none)-but because of what it forceful editorial policy. It has always been has accomplished in its own right. While The Charlotte Observer does not on the liberal side. It has become more con- The Daily News is a metropolitan daily- display the growth and zest of some of its servative in recent years, but it is still quite but one that has yet to conquer its own ano- Sunbelt counterparts, it shows signs of vital- liberal for Kansas." nymity outside its marketing area. One re- ity that distinguish it from other mainstay Today the News is less an aberration in cent exclusive was picked up by one of the papers in the region. One ADWEEK judge the state's political fabric than it was 20-plus major wire services, only to be greeted with called it "a. first-class operation-a quality years ago. But its reputation lives on- skepticism by an editor in Washington who, per with good, strong leadership." Anoth- strengthening in turn the image of its own- with brow furrowed, remarked, "Just what said the legacy of "fine Southern journal- er, the Hutchinson-based Harris Group, the hell's the Los Angeles Daily News?" ism" lives on in Charlotte. whose holdings include other small papers in The paper began as a weekly shopper, the Not everyone is that high on the Observer. Kansas, Iowa and California. Valley News and Green Sheet. The "Green Some question whether it is as good as it "Harris runs good newspapers," said a Sheet" was dropped in 1979 as the paper's once was. Others say the Observer's stature news executive who has dealt with other frequency was increased. Still, the Valley as the largest paper in the Carolinas should chains. "They spend more money than they News was not exactly making journalistic not eclipse the editorial excellence of papers have to, they have a good reputation, and history. As ADWEEK panelist Lyn Nofziger Page N.R. 42 ADWEEK April 1982 NEWSPAPER REPORT 1 Als, "It went from being a once-a-week zoning in the country." The news reports He brought in Bill Ketter, a former UPI throwaway to being a four-times-a-week and advertising were packaged for market executive in Boston and New York, as edi- throwaway." areas. With special production techniques, tor. Ketter, in turn, established a demand- Much of the credit for its success goes to Vaughn said, the Sentinel-Star ensures "the ing style and-in the words of one staffer- Bruce Winters, a former national political zoned news is what happened last night, not "breathed life into this one." reporter who molded it into an informative, what happened two or three days ago." How does The Patriot Ledger compete SO upstart paper that could compete in a tough, close to The Boston Globe? City editor Jo- competitive market. hanna Seltz said, "We are what the Globe Winters said the new name helped over- come the lingering image of a throwaway NEWS MYERS PRESS isn't-people's hometown paper for 28 towns and one city." shopper. And he notes that the Daily News, GANNETT NEWSPAPER According to Ketter, failing pm papers now owned by the Tribune Co., had the larg- forgot that "useful hard, spot news is what est circulation increase-18 percent, to CIRCULATION: 70,000 people buy a paper for." He runs features 140,000-of any of the 100 largest dailies in and soft news because "you have to be com- the country, a distinction he calls "very plete to appeal to a wide variety of readers," gratifying." but he believes fresh news is what sells Winters gives his readers-scattered Farther to the south, along Florida's Gulf newspapers best. "We are the only place our from Van Nuys to Venice-an ample diet of Coast, the Gannett-owned Fort Myers readers will find out about the town meeting national and international news. But he be- News-Press sells an average of 70,000 news- or the fire in the neighborhood." lieves local news sells the paper. Unlike the papers on weekdays and 81,000 papers on Los Angeles Times, the Daily News has no Sunday to a population that varies with the bureau in Nairobi, no 35-member Washing- seasons. The ton staff-just a lot of people covering the Critics contend that Gannett, the nation's valleys. largest chain, does not do as much to im- MOUNTAIN EAGLE prove its papers as it does its profits. But ex- CIRCULATION: 7,700 -ecutive editor Ron Thornburg points out Sentinel Star that in 1971, the year Gannett took over, the News-Press did not win a single journalism prize. The next year it won one and by 1980 The weekly Mountain Eagle has some it had won 88. 7,700 paid subscribers. One of them is CIRCULATION: 227,000 Charles Kuralt, longtime man-on-the-road for CBS and an ADWEEK panelist. "It is a The Patriot Ledger weekly you ought not to overlook," he ad- The Orlando Sentinel-Star and Fort vised. "It is a brave little paper that has run Myers News-Press have one obvious thing in into all kinds of trouble over the years. It is common-geography. The second thing CIRCULATION: 90,000 very brave, even noble." they have in common-excellence-may be If a paper can be measured by the trouble directly linked to the first. it incites on behalf of the right causes, The In fact, there are characteristics unique to Mountain Eagle would be on anybody's list. the Florida market that have fostered the The real action in the newspaper industry The Mountain Eagle's motto, "It screams," development of top-notch papers like the St. these days is not in the cities, but the sub- was changed after the paper was firebombed Petersburg Times and the Orlando and Fort urbs. The Patriot Ledger's offices are four in 1974. Today it reads, "It still screams." Myers papers. O. Reid Ashe, the Southern- miles from the sprawling plant of the vener- The Eagle is a family-run operation head- born and Northern-educated publisher of able Boston Globe. And while the paper's ed by Tom Gish, his wife Pat, their son Ben the Jackson (Tenn.) Sun, explains that editors may sometimes hope the proximity and son-in-law Fred Oakes. The family has "newspapers down here just have to be good is causing consternation in the Globe board owned it for 25 of its 75 years. Ben Gish says to survive. You're not fighting entrenched room, it is not because they envision them- the firebombing came after a series of edito- habits. Everyone's been there a relatively selves as the next great Boston daily. rials denouncing police harassment of short period of time, they've read papers all The Patriot Ledger has become one of the youths. A city policeman convicted of hiring their lives and they know a good paper-and country's fastest-growing dailies not by go- two people to carry out the bombing was will buy it-when they see it." ing head-to-head against the Globe but by handed a one-year suspended sentence. Theory aside, the Tribune Co.-owned developing its own market in the Globe's Given that there are only 30,000 people in Sentinel-Star has experienced meteoric backyard-offering a complete, yet locally all of Letcher County, nestled among the growth in the last two years, as has its mar- oriented paper that has risen in circulation Cumberland Mountains in eastern Ken- ket, which includes Disney World. Winter from 73,000 to 90,000 over three years. tucky, Ben Gish says he is proud of his 7,700 circulation has gone from 189,000 to 227,000 "They do one hell of a job," said a Boston- circulation. Kuralt voices his own pride in and is expected to expand as Disney World area news executive. "It's an extremely pro- The Mountain Eagle for "fighting the vest- does. gressive paper that has done a good job re- ed interests of fat cats." The Tribune Co. bought the paper in the sponding to the community's needs. There "It has done what it was supposed to do," mid-1960s and "didn't do much except take isn't much that walks or talks in their area the veteran newsman says. "It survived money out in boxcars," said executive that they don't know about." when it looked like it couldn't. It has stood Cultor Steve Vaughn. But that wasn't un- The main driving force has been publisher up for what is decent in a politically corrupt usual for the time in Florida. K. Prescott Low, who also serves on the part of Appalachia." In 1976, Jim Squires was brought in as board of the American Newspaper Publish- editor, and during the next five years-be- ers Association. But along with his willing- This report was compiled by Norman D. Sandler fore taking over the Chicago Tribune-he ness to make a financial commitment to ex- in Washington, DC, and Paul E. Schindler in oversaw what Vaughn called "possibly the cellence, Low has a penchant for tapping San Francisco with the help of the ADWEEK panel most aggressive and complicated edition talent. of judges. THE WHITE HOUSE WASHINGTON August 12, 1982 Dear Mr. Stumpff: Thank you for your letter. I regret that this response has been delayed. However, due to the hectic pace here in Washington, it is not always possible for me to reply as quickly as I would like. It was good of you to give me the benefit of your views on the proposed Products Liability Act of 1981. The Administration is currently considering the concept of Federal legislation providing uni- form standards of product liability. You can be sure that I will keep your comments in mind as we continue deliberations on this topic. With best wishes, Sincerely, MICHAEL K. DEAVER Assistant to the President Deputy Chief of Staff Mr. Gene A. Stumpff President HAMMARY Post Office Box 760 Lenoir, NC 28645 HAMMARY P.O. Box 760 Lenoir, North Carolina 28645 704 728-3231 June 21, 1982 The Honorable Michael K. Deaver Deputy Chief of Staff and Assistant to the President The White House Washington, D. C. 20500 Dear Mr. Deaver: I am writing to urge your cosponsorship for H.R. 5214, the Products Liability Act of 1981, introduced by Congressman Shumway of California. Uncertain and inequitable products liability tort laws are a serious problem to our company, which employs over 700 persons. Product Liability tort laws are largely judge-made, and are different in each of the fifty states. In fact, product liability tort laws are continually changing; for products manufactured today, we do not know the standard of conduct to which we will be held tomorrow. Since the law of the state where the injury occurs is generally applied, and since we ship our product into virtually every state, there is little that the North Carolina legislature can do to protect us. H.R. 5214 provides uniform principles which will be applicable in all states. These principles place responsibility for harm on the person best able to avoid injury, and otherwise respond to our concerns by equitably balancing the needs of product sellers for certainty with the needs of injured product users for adequate redress. This measure is presently pending in the Committee on Energy and Commerce's Subcommittee on Health and the Environment. This Subcommittee is chaired by Congressman Henry Waxman, who had indicated that, the Subcommittee's schedule permitting, he expects to hold hearings on product liability tort legislation later this year. It is important for you to add your name as a cosponsor to H.R. 5214 at this time. Your cosponsorship will help assure a speedy consideration of this legislation, and will demonstrate that support for this approach transcends geographic and partisan consideration. Thank you for your attention and cooperation in this matter. Respectfully, Gene A. a Stumpff President CAS/mb sfma USI A Division of INC. THE WHITE HOUSE WASHINGTON August 12, 1982 Dear Father Lester: It was good to hear from you again. One of the most pleasant aspects of my position is the opportunity it gives me to keep in touch with old friends. It was good of you to take the time to give me your insights into the question of nuclear dis- armament. I am taking the liberty of forwarding your letter to Mr. John F. Burgess, Special Assistant to the President for Public Liaison. Again, thank you for writing. With best wishes, Sincerely, MICHAEL K. DEAVER Assistant to the President Deputy Chief of Staff The Reverend William Lester, S.J. Foundation for Moral Education 2980 Senter Road San Jose, CA 95111 FOUNDATION FOR MORAL EDUCATION 2980 SENTER ROAD SAN JOSE, CALIFORNIA 95111 (408) 281-2151 August 4, 1984 Board Members Mrs. John D. Crummey Mr. Michael Deaver San Jose THE WHITE HOUSE Dennis Delisle Washington, D. C. Owner, D.N.A. International William Lester Jesuit Dear Mike, Consuelo Castillo Malatesta Founder Castillo's Mexican Kitchens I know you're busy so right to the point. Lloyd C. Winter Olympic Track Coach The President seems very concerned about the proponents of nuclear-freeze. Perhaps the following points from the Advisory Board moral view may be of some use to him, especially with Catholic A. E. "Gene" Cancilla leaders. Realtor. San Jose Luis Caratan Contrary to the stand of some bishops, distinguishing President M. Caratan, Inc. between combatants and non-combatants in a total war is James de Lorimier next to impossible. Even civilians are in the war effort. So, Partner Monterey Packing Co. it seems even though civilian centers have low priority for Rd K. Dornan our bombing, they need not be held absolutely immune. Com sman R. T. Dunkin, D.D.S., K.M. Self-defense is a moral right. Also, we may die in San Jose our battle to avoid unjust slavery. Hence, it seems the Ray K. Farris II, CLU Farris, Farris & Associates great number of deaths that would come to us in a nuclear war Jarvis Gantt against the Kremlin and its likes is morally allowable. President (Catholic leaders seem to overlook that point entirely.) It Probe Systems, Inc. is even more allowable to kill the unjust aggressor if that James M. Graham Attorney, Sacramento is the only way of stopping him. Hildegarde Chanteuse, New York City Catholic leaders of nuclear-freeze argue that dispropor- Donald Lima tionate means -- an overkill -- may not be used in self-defense. President Lima Family Mortuaries The principle is correct. But they fail to see that the Craig Needham destruction to the free-world alone, if it surrenders to the Attorney, San Francisco enemy, would probably be as great as the probable destruction Stefan Possony Senior Fellow to both sides in a nuclear war. Two countries alone, Hoover Institute the U.S.S.R. and China, rounded up and executed like sheep Manuel Rosa 50 million people (conversative estimate) and put millions Chairman Santa Clara Building Maintenance more in prison camps and still do it. Twice that would surely Joseph Russell be slaughtered if our part of the world were taken over Director of Corporate Services California Microwave where freedom has long been experienced. Then, too, the Mansfield Smith, M.D. enemy's totalitarianism would seek to destroy the very spirit Founder & Chairman of man. Northern California Transplant Bank George Snell President Evidently some of the Catholic leaders lack a basic United Broadcasting Co. knowledge of Marx-Leninism and the Kremlin. Archbishop [ 'd Traynor John Quinn of San Francisco, for example, stated in his talk F ent Alpha Recorded Tape to the Commonwealth Club that the Kremlin leaders have the Eugene White same desire for peace as our leaders. People like Quinn Chairman Amdahl Corporation see the war not as the free world's struggle for survival -2- of freedom and human, civilized living but simply as an unconscionable, deadly fight between two good persons. Mike, don't bother to respond to this letter unless somehow I can be of help. You're in our prayers here. My best. Sincerely, Dute Wm. Lester, S.J. ( Enclosure: Archbishop Quinn's statement as reported by Commonwealth Club ( THE WHITE HOUSE WASHINGTON August 12, 1982 Dear Mr. Lee: Mr. Deaver received your August 11th Mailgram. No one in this office knows the name of the man or men who hired Ronald Reagan to work for General Electric Theatre. Sorry we could not be of more assistance to you. Sincerely, SHIRLEY MOORE Staff Assistant to Michael K. Deaver Mr. Bill Lee 21225 Lopez Street Woodland Hills, CA 91364 BILL LEE TATES POSTA ® 21225 LOPEZ ST WOODLAND HILLS CA 91364 western union Mailgram UNITED SERVICE ® U.S.MAIL 1-0121908223 08/11/82 ICS IPMBNGZ CSP WXSA 2134569590 MGM TDBN MALIBU CA 62 08-11 1010A EST MR DEAVER WHITE HOUSE 1600 PENNSYLVANIA AVE WASHINGTON DC 20500 DEAR MR DEAVER: I GOT SERIOUS TROUBLE IN LOS ANGELES, I NEED TO FIND OUT THE NAME OF THE GUY WHO HIRED THE PRESIDENT TO WORK FOR THE GENERAL ELECTRIC THEATRE BACK IN THE 50'8? DID HE DIE OF A HEART ATTACK RECENTLY? BILL LEE 21225 LOPEZ ST WOODLAND HILLS CA 91364 10:08 EST MGMCOMP Stan Earl ordershed Ralph taledano TO REPLY BY MAILGRAM, SEE REVERSE SIDE FOR WESTERN UNION'S TOLL FREE PHONE NUMBERS