Tlaib presses House panels for probe into Gilbert's Detroit tax breaks

Keith Laing
The Detroit News

Washington — U.S. Rep. Rashida Tlaib, D-Detroit, is pressing for a House investigation into billionaire Quicken Loans founder Dan Gilbert's use of federal tax breaks that were intended to spur development in poor areas — an effort a Gilbert spokesman called 'incomprehensible" and "frustrating."

Pro Publica reported that Gilbert appeared to leverage his relationship with the Trump administration to win tax breaks for real estate properties in downtown Detroit that did not meet the criteria for being designated as "opportunity zones" under a 2017 tax cut law.

The tax law, known as the 2017 Tax Cuts and Jobs Act, established census tracts that were labeled as opportunity zones in an effort "to spur economic development and job creation in distressed communities throughout the country and U.S. possessions by providing tax benefits to investors who invest eligible capital into these communities," according to the Internal Revenue Service. 

Rep. Rashida Tlaib, D-Mich.

Tlaib said in a letter to the chairs of the U.S. House Ways and Means Committee, Oversight and Reform Subcommittee on Economic and Consumer Policy and the Financial Services Subcommittee on Oversight and Investigations that Gilbert unfairly used political connections to win support for his tax break applications. 

"According to ProPublica, billionaire Dan Gilbert’s Quicken Loans company donated $750,000 to President Trump’s inaugural fund, hosted Ivanka Trump in 2017 for a panel discussion, and last year Gilbert watched the midterm election returns at the White House with President Trump, who has called Gilbert 'a great friend,'" she wrote. 

"In return, three census tracts in downtown Detroit, where Gilbert owns valuable real estate, were selected as opportunity zones," she continued. "According to ProPublica, multiple studies have found that property values in opportunity zones increased because of the tax break, and Gilbert has poured more than $3 billion into real estate in Detroit — the vast majority of which is now in opportunity zones." 

Jared Fleisher, Quicken Loans vice president of government affairs, previously said Gilbert’s companies gave input to the state of Michigan about opportunity zones but said they “did not exercise any inappropriate influence.”

The companies “joined a wide range of stakeholders in providing feedback into the Opportunity Zone selection process,” Fleisher said in a prior statement. “The State of Michigan engaged interested parties, asked for their input and encouraged participants to share the State of Michigan’s request for input with other potentially interested groups.”

Tlaib said the Trump administration's decision to award the tax breaks to Gilbert flies in the face of the purpose of the opportunity zone program. 

"The stated purpose of opportunity zones was to encourage new investment in poor areas around the country with tax breaks on those investments, to create housing and economic opportunity," she wrote.

"Census tract eligibility was based on poverty and income levels," Tlaib continued. "Two of the downtown Detroit census tracts designated as opportunity zones, however, are sites of significant wealth and existing investment, with companies like Microsoft and JP Morgan leasing space in Gilbert-owned buildings.

"Instead of fostering the creation of housing or new jobs, though, these Detroit opportunity zones are the sites of several long-planned Gilbert mega investments, including the construction of a skyscraper that has already received $618 million in tax breaks from the State of Michigan." 

But Quicken Loans "had no role at all in the Treasury Department's determination" about which areas were eligible to be opportunity zones," Fleisher said in a Thursday statement.

"It is beyond disappointing and frustrating to see the blind perpetuation of such a clear falsehood from a Michigan representative. ... These areas were designated as eligible for one simple reason: They were, as a matter of fact, eligible under the law.

“... Rep. Tlaib would be well served to spend some time at www.oppzonefacts.com learning the truth behind the false ProPublica narrative before advocating that the government spend the public’s money chasing a ghost story."

The freshman lawmaker said the treatment of Quicken Loans is likely to erode public trust in the federal government.

"It appears that a tax program supposedly designed to benefit the poorest amongst us is now being used to reward political donors and wealthy investors," she wrote.

Pro Publica reported that Gilbert donated $750,000 to Trump's inaugural fund. In October 2016, Gilbert and his wife Jennifer each gave $75,000 to Democrat Hillary Clinton’s Hillary Victory Fund, a joint-fundraising venture between the Clinton presidential campaign, the Democratic National Committee and state Democratic parties

klaing@detroitnews.com

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Twitter: @Keith_Laing