The Tolbert Report

I have not commented much, other than a few pot shots on twitter, on the whole plethora of events on Rep. Mike Ross. However, as few dedicated readers have asked so I am sure you are all dying to know my opinion. So here it is. In my opinion, the entire events speak volumes on the liberal left wing of the Democrat Party that is now in control and very little on Rep. Mike Ross himself.

There has been much written about the 2007 sale of Mike Ross’ pharmacy in Prescott for $1,254,420. The news was first reported by Pro Publica and Politico last Tuesday. Pro Publica focused heavily on the $420,000 paid for the pharmacy building and land and compared this to the assessed value somewhere in the mid $200,000 range. The implication of the article is the purchaser Stephen L. LaFrance Sr. of USA Drug was buying influence by paying more than the market value of the business and that Rep. Ross’ opposition as a leader of the Democrat Blue Dogs to the public option aspect to the health care reforms is the pay back.

Let’s take a look at this. First, this sale of Ross’ business took place in 2007. At this time, President Bush was still in the White House and any talk of dramatic health care reform was a nothing more than a dream wish list of liberal Democrats. To think someone would have paid off Mike Ross just in case it came up later seems a bit of a stretch for me.

Second, to analysis the sale of the pharmacy, one must analysis whether the entire purchase price of $1,254,420 was a fair price. To separate out the price paid for the building and land and compare this to the assessed value is not a sound comparison. Determining the fair price for the business would best be accomplished by an analysis of the financial statements, particularly the balance sheet and cash flows, for the years preceding the sale. However, a price of $1.2 million does not appear out of line to this accountant based on the information available in the press.  If someone has the actual financial statements for me to take a look at, I would be glad to do so.

Also last week the commercial above was released last week by a group called Change Congress which went after Rep. Ross for the $921,000 (according to them) that he received in campaign contributions from the health sector. The ad uses, with permission, some video I shot of a press conference Rep. Ross conducted on health care at Arkansas Children’s Hospital in August. The ad properly credits me for the footage and I appreciate that but I do want to be clear that the ad does not necessarily represent my views. I encourage you to watch the full context of the quotes here and here.

Last week was certainly a tough week for Rep. Ross. The liberal special interests went after him primarily because he stood up to the White House and the Democrat House leaders on health care (although it should be pointed out that he did end up voting for the bill/HR3200 before his committee.) However, in his home district, far removed from the beltway political environment, these political attacks might be a badge of courage that will end up as a asset if he can survive the short term political storm.

UPDATE – Max Brantley offers a similar take as mine, so I guess the extreme right and the extreme left agree on this one.  He does offer a keen suggestion as to why the purchase price is a bit high for the building and land and a bit low for the inventory – taxes.  I should have picked up on that one.  In short, you pay lower taxes on the gain from the sale of property (capital gains) than you do on the sale of inventory (ordinary income).

Max also bemoans the inability to see the cash flows for Holly’s Health Mart to determine in the total purchase price was fair.  I did offer to loan my CPA skills to Rep. Ross to take a look at these financial statements and see if it was a fair price.  They passed but the offer is on the table.

Tags: 2010 Candidates