Employees say tax commish helped pal

BOISE - Idaho Tax Commission Chairman Royce Chigbrow tried to use his position to help a friend embroiled in a dispute with a former business partner, agency employees allege in records obtained by The Associated Press.

The e-mails and documents are among records the Idaho attorney general's office collected in a separate lawsuit that alleges commissioners have given politically connected people secret tax deals. They describe how Chigbrow intervened on behalf of Benton "Skip" Hofferber, an Idaho businessman who supported Chigbrow's unsuccessful 2006 run for state controller.

Hofferber is fighting with his former employer, Boise Food Service, after being fired in October 2009.

Tax Commission employees say that one month later, Chigbrow started summoning them to his office to provide information to Hofferber about the company's tax problems. Chigbrow met with Hofferber about the case at a private Boise dining club, inappropriately handled the company's cashiers checks, and tried to block a refund after Boise Food Service had brought its taxes current, according to the documents obtained under Idaho Public Records Law.

In an e-mail response to the AP, Chigbrow, an accountant appointed to his post in 2007 by Republican Gov. C.L. "Butch" Otter, said he has always sought to minimize conflicts of interest.

"On occasion, I receive questions from taxpayers or tax preparers I am acquainted with," Chigbrow wrote Dec. 15. "While I have forwarded these inquiries to employees of the Tax Commission, I have, in forwarding such items, never attempted to influence the final outcome or result."

Employees whose names were redacted from the documents contend otherwise. "I expressed my concern that this was a conflict of interest," one employee wrote.

Tax Commission employees have declined requests to speak about the issue on the record.

The AP relied on the same records for a Dec. 17 story about employees' concerns that Chigbrow helped clients of his son's accounting firm.

In this case, Hofferber, who donated $100 to Chigbrow's 2006 campaign, didn't return a message left this week through his attorney.

Hofferber sued his former business partner last year, saying he'd been fired in "bad faith" from Boise Food Service, the owner of nine Sonic Drive-In franchises in southwestern Idaho. Hofferber contends majority owner Joseph McGivney fired him to convert Hofferber's 30 percent stake for "a fraction of its value," according to a lawsuit filed Dec. 18, 2009, in state court.

A month earlier, on Nov. 20, a Tax Commission employee described being called to Chigbrow's office. Hofferber was there, wanting to know what collection action was being taken on delinquent taxes; he was interested in buying the company, according to one employee's notes.

"I asked if he was a responsible party and he said he had been at one time, but was removed as an officer in October," the Tax Commission employee wrote. "I told him I couldn't talk to him about specifics of this company."

On Dec. 1, the same Tax Commission employee described a phone call from Chigbrow.

"He said Skip (Hofferber) had called him," the employee wrote. "I told him (Chigbrow) that he needed to tell Skip to back off, because I couldn't tell him anything."

A forced collection against Boise Food Service began in December - on Chigbrow's orders, Tax Commission e-mails indicate.

"The chairman said he didn't want to mess with this anymore, and to go ahead with the levy," according to an employee's Dec. 22 e-mail.

Four months later, another Tax Commission employee reported receiving two company cashier's checks from Chigbrow, one for $30,097 and another for $270. According to records and an interview with McGivney, the checks came from Hofferber during a lunch meeting at Boise's exclusive Arid Club.

"The chairman directed us to hold them to apply to the account only if we didn't have any levy source to get the funds," another employee wrote in notes about the case.

State law requires checks be deposited within 24 hours, but the employee said he followed Chigbrow's direction and placed them in his desk for safe keeping.

Meanwhile, McGivney reported the checks stolen. On April 21, 2010, Boise police Detective Brad Thorne called the Tax Commission to see if the agency had the checks.

No charges were filed. Thorne didn't return a phone call from the AP seeking comment.

McGivney, a Gig Harbor, Wash., businessman who sought bankruptcy protection this month, said Tuesday that he learned during Thorne's investigation that Hofferber and Chigbrow had been meeting to discuss the company.

Hofferber shouldn't have had access to the money because he'd been fired months earlier, McGivney said.

"They had cut a deal at the Arid Club, and this guy from the Tax Commission was holding the check in his desk," McGivney said he was told by the detective and Tax Commission employees. "Then, I knew that something was up."

After the police probe, Chigbrow directed that the checks be credited to Boise Food Service's account, according to Tax Commission employees. With the taxes now current, however, employees say the chairman sought to block a $29,442 refund.

In response, the Tax Commission's deputy attorney general advised against a credit lock.

"The Commission must refund the excess amount," according to an attorney general's May 3 e-mail.

Chigbrow disagreed, according to an employee's e-mail two days later.

"Until we hear further, let's keep the credit lock in place pursuant to the chairman's instructions," the employee wrote.

Eventually, the money was applied to the company's April tax bill, records show.

Chigbrow, who declined to respond to further questions from the AP this week, wrote Dec. 15 that he never instructed employees to block the refund.

"I categorically deny ever directing staff to put a credit lock on any money," Chigbrow said. "I further deny disregarding legal advice to the contrary."

Some lawmakers have said they're considering reforming the four-member Tax Commission next year. They say its makeup of political appointees - currently two Democrats and two Republicans - leaves it vulnerable to conflicts.