The Rev. Henry Lyons
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Lyons' tax reports are called incomplete
By MONICA DAVEY and DAVID BARSTOW
©St. Petersburg Times, published February 6, 2006
The Rev. Henry J. Lyons' 1995 and 1996 tax returns did not report any of the five-figure commissions he earned from corporations that marketed products to members of the National Baptist Convention USA, two tax preparers said Thursday.
"I didn't see anything from (the corporate deals) we've been reading about in the newspapers," Kerry Cushman said moments after he testified before a federal grand jury investigating Lyons' handling of convention finances.
In interviews last fall, Lyons said he earned more than $200,000 from marketing deals he negotiated as convention president between 1995 and 1997. But Cushman, who prepared Henry and Deborah Lyons' 1996 taxes, said the joint return did not reflect income from any of those corporate deals.
Cushman, who worked in the Largo branch of Income Tax Savers, said the couple reported earning about $115,000 in gross income in 1996. After deductions, their taxable income was about $20,000, Cushman said. Even then, Lyons pressed Cushman to find more deductions.
"Is that the best you can do?" Cushman recalled Lyons asking.
Norman Powe, who prepared the couple's 1995 taxes at Income Tax Savers, said Lyons reported earning less than $100,000 in gross income that year. Did any of that income include commissions from corporations?
"Not to my knowledge," Powe said.
It is not clear whether Lyons reported his commissions from marketing deals on other tax returns, or whether he amended his 1996 taxes, as he recently did with his 1994 and 1995 taxes.
Grady Irvin, an attorney for Lyons, declined Thursday to comment on Lyons' tax status.
But at a news conference Thursday morning, Deborah Lyons said she has heard that federal authorities plan to indict Lyons on charges of tax violations two weeks before federal tax returns are due this spring.
"Allegations say that the U.S. Attorney Charles Wilson or the IRS is intentionally waiting until the first of April to indict Dr. Lyons and use him as a sacrificial lamb to scare the black community into paying their taxes on time," Deborah Lyons said.
"If this is true, is Attorney Wilson saying that black people don't abide by the law as white people do? Why must my husband be sacrificed by the IRS? I believe that this is a conspiracy and blatant harassment on the part of the government. My husband and I have always been taxpaying, law-abiding citizens."
Mrs. Lyons made the comments during a news conference with National People's Democratic Uhuru Movement founder Omali Yeshitela, with whom Dr. Lyons has been at odds in the past. Mrs. Lyons and Yeshitela declined to say exactly where they had learned what authorities plan to do. "It comes from good sources," Yeshitela said.
Asked to respond to Mrs. Lyons' claims, a spokesman for Wilson described them as "reckless speculation."
"We don't even know if Lyons will be indicted," said Assistant U.S. Attorney Monte Richardson. "It's up to the grand jury -- not the U.S. attorney -- to determine if any charges will be brought."
But taxes were the focus of the grand jury's work Thursday morning. Powe testified for about 20 minutes, followed by Cushman. John Migliano, a certified public accountant, also testified but declined to describe his testimony.
Cushman, who described himself as a former IRS agent with 30 years' experience in the tax field, said he first met Lyons in early 1997 when Lyons came to Income Tax Savers. He spent about two hours on Lyons' taxes, for which he charged about $200.
Lyons told Cushman his gross income came from three sources: $71,900 in wages he earned as a minister, the $32,000 salary Deborah Lyons earned as a social worker, and $10,000 to $15,000 in interest income from accounts at a St. Petersburg bank.
Lyons offset his gross income by deducting mortgage interest, travel expenses, an $11,000 loss on the sale of a rental property, and assorted depreciation costs.
"He had a lot of expenses," Cushman recalled.
Another major deduction: Lyons said he gave 25 percent of their gross income -- more than $25,000 -- to charity. He did not provide any records to support this deduction. "I believed him," Cushman said.
In the end, Cushman said, Lyons owed the IRS a few thousand dollars. He said Lyons' total tax bill for 1996 was about $7,000.
In the news conference at Uhuru Movement headquarters, Deborah Lyons defended her husband of 26 years and criticized the St. Petersburg Times.
"Through the massive influence of pen and paper, the St. Petersburg Times has made a victim out of my husband," she said, adding later, "Someone or some group needs to rise up and set us free from this paper."
And then: "I plead with you to call and write your local, state and federal officials. Remember the positive things that Dr. Lyons has done and those things that he continues to stand for."
Yeshitela's joint appearance with Mrs. Lyons surprised some.
A year ago, Henry Lyons opposed an attempt by Yeshitela and his allies to control a coalition of African-American leaders in St. Petersburg. Lyons threw his support behind Yeshitela's opponent, referring to Yeshitela and his Uhuru allies as a "renegade group."
And, even as Yeshitela sat beside Mrs. Lyons and her daughter on Thursday, he acknowledged: "I am not a supporter of Dr. Lyons, but I am totally opposed to the methods being used by the federal and state governments in dealing with him and his family."
Yeshitela said that the offices of the state and federal prosecutors have been "totally incapable" of rulings favorable to the African-American community, citing the fatal shooting of a black motorist by a white police officer and plans for a controversial "Weed and Seed" drug-enforcement program.
It was unclear how Yeshitela and Mrs. Lyons came to join forces. Lyons' defense attorneys were unaware of the news conference, according to a release from Irvin's office. Henry Lyons himself was in Ohio on Thursday and "I am comfortable that he too was unaware" of his wife's joint news conference, Irvin said.
Yeshitela said he has heard rumors that "imminent" charges against Lyons go beyond tax violations. He said Lyons likely will be charged with grand theft as a result of a state investigation into more than $200,000 in donations for burned churches in the South.
According to Yeshitela, a "suggestion being leaked" from the state prosecutor's office was that Lyons would be arrested on some Sunday while preaching at Bethel Metropolitan Baptist Church in "an attempt to humiliate Dr. Lyons and his church and to demoralize the African community."
"Such acts would be the equivalent of a modern-day lynching," he said.
But even Lyons' own defense team questioned the allegation that Lyons would be arrested at his church.
"I have no such knowledge that (Pinellas-Pasco State Attorney Bernie) McCabe is planning on doing that," attorney Denis de Vlaming said. "In fact, quite the contrary."
Asked about the specific state and federal charges cited by Mrs. Lyons and Yeshitela, de Vlaming said he had no knowledge. "I can tell you that neither the state attorney nor the U.S. attorney has indicated what they are going to charge him with."
McCabe dismissed Yeshitela's claim that Lyons would be arrested at church.
"That never entered my mind," said McCabe. "I can't imagine doing that. I think they're just looking for a cheap way to get their name in the paper and get their face on TV."
What about Yeshitela's suggestion that Lyons be allowed to surrender to the authorities at a time arranged with his lawyers? "I don't do that," McCabe said. "Rev. Lyons will be treated like everybody else. If he is charged he'll be treated like everyone else."
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