Senate Panel Approves Racing Board Appointees

Gov. George Deukmejian’s reappointment of an influential Southern California businessman to the state Horse Racing Board was approved Wednesday by a Senate panel, despite questions about efforts to protect a controversial tax shelter for one of the appointee’s companies.

The Rules Committee voted, 5-0, to recommend that the full Senate approve the reappointment of William Lansdale, 70, of Huntington Beach.

The committee also approved the Republican governor’s appointment of Phoebe Hearst Cooke of Woodside to the board, which regulates horse racing in California.

Lansdale, head of an investment and oil exploration firm and a major GOP campaign contributor, has been on the board since 1985. He was reappointed by Deukmejian last year to a term that ends in 1993.

The appointment appeared to run into trouble when one Rules Committee member, Sen. Henry Mello, D-Watsonville, began questioning Lansdale about a special exemption written into 1986 federal tax legislation.

The exemption was designed to prevent the IRS from collecting back taxes from two companies, including Lansdale’s La Isla Virgen Inc., which had benefited from a Virgin Islands tax shelter, according to the Long Beach Press-Telegram.

A federal appeals court struck down the shelter in 1987, and Lansdale sought new legislation to prevent the United States or the Virgin Islands from seeking millions of dollars in back taxes from La Isla Virgen, the Press-Telegram said.

But the Lansdale language was dropped from the bill after news articles appeared about special tax exemptions Congress had enacted.

Mello asked Lansdale about a Philadelphia Inquirer article about efforts to secure the La Isla Virgen tax break. But Lansdale disputed the accuracy of the article and a Republican member of the Rules Committee objected to Mello’s line of questioning.