There’s a story behind Sunday’s blog entry — the one about The Star’s blown coverage of Waddell & Reed’s role in the Dow Jones Industrial Average’s 998-point plunge on May 6.
I mentioned in that entry that Waddell & Reed, an Overland Park-based mutual fund company, had weathered its share of negative publicity. As I wrote, I was thinking about former chief executive officer Keith Tucker and his income-tax shenanigans.
But, for me, Tucker fits into a bigger, wider context. In a nutshell, Tucker is right near the top of my “Prunes for the Ages” list because while living in what I consider the most beautiful house in Kansas City — the Corrigan House, on the northwest corner of 55th and Ward Parkway — Tucker and his wife Laura shrouded the house with talls shrubs, denying passers-by of a view of one of the best examples of Prairie Style architecture in the Midwest. The house was designed by Kansas City’s most famous architect, Louis Curtiss, whose work also includes the Boley Building at 12th and Walnut and the Folly Theatre, which he designed along with Frederick Gunn.
Before the Tuckers bought the house in 1998, Jackson County Circuit Court Judge H. Michael Coburn and his wife Linda lived there. Unlike the Tuckers, the Coburns let the public see the house, with its beautiful leaded glass windows, antique exterior light fixtures and unusual, L-shaped footprint.
So, this is a story about a rat (Tucker), a judge (Coburn) and a house (the Corrigan House).
Let’s take it from the top.
Tucker took the reins at Waddell & Reed in 1992. Under his watch, the company was often entangled in litigation. He resigned as chairman and c.e.o. in May 2005. A month earlier, the firm agreed to pay $7 million in fines and up to $11 million in restitution to settle charges that it aggressively pressured customers into buying unnecessary annuity products.
Tucker was so deeply embedded in the company, however, that it kept him on as a consultant and non-voting board member for eight years, which, presumably, keeps him on the payroll until 2013.
The year before he resigned, the IRS came knocking — figuratively, I presume — at Tucker’s door. The agency contends that the Tuckers claimed $39.2 million in sham tax-shelter deductions and that they owe more than $22 million in income taxes and penalties. The Tuckers say that the tax shelters were legitimate. The case has not been resolved primarily because the U.S. Tax Court is awaiting the outcome of a criminal case involving KPMG executives who put the Tuckers’ tax shelter together. Interestingly, Tucker was a partner with KPMG earlier in his career.
Tucker was also involved in another tax case. In that one, he attempted to recoup $1.2 million in Kansas City earnings taxes he paid under protest from 1999 to 2003. It seems that Tucker, while running Waddell & Reed, contended that he was a Texas resident. Odd, seeing as how he and his wife were living in the Corrigan House on Ward Parkway and he was commuting between there and Waddell & Reed offices in Overland Park…not between Texas and Overland Park.
Tucker based his Texas residency claim partly on the fact that in February 2000, less than two years after he and his wife bought the Corrigan House, he conveyed the property to his wife. The case went to court, and Jackson County Circuit Judge John M. Torrance ruled in favor of the city. In 2008, the Missouri Court of Appeals in Kansas City upheld Torrance’s ruling, and the case ended. So, the rat lost that round.
Coburn was one of the most admired and best-liked judges on the Jackson County bench in the 1980s and 1990s. He was decisive, smart and funny. He once told a reporter about the time that he and his wife were sleeping in their home — the Corrigan House — and he awakened to noises and found a burglar in the house. The judge said he wrestled with the burglar and, after quite a tussle, managed to get the guy out of the house.
Tragically, Coburn died in December 1994 after falling into unsecured elevator shaft of an abandoned building that he was inspecting as part of a court case.
Coburn’s widow, Linda, continued living in the house until July 1998, when she sold it to the Tuckers.
Bernard Corrigan was born in Quebec in 1847 and moved to Kansas City in 1858. He built his fortune partly as a streetcar developer. Work on the home at 55th and Ward Parkway began in 1912. Two of the home’s outstanding features are the reinforced-concrete foundation and the gray limestone exterior walls, with a medium-rough, or “shot-sawed” finish.
The house was completed in 1913, but Corrigan died suddenly in January of that year, two months before he was supposed to move in. One of the early residents of the house was Joseph J. Heim, who owned and operated Heim Brewery in the East Bottoms.
Robert Sutherland, founder of what is now Sutherlands, acquired the home from Heim in 1923 for $90,000.
When the Tuckers bought the house and surrounding 2.4 acres in 1998, the price was $1.65 million. By the time Laura Tucker sold the home 4 ½ years ago — at the top of the real estate market — the price tag had risen to $6 million. So the rat won that round.
As for Tucker, he’s now apparently a legal resident of Texas, working as chairman — along with some of his old KPMG buddies — at a company called Century Bridge Capital. Century Bridge has offices in Dallas and Beijing. Century’s focus, according to its website is “to invest in the growing Chinese real estate sector by forming joint ventures with Chinese real estate development companies to develop properties.”
I feel sorry for Century’s clients, whoever they are. I also feel bad — and will as long as those shrubs rise high against the wrought-iron fence — about the view that he denied area residents of the Corrigan House.
So, why did Tucker put up the shrubs? I think it’s obvious: He had something to hide.