Rob Lowe May Sue Over California SBOE Member's Comments

For over 50 years, Bloomberg Tax’s renowned flagship daily news service, Daily Tax Report® has helped leading practitioners and policymakers stay on the cutting edge of taxation and...

By Laura Mahoney

Feb. 26 — Actor Rob Lowe is considering legal action against former State Board of Equalization Chair Jerome Horton (D) over alleged anti-Semitic statements made to him and his wife, and other disparaging remarks Horton made publicly about the couple's tax appeal before the five-member board.

Lowe has informed other board members in a Feb. 24 e-mail obtained by Bloomberg BNA that Horton made anti-Semitic statements to his wife, who is Jewish, during a closed-door meeting with the Lowes and their lawyer last summer in advance of their November hearing before the board. Horton asked Lowe's wife, Sheryl Berkoff, if she “Jewed down” the contractors who built their home, Lowe said.

“Appalled, we asked him to explain his comment,” Lowe said in the e-mail to an individual on SBOE member George Runner's (R) staff. “He doubled down, saying ‘C'mon. You know what I'm saying. Did you Jew them down? You must have.' ”

Lowe said he, his wife and his lawyer, Mark Bernsley, were in the room along with Horton and his staff. Lowe added that he will be bringing Horton's comments to the attention of the Anti-Defamation League, and he encouraged the staff member to share his message with others.

“I welcome the opportunity to discuss their concerns,” Horton told Bloomberg BNA in a statement Feb. 26.

Lawyer: Comments Inappropriate, Unethical

At the same time, Bernsley said the Lowes may sue Horton over the anti-Semitic statements as well as separate comments Horton made in a letter and news release Horton sent out after the board's latest decision in their tax appeal Feb. 23. Horton's verbal and written comments were highly inappropriate and unethical, Bernsley said.

“We are reviewing whether they are actionable and whether BOE staff or facilities were used to communicate the comments,” Bernsley said to SBOE Chair Fiona Ma's deputy director in a Feb. 25 e-mail. “Malice is certainly evident from Mr. Horton’s anti-Semitic comments informally reported to the board immediately after they were made at our ex parte meeting with Mr. Horton.” Bernsley provided the e-mail to Bloomberg BNA on Feb. 25.

The SBOE is the only elected tax board in the country, and members are free to meet with taxpayers privately to discuss their tax appeals before they are considered by the full board .

In its most recent ruling in the Lowes' tax appeal on Feb. 23, the board set a basis of $12.1 million for the 2005 sale of the couple's home in Montecito, Calif., for $25 million. It was a nearly complete victory for the Lowes, who claimed their basis was $13.5 million. The Franchise Tax Board argued the basis was closer to $7 million, which would make much more of the sales price subject to income as gain .

Horton: Lowes' Basis Claim Unsubstantiated

Beyond the alleged anti-Semitic comments, Horton sent a letter by e-mail Feb. 24 to an unknown number of addresses including Bloomberg BNA, and a news release distributed by the SBOE on Feb. 25, saying the five-member board violated its own rules by granting most of the Lowes' claims in their appeal because the Lowes failed to substantiate their claims.

“The gap between the rich and poor just got wider with this gift of public funds to one of our most affluent citizens,” Horton said in the news release and letter. “I love Rob Lowe’s movies, but not enough to gift him $514,000 of California’s taxpayer dollars.”

Lowe sent his Feb. 24 e-mail to the SBOE staff member after reading Horton's response to the board's vote. In the message, he said he wouldn't address Horton's “unnecessarily gratuitous and divisive class warfare rhetoric,” but he wanted to bring attention to his anti-Semitic comments.

Bernsley said the Lowes may ask the board to rehear the case to demonstrate the board made a proper ruling, even though they have already been vindicated.

“I will be curious to learn whether there is a precedent for board members making public statements suggesting the impropriety of board decisions they don't agree with, and about the taxpayers who come before the board and, if not, why the Lowes were singled out for such disparaging treatment,” Bernsley said. “Because Mr. Horton may now become a defendant in a lawsuit, and has an apparent (if not obvious) bias, I ask that he be precluded from any further deliberations concerning the Lowes.”

Horton was the SBOE chair for five years until Feb. 24, when the board elected Ma to the post.

To contact the reporter on this story: Laura Mahoney in Sacramento, Calif., at

To contact the editor responsible for this story: Brett Ferguson at

Request Daily Tax Report