THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Friday, October 27, 1995 TAG: 9510270517
SECTION: FRONT PAGE: A1 EDITION: FINAL
SERIES: ELECTION '95
THE CITIZENS' AGENDA
The Virginian-Pilot has asked people around the state what their major
concerns are leading up to the Nov. 7 election.
SOURCE: BY MAC DANIEL AND ROBERT LITTLE, STAFF WRITERS
DATELINE: CHESAPEAKE LENGTH: Long : 115 lines
After three years of not paying property taxes on his office, Chesapeake lawyer Fred Quayle delivered almost $20,000 to the city treasurer and settled his debt.
That was June 26, 1991.
The next day, Quayle announced before a gathering of 200 that he would run for state Senate on a platform stressing quality education and fiscal responsibility.
In February, the first-term Republican senator paid more than $4,000 to settle a property tax bill that had been overdue since just after he won that election.
And earlier this month, a few weeks shy of his Nov. 7 showdown with Democrat Johnny Joannou, Quayle settled a $30,000 bill with the IRS, an accumulation of payroll taxes he failed to pay for his Chesapeake title insurance company.
Quayle said that paying off his office tax debt and announcing his candidacy in 1991 were not related. And the past-due taxes, he said, should not matter.
``I'm kinda proud of the fact that I hung in there and got all this taken care of,'' Quayle said this week at his campaign headquarters. ``The government has made a fairly substantial profit off of me.
``Most of this stuff existed four years ago,'' he said. ``And I don't see how it has impeded my ability to lead the 13th District in the very least.''
The campaign for Virginia's 13th Senate District, which includes parts of Portsmouth, Chesapeake and Suffolk and stretches west to Hopewell, has been an anomaly of sorts. While candidates in other districts around the state debate the merits of George Allen Republicanism vs. Virginia's Democratic history, Quayle and Joannou each jostle to establish themselves as less unscrupulous than the other.
As the election nears and the attacks sharpen, Quayle's district has become one of the final battlegrounds between two political parties bent on emerging from the election with control of the state Senate.
Joannou, too, has been on the defensive about past conduct. A legislator for 15 years before he lost to Quayle in 1991, Joannou missed the opening of the 1985 General Assembly session while appearing in federal court on trial for 13 felony charges - one for conspiracy, the rest for mail fraud.
Never before had a Virginia legislator been indicted on felony charges while in office. The trial lasted 10 days; more than 100 people testified.
Charges flew that Joannou schemed, through a Portsmouth car dealership, to fix speeding tickets. Prosecutors said he helped issue documents claiming cars' speedometers were broken, even though his company didn't have the equipment needed to calibrate speedometers.
Jurors acquitted Joannou of all charges on Jan. 18, 1985, saying later that the prosecutor's evidence was flimsy.
That has not stopped Quayle from making the trial an issue in the campaign and referring to Joannou as an ``indicted former senator.''
``After spending thousands to `beat the rap' and watching his co-conspirators go to jail, Joannou wants to return to the Senate and continue what he started,'' Quayle writes in campaign literature.
Joannou calls it unfair to talk about the two candidates' past troubles in the same breath.
``I was tried. . . . I took the witness stand and the jury said I didn't do anything wrong. How does that compare to what he's done?'' Joannou said this week. He calls his trial a political ploy by Republican prosecutors.
``All I'm saying to you is, I'm not ashamed of anything. The record is clear. And the record is clear on Fred Quayle. He's not going to sit there and say he didn't withhold those taxes, because he did it.''
Quayle's tax problems with both the Chesapeake treasurer's office and the Internal Revenue Service began around 1989, two years after he purchased and moved into a spacious office building in the Churchland section of Chesapeake.
Soon after he bought the building, Quayle said, interest rates skyrocketed while he and his partner struggled to find tenants.
Quayle's partner, James W. Jones, also owned another building in the office complex. And as both men's financial situation grew graver, Quayle said he assumed the full debt on the building at 3808 Poplar Hill Road.
``As I could get the money,'' he said, ``I went to pay those taxes.''
At the same time, Quayle stopped paying federal withholding tax for his employees, a move that resulted in the IRS placing a $30,021 tax lien against the title insurance company that Quayle and his wife, Brenda, have run out of his Chesapeake law office since 1984.
On Oct. 5 of this year, a month and two days before the election, the IRS released the lien after Quayle agreed to pay the remainder of the money. He said a relative gave him the money.
Quayle declined to say how much his title insurance company made during the period or how much he or his wife received in salary. All Quayle would say was the company helped his law firm financially but was ``no major money-maker.''
According to a financial disclosure report Quayle filed with the state in January, he makes at least $150,000 a year from his law practice, his title insurance company and a real estate venture.
``In 1989, we got a little bit behind in our taxes,'' Quayle said in July. ``It's just a brief period that I went through and that a lot of businesses go through.''
Quayle said he ``had every intention'' of letting the public know about his troubles. He said he wanted to get the problem cleared up before he went public. But he never felt that his past problems with taxes should be an issue in this campaign.
``I don't think it's a question of me not being a good steward'' of taxpayer dollars, said Quayle. ``I have only so much control over how much (business) comes into my office.'' ILLUSTRATION: HUY NGUYEN COLOR PHOTOS\The Virginian-Pilot
Johnny Joannou
Fred Quayle
KEYWORDS: HOUSE OF DELEGATES RACE 13TH DISTRICT CANDIDATES by CNB