Last month, Bethesda attorney Gary Silversmith had a problem with his boat, the Sequoia. The nine-decades-old yacht was en route to D.C. after spending the winter in Norfolk, Va., but had nowhere to stay.
The District government, which owns the Gangplank Marina where the Sequoia was headed, decided in February not to allow the Sequoia to use the marina this year because of an “almost decade long history of defaults” on previous slip rental agreements, according to a memo written by the marina’s manager.
But this wasn’t just any pleasure craft to which the city was denying harbor. The 90-year-old 104-foot wooden Trumpy was the party boat for eight U.S. presidents. First purchased by the Commerce Department to track down bootleggers during Prohibition, the boat served every president from Herbert Hoover through Gerald Ford. Franklin Roosevelt entertained Winston Churchill on the boat during the height of World War II. Richard Nixon practically lived on board. And, according to one recent book, Robert Kennedy began a love affair with Jackie Kennedy on the Sequoia six months after John F. Kennedy was assassinated. (JFK, by the way, spent his last birthday on the boat.) Killjoy Jimmy Carter sold the boat shortly after assuming the presidency in 1977. It was purchased by Silversmith in 2000 and can be chartered for private events for about $10,000 a pop.
Emails obtained by LL show Silversmith pleading with and cajoling city officials to reverse their decision and allow the Sequoia to dock at the Gangplank this summer. On March 8, he told officials in the Deputy Mayor for Planning and Economic Development’s office (which oversees the marina’s private management company, Coastal Properties Management) that the boat was two days away from arriving in D.C., and if it wasn’t allowed to use the Gangplank, it would dock in Virginia. Silversmith told city officials that he’d already sent invitations to “many noted people (CEOs of Walmart, PrincessCruises, Amtrak, CACI, Washington Post), Senators (John McCain), and Cabinet members (Chuck Hagel)” for an event marking the 50th anniversary of the Vietnam War that was supposed to begin at the Gangplank.
“Should I tell them that the District will not allow the event?” Silversmith asked.
DMPED officials ordered the manager to accept the Sequoia temporarily on the same day as Silversmith’s email. The boat has since been allowed to stay the rest of the season, Silversmith says.
City officials have been mum on why they changed their mind. “We believe the yacht is an historic landmark that belongs in the District,” is all DMPED spokeswoman Chanda Washington would say.
But the Sequoia’s historic charms aside, it appears Silversmith has also been pulling some political strings. Silversmith says he reached out for help to Rock Newman, a boxing promoter who was a close aide to Ward 8 Councilmember Marion Barry when Barry was mayor. Newman says he’s a big fan of the boat (he had his 25th wedding anniversary there) and was concerned that Silversmith, whom he met through the boat and has known for years, wasn’t getting fair treatment from the city. So Newman said he called his friend Mayor Vince Gray to ask the city to just hear Silversmith out.
Newman, who once managed world heavyweight champion Riddick Bowe, characterized his role as “just letting [Gray] know that he needed to be aware that a D.C. institution was in jeopardy.” Newman says Gray said he would address Newman’s concerns “through very proper channels.” (Newman says he has no financial stake in the boat and didn’t get paid to call Gray.)
Silversmith says the Gangplank’s manager, Jay Nickerson, has a personal vendetta against the boat because of a past run-in with a former captain whom Silversmith describes as a “hot-headed Latino” from Bolivia. Silversmith says Nickerson had made it his mission to get the Sequoia kicked out of the Gangplank and had overblown minor problems (like late rent payments, or problems with the Marina’s parking rules) in order to convince the city not to allow the Sequoia to use the marina this year.
Nickerson told LL he could speak for “hours” about problems he’s had with the Sequoia if DMPED granted him permission to speak with reporters. Sadly, DMPED did not allow him to speak with LL.
Silversmith says the city currently has him on a “short leash,” making him prepay this season’s entire rent and has warned him that any violations of the marina’s rules could get the Sequoia evicted.
As for the mayor, DMPED’s spokeswoman Washington says Gray had “no role” in the decision to allow the Sequoia to stay at the Gangplank and would not say whether the mayor even spoke to any DMPED employee. Pedro Ribeiro, a spokesman for the mayor, says Deputy Mayor Victor Hoskins briefed Gray after the decision to keep the Sequoia at the Gangplank was made. LL asked both Ribeiro and Washington whether the mayor had advocated to anyone at DMPED that the Sequoia be allowed to stay in D.C., but neither would answer.
In any event, there’s a special twist to the District’s about-face on the Sequoia: The boat may be delinquent on more than a decade of city taxes, a liability that one expert estimates could total more than $10 million. In fact, on the same day city officials ordered the manager of the Gangplank to allow the Sequoia to temporarily use the marina, auditors from the D.C. tax office were on the second day of a two-day examination of the Sequoia’s financial records.
LL learned that in Delaware court records of a heated legal battle between Silversmith and an investor in the Sequoia, FE Partners, which agreed to give a $5 million loan to Silversmith last year. Silversmith says FE Partners had a “dastardly” plan of issuing bogus default notices on the loan in an attempt to acquire the Sequoia at a low price and ship it overseas. FE Partners, which is partially owned by a wealthy Indian family, denies Silversmith’s accusations and says he’s a crooked businessman who lied to investors about the boat’s debts and other problems.
In court records, Silversmith says he’s never paid city sales taxes or property taxes for the Sequoia during his 13 years of ownership. Silversmith says that’s because he got bad advice from the city’s tax office when he first bought the boat in 2000. He says city tax employees are still in the process of auditing his books.
Tax attorney Lance Jacobs, who was hired by FE Partners, says in an affidavit filed in court records that the Sequoia could owe more than $10 million in D.C. taxes, fines, and interest. Jacobs, who is the former State and Local Tax Committee chair of the Tax Section of the D.C. Bar Association, estimates in an affidavit that the Sequoia’s property tax bill could be more than $7.8 million and its sales tax could be more than $2.6 million.
Silversmith says city tax officials have told him to file tax returns for past years. But Silversmith says Jacobs’ estimates are far too high, and that the fact that the boat spends the majority of the year in Virginia and has several nonprofits as its clients will reduce those numbers. At worst, Silversmith says, the Sequoia’s tax bill will be about $100,000.
“Will we have to owe something?” Silversmith says. “Yes.”
FE Partners also alleges in its lawsuit, as does Nickerson in his memo, that Silversmith improperly served and sold alcohol on the Sequoia without a liquor license. Silversmith says only licensed caterers served alcohol on the boat, but that he’s in the midst of applying for a liquor license as a “precaution.”
An added wrinkle to the Sequoia’s tax issues involves Silversmith’s relationship with District CFO Nat Gandhi, whose office is responsible for collecting city taxes. Silversmith tells LL that he and Gandhi are on “friendly” terms and that Gandhi’s been on the Sequoia a few times. When LL asked Gandhi’s spokesman David Umansky about Silversmith, though, LL received a stern email admonition that Gandhi and Silversmith are “NOT” friends.
“I wonder who would tell you these things, you should consider your sources,” Umansky said on LL’s voicemail. He followed up with an email saying “[Gandhi] cannot remember the last time they spoke, but it was at least several years ago.” Umansky also said that Gandhi had only been on the Sequoia once, in 2007.
But emails obtained by LL show a different story. In May 2012, Silversmith sent an email to Gandhi’s personal account inviting him to a “Cigar Cruise” in June.
“Nat,” Silversmith wrote. “Can you come?”
Gandhi’s assistant, Lynnette Jones, responded on her city email account saying that Gandhi would be there and wanted to know if he could bring a guest or if it was a “fellas only” event.
In an email from August 2012, Silversmith says he just had lunch with Gandhi, who had asked if he could bring India’s ambassador to the United States to visit the Sequoia later in the year. Gandhi sent an email to Silversmith in November about the possible visit.
In a follow up, Umansky says Gandhi did not attend the “Cigar Cruise” or any event on the boat with the Indian ambassador. As for the August lunch, Umansky says Gandhi “does not recall the event, but his calendar shows that Silversmith did attend a lunch with others.”
Maybe they ate in silence.
Photo by Darrow Montgomery