Tax Debts Follow Drug-Dealing Thompson Fundraiser

Nov. 5, 2007— -- The former drug-dealing bookie friend of GOP presidential candidate Fred Thompson, who serves in a key fundraising role, has another issue to explain to his longtime friend: why he and his former companies have a record of unpaid taxes.

Thompson said yesterday he has just learned that Philip Martin, his "longtime friend," chairman of the group "First Day Founders" and close campaign adviser, had been convicted of several felonies including drug dealing and illegal gambling. A review of public records shows that the IRS and the state of Tennessee have filed liens for outstanding tax debts against Martin and his former businesses.

In fact, businesses he helped to found and run currently carry nearly $1 million in old tax debts, according to Tennessee property tax records.

Martin, who lives in a multi-million-dollar home on a secluded Alabama island, could not be reached for comment. Messages to his lawyer, John P. Konvalinka, were not returned.

A Thompson spokeswoman yesterday declined to discuss the candidate's relationship with Martin, but said Thompson was unaware of any tax debts related to Martin.

Martin helped secure more than $6 million in pledges for Thompson's campaign as head of a group dubbed the "First Day Founders." He has also provided dozens of charter flights to Thompson, his aides and family, charging a fraction of normal charter prices for the trips, according to the Washington Post.

In a television appearance yesterday, Thompson defended Martin.

"I know Phil is a good man. He is my friend. He is going to remain my friend," said Thompson. Referring to Martin's criminal past, Thompson said he would not "throw my friend under the bus for something he did 25 years ago if he's okay now."

"On the other hand, I'm running for president," Thompson said. "I've gotto do the right thing. Problems occur. I'll just have to figure it out."

Records show Martin had one IRS lien filed against him in 1995, and the state of Tennessee filed three against him in 2002. A clerk confirmed that those state tax liens have been satisfied. An IRS spokesman said privacy laws prohibited him from discussing whether Martin had repaid his debt to the federal government.

As of November, Hamilton County, Tenn. records show that four of Martin's former businesses owe a total of more than $940,000 in overdue taxes and interest to the county, with some debts dating back to 1999. Nearly $860,000 is owed by Soil Restoration, a firm Martin helped run, according to the Washington Post. Four Seasons Technologies, of which Martin was a vice chairman and part owner, owes $4,200. M & M Holdings, which the Washington Post confirmed Sunday was a Martin concern, owes more than $7,000. Alternative Fuels, LLC, a Martin business located at the same address and suite number as Four Seasons, owes more than $71,000.

More than a dozen states have also filed dozens of liens against Martin's former businesses.

As the storm of controversy gathers around him, Martin has a comfortable port in which to hunker down. In 2005, the businessman paid $2.4 million for a 7,600-square-foot mansion on Ono Island, in the Gulf Shore region of Alabama, real estate records show.

The five-bedroom, six-bathroom home features its own private beach and dock, a conference room, a wine room, a "spacious game/exercise area," an outdoor pool and an original Salvador Dali hanging above the entryway, according to 2006 profile of the home in Pensacola Home and Garden magazine.

Business associates are always very impressed by the home, Martin told the magazine.

"They get to take the elevator to the meeting room," which holds up to a dozen people, the magazine quoted Martin as saying. The house "suits my larger-than-life personality," Martin reportedly joked with the article's author.

The Internal Revenue Service has filed liens totaling roughly $250,000 against Martin's former businesses, according to public records, and state and local tax authorities from Kentucky, Texas, South Carolina, Ohio and elsewhere have filed liens against Martin or his former businesses for over $50,000 more.

Martin's criminal history grabbed headlines Sunday. Police files show Martin was convicted of or pleaded guilty to multiple felonies in the 1970s and 80s and started and folded dozens of businesses in the 1990s.

In recent years, Martin has also faced roughly a dozen lawsuits from furious investors who say they were burned in his failed ventures and are owed millions.

Martin's lawyer, John P. Konvalinka, told the Washington Post recently that "for a man engaged in 1,000 transactions a year, he doesn't have near the amount of litigation that some of my clients do."

Kate McCarthy contributed to this report.