GOP Incumbent Seems Safe in CD-4 as Challenger Faces Tax Controversy

Tara Nurin | October 30, 2018 | Elections 2018, Politics
Democratic candidate Welle disputes tax issue as conservative Rep. Smith handles a controversy of his own. District that has long voted Republican looks unlikely to go blue

Candidates in 4th Congressional District: Democratic challenger Josh Welle, left, and Republican Rep. Chris Smith
A congressional district widely expected to remain in long-term incumbent Chris Smith’s hands may be even safer for the Republican now that his opponent is under fire over accusations of tax and ethics violations. First-time Democratic candidate Josh Welle, who is running to unseat Smith in central New Jersey’s 4th district, is fielding questions over why he didn’t pay certain business taxes and misrepresented his firm’s status to congressional ethics officers. Smith is running for his 20th term in office and is battling his own controversy.

Earlier this month a media investigation found that Welle didn’t dissolve his two-year-old software company by the date he’d reported on financial disclosure forms and that he owed back taxes to Delaware, where he incorporated, in a disputed amount of anywhere from $1,300 to $130,000. Welle blames a miscommunication for the discrepancies and has since paid off his debt. But questions linger over whether he intentionally misreported the dissolution date and neglected to pay two years’ worth of franchise taxes or whether his outside business agent simply failed to receive or understand his staff’s instructions to dissolve the company in the summer of 2017, as Welle claims.

The Daily Beast has observed, “At worst, he misled congressional ethics officials about a business of his that just resolved a six-figure tax-delinquency bill. At best, he set up the firm lacking a basic understanding of how to manage it.”

Although the press has reported that he owed Delaware $130,000 in taxes, Welle says he owed and paid a little more than $1,300 and that journalists who stand by their calculation fail to understand that the larger amount represents an estimated tax liability that he never actually owed. Attempts to independently verify the figure have been unsuccessful.

“I had a tax liability of about $1,100 that I paid within hours of finding out about it,” Welle says. “$130,000 is completely erroneous.”

Smith’s LGBTQ issue

Smith faces a controversy of a different sort. Long criticized by the left for his conservative stance on gay rights, the devoutly Catholic congressman is battling accusations that he implied to students at Colts Neck High School that adoptable babies would be better off in orphanages than with gay adoptive parents. Smith says the LGBTQ newspaper that published those remarks took them out of context; he later released an audio recording of the entire question-and-answer session that shows he never explicitly expressed that sentiment and in fact said they would not be better off in orphanages at another point in his appearance.

The two controversies have little in common. But, ironically, the two men get attacked for the same thing: spending too much time away from New Jersey.

After first getting elected in 1980, Smith moved his young family to the Washington, D.C. area so they wouldn’t have to spend so much time apart during the week. Though his campaign staff is adamant that he maintains a home in the district and has always voted there, critics have spent decades counting and publicizing the (few) number of nights he stays over and have used it as the biggest accusation against him.

Welle calls him distant and out of touch with constituents while voters write letters to the editor complaining about his refusal to hold town-hall meetings or debate political opponents. (Smith did agree to debate Welle in a private TV studio for a program that aired October 19 on News 12 NJ.) He has twice declined to be interviewed for NJ Spotlight stories on his 2018 primary and general election races, and Vote Smart writes on its website, “Chris Smith has refused to provide voters with positions on key issues covered by the 2018 Political Courage Test, despite repeated requests from Vote Smart and voters like you.”

Smith points to the many accolades he’s received for outstanding constituent service and the several prominent pieces of legislation he’s authored — including Megan’s Law regarding the residency of convicted sex offenders — that arose from problems he helped district residents navigate. Meanwhile, the congressman’s campaign staffers frequently mention Welle’s own troubles with residency.

Welle raised more money than Smith

Raised in Wall Township, Welle left New Jersey for college at the U.S. Naval Academy, followed by graduate school and military service. When the 38-year-old returned from his last deployment several years ago, he settled in Northern Virginia with his wife and established the software company Severn Pacific. Records show he voted in Virginia in 2016 and 2017 and only moved back to New Jersey a month after declaring his candidacy for Congress.

Welle can claim some election-cycle bragging rights, however. He’s the first opponent to raise more money than Smith ($1.4 million) and his prowess compelled the 64-year-old Smith to break $1 million in donations for the first time. Smith went into the final weeks of the campaign with a financial advantage, $644,665 compared with Welle’s $335,161.

But Smith’s money is hardly the issue. The challenger may have had some reason for optimism early on in the race — Monmouth University Polling Institute director Patrick Murray told NJ 101.5 in early April that every district in the state could end up in play and the Democratic Congressional Campaign Committee listed New Jersey’s 4th district as one of 100 to watch — but no respected analyst currently thinks the district has any chance of flipping from red to blue.

The district has voted Republican for decades. Its 126,000 Democrats, 140,000 Republicans and 235,000 unaffiliated voters elected President Donald Trump by a 56 percent to 41 percent margin and last favored a Democrat for the presidency in 2000, when they went for Al Gore by four points. While voter registration logs show the state has become bluer since the last presidential election, District 4 has moved in the opposite direction over that period, gaining 7,225 Republicans and 5,086 Democrats.

Smith has won all his Congressional campaigns since 2000 with at least 63 percent of the vote.

Watching how women vote

Come Election Day on November 6, national pundits will be watching closely to see how women — particularly suburban white women — vote and whether African-American women vote at all. The 4th district, covering all of Monmouth County and parts of Ocean and Mercer counties, is entirely suburban and 78 percent white. Women outrank men by 52 percent to 48 percent. Black turnout likely won’t sway the results much either way: Hispanics comprise 10 percent of the minorities here, with blacks and Asians trailing, at 6 percent and 4 percent, respectively.

In the Trump era, the destination of the district’s white-women vote may be a toss-up, just as Smith’s record on women is bafflingly mixed. As chair of the bipartisan pro-life caucus, he may be the most vocal abortion foe in Congress, receiving a 3 percent lifetime rating from Planned Parenthood. But he also has authored bills to protect women from sex trafficking and defend themselves against sexual harassment in the Capitol, and he has broken rank with his party to support children’s healthcare, protect DACA dreamers, and block the separation of undocumented children from their families.

According to analyses by NJ Spotlight and the U.S. Census Bureau, as of 2016 the shore-lined 4th district’s demographics closely resemble the rest of the state in many ways. Median household incomes is $76,000 a year. Thirty-seven percent of residents older than 25 in both the district and the state had earned at least a bachelor’s degree. Both the district and the state tally those older than 64 at approximately 16 percent of the population.

Other candidates

However, as home to part of Joint Base McGuire-Dix-Lakehurst, the 4th district contains a high proportion of veterans, who generally lean Republican. Welle may curry favor as a vet himself, though Smith chaired the House veterans’ affairs committee for two terms and is deeply beloved by many veteran organizations.

Running as Independents or third-party candidates are Felicia Stoler, Michael Rufo, Edward Stackhouse, Jr., Brian Reynolds and Allen Yusufov.