Asch ’79 withheld business past
By Greg Berger, The Dartmouth Staff
Published on Tuesday, March 9, 2010
While Board of Trustees petition candidate Joe Asch ’79 has contended that the professional background of his opponent — the Alumni Council-nominated John Replogle ’88 — would not benefit the Board, Asch has been repeatedly reticent to fully disclose his own professional experience.
In previous interviews with The Dartmouth, Asch has stated that he founded a paramedical products firm based in Europe that manufactured and sold internationally medical supplies of Asch’s own design, but declined to disclose the name of the company. Legal documents recently obtained by The Dartmouth, however, tie Asch to Arand Ltd. and, later, Ballet Technologies, two paramedical supply companies specializing in electrolysis needles.
In an interview on Monday, Asch said that he did not share the name of his company because he did not want industry outsiders to know how profitable the industry is.
“I don’t spread it around because it would be attractive to other people to join in that industry, if they knew how successful it was,” Asch said.
A French court document obtained by The Dartmouth that links Asch to Arand reveals that in 2004, Arand was investigated for “une fraude fiscale,” a French legal term that translates as fiscal or tax fraud. Asch confirmed on Monday that he was once associated with Arand.
In 2004, Arand was brought to court for legal issues concerning the company’s failure to pay taxes. An appeal of the case in 2005 rose to the French Court of Cassation, the highest French appellate court that rules on civil and criminal matters.
On April 20, 2005, the French Court of Cassation dismissed an appeal by Arand, which sought to reverse a lower court ruling “authorizing the tax administration to carry out operations to search for and seize documents, in search of proof of fiscal fraud,” according to an English translation of the court documents that were originally printed in French.
In its appeal, Arand claimed that the French tax administration unlawfully obtained documents from a private apartment that were later used to charge Arand with tax evasion in a May 12, 2004 lower court decision, according to the document.
The court document details how an apartment occupied by “Joseph X” and his wife was used by Arand to conduct company business — including telephone calls, mailings and “trading activities” — without being properly registered with the French government.
“The corporation Arand Ltd. is not known to the Tax Center at 16 Porte Dauphine, of competent jurisdiction, to perform commercial activity at the address,” according to the translated documents of the decision. “There exists the presumption that the corporation Arand Ltd. performs a commercial activity in France out of the offices … occupied by Joseph X and/or his wife … which constitutes a taxable activity under the tax on corporations, without submitting tax and communication statements, and as such may not have satisfied best practices in its accounting statements.”
Asch, on Monday, said the tax dispute was “settled amicably.”
Asch added that the 2004 case was in reference to shipping sales Arand made to Italy and Spain from France in which the company should have been paying a value added tax. Arand eventually paid the proper amount of tax, which Asch said was approximately $8,000. Half of the sum was covered by the company’s French manufacturers, because Asch said they were partially at fault.
This tax issue was more a “question of jurisdiction,” he said, since Arand had already paid the proper tax amount in the United States, although it should have been paid it in France. Asch added that the proper taxes were then paid in France and the company was given a credit for the equivalent amount from the U.S. government.
The taxes were paid late with “no penalties and no interest,” he said.
According to Asch, the French tax authorities asked to obtain documents from his private residence in France, and he complied with the requests.
“This wasn’t an adversarial situation, this wasn’t an ‘us against them,’” Asch said in the interview on Monday. “We gave them their documents after the 12th of May [2004],”
Asch and his family moved to the United States in 2004, after living in Paris since 1986 and summering in Hanover in the early 1990s, Asch wrote in a letter posted on his campaign web site.
When shown the French Court of Cassation document, Asch repeatedly said that he had “never seen this document before,” adding that he believed it to be an “internal” French government document.
Arand Ltd. was founded in 1988 in the Channel Islands, a British protectorate off the coast of France, according to the company’s certificate of incorporation in the Channel Islands.
“It was a tax jurisdiction that was very good for international trade, we sell our needles in about 30 different countries and it made sense to be there,” Asch said, adding that the arrangement was an “absolutely standard legal affiliation.”
In 2004, Ballet Technologies was founded and received all of the trademark information originally filed by Arand Ltd. Asch is a current director of Ballet Technologies Limited, according to a June 2009 annual filing with the U.K. Companies House, a British government corporation registry.
Asch declined to comment on the nature of his involvement with Ballet Technologies in the Monday interview because he “did not think it was relevant to the campaign.”
The current Ballet needles web site lists as its distributor in France a company whose address is in the U.K. The distributors that carry Ballet needles are typically based in the countries they service, according to the web site.
In earlier years, a smaller French company was listed as the French distributor. Although the needles are manufactured in France, by selling them from outside of the country, the company avoids value added taxes, Asch said.
“At one point we had a small company [in France], but we decided to fold that up after we had the complications with the French tax authorities,” Asch said. “Our lawyers said it would be a lot easier and cleaner to do that.”
Both Replogle and Morton Kondracke ’60, an Alumni Council-nominated candidate running unopposed for the other open Trustee position, have previously fully disclosed their professional affiliations since they graduated from the College.
After his time at Dartmouth, Replogle worked at Boston Consulting Group followed by a few years with Associated Project Control, a company involved in the construction of retail stores, Replogle said.
Replogle then returned to Boston Consulting Group after graduating from Harvard Business School, after which time he held several posts ranging from head of sales to managing director of Guinness Bass Import Company, Replogle said.
Currently, Replogle serves as the chief executive officer of the global personal care company Burt’s Bees, a position he assumed in 2006 after serving as the general manager for Unilever’s North American skin care division. Replogle also served on the Boards of Ravens Cross School, Habitat for Humanity and Terracycle.
Following a three year stint in the U.S. Army after Dartmouth, Kondracke has since worked at several newspapers, magazines, television shows and other media outlets as a journalist. Kondracke is now the executive editor of Roll Call, a Washington, D.C. newspaper.
In a letter posted on Asch’s campaign web site in support of his candidacy, Brice Acree ’09 cited Asch’s business experience as an attribute in a time when the College is facing major budget cuts.
“Joe has a professional résumé packed with business experience and financial gravitas that our trustees need — particularly during a time of economic crisis — to help us navigate these hazardous waters,” Acree wrote.
A letter from three trustees who were former petition candidates for the Board — T.J. Rogers ’70, Peter Robinson ’79 and Stephen Smith ’88 — contrasts Asch’s experience as an entrepreneur with the business backgrounds of many current trustees.
“The Board, in our opinion, has plenty of investment bankers and financiers,” the letter stated. “Joe is an entrepreneur who built an international medical products company from scratch.”
Voting for the Board of Trustee elections begins March 10.
I was approached yesterday by a reporter from The Dartmouth asking about a tax dispute my medical products business had in France in 2004.
My company does business in 30 different countries and disputes as to where taxes should be paid have occasionally cropped up in different jurisdictions. Over a number of years, our accountants interpreted the French tax code differently from the manner in which France’s tax authorities did. When approached by the French authorities in 2004, we amicably resolved this jurisdictional confusion, and my company paid the outstanding taxes in full with no penalties or interest due. We received a compensating tax credit in the United States in the identical amount. We have had no further complications since that time in France or in any other country.
The larger question is why and how these issues have arisen in the final week of my campaign for Trustee of Dartmouth College. Who would pay attorneys in France to try to ferret through files to come up with something as benign as this to try to discredit my company? How does the D’s reporter presume to interpret French legal documents that I have never seen before?
This Trustee campaign should be about the candidates aptitude to help lead the College – not muckraking, personal attacks and smear campaigns. Whoever is behind this effort should be ashamed.
Joseph Asch ‘79 March 9, 2010
By Joseph C. Asch 79 on Mar 9 | 4:55 am
Whatever Joe Asch may feel personally about having to answer questions from a reporter about his professional background, he should try to remember that the exercise is professional. It is not personal. If he is having trouble distinguishing between the two, perhaps he will also have trouble leaving his personal agenda at the door if he is elected to the Board of Trustees.
By Anne Bagamery ‘78 on Mar 9 | 7:16 am
i don’t think an internal government document never seen before is benign, it seems newsworthy. Do you need an MD to be a professional electrologist? So are the needles “medical supplies?” or something else.
By benign? on Mar 9 | 7:25 am
Sucks for you, Joseph, but nothing in your comment belies the main point of the D’s article. Yes, someone almost certainly fed information to the D as part of a smear campaign against you. But strikingly absent from your complaint is a claim that anything the D said was incorrect.
Frankly, I’m impressed by Greg Berger’s reporting. It’s one of the best pieces of original journalism I’ve seen in the D.
By Anon ‘05 on Mar 9 | 8:54 am
Where’s the “civility, collegiality, and persuasion” that Mathias keeps talking about? This is a last minute smear campaign, plain and simple.
By DartBored on Mar 9 | 9:27 am
Anyone with business experience in Europe knows how complex the cross-border tax issues are, even in the days of the Euro.
We live in a nation of laws. Business-to-business disputes are often resolved in the courts. Did anyone question former Board chair Neukom about all the suits against MicorSoft? John Replogle is effectively a division general manager of the Clorox Corporation, and presuambly a junior officer in the larger entity which is the owner of the Burt’s Bees business; have they never been involved in litigation?
Please…..
By Timothy A. Dreisbach 71 on Mar 9 | 9:31 am
Stunning naivete from Dartmouth sophomore Greg Berger. Stunning violation of business ethics from John Replogle.
If I read this article correctly, the situation is that a multinational company, while paying the correct amount of taxes to its “home” country, came under investigation by one of the 30 companies in which it distributes because that country felt it wasn’t getting a due taste of revenues. One tax lawyer presumably said that the most tax efficient organization would be to start a French subsidiary that would be the sole distributor within France, and have the original company sell only outside of France; and that this advice proved to be incorrect, or that it was correct for a time but became incorrect because the laws changed.
This is actually indicative of a wave of re-definitions of jurisdictions that have been taking place since the E.U. formed. It’s just fundraising within the E.U.
Though one does wonder whether John Replogle’s unit at Chlorox has ever had a tax dispute.
By Joseph I. Malchow 08 on Mar 9 | 9:47 am
Forget Joe’s company’s tax problems. Why did he run as an entrepreneur without explaining his company at all? Are we supposed to take his word for it that he built “an international medical products company from scratch” and never check the facts? That’s not the attitude he applies to the claims that come out of the Administration. He must have something to hide: he must have concealed the identity of his needle company for a reason. After all, if it is such a success, why not tell people the facts and let them decide for themselves? What Is Joe Afraid Of?
What Is Joe Afraid Of?
By anonymous on Mar 9 | 9:52 am
When did Joe Malchow become an international tax lawyer? What does he mean when he says “one of the 30 companies in which it distributes because that country…”? A company is different from a country, Joe.
This isn’t a problem created by underlings at a huge corporation, it involves Asch’s own house and his own entrepreneurship!
By Taste of his own medical supplies? on Mar 9 | 9:57 am
I look forward to seeing what John Bruce has to say over at “In the Shadow of Mount Hollywood.” He has written about Asch in the past. If only this story involved alcohol enough to let John get in a plug for Prohibition it would be perfect for him.
By YouGoJohnBruce on Mar 9 | 10:01 am
A muck-raking article with an accusatory headline, the day before the Trustee Election starts, and the day after I receive a mailing from “Dartmouth Undying” that is just a blatantly dishonest smear job against Joe Asch. Clearly, there is a group of people practicing “the politics of personal destruction” on a small scale to defeat Asch and discourage future petition candidates. Have you people no shame?
By Steven R. Koch ‘82 on Mar 9 | 10:14 am
Stunning paranoia by rabid Asch supporters to assume that the source of this information was Replogle. The list of those who see Asch as unqualified to be a trustee is long and diverse ranging from current and former faculty members, the leadership of Asch’s own Class of ‘79, and many, many members of the Upper Valley Community who have come to know him and his caustic attacking style all too well.
By Alexander Anderson McKenzie on Mar 9 | 10:37 am
I have never seen a “caustic attack” from Joe Asch, but I have seen plenty from his opponents lately! Stunning, indeed!
By Steven R. Koch ‘82 on Mar 9 | 10:45 am
Let me get this straight: Joe Asch was “associated” with a company that was “investigated” by French tax authorities. He was convicted of nothing. He did pay taxes to one country and another country claimed that those taxes should have been paid to it instead. The dispute was settled amicably to the satisfaction of all parties and no penalty or interest was charged. Asch’s European business is very profitable. All this amounts to a scandal? Well, in a way it is. It’s another example of the scandalous conduct of those behind Dartmouth Undying in impugning anyone who dares to question the school’s establishment.
In the interests of transparency, will Greg Berger reveal who has put him on to this “story”? If he believes that he owes confidentiality to his source, will he at least state whether he has been “tipped” by a member of the administration or a supporter of Dartmouth Undying or a candidate on its slate?
As one who has been resident in Europe, I can confirm Tim Dreisbach’s comment regarding the complexity of dealing with European tax authorities, especially when more than one country is involved. I was once “investigated” for trafficking in Swedish automobiles without paying taxes. I suppose Mr. Berger might infer, therefore, that I was involved in fraud. My “trafficking” consisted of buying a Volvo as a gift for my father.
It is passing strange that The Dartmouth has for some years seemed very eager to sniff out evidence of wrongdoing by those of us who have criticized the administration or the board, and then to publish very misleading, incomplete reports. When we have sought to correct the record, the Dartmouth has refused to print our submissions, and we have had to purchase ad space in the paper to make our rebuttals known, at least to the D’s local readership. When we pass on information deserving of investigation, however, it is ignored.
By Frank Gado on Mar 9 | 12:03 pm
Mr. Malchow (as unbiased a journalistic as has ever been) clearly does not understand ‘naivete’, ‘business ethics’, or ‘violation’. Nor, given his track record, would I expect him to.
Mr. Dreisbach should have advised Mr. Asch before Mr. Asch responded to the reporter (who did an excellent job), and before Mr. Asch wrote his knee-jerk reply above — which reply in fact proves Ms. Bagamery’s point. [In further fact: Mr. Dreisbach, perhaps you should consider running for Trustee.]
Had Mr. Asch continued, above, the calm and mostly clear response given to the reporter (except for the part about ‘I’ve never seen this document before!’), he would have appeared much more Trustee-like. Instead, his response demonstrates his unfitness for the position.
As for Mr. Koch’s assertions: I have been the recipient of Mr. Asch’s caustic words, several years ago. I can assure you of their vehemence, their damage, and (in my case) their untruthfulness. I had hoped he had grown. Instead, as evidenced by his response to this opportunity to demonstrate his ‘growth’, he has fallen short of what is expected of a Trustee.
By Stunning to Whom? on Mar 9 | 12:29 pm
Do people really think that Mr. Berger called up his “sources” in France to unearth this non-story story? And then hired translators to decipher the French legal docs? It’s not paranoia to assume that someone who’s trying to slam Joe spoon-fed Mr. Berger this story.
From reading the article—and yes, I’m no legal scholar, but neither is Mr. Berger—it seems like there was some tax complication at one of Joe’s companies…and just that: a complication, not an instance of ethical malfeasance. Mathias/Replogle want to spin Joe as an unethical businessman, but they’ll need to do better than this article next time. This article does not convince. Joe does an excellent job of making his clear and level-headed case contra the “charges” levied against him.
By now, I hope that alums are beginning to realize the extent to which Replogle/Mathias are willing to go to smear Joe and the other Association of Alumni petition candidates. I’m just disappointed that The Dartmouth is willing to play the pawn in Mathias and Replogle’s dirty game.
By Emily on Mar 9 | 12:30 pm
You have never seen a caustic attack made by Joe Asch? Have you ever read anything he has written?
By Anonymous on Mar 9 | 12:30 pm
This is the best piece of reporting that the D has done in a long time. I really wish there were more articles like this one done.
Secondly, for all the commenters, it is rather amusing that they have jumped to some pretty wild conspiracy theories. What evidence do any of you have that Berger is a Repologle supporter? What evidence do you have that he or anyone related to him “fed” the information?
It’s the same thing every time, through out accusations and expect others to have to prove them wrong, it’s a great trick in arguments but anyone with a little bit of logic should be able to see through it.
By electro acupuncture needles? (quakery?) on Mar 9 | 12:55 pm
How are you people saying Asch has never attacked anyone?
80% of his writing is little more than attacks on administrators and his opponents in this race. What a joke…
Clearly he called in the reserves to comment on this article
By ‘10 on Mar 9 | 1:24 pm
All I can say is no one better take tax advice from The Hanover Institute-Frank Gado, even if he has lived in Europe…..
On the other hand, Joseph Asch should be able to tell us which is better, and why: laser hair removal, or electrolysis? Can you convince me to give up my Nair?
By Word to the wise on Mar 9 | 1:26 pm