Stanford Law School is among the most prestigious in the nation — perhaps the most highly-regarded law school not to have its alumni featured as mainstays at the Supreme Court, the way Yale and Harvard do, for example.
That may be by design. For Stanford lawyers, Silicon Valley and its limitless riches tend to represent the brass ring. Besides, those dowdy Washington robes just don’t look good on the yacht.
Still, like their counterparts at Harvard and Yale, Stanford Law School graduates enter into a great web of powerful connections, peopled by the elite of Wall Street, K Street, Sand Hill Road and Davos.
Among the most powerful and influential Stanford Law grads today is the billionaire Peter Thiel, an early Facebook investor and PayPal co-founder — and one of the most prominent backers of Donald Trump‘s MAGA movement during the 2016 presidential election and beyond.
In 2016, the Times reported a Thiel donation pledge of $1.25 million to Trump/MAGA efforts. In 2022, Vanity Fair still describes Thiel as “MAGA’s Biggest Money Man.” According to the New York Times, Thiel “has set himself up to be the far-right kingmaker… giving more than $20.4 million to 16 House and Senate candidates.”
And Thiel will soon gain access to a lot more of his money, thanks to a savvy tax tip he took from the work of Joseph Bankman, the prominent Stanford Law professor and father of Sam Bankman-Fried.
(Bankman-Fried is, of course, the crypto evangelist and founder of FTX who was recently arrested in the Bahamas for alleged fiduciary misdeeds on a vast scale.)
Professor Bankman’s profile on the Stanford Law site begins with this: “A leading scholar in the field of tax law, Joseph Bankman is the author of two widely used casebooks on the subject. His writings on tax policy cover topics such as progressivity, consumption tax and the role of tax in the structure of Silicon Valley start-ups.”
Note: not Bahamian start-ups.
(Bankman, though teaching at Stanford, is himself a graduate of Yale Law School. That web of connectivity spun by elite institutions is not imaginary.)
Perhaps Bankman-Fried of the now bankrupt FTX could have done better had he sought out financial tips from his father, whom Thiel reportedly credits with teaching him how a regulated vehicle like a Roth IRA might be used just as creatively as a digital wallet.
(Bankman is a tax and tax shelter expert who has helped write laws in California. He actually helped close tax loopholes that netted California billions in lost revenue. On IRAs, however, Bankman told Stanford Lawyer magazine: “By investing in an IRA and taking tax benefits, a taxpayer is simply following the incentives that Congress set up.”)
One of the law students of Sam Bankman-Fried’s dad, Joe?— Teddy Schleifer (@teddyschleifer) December 13, 2022
Thiel told Joe Bankman that his tax law class was “his most valuable because he was able to put a lot of his Facebook stock in an IRA.”https://t.co/a5mp08vIcW
Thiel told Bankman that [Bankman’s] tax law class was “his most valuable because he was able to put a lot of his Facebook stock in an IRA,” according to Theodore Schleiffer at Puck News.
Thiel has used the knowledge he said he learned from Bankman to build a nest egg worth a fortune. The Roth IRA tax shelter technique he learned from Bankman has reportedly allowed Thiel to legally sock away billions untouched by the tax man — with an emphasis on legally. (Other billionaires such as Warren Buffett also reportedly have rich Roth IRA accounts.)
ProPublica reports that “as long as Thiel waits to withdraw his money until April 2027, when he is six months shy of his 60th birthday, he will never have to pay a penny of tax on those billions.” So the funds for generous MAGA donations won’t dry up any time soon. Thiel is just 55.