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Petitioner was a disqualified person with respect to the
Plan because (1) he was a fiduciary (sec. 4975(e)(2)(A)), (2) he
owned Rollins (sec. 4975(e)(2)(E)), and (redundant in the instant
case) (3) he owned at least 10 percent of Rollins (sec.
4975(e)(2)(H)). The transactions were uses by petitioner or for
petitioner’s benefit, of assets of the Plan. These assets of the
Plan were not transferred to petitioner. As to each of the
transactions before us, petitioner sat on both sides of the
table. Petitioner made the decisions to lend the Plan’s funds,
and petitioner signed the promissory notes on behalf of the
Borrowers. This flies in the face of the general thrust of this
legislation to stop disqualified persons from dealing with the
relevant employees plans or the plans’ assets. The Congress
replaced prior laws’ arm’s-length standards and put in their
place prohibitions on certain kinds of dealings (with exceptions
not relevant to the instant case). The prohibitions were backed
up by excise taxes, to be imposed without regard to whether the
transactions benefited the employees plans.
However, the Congress chose to carry out this “general
thrust” by enacting a series of detailed prohibitions. The
question before us at this point is whether petitioner violated
one of these detailed prohibitions--direct or indirect use of a
plan’s assets or income by petitioner or for petitioner’s
benefit.
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