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5 Shady Financial Tactics Employed By Mitt Romney
Think Progress / News Report
Published: Tuesday 3 July 2012
5 ways Romney is avoiding taxes and other financial expenditures.
After significant pressure, Mitt Romney released two years of his tax returns, which showed, among other things, that he pays a lower tax rate than many middle-class families and has employed a Swiss bank account to hold his investments. Today, Vanity Fair ran an expose on Romney’s investments, providing some new details regarding funds that he keeps in the Cayman Islands, how his retirement fund grew so large, and how he manages to avoid paying his fair share of taxes.
“Romney, like the superhero who whirls and backflips unscathed through a web of laser beams while everyoneelse gets zapped, is certainly a remarkable financial acrobat. But careful analysis of his financial and business affairs also reveals a man who, like some other Wall Street titans, seems comfortable striding into some fuzzy gray zones,” wrote Vanity Fair’s Nicholas Shaxson. Here are five ways Romney is engaging in such financial shenanigans:
1. Romney owns a corporation in Bermuda. Filings describe Sankaty High Yield Asset Investors Ltd. as a “a Bermuda corporation wholly owned by W. Mitt Romney.” The corporation was established by Romney in 1997, but was transferred into a blind trust under Ann Romney’s name the day before Mitt began his tenure as governor of Massachusetts. Bermuda is a famed tax shelter.
2. Romney uses special, tax-free stocks to inflate his retirement account.Romney’s independent retirement account set up during his time at Bain Capital could contain as much as $102 million — a staggering amount given limits on employee contributions. The Vanity Fair piece parses how Romney inflated his IRA so much: When Bain bought and sold companies, it gave employees select, high-risk, high-revenue shares of the business. These shares went straight into Romney’s IRA, so they were untaxed profits. And since they started off low, the shares were seen as being below contribution limits — despite the fact that they promptly grew into a large fortune.
3. Romney’s blind trusts are not-so-blind. Ann and Mitt Romney keep their investments in a “blind trust,” which means that they avoid making investment decisions that may impact their political work. But the Romney’s blind trust, which is run by their personal lawyer, includes investments in a companyowned by their own son.
4. Romney uses a so-called “blocker corporation” to avoid taxes on his IRA.Though Romney says his investments in the Cayman Islands do not help him lower his tax bill, Romney’s IRA appears to have invested in an offshore corporation which then invests in U.S. businesses, to avoid paying the the U.S.’s Unrelated Business Income Tax.
5. Bain Capital helped financial fraudsters dodge taxes. Bain received investments from “the newspaper tycoon, tax evader, and fraudster Robert Maxwell” (who has since died), as well as other financial oligarchs, which helps provide them “with additional ways to skip around tax, disclosure, and regulatory requirements that they might trigger if they invested directly.”
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ABOUT Pat Garofalo
Pat Garofalo is Economic Policy Editor for ThinkProgress.org at the Center for American Progress Action Fund. Pat’s work has also appeared in The Nation, U.S. News & World Report, The Guardian, the Washington Examiner, and In These Times. He has been a guest on MSNBC and Al-Jazeera television, as well as many radio shows. Pat graduated from Brandeis University, where he was the editor-in-chief of The Brandeis Hoot, Brandeis’ community newspaper, and worked for the International Center for Ethics, Justice, and Public Life.
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By Kiley Kroh
12 comments on "5 Shady Financial Tactics Employed By Mitt Romney"
July 05, 2012 9:50pm
When Mitt's father ran for president in 1968, he released 12 years of tax returns. He stated “one year could be a fluke, perhaps done for show.” Mitt has released one year, and that revealed he had declared accounts in Bermuda, The Cayman Islands and Switzerland. All countries that are tax havens and have secrecy laws to protect depositors. Not illegal, but highly suspect. Why not Germany, France or Italy? He may and I repeat may release a later year tax return, but he can't release a previous year. You see Mitt doesn't like to pay taxes. When he worked for Bain, they lobbied for the tax break that allows them to pay 15% on carried interest. When they wanted to close the loophole, Bain spent millions again on lobbying. When he was on the board of directors of Marriott, he was Audit Chairman. He reduced their tax rate to 6.8% through offshore tax dodges and sleazy loopholes. Enough of this, the real story starts below.
In 2009 the IRS had a tax amnesty for people that had money in undeclared Swiss bank accounts. The IRS was given a list of 4,500 names, and let the financial world know they were going to go after these people. More than 30,000 people came forward and the government collected 2.7 billion in taxes and penalties. The company that came forward with these names was UBS, the same company that Mitt has his "declared" account with. Some believe up to 10 trillion dollars are stashed in tax havens by Americans. His staff was sweating bullets in January when he released his tax release. Now that there are calls for him to release his previous tax returns, they are back in panic mode. They have no way to explain the mysterious appearing accounts and the sudden surge in assets. If he does release them, look for white out and a copy of Photo Shop at his campaign office.
July 04, 2012 2:08am
Romney is a money-worshipping pig and tax cheat who has no business running for the presidency.
His secret Swiss bank account got moved quickly when he learned about the Obama administration pressuring Swiss bankers for the names of secret account holders.
With a tax cheat running the Treasury Dept. (Tim Geithner), we certainly don't need one in the White House.
July 03, 2012 11:55pm
Everybody "says" that Romney is a super-rich, unethical oligarch, but please, everybody, don't become sanguine about Obama's re-election. Remember, voters in the U.S. never fail to disappoint. George Bush was elected ... and re-elected ... despite a long list of reasons not to vote for him.
July 03, 2012 8:50pm
Great article, Pat. I am so glad we have journalists like you to expose the truth behind these guys. I look forward to even greater exposes of Romney. Thank you!
July 03, 2012 6:38pm
willard is little more than a over coiffed, over financed venal cretin/dilettante whose hobby is running for political office, perhaps to try and live up to his fathers expectations (?). While his money makes $57,000.00+ A DAY, (how much did you make last year?), offshore, and he pays piddling 15% in taxes, he wants to be the one to show us how we can ALL be millionaires? Apparently we're going to be doing this by delivering pizzas to each other. Sure thing! Even republicans don't like him as they proved unambiguously during the primaries in their search for anyone who WASN'T romney. mitt needs to retire to the Bahamas so he can live with his money. F*ck mitt...... Obama starts looking a whole lot better when viewed alongside this narcissistic toad.
July 03, 2012 2:34pm
Hey Oldhat; If you want to help the poor give to some poor sap in your community instead of some large corporation where most of your donations go to the salaries of the non profit corp. Romney is Pond Scum like most politicians.
July 03, 2012 12:08pm
Romney belongs in jail for tax evasion not the White House. The bottom line is that he refuses to even support the America that provided him the means to become wealthy. He has done that using less than honorable means. The man does not want to support America by paying taxes. Citizens united will BUY the White House for this traitor. What in hell is wrong with everyone? We should be DEMANDING citizens united be struck down. We should run people that refuse to support America out of the country, NOT reward them.
July 03, 2012 11:10am
In a recent study it was reported that rich people are less humane that the average rest of us. They are more self centered have less empathy for others and validate their worth by hoarding money.
Do we want that sort of person to lead us?
July 03, 2012 10:35am
The reason the idiots support the Republicans is that secretly they see themselves in his shoes someday. A fantasy life of greed and grease is enough to blind themselves to the reality of not having anything and not going to have anything. If they faced reality they could identify with the poor whose health and wealth they are helping snatch. Teabaggers, wake up and smell the rotting Republicans!
July 03, 2012 10:35am
When it comes to GOP crooks, Romney is the LEADER OF THE PACKRATS!!
July 03, 2012 10:31am
so writer wants to do away with charity deductions giving to charity is BAD
July 03, 2012 10:04am
Snake oil vendor Romney wants to take you to the cleaners to pay for his deeper tax cuts for himself, the rich, and corporations. Romney pays 14% rate on his earnings against over 30% for American workers and middle class. He’d like to pay two percent or even zero taxes. Where’s the math? When is he going to repay Bush’s $10 trillion overdrawn account? Only the witless would buy a used car from Mr Romney.