Recently, three important and somewhat overlapping articles have been published about the mysteries surrounding Mitt Romney’s estimated quarter-of-a-billion dollar fortune. The first is an in-depth investigation for Vanity Fair into Romney’s multitude of offshore investments and bank accounts in countries such as the Cayman Islands, Bermuda, and Switzerland. The second is a Washington Post article focusing primarily on one of Romney’s offshore companies, Sankaty High Yield Asset Investors, Ltd. And the third is a Talking Points Memo report on Romney’s $100 million plus individual retirement account (“IRA”).
Combined, these three articles paint Romney as an extremely wealthy man who has chosen to invest much of his money overseas, rather than here in the US, who is likely pushing the envelope to dodge as much taxes as possible, and who refuses to disclose even basic details about his financial dealings even while asking the American people to trust him with their hard earned tax dollars. Based on these articles and other news reports, we pose in this edition of our series Questions for Mitt Romney a number of questions that journalists should ask about Romney’s fortune, and that voters should demand answers to.
1. Why won’t you release your tax returns? In 1968, your father, George Romney, started a tradition for Presidential candidates by releasing 12 years of tax returns, noting that “one year could be a fluke, perhaps done for show.” Yet, in your entire political career, you’ve only released your 2010 return (with a promise to release your 2011 return this fall), and then only under significant political pressure.
- Why won’t you release your earlier returns?
- Your 2010 return shows that you had an effective federal tax rate of 13.9% on income of $21.6 million. What was your effective federal tax rate for earlier years?
2. What is in your offshore accounts and investments? Based on your 2010 tax return, the Obama campaign has put together this map showing you have offshore accounts and investments in seven countries – Bermuda, Cayman Islands, Switzerland, Luxembourg, Germany, Australia, and Ireland.
- Is this an accurate list of your offshore accounts and investments?
- Do you have other offshore accounts and investments?
- What is the value of each such account and investment?
- Why did you choose to invest this money overseas, rather than here in the United States?
3. How “blind” is your blind trust? In order to avoid impropriety or even the appearance of impropriety, political candidates and elected officials often put their wealth into a blind trust so that they do not make political decision based on how their money is being invested. Your blind trust, however, is run by R. Bradford Malt, your longtime lawyer who is the President of your Bermuda company Sankaty. One of the investments that Mr. Malt made with your trust was to put $10 million into a company named Solamere, which was co-founded by your son Tagg Romney and your campaign’s National Finance Chair, Spencer Zwick.
- Did you know about the Solamere investment in advance?
- Were you involved in deciding that the Solamere investment should be made?
- If you were to become President, what additional steps, if any, would you take to make sure your decisions as President are not affected by your knowledge regarding your investments?
4. How did you amass a $100 million plus IRA? IRAs were created to provide Americans with a tax advantaged way to help ensure that they had a modest amount of money available to retire on. In 2008, the average IRA had a fair market value of $67,545. Your IRA has a value of more than $100 million.
- Given that annual IRA contributions have been limited to between $2,000 and $6,000 over the past twenty years, how did you accrue such a massive IRA?
- Was it by gaming the value of investment partnerships in order to produce outsized yields?
- Was it by investing in blocker corporations in order to avoid the Unrelated Business Income Tax?
- If so, how much in taxes have you avoided through use of your IRA?
5. Do you still profit from Bain Capital? While you left Bain Capital in 1999, you have continued to receive income from it, including a $2 million payment that was announced just this past June.
- News reports suggest that you have personal interests in at least 12 of Bain Capital’s 138 investment funds organized in the Cayman Islands. Is that accurate? If so, what are the value of those interests?
- How much income have you amassed from your relationship with Bain Capital since you left the company in 1999?
- How much income do you expect to continue to receive from your relationship with Bain Capital in future years?
6. What other investments do you have? Your past financial disclosures identify 25 investments of “over $1 million,” including in Solareme and in the hedge fund Elliott Associates, which pioneered “vulture funds” which prey off of distressed nations by buying up their debt cheap and then pursuing aggressive litigation to get paid the full amount of that debt.
- What are the actual sizes of those 25 investments of “over $1 million”?
- Do you have any concerns about investing in a firm that pursues “vulture funds,” given the impacts such funds can have on struggling countries such as Greece?
7. What laws would you change? Your response to most questions about the investment of your quarter-of-a-billion dollar fortune is to assert that everything you are doing is legal.
- How can the public be assured that everything is legal if you will not disclose your tax returns from before 2010 or other information about your investments?
- Are there any tax loopholes or exemptions that you are currently taking advantage of that you would push to end if you were elected President? If so, identify the specific ones. If not, explain why not.
- Do you stand by your pri0r opposition to eliminating the carried interest tax break, pursuant to which you pay 15% tax on much of your investment income, rather than the 28-35% that most middle and upper middle class Americans pay on their wages?
- Do you believe that it is acceptable for millionaires and billionaires to pay only 13.9% of their income in taxes, especially when working and middle class families often pay a larger percent and when our nation is running deficits?
What we know about Romney’s quarter-of-a-billion dollar fortune – that he made the fortune on the backs of hard-working Americans whose livelihoods were destroyed by Romney’s company Bain Capital, that Romney pays a lower federal tax rate than many middle class Americans, that Romney has managed to conjure up a $100 million plus IRA, and that Romney has invested significant amounts of money in other countries that are well known tax havens – is bad enough. The fact that we do not know what Romney’s fortune is invested in, what is in his tax returns, and what sort of tax loopholes he is taking advantage of is even worse.
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Earlier editions of this series include Questions for Mitt Romney on immigration, health care reform, the NRA and guns, military service, Jerry Falwell and Liberty University, Robert Bork, and Ann Coulter.