| The Sack America Folks Working Hard. Robert Maxwell and Jack Lyons, two of the most notorious figures in British corporate history, helped Mitt Romney build his $250 million (£160 million) fortune, it can be disclosed. Maxwell, the late owner of Mirror Newspapers, invested $2 million in Mr Romney's first private equity fund, which launched the controversial career in finance that the Republican presidential challenger now cites as proof of his ability to lead the US to prosperity. He was recruited by Lyons, a late colleague of Mr Romney's at Bain & Company and one of the "Guinness Four" who were convicted in 1990 over the infamous share-trading fraud at the drinks firm. Lyons and his family invested almost $3 million in Mr Romney's fund. Both Lyons and Maxwell kept their money in tax havens. The discovery of their financial links to Mr Romney comes amid mounting pressure on the former Massachusetts governor to disclose details of his own offshore holdings, including a Swiss bank account. BAIN CAPITAL STARTED WITH HELP OF SECRETIVE INTERNATIONAL INVESTORS Presidential candidates are not required to disclose their tax returns, but it has become common practice. Romney's father released 12 years of returns when he ran for president in 1968. Obama, whom Romney presumably will challenge in November, has released returns back to 2000. DID HE PAY LOW TAXES IN 2009? Could it be that Romney paid very little in taxes in 2009 or earlier? Romney's tax return information released in January showed he paid a 13.9-percent effective tax rate in 2010 and expected to pay a 15.4-percent effective rate on his 2011 income. Those rates are far below the 35-percent top tax rate for wages, chiefly because Romney gets most of his income from investment gains, which are taxed at a rate of 15 percent. The 2008 financial crisis hammered many wealthy investors. Some tax experts speculate the crisis may have generated large capital losses for Romney that, carried forward into 2009, might have sharply reduced his tax bill for that year. Romney campaign spokeswoman Andrea Saul said on Thursday that there has been no year in which Romney paid zero taxes. Romney might have had other types of income in 2009 and earlier that could not be offset by capital losses, other experts said. "The number everyone is focused on is, of course, the effective tax rate," said University of Notre Dame accounting professor Brad Badertscher. Obama reported paying effective tax rates of about 26 percent in 2010 and about 20.5 percent in 2011. WHAT ABOUT THAT MASSIVE IRA? Romney's individual retirement account, or IRA, holds as much as $101 million, despite an annual contribution limit of about $6,000. How could it have gotten so large? Some tax experts suggest its value has been bloated by stock acquired by Bain at rock-bottom prices. The IRA holds some of Romney's most lucrative investments, according to a financial disclosure form filed with election officials last August. Pre-2010 tax returns might reveal little about the IRA, however, since personal returns only show contributions and withdrawals in a given year, and would not show, for example, the values of partnership interests. WIFE'S SWISS BANK ACCOUNT Ann Romney, the candidate's wife, held a trust with a $3 million bank account at UBS AG, the Swiss banking giant that in 2009 agreed to settle U.S. charges that it helped Americans evade taxes. The account was closed in 2010, the Romney campaign said. University of Southern California Professor Edward Kleinbard wondered if the Swiss account generated income for the Romneys in ways they would rather not disclose, perhaps for instance by investing in foreign currencies against the U.S. dollar. "Most presidential candidates don't think it appropriate to bet that the U.S. dollar will lose value by speculating in Swiss francs, which is basically the rationale offered by the trustee of Romney's 'blind' trust for opening this account," Kleinbard wrote in a Los Angeles Times opinion piece on Wednesday. The trustee in charge of the Swiss account said it was an attempt to diversify investments. CARRIED INTEREST Romney earned about $13 million in income over the past two years from "carried interest," a form of earnings available to private-equity firm partners and taxed at the 15 percent investment tax rate, rather than the higher rate on ordinary income, according to the campaign. The carried interest provision of the U.S. tax code has repeatedly been targeted for elimination by Democrats who call it unfair, but the private-equity industry has fought repeal. WHAT ABOUT OFFSHORE INVESTMENTS? In 2010, Romney and his family had substantial income from private equity, venture capital and other funds, according to disclosures in August to the Federal Election Commission. Much of this income came from funds organized by Bain Capital. Some of the funds and affiliates are in tax havens such as the Cayman Islands, Bermuda and the U.S. state of Delaware. "The so-called offshore account in the Cayman Islands, for instance, is an account established by a U.S. firm to allow foreign investors to invest in U.S. enterprises and not be subject to taxes outside of their own jurisdiction," Romney said in a recent interview in National Review magazine. The tax returns released thus far also show investments in places such as Luxembourg and Switzerland. No one is claiming these investments were illegal, but the use of offshore tax havens could hurt Romney in the campaign. (Additional reporting by Lynnley Browning; Reporting By Kim Dixon; Editing by Kevin Drawbaugh and Philip Barbara) So he and his partners tapped an eclectic roster of investors, raising more than a third of their first $37-million investment fund from wealthy foreigners. Most of the foreign investors’ money came through corporations registered in Panama, then known for tax advantages and unusual banking secrecy. Previously unreported details, documented in Massachusetts corporate filings and other public records, show that Bain Capital was enmeshed in the largely opaque world of international high finance from its very inception. The documents don’t indicate any wrongdoing, and experts say that such financial vehicles are common for wealthy foreign investors. But the new details come as President Barack Obama has criticized Romney for profiting from Bain Capital’s own offshore investment entities, which are unavailable to most Americans. The Romney campaign declined to comment on the specifics of Bain’s early investors. Romney has argued that his offshore investments are entirely proper, and that he has paid all the U.S. taxes that he owes. The offshore funds do provide tax advantages for foreign investors, allowing Bain to attract billions of dollars. "The world of finance is not as simple as some would have you believe," Romney said in an interview this week with National Review Online. The first outside investor in Bain was a leading London financier, Sir Jack Lyons, who made a $2.5-million investment through a Panama shell company set up by a Swiss money manager, further shielding his identity. Years later, Lyons was convicted in an unrelated stock fraud scandal. About $9 million came from rich Latin Americans, including powerful Salvadoran families living in Miami during their country’s brutal civil war. That first investment fund - used to invest in start-up companies and leveraged buyouts - paid out a stunning 173 percent in average annual returns over a decade, according to a prospectus prepared by an outside bank. It was the start of the private equity powerhouse that ultimately fueled Romney’s political career. He now cites his experience at Bain as a chief qualification for the White House. That strategy provided even greater tax advantages for foreign investors, allowing Bain to attract billions of dollars. Romney faced unusual complications when he launched Bain Capital, a spinoff of Bain & Co., the Boston consulting company he joined when he graduated from Harvard Business School. At the time, U.S. officials were publicly accusing some exiles in Miami of funding right-wing death squads in El Salvador. Some family members of the first Bain Capital investors were later linked to groups responsible for killings, though no evidence indicates those relatives invested in Bain or benefited from it. Romney has said he checked the foreign investors’ backgrounds. His campaign and Bain Capital declined to provide specifics. Alex Stanton, a spokesman for Bain Capital, said confidentiality rules barred him from commenting on the investors. Page: 1 2 3 Continue » America's 1% Are In Harmony On The Matter That Concerns Them Most -- Who Gets The Biggest Slice Of The Pie. READ MORE… Just as earlier this year Egypt expelled hundreds of people associated with foreign-funded “non-governmental organizations” (NGOs) for “instilling dissent and meddling in domestic policies,” the Russian Duma (parliament) has just passed a law that Putin is expected to sign that requires political organizations that receive foreign funding to register as foreign agents. The law is based on the US law requiring the registration of foreign agents. Much of the Russian political opposition consists of foreign-paid agents, and once the law passes leading elements of the Russian political opposition will have to sign in with the Russian Ministry of Justice as foreign agents of Washington. The Itar-Tass News Agency reported on July 3 that there are about 1,000 organizations in Russia that are funded from abroad and engaged in political activity. Try to imagine the outcry if the Russians were funding 1,000 organizations in the US engaged in an effort to turn America into a Russian puppet state. (In the US the Russians would find a lot of competition from Israel.) The Washington-funded Russian political opposition masquerades behind “human rights” and says it works to “open Russia.” What the disloyal and treasonous Washington-funded Russian “political opposition” means by “open Russia” is to open Russia for brainwashing by Western propaganda, to open Russia to economic plunder by the West, and to open Russia to having its domestic and foreign policies determined by Washington. “Non-governmental organizations” are very governmental. They have played pivotal roles in both financing and running the various “color revolutions” that have established American puppet states in former constituent parts of the Soviet Empire. NGOs have been called “coup d’etat machines,” and they have served Washington well in this role. They are currently working in Venezuela against Chavez…MORE… Right-Wingers Go Nuts Because Obama Nominee Sent Her Kids to Jew CampNaturally, people are having a field day with the report, but not in the way the Daily Caller expected. There is just downright mocking of this story in subjecting it to complete ridicule. Really, the conservatives do need to get better material. Right wing turns on Mitt Romney for refusing to release tax returns. Mitt Romney's position is becoming untenable as even conservatives in his own party are insisting that he release his returns. How did it come to this? Republican presidential ... |
No comments:
Post a Comment