With a Business Record Like That, Romney Should Just Stick to the Flip-Flops

Sliding in the polls and struggling to overcome his image as a serial flip-flopper, the New York Times reports that smooth talking Mitt Romney is trying to shift attention away from ideological issues and toward his business record. In light of recent revelations about his leadership at Bain Capital, he might want to reconsider.

This week, the Los Angeles Times revealed that Romney used "shell companies in two offshore tax havens" to help clients "avoid paying U.S. taxes." At Bain Capital, Romney reportedly steered clients toward tax shelters in the Cayman Islands and Bermuda, attracting "billions of additional investment dollars" to Bain Capital, boosting profits for Romney and his partners. The Times also reported that Romney continues to earn money from at least one of his Cayman Island tax shelters, including more than $1 million last year from BCIP Associates III Cayman, "a private equity fund that is registered at a post office box on Grand Cayman Island." [Los Angeles Times, 12/17/07] On Romney's watch, Bain Capital also developed a reputation for extracting "jaw-dropping" consulting fees out of companies, sometimes just shortly before those companies collapsed and workers were left jobless. [Los Angeles Times, 12/16/07]

Maybe Romney would rather focus on his personal financial business, for example the millions he made from his trust funds when they invested in companies doing business in Iran, despite his sharp rhetoric on the campaign trail urging state pension funds to divest from those companies.

"If smooth talking Mitt Romney thinks he can rescue his floundering campaign by talking about his business experience then by all means, let's talk about his whole record," said Democratic National Committee spokesman Damien LaVera. "After Romney explains why he helped companies set up offshore tax havens and slash jobs instead of investing in America's economy he can explain why he talks tough on divesting from companies doing business in Iran when his own trust funds are littered with those same investments. With a record like that, Romney might have an easier time explaining all those flip-flops."

He's So Bain:
Mitt Makes Millions on Offshore Tax Shelters Taxes...

Romney Got Rich Advising Clients to Use Offshore Tax Shelters. "While in private business, Mitt Romney utilized shell companies in two offshore tax havens to help eligible investors avoid paying U.S. taxes, federal and state records show.Romney gained no personal tax benefit from the legal operations in Bermuda and the Cayman Islands. But aides to the Republican presidential hopeful and former colleagues acknowledged that the tax-friendly jurisdictions helped attract billions of additional investment dollars to Romney's former company, Bain Capital, and thus boosted profits for Romney and his partners." [Los Angeles Times, 12/17/07]

Romney Still Profiting from Offshore Shelters. "In the Cayman Islands, Romney was listed as a general partner and personally invested in BCIP Associates III Cayman, a private equity fund that is registered at a post office box on Grand Cayman Island and that indirectly buys equity in U.S. companies. The arrangement shields foreign investors from U.S. taxes they would pay for investing in U.S. companies. Romney still retains an investment in the Cayman fund through a trust. Campaign disclosure forms show the investment paid him more than $1 million last year in dividends, interest and capital gains." [Los Angeles Times, 12/17/07]

Financial Advisor Increased Mitt's Offshore Investments. "His financial trust retains investments in at least 32 Bain and Sankaty equity, hedge and debt funds, among other assets, the documents disclosed. Under his retirement agreement, Romney retains a share of the profits at Bain Capital, as well as the right to make new investments in Bain funds through his trust, until February 2009. Malt said he had repeatedly increased Romney's stake in the Cayman fund since 2003. He said he was unaware of the specific figures, but added that he knew he 'wrote a lot of checks,' and that it paid a return of 20% to 30% a year." [Los Angeles Times, 12/17/07]

...While Cutting Jobs and Closing Companies...

The Bain Way: Collect Millions in Fees Then Shutter the Shop. "From 1984 until 1999, Romney led Bain Capital, a Boston-based private equity group that earned jaw-dropping profits through leveraged buyouts, debt hedge funds, offshore tax havens and other financial strategies. In some cases, Romney's team closed U.S. factories, causing hundreds of layoffs, or pocketed huge fees shortly before companies collapsed." [Los Angeles Times, 12/16/07]

Romney "Unconcerned About Those Affected By His Decisions." "Some of Romney's colleagues recall him as vain, however, and focused only on the bottom line. They saw him as impatient and unconcerned about those affected by his decisions." [Los Angeles Times, 12/16/07]

• Bain Reaped $100 Million While Hundreds Lost Jobs and Ampad Went Bankrupt. In 1992, Bain Capital invested $5 million towards the purchase of American Pad & Paper (Ampad) from Mead Corp., which, at the time, was only $11.3 million in debt with sales of $106.7 million. Over the next 8 years, under Bain management Ampad had gone public, made several acquisitions, and made over $100 million in payouts to Bain and to its investors. By 1999, two American plants were closed, 385 Ampad workers were laid off, the company was $392 million in debt, sales were slipping, and, the next year, its creditors forced Ampad into bankruptcy. [Securities and Exchange Commission Filings, Boston Globe, 6/26/07]

...And Hypocritically Pandering on Iran.

Despite Tough Talk On Iran, Romney Made Millions There. Romney had up to $250,000 invested in the Russian state-owned GazProm, according to his personal financial disclosure for 2006. And in 2006, the Romneys made up to $1 million in a fund invested in GazProm and the Chinese state oil firm, Cnooc Ltd. The Wall Street Journal noted that the fund, Horizon: Alpha + had more than $1 million of wife Ann Romney's assets invested in it and yielded her up to $1 million in 2006. [Chicago Tribune, The Swamp blog, 9/19/07]

• Romney Urges Divestment from Iran, Calls on Iranian President to be Indicted for Genocide. In February 2007, Governor Mitt Romney released a letter sent to New York State Comptroller Thomas P. DiNapoli urging that he pursue "a policy of strategic disinvestment from companies linked to the Iranian regime." [MittRomney.com release, 2/22/07] This week, Romney called on the United Nations to ban Iranian President Mahmoud Ahmadinejad from speaking to the world body next week and instead indict him for genocide. [AP, 9/17/07]

1994: Romney "The Blind Trust is an Age-Old Ruse." During Romney's Senate run against Ted Kennedy in 1994, he alleged that a financial arrangement of Kennedy's was a conflict of interest, and charged that a blind trust could be given "rules" that prohibited from potentially sensitive investments by the stakeholder. He was quoted as saying, 'The blind trust is an age-old ruse. You give a blind trust rules. You can say to a blind trust, don't invest in properties which would be in conflict of interest or where the seller might think they're going to get an advantage from me.' " [Boston Globe, 10/19/1994]

• Romney "The Fact that It's a Blind Trust Does Not Hide It." Romney said, "'It's a conflict of interest pure and simple - and it's wrong for a U.S. senator,' said Romney. 'The fact that it's a blind trust does not hide it.' A Kennedy aide, however, replied the senator had no financial interest in the federal leases. [Boston Herald. 10/19/1994]