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GOP2012: Republican debate, December 15th, 2011
The Reality
Fact Check

Mitt Romney’s Assets for America?

January 26, 2012 at 9:23 p.m.


While Mitt Romney described his wealth as “an asset to help America,” his tax returns tell a very different story. Romney has invested millions of dollars in funds in foreign tax havens like Switzerland, Grand Cayman, and Bermuda – tax havens that can provide investors business and tax advantages that cost American taxpayers about $100 billion a year . And he made hundreds of millions of dollars at as a corporate buyout specialist at Bain Capital, where he and his partners took companies to bankruptcy, laid off American workers, and outsourced their jobs to other countries.



“So Let’s Be Clear: Romney Hasn’t Released His ‘Taxes.’ He Has Released A Single Tax Return From A Year In Which He Was Already Running For President For A Second Time.” [Washington Post, 1/24/12]

Romney Turned Over 23 Years To The McCain Vetting Team And Only One Full Year To The American People. “In 2008, when John McCain was vetting Mitt Romney for vice president, Romney turned over 23 years of tax returns. McCain went on to pick Sarah Palin. This year, the American people are vetting Romney for president, and Romney has turned over one full year of his taxes. So let’s be clear: Romney hasn’t released his ‘taxes.’ He has released a single tax return from a year in which he was already running for president for a second time.” [Washington Post, 1/24/12]



“Although It Is Not Apparent On His Financial Disclosure Form, Mitt Romney Has Millions Of Dollars Of His Personal Wealth In Investment Funds Set Up In The Cayman Islands, A Notorious Caribbean Tax Haven.” [ABC News, 1/18/12]

·         Romney Has As Much As $8 Million In At Least 12 Funds Listed On A Cayman Islands Registry In Addition To One Investment Worth Between $5 Million And $25 Million That Was Domiciled In The Caymans. “But tax experts tell ABC News there are other reasons Romney may not want the public viewing his returns. As one of the wealthiest candidates to run for president in recent times, Romney has used a variety of techniques to help minimize the taxes on his estimated $250 million fortune. In addition to paying the lower tax rate on his investment income, Romney has as much as $8 million invested in at least 12 funds listed on a Cayman Islands registry. Another investment, which Romney reports as being worth between $5 million and $25 million, shows up on securities records as having been domiciled in the Caymans.” [ABC News, 1/18/12]

Romney Campaign: The Funds In Which Romney Invested Were Set Up In The Cayman Islands To Help Attract Money From Foreign Investors. “Romney campaign officials and those at Bain Capital tell ABC News that the purpose of setting up those accounts in the Cayman Islands is to help attract money from foreign investors, and that the accounts provide no tax advantage to American investors like Romney.” [ABC News, 1/18/12]

·         Citizens For Tax Justice Rebecca J. Wilkins: Offshore Investment Vehicles Attract Investors “Because It Helps Them Avoid Paying Taxes On That Income.” “‘It helps U.S. investors avoid U.S. tax,’ said Wilkins, ‘it helps foreign investors avoid taxes in their home country, so it's not illegal or improper to set those funds up in a foreign jurisdiction, but it makes it more attractive to investors because it helps them avoid paying taxes on that income.’” [ABC News, 1/18/12]

At Least 23 Funds And Partnerships Listed In The Romneys’ 2010 Tax Returns – Including 11 Based In Low-Tax Foreign Countries Like Bermuda, Cayman Islands And Luxembourg – Did Not Show Up Or Were Not Listed In The Same Fashion On Romney’s Most Recent Personal Financial Disclosure. “Some investments listed in Mitt and Ann Romney’s 2010 tax returns – including a now-closed Swiss bank account and funds located in overseas tax havens – were not explicitly disclosed in the personal financial statement the GOP presidential hopeful filed last August as part of his White House bid. A review by the Los Angeles Times/Tribune Washington Bureau found that at least 23 funds and partnerships listed in the couple’s 2010 tax returns did not show up or were not listed in the same fashion on Romney’s most recent financial disclosure, including 11 based in low-tax foreign countries such as Bermuda, the Cayman Islands and Luxembourg.” [Los Angeles Times, 1/26/12]



Romney Closed A Swiss Bank Account “After An Investment Advisor Decided It Could Be Politically Embarrassing.” “Romney advisers stressed that the holdings in the Caymans - along with those in a Swiss bank account that was closed in 2010 after an investment adviser decided it could be politically embarrassing to Romney - were reported on tax returns and were not vehicles to avoid taxes.” [Reuters, 1/24/12]

·         Romney’s “Swiss Bank Account Closed Just As Romney Launched His White House Run.” “Among the new details contained in the documents are Romney's continuing profits from the private equity firm he founded but no longer runs, a Swiss bank account closed just as Romney launched his White House run and new listings of investment funds that were set up in offshore locations from the Caribbean to Ireland and Luxembourg.” [Associated Press, 1/24/12]

Romney Trustee Bradford Malt: The Swiss Bank Account In The Ann Romney Blind Trust Held Approximately $3 Million. Malt: “The Swiss bank account was in the Ann Romney Blind Trust. It held approximately $3 million it was just an investment of the trust, a bank account of the trust which I have mentioned I have subsequently closed.” [Romney Campaign Conference Call on the Romney Tax Returns, 1/24/12]



Election Law Expert: There Could Be Legal Consequences For Romney If He Deliberately Left His Swiss Bank Account Information Off His Personal Financial Disclosure. “Romney’s failure to include the information about the Swiss bank account could have legal consequences, but only under one condition: if he deliberately left such information off the form, an election law expert tells TPM. Lying to the FEC is crime, but proving that Romney decided to purposefully omit the information (if he did) would be a pretty high burden to meet.” [Talking Points Memo, 1/26/12]

Washington, D.C. Ethics Lawyer: Failure Of A Presidential Candidate To Properly Disclose Assets On A Federal Financial Disclosure Form “Would Lead A Candidate To Face The Obvious Question: 'Why Didn't You Disclose It?’” “The missing funds puzzled ethics experts in Washington, who said the disclosure laws require federal candidates to reveal significant holdings individually, including those located overseas and in bank and private equity accounts. ‘I wonder what theory they could possibly have for declaring an asset to the United States Internal Revenue Service and not putting it on federal financial disclosure forms,’ said Stanley Brand, a Washington, D.C. ethics lawyer who has represented federal candidates from both political parties. ‘Failure to do so would lead a candidate to face the obvious question: 'Why didn't you disclose it?’’” [Los Angeles Times, 1/26/12]

Ethics And Disclosure Expert Kenneth Gross Said “He Did Not Understand Why Romney And The People Who Helped Him Prepare His Disclosures Did Not Reconcile Them With His Tax Returns, Or, If The Tax Return Was Completed After The Financial Disclosure, Why The Latter Document Was Not Amended Earlier.” “Kenneth Gross, an ethics and disclosure expert at the Skadden, Arps law firm, said he had handled complex financial disclosure issues for wealthy people and therefore had sympathy for the assertions from Romney's camp that entities might have been listed under different names in different documents and that third parties may not have provided timely information. He said he did not understand why Romney and the people who helped him prepare his disclosures did not reconcile them with his tax returns, or, if the tax return was completed after the financial disclosure, why the latter document was not amended earlier.” [Reuters, 1/26/12]



Under Romney, Bain Capital “Also Maximized Returns By Firing Workers, Seeking Government Subsidies, And Flipping Companies Quickly For Large Profits.” “But a closer examination of the prospectus paints a different picture of Bain's operation. Under Romney's leadership, Bain became one of the nation's top leveraged-buyout firms, helping lead a trend in which companies were acquired using debt often pledged against their own assets or earnings. Bain expanded many of the companies it acquired. But like other leveraged-buyout firms, Romney and his team also maximized returns by firing workers, seeking government subsidies, and flipping companies quickly for large profits. Sometimes Bain investors gained even when companies slid into bankruptcy.” [Los Angeles Times, 12/3/11]

Under Romney And Bain Capital, Dade International Workers Saw Pension Plans Replaced And Salaries Cut. “Cost-cutting became a mantra inside the company. After his employer, DuPont, was bought by Dade, William T. Mowrey, a field engineer, said his generous pension plan was replaced by a 401(k); his salary was cut by $1 an hour, costing him $2,000 a year in income. When he filed for overtime, he said, his new bosses refused to pay it. ‘They were just trying to milk as much out of us as they could,’ he said.” [New York Times, 11/13/11]

  • Under Romney And Bain Capital, Good Paying Jobs – Some Paying More Than $80,000 A Year—Were Cut At Dade. “Many workers, like Mr. Shoemaker, the Dade employee in Westwood, and his wife, a temporary employee at the same plant, did not leave on their own terms. When they lost their jobs in 1997, they had to abandon plans to buy their first home together. ‘It created a lot of stress,’ said Mr. Shoemaker, 59, who had earned more than $80,000 a year.” [New York Times, 11/13/11]

Bain Capital Cut Jobs And Benefits At GS Industries While Bain And Other Investors Received Management Fees And A $65 Million Dividend. “That was true in the case of GS Industries, the 10th-biggest Bain investment in the Romney years. Bain formed GSI in the early 1990s by spending $24 million to acquire and merge steel companies with plants in Missouri, South Carolina and other states. Company managers cut jobs and benefits almost immediately. Meanwhile, Bain and other investors received management fees from GSI and a $65-million dividend in the first years after the acquisition, according to interviews with company employees.” [Los Angeles Times, 12/3/11]

·         While Bain Capital Partners Made A 100% Gain On Their Initial Investment In GS Industries, 700 Workers Were Fired And Lost Health Insurance, Severance And A Chunk Of Their Pension Benefits. “More than 700 workers were fired, losing not only their jobs but health insurance, severance and a chunk of their pension benefits. GSI retirees also lost their health insurance and other benefits. Bain partners received about $50 million on their initial investment, a 100% gain.” [Los Angeles Times, 12/3/11]



“Bain Investors Typically Profited,” Even When They Added “Significant” Debt To Their Acquisitions And Increased The Likelihood Of Bankruptcy And Job Cuts. “Leveraged buyouts allow investors to purchase businesses with the acquisition funded sometimes by significant amounts of debt. To critics, these leveraged deals can make acquired companies more vulnerable to economic downturns, leading to a greater likelihood of bankruptcy and job cuts. At the same time, the deals sometimes introduce discipline to firms and even whole industries that need it. Either way, Bain investors typically profited.” [Los Angeles Times, 12/3/11]

·         April 1999: Bain Capital “Pushed Dade To Borrow Hundreds Of Millions Of Dollars” To Pay Bain Capital $242 Million For A Portion Of Its Shares.  “Bain settled on a common tactic in private equity: it pushed Dade to borrow hundreds of millions of dollars in April 1999 to buy half of Bain’s shares in the company — and half of those of its investment partners. Bain pocketed the $242 million. Goldman received $121 million. Top Dade executives got $55 million, records show. The total payout to shareholders reached $420 million — nearly as much as the purchase price for Dade. The money was hard to resist, acknowledged Mr. Brightfelt, the former Dade president. ‘We were all glad to get some cash out,’ he said, ‘and we thought we deserved it.’” [New York Times, 11/13/11]

·         Under Romney’s And Bain Capital’s Direction, Dade “Quadrupled” Its Debt Which “Propelled The Business Toward Bankruptcy,” While 1,700 Workers Were Cut In The United States. “By the time the Harvard M.B.A.’s from Bain were finished, sales at the medical company, Dade International, had more than doubled. The business acquired two of its rivals. And Mr. Romney’s firm collected $242 million, a return eight times its investment. But an examination of the Dade deal shows the unintended human costs and messy financial consequences behind the brand of capitalism that Mr. Romney practiced for 15 years. At Bain Capital’s direction, Dade quadrupled the money it owed creditors and vendors. It took steps that propelled the business toward bankruptcy. And in waves of layoffs, it cut loose 1,700 workers in the United States, including Brian and Christine Shoemaker, who lost their jobs at a plant in Westwood, Mass. Staggered, Mr. Shoemaker wondered, ‘How can the bean counters just come in here and say, Hey, it’s over?’” [New York Times, 11/13/11]

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