Mitt Romney's Taxing Weekend

December 17, 2007 -- For Mitt Romney, the word of the week appears to be "taxing:" as in taxing his credibility, misleading on his tax raising record, and new revelations about the millions he made steering companies toward offshore tax shelters.

According to a Los Angeles Times investigation of Romney's tenure at Bain Capital, Mitt "utilized shell companies in two offshore tax havens to help eligible investors avoid paying U.S. taxes." Romney steered clients toward tax shelters in the Cayman Islands and Bermuda, helping "attract billions of additional investment dollars to Romney's former company, Bain Capital, and thus boosted profits for Romney and his partners." Not only was Romney "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," he "still retains an investment in the Cayman fund through a trust." That investment earned Romney "more than $1 million last year in dividends, interest and capital gains." [Los Angeles Times, 12/17/07]

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On NBC's Meet the Press yesterday, Romney tried to argue that the $501 million dollars in fee hikes he pushed through in his first year as governor are not taxes because they are not "broad-based" fees like "driver's license fees or automobile fees for registration." True, many of his fee hikes were narrowly targeted toward groups like the blind, the mentally disabled, and gun owners. And Romney's fees made it more expensive to get married or divorced, file a court case, buy a house, or renew a driver's license in the Bay State. [Congress Daily, 8/28/03] No wonder Bay Staters nicknamed Governor Romney "Fee-Fee." [AP, 8/28/07].

Finally, while Romney was attempting to distract from his tax-raising record, he resorted to an all-out lie to distract from his record on gun control issues. Romney told Tim Russert he "received the endorsement of the NRA" during his 2002 gubernatorial campaign. In reality, not only did the National Rifle Association not endorse Romney, it actually gave his Democratic rival a higher rating. [WashingtonPost.com, 12/16/07]

"Considering his tax-raising record and the millions he made steering clients toward offshore tax shelters, it's no surprise smooth talking Mitt Romney is so desperate to convince voters to ignore his history," said Democrat National Committee spokesman Damien LaVera. "Mitt Romney may be running for flip-flipper in chief, but if he expects the voters to trust him to lead our country, he should respect them enough to be straightforward about his real record."

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

Romney and His Bain Colleagues Made a Mint Steering Corporate Clients to 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]

Romney Financial Advisor INCREASING 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 Showed Indifference to Human Impact of 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]

Source: DNC