John Cook
Mitt Romney's $250 million fortune is largely a black hole: Aside from the meager and vague
disclosures he has filed under federal and Massachusetts laws, and the
two years of partial tax returns
(one filed and another provisional) he has released, there is almost no
data on precisely what his vast holdings consist of, or what vehicles
he has used to escape taxes on his income. Gawker has obtained a massive
cache of confidential financial documents that shed a
great deal
of light on those finances, and on the tax-dodging tricks available to
the hyper-rich that he has used to keep his effective tax rate at
roughly 13% over the last decade.
Today, we are publishing more than 950 pages of internal audits, financial statements, and
private investor
letters for 21 cryptically named entities in which Romney had
invested—at minimum—more than $10 million as of 2011 (that number is
based on the low end of ranges he has disclosed—the true number is
almost certainly significantly higher). Almost all of them are
affiliated with Bain Capital, the secretive
private equity firm Romney co-founded in 1984 and ran until his departure in 1999 (or 2002,
depending on whom you ask).
Many of them are offshore funds based in the Cayman Islands. Together,
they reveal the mind-numbing, maze-like, and deeply opaque complexity
with which Romney has handled his wealth, the exotic tax-avoidance
schemes available only to the preposterously wealthy that benefit him,
the unlikely (for a right-wing religious Mormon) places that his money
has ended up, and the deeply hypocritical distance between his own
criticisms of Obama's fiscal approach and his money managers' embrace of
those same policies. They also show that some of the investments that
Romney has always described as part of his
retirement package at Bain weren't made until years after he left the company.
Bain
isn't a company so much as an intricate suite of steadily proliferating
inter-related holding companies and limited partnerships, some based in
Delaware and others in the Cayman Islands, Luxembourg, and elsewhere,
designed to collectively house roughly $66 billion in wealth in its many
crevices and chambers. When Romney left in 1999, he and his wife
retained significant
investments in many of those Bain vehicles—he claims they are "passive investments" and that they are managed in a blind trust (though the
trustee isn't blind enough
to meet federal standards of independence). But aside from disparate
snippets of information contained in his federal and Massachusetts
financial disclosure forms, his 2010 tax returns, and
SEC filings, the nature of those investments has been obfuscated by design.
When he
disclosed his finances to the U.S. Office of Government Ethics in 2007,
Romney took care to publish the underlying holdings of many funds he
invested with—after disclosing his $1 million-plus stake in "GS 2002
Exchange Place Fund LP," for instance, he listed six pages of individual
equities
the fund
held, from Panera Bread Co. to Tribune Co. But when it came to the Bain
investments, he simply listed the value of his investments in
odd-sounding entities like "Sankaty High Yield Partners II LP" with no
indication of what was inside. In an accompanying note, he claimed that
he had tried and failed to get the information: "The filer has requested
information about the underlying holdings of these funds and values and
income amounts for these underlying holdings. However, the fund
managers have informed the filer in writing that this information is
confidential and proprietary, and has declined to provide such
information."
That information—for Sankaty and 20 other funds—
is now available here,
in the form of 48 documents totaling more than 950 pages. They consist
predominantly of confidential internal audited financial statements from
2008, 2009, and 2010, as well as investor letters from the same period,
for Bain entities that Romney has previously disclosed owning an
interest it. Owing to the timeframe—during and after the catastrophic
economic meltdown of 2008—some of the investments show substantial
losses. One limited partnership had even entered into liquidation as of
October 2008 after failing to meet certain payments owed to partners.
Others show astronomical gains.
The documents are exceedingly
complicated. We don't pretend to be qualified to decode them in full,
which is why we are posting them here for readers to help
evaluate—please leave your thoughts in the discussion below. We asked an
attorney who specializes in complex offshore corporate transactions,
including ones involving Cayman Island entities, to review them and help
us understand them. (We also asked the Romney campaign. It hasn't
responded yet.) The
full set can be read here.
Here's what we've found so far:
[
Image by Jim Cooke; photo via Getty]
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