Skip to main content

Gawker (via Eman at Daily Kos) dropped a bombshell Thursday when it released over 950 pages of confidential documents from 21 Bain Capital-related investment vehicles, all of which Mitt or Ann Romney invested in. It made all 48 documents into a single searchable one here so that others could take a look and see what nuggets it might contain.

Romney previously claimed that his Cayman Island funds had to be located there in order to attract foreign investors, who invested via the Caymans so they would not be subject to U.S. taxes on their earnings, and that he did not reduce his tax bill as a result of his Cayman holdings. The newly released documents confirm that among these 21 funds, two set up a total of five so-called "blocker corporations" which allow U.S. non-profit entities to legally pretend to be foreign (i.e., Cayman) corporations in order to avoid the 35% "unrelated business income tax, which was created to prevent nonprofit groups from undertaking profit-making ventures that compete with taxpaying companies," as the New York Times reports. The still-unanswered question is whether Romney's huge 401-k, valued between $20 million and $102 million on financial disclosure forms, is one of the entities that invested in a blocker corporation, which would then refute Romney's assertion that his Cayman investments had not reduced his tax.

The two Bain funds with blocker corporations are Bain Capital Asia Fund LP (mentioned in the Times article; 3blockers) and Bain Capital IX Coinvestment Fund (2 blockers).

A second issue that has been raised is that various Bain entities converted management fees to carried interest (via Ryan Grim). While people know that the carried interest loophole (which makes management compensation into capital gains) exists and is legal, the issue raised by Professor Victor Fleischer of University of Colorado Law School is that private equity firms have come up with a way to make fees that are unarguably management fees subject to ordinary income (35% tax) into capital gains (15% tax) by "waiving" the fees in exchange for virtually certain future profit, so that the extremely slight economic risk is disproportionately small compared to the tax gain. Fleischer argues that this is flat out illegal and concludes: "Mitt Romney has not paid all the taxes required under law." Not all experts agree. We can look forward to more argument on this issue in coming days. Even if it is legal, it is morally even less defensible than the carried interest loophole.

In the end, we are still left with the fact that the tax system for the 1% is different from that for the rest of us.  Whether Romney releases more tax returns or not, that issue is not going away. And the drip, drip, drip of new information makes me think he will eventually cave in.

Originally posted to Kenneth Thomas on Sat Aug 25, 2012 at 02:27 PM PDT.

Also republished by The Bain Files.

EMAIL TO A FRIEND X
Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags

?

More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

Renee, Thumb, Alumbrados, Angie in WA State, Mimikatz, KeithH, TXdem, dwellscho, RF, Chi, dragonlady, Odysseus, melo, glitterscale, tiggers thotful spot, PeterHug, greenbird, bosdcla14, Emerson, karlpk, Eman, Wintermute, cotterperson, SanJoseLady, hyperstation, eeff, WI Deadhead, frisco, exNYinTX, expat germany, hubcap, Creosote, rasbobbo, tyler93023, concernedamerican, Babsnc, sponson, DickCheneyBeforeHeDicksYou, cyberKosFan, susakinovember, Xapulin, themank, PBnJ, khloemi, ivote2004, Fe, jalbert, corncam, griz4u, Cedwyn, antirove, sidnora, revsue, Lilyvt, Redfire, psnyder, emmasnacker, pat bunny, Lawrence, duncanidaho, laughingriver, Chirons apprentice, lizah, defluxion10, chickeee, riverlover, Bendra, zerelda, ybruti, Sembtex, mungley, KayCeSF, tomjones, NapaJulie, Deward Hastings, Black Max, Josiah Bartlett, Frank Vyan Walton, Gowrie Gal, nailbender, Los Diablo, ExStr8, maybeeso in michigan, bloomer 101, historys mysteries, Ckntfld, ichibon, revbludge, OpherGopher, ccasas, basquebob, ChemBob, TigerMom, Brooke In Seattle, Gary Norton, reflectionsv37, eru, majcmb1, SaraBeth, Pam from Calif, Inland, Fury, ladybug53, jane123, sunbro, kaliope, Savvy813, Thursday Next, Shotput8, bunsk, Brian B, Ekaterin, Alan Arizona, kathny, jay23, Jim P, begone, SSMir, martini, elliott, Showman, redcedar, gwilson, BachFan, Kingsmeg, vigilant meerkat, hungrycoyote, Russgirl, tonyahky, Yellow Canary, kestrel9000, technomage, ruleoflaw, mskitty, KenBee, The Wizard, Son of a Cat, fou, blueoasis, TalkieToaster, global citizen, StrayCat, erratic, gpoutney, Libby Shaw, SadieSue, myrealname, doinaheckuvanutjob, middleagedhousewife, AllDemsOnBoard, llbear, rage, CA Nana, Persiflage, chicating, BB10, means are the ends, Statusquomustgo, jkshaw, markthshark, Leap Year, Quicklund, Nulwee, OHdog, cpresley, Sapere aude, phonegery, pgm 01, out of left field, Cronesense, Habitat Vic, Dartagnan, gloriana, la urracca, jeanette0605, noofsh, terabytes, dclawyer06, deepeco, sfbob, brjzn, joedemocrat, newpioneer, lcdrrek, davehouck, bnasley, rantsposition, US Blues, jedennis, second gen, SeaTurtle, carpunder, Rumarhazzit, uciguy30, madgranny, skod, Aynsley, vet, TomP, Empower Ink, rmonroe, JDWolverton, gundyj, hkorens, JeffW, TX Freethinker, scooter in brooklyn, OleHippieChick, mamamedusa, Youffraita, shaketheworld, bill warnick, bythesea, elwior, Sharon Wraight, Akonitum, KJG52, Its any one guess, mikeconwell, monkeybrainpolitics, Lujane, tofumagoo, royce, pamelabrown, RandomNonviolence, hwmnbn, Jake Williams, pickandshovel, Jeff Y, WoodlandsPerson, alnep, glendaw271, petulans, luckylizard, doppler effect, Nica24, Mayfly, immigradvocate, jlms qkw, statsone, RWN, maggiejean, prettygirlxoxoxo, J M F, christine20, Kansas Born, ceebee7, greengemini, hummingbird4015, not a cent, juca, carolyn urban, bobatkinson, Carol in San Antonio, LeftOfYou, Nebraskablue, janmtairy, notrouble, Heianshoka, CamillesDad1, bekosiluvu, DefendOurConstitution, followyourbliss, elziax, marzook, TheOpinionGuy, Keith Pickering, Little Flower, Tortmaster, nancat357, jan0080, MizKit, astral66, Lefty Ladig, ruscle, Just Bob, brentbent, coppercelt, KroneckerD, roadbear, NJpeach, politik, Interceptor7, Anima, Crabby Abbey, Polly Syllabic, ATFILLINOIS, NM Ray, renzo capetti, womankind, Eddie L, pixxer, laserhaas, dlemex, ericlewis0, Floande, stevenaxelrod, Actbriniel, slice, Jane Lew, annieli, Maximilien Robespierre, kerflooey, MidwestTreeHugger, salientwhisper, ozsea1, spooks51, darylita, bgblcklab1, implicate order, freesia, ardyess, Olympia, OhioNatureMom, Nicci August, California06, FightingRegistrar, deeproots, Teiresias70, CoExistNow, mrsgoo, Haf2Read, marleycat, PorridgeGun, zukesgirl64, laurnj, vjcalaska, thomask, Santa Susanna Kid, Hoghead99, BarackStarObama, muddy boots, Yogurt721, floridablue, seattlebarb, antooo, Merry Light, VTCC73, Caddis Fly, SteelerGrrl, thejoshuablog, Regina in a Sears Kit House, Auriandra, MichaelNY, too young to give up, ArtemisBSG, johnnr2, bearette, Only Needs a Beat, Pinto Pony, Cordyc, Liberal Granny, IndieGuy, tb92, S F Hippie, 2thanks, Trotskyrepublican, childrens DO learn, This old man, peachcreek, reginahny, MartyM, doroma, Buckeye54, wxorknot, oldpotsmuggler, arizonablue, Glen The Plumber, RonK, Robynhood too, tripodisblack, Canis Aureus, ForestLake, DamselleFly, ebailey, countwebb, remembrance, tommyd357, goodpractice, parsonsbeach, howabout, Icicle68, bob152, ET3117, Demeter Rising, Jim Domenico, ekgrulez1, sparkysgal

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site