Romney's undisclosed offshore assets, including Sankaty co. in Bermuda, hint at greater wealth

Republican Presidential candidate, former Massachusetts Governor Mitt Romney speaks during a campaign event at the Electronic Instrumentation and Technology company June 27, 2012 in Sterling, Virginia. / Getty

(AP) WASHINGTON - For nearly 15 years, Republican presidential candidate Mitt Romney's financial portfolio has included an offshore company that remained invisible to voters as his political star rose. Based in Bermuda, Sankaty High Yield Asset Investors Ltd. was not listed on any of Romney's state or federal financial reports. The company is among several Romney holdings that have not been fully disclosed, including one that recently posted a $1.9 million earning suggesting he could be wealthier than the nearly $250 million estimated by his campaign.

The omissions were permitted by state and federal authorities overseeing Romney's ethics filings, and he has never been cited for failing to disclose information about his money. But Romney's limited disclosures deprive the public of an accurate depiction of his wealth and a clear understanding of how his assets are handled and taxed, according to experts in private equity, tax and campaign finance law.

Sankaty was transferred to a trust owned by Romney's wife, Ann, one day before he was sworn in as Massachusetts governor in 2003, according to Bermuda records obtained by The Associated Press. The Romneys' ownership of the offshore firm did not appear on any state or federal financial reports during Romney's two presidential campaigns. Only the Romneys' 2010 tax records, released under political pressure earlier this year, confirmed their continuing control of the company.

Not all of Romeny's VP choices are fat cats
Romney camp puts his net worth between $190M - $250M
Obama's 2011 assets valued between $2.6M - $8.3M

The mystery surrounding Sankaty reinforces Romney's history of keeping a tight rein on his public dealings, already documented by his use of private email and computer purges as Massachusetts governor and his refusal to disclose his top fundraisers. The Bermuda company had almost no assets, according to Romney's 2010 tax returns. But such partnership stakes could still provide significant income for years to come, said tax experts, who added that the lack of disclosure makes it impossible to know for certain.

"We don't know the big picture," said Victor Fleischer, a University of Colorado law professor and private equity expert who urged corporate tax code reforms during congressional testimony last year. "Most of these disclosure rules are designed for people who have passive ownership of stocks and bonds. But in this case, he continues to own management interests that fluctuate greatly in value long after his time with the company and even the end of his separation agreement. And the public has no clear idea where the money is coming from or when it will end."

Named for a historic Massachusetts coastal lighthouse, Sankaty was part of a cluster of similarly named hedge funds run by Bain Capital, the private equity firm Romney founded and led until 1999. The offshore company was used in Bain's $1 billion takeover of Domino's Pizza and other multimillion-dollar investment deals more than a decade ago.

Romney's campaign declined to answer detailed questions from AP about Sankaty. Romney aides have said in the past that some disclosures were not required because those assets were valued by his financial advisers at less than $1,000 below the minimum threshold under federal rules set by the U.S. Office of Government Ethics. A financial snapshot of Sankaty in Romney's 2010 tax returns showed the holding with almost no value at the time with $10,000 in both assets and liabilities.

"Everything on the filings is reported as required," campaign spokeswoman Andrea Saul said in a brief statement. "If OGE has an issue with any filings, they would let us know." The agency declined to comment.

While Sankaty no longer plays an active role in Bain's current deals, private equity experts said such holdings could provide significant income to Romney under his 10-year separation agreement from Bain, which expired in 2009. Investment funds typically churn "carried interest," profit shares due to the managers of the funds that often range as much as 20 percent of a fund's annual profit known as "the carry." Even after investment funds are exhausted, profit shares and other late earnings from those stakes can continue to stream, arriving as lucrative "tails," tax experts say. In some circumstances, the analysts added, offshore companies like Sankaty could also offer limited tax deferral advantages.

The implications of Romney's Bain profit-sharing became clear last month when his trust reported that one rarely disclosed asset had posted a $1.9 million payout. The income was described as a "true-up" payment, catch-up income that made up for unpaid earnings owed to Romney as part of his Bain separation agreement.

Such sizable earnings are possible "depending on the terms of the agreement," said tax law expert Michael Kosnitzky, an attorney at the New York firm of Boies, Schiller & Flexner. The Romney campaign acknowledged recently that it could not rule out more large future payments.

The use of offshore companies such as Sankaty is allowed under U.S. tax laws. They are typically set up as shell corporations by private equity and hedge funds to route investments from large foreign and institutional investors, such as large pension plans, into corporate takeovers. The money is used to provide equity and buy up debt. In turn, the investors gain U.S. tax advantages by passing their funds through the offshore "blocker" corporations, avoiding a high 35 percent tax on earnings that the Internal Revenue Service describes as "unrelated business income."

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[112844]

I HAVE SAID IT BEFORE AND I'LL SAY IT AGAIN AND I'LL KEEP ON SAYING IT !!!!!! MITT "TRICKY DICKY" ROMNEY

[occupy_cbs]

Ask yourself this question: what do you really think caused firms to lay off so many workers that unemployment jumped from 4.4% in May 2007 to 10% in October 2009 (remaining at 8.2% today), a sudden spike in business regulations and taxes, or a collapse in demand?

It is impossible to imagine that anyone truly believes the former to be the case, but I hear republicans including mitt romney saying that on a daily basis, leading me to believe they have ulterior motives.



=====
seabass6251: "To answer your question, it was uncertainty about the overall, future economy by consumers and businesses.."
=====




LOL! That has to be the #1 republican talking point - uncertainty - but just 'think' for once.....it's all about the BUSINESS CYCLE, and nobody knows what the future holds, so there is always UNCERTAINTY!

Even during the longest economic expansion in our history -- from March 1991 to March 2001 -- nobody was talking about doom and gloom except for republicans like "the newt," but that was early, in 1992/1993, when they said tax increases on the wealthy would stall the recovery and put us back into recession and cause unemployment to rise again. Obviously, they were wrong, and business and the middle class flourished -- actually everyone did very well, even the wealthy that saw their taxes increase. And, 22 million private-sector jobs were created even while outsourcing became prevalent!


So take your UNCERTAINTY republican talking point and shove it, and realize that it certainly was not "a sudden spike in business regulations and taxes" like mitt romney believes, that caused "unemployment jumping from 4.4% in May 2007 to 10% in October 2009".

But....it was a collapse in demand from consumers, and mainly from middle class consumers that no longer have that disposable income!

[occupy_cbs]

In reality, the reason we are stuck where we are is because the middle class lacks jobs and incomes -- something that will get markedly worse if we continue to try to cut government spending and balance the budget like paul ryan and other GOP leaders say. That's a fact!

[occupy_cbs]

seabass6251: "You would be much better off to study US history....Review the economy after WWI and the action taken by the government. See the immediate results of the federal government cutting the annual budget by half......Compare that to FDR's actions during the 30s when he increased government spending.."




Actually, it's YOU that needs to study history seab_ass, and understand exactly what CAUSED the Great Depression, and that FDR took office 3 & 1/2 years AFTER the 1929 stock market crash! YOU republicans sure have a need to re-write history, since it was republican economic policies that caused both the Great Depression and the bush/cheney Great Recession.

There were many similarities leading up to both catastrophic economic downturns -- with one being the huge income inequality that led to the top 1% owning such a huge amount of our nation's wealth.

The other things you need to understand is that hoover increased government spending by 50% in his own republican stimulus program while unemployment kept increasing, and that republicans passed the smoot-hawley tariff act of 1930, that many economists believe increased the severity and length of the Great Depression through republican protectionism.

Don't just 'cherry-pick' your version of history -- include it all!

Oh, and BTW, it was government spending that did indeed get us out of the Great Depression, as unemployment peaked the same year that FDR took charge (just like President Obama) and continuously got better, except for a slight burp in 1936 when republicans cut funding. The eventual end to the Great Depression was our entrance into WWII, and the huge government SPENDING. And, just like after WWI, government spending and the budget were seriously cut after WWII.

[newseer]

ROMMNEY IS JUST A MISERABLE TAX EVADER, THAT HAS BEEN HIDING HIS WEALTH IN SECRET, UNNAMED, NUMBERED ACCOUNTS IN CAYMAN ISLANDS, SWITZERLAND AND OTHER TAX-EVADER HAVENS IN THE CARIBBEAN AND EUROPE. IS THIS THE KIND OF PRESIDENT WE WANT? TAX EVADERS ARE ROBBING THE AMERICAN PEOPLE AND SHOULD BE PUT IN JAIL, INSTEAD OF ALLOWING THEM TO RUN FOR OFFICE TO CONTINUE THEIR CRIMINAL BEHAVIOR.

[occupy_cbs]

seabass6251: "You would be much better off to study US history"




Ask yourself this question: what do you really think caused firms to lay off so many workers that unemployment jumped from 4.4% in May 2007 to 10% in October 2009 (remaining at 8.2% today), a sudden spike in business regulations and taxes, or a collapse in demand?

It is impossible to imagine that anyone truly believes the former to be the case, but I hear republicans including mitt romney saying that on a daily basis, leading me to believe they have ulterior motives.

In reality, the reason we are stuck where we are is because the middle class lacks jobs and incomes -- something that will get markedly worse if we continue to try to cut government spending and balance the budget like paul ryan and other GOP leaders say.

[oeddie99]

Mitt's ass must get awfully jealous of all the **** that comes out of his mouth.

[TimeToEvolve]

Who wants this slimy slimewad to be the President? The Top 1% wants him as their parasitic puppet to finish the job of stealing all the money from the 99%. And some of the American people who are honesly too dumb to know better. Simple.

[occupy_cbs]

Easy seab_ass -- the tax code is written by the top 1% and their lobbyists, and benefits them more than any other Americans!

[occupy_cbs]

When mitt romney got brave enough to escape the cocoon of fox news, and appeared on Face the Nation in June, he added his voice to the chorus of those saying that economic recovery would follow if only we relieved the terrible burden that the government has placed on the nation's job creators: business. Were taxes and regulations relaxed, this would reduce costs sufficiently to allow firms to do what they are already dying to do, which is expand operations and hire workers.

If the demand for goods and services stays where it is today and we only cut industry taxes and regulations, there is absolutely no reason to think that firms would expand employment with mitt romney's magic wand. Rather, they would continue to produce at the same level and simply earn higher profits like their record profits in 2010-11.

On the other hand, if we leave taxes and regulations untouched but increase demand, entrepreneurs will happily add workers. And that is the root of the problem today. The bottom line, lost on mitt romney and many others, is that the real job creators are consumers. The direct route to reducing unemployment is boosting demand, not reducing costs.

Ask yourself this question: what do you really think caused firms to lay off so many workers that unemployment jumped from 4.4% in May 2007 to 10% in October 2009 (remaining at 8.2% today), a sudden spike in business regulations and taxes, or a collapse in demand?

It is impossible to imagine that anyone truly believes the former to be the case, but I hear republicans including mitt romney saying that on a daily basis, leading me to believe they have ulterior motives.

In reality, the reason we are stuck where we are is because the middle class lacks jobs and incomes -- something that will get markedly worse if we continue to try to cut government spending and balance the budget like paul ryan and other GOP leaders say.

[Eco99]

Let us also not forget the tax cuts have been in place for what 8+ years and what has it done for the economic condition. We have reduced taxes and increase spending (all under the previous administration) and they want to cut taxes more? Been there, done that and it failed, miserably. Also the regulations argument holds no water anyway. There are some arguments that regulations not only create techincal jobs but also tend to be protective of the public welfare (clean environment, financial protections, job safety, etc.). Nothing is more inane then arguments for deregulation alls it allows is for corporations to line their pockets even more usually at the expense of the middle class either directly or indirectly.

[occupy_cbs]

seabass6251: "General welfare historically meant roads, bridges, military, etc. that we all benefit from. However, social programs benefit the recipient only at the burden of others. That most definitely is not 'making sure that government works for all'".



Let me begin with the preamble:
"We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America."


So now, you're trying to tell me the right-wingers like romney want to expand the military-industrial complex so much more than the quadrupling during bushworld, that they will also lump it into the "general welfare" category like you did, and not leave it by itself as "common defense"?

This is exactly why we are so screwed as a nation full of right-wing extremists as a screaming minority, so vocally against "welfare," without realizing the hundreds of billions we spend on CORPORATE WELFARE in the form of defense contractors and energy companies, especially since our military is the largest user of energy in the world!

Nice try, or maybe it was a Freudian slip, eh?

[Eco99]

"In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists, and will persist."

Sounds like a recent quote concerning recent events ... but said over 50 years ago. Oh Ike how right you were.

[Eco99]

Hey occupy ... maybe their interpretation of "general" is not by popultion but by holders of wealth. They have to look after their welfare less the common man get smart and speak up.

[ParadoxisOK]

FOXNEWS, Murdoch, and Romney....dare anymore need be said!?

Peeuuuuuu!