N.Y. attorney general opens probe into private equity firms, including Bain
In this March 18, 2011 file photo, New York Attorney General Eric Schneiderman answers question during a news conference in his New York City office. / AP
(CBS/AP) - The New York attorney general has opened an investigation into numerous private equity firms, including Bain Capital, according to an official familiar with the inquiry, CBS News has confirmed.
Attorney General Eric T. Schneiderman is examining whether the firms used a tax strategy to avoid paying hundreds of millions of dollars in taxes. The practice involved converting some fees collected for managing accounts into fund investments, resulting in a tax rate of 15 percent instead of 35 percent.
Republican presidential candidate Mitt Romney co-founded the private equity firm in 1984. He ran the organization until 1999, although documents show that he remained the sole owner, president and chief operating officer until 2002.
The New York Times first reported the investigation of more than a dozen firms. The report indicates that some observers think it is a political motivated investigation by a Democratic attorney general with relations with President Obama, while others say Schneiderman is seeking additional tax revenue for New York.
Tax experts tell the Times they have differing views about the strategy's legality. The New York Times estimates that Bain saved more than $200 million in taxes.
Though Romney collects benefits as a Bain retired partner, the inquiry isn't focused on the time he ran Bain.
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From what I can make of it so far, Mitt's interest in the Presidency is more focused on getting Bain in there good and making a greater fortune for Romney and his friends and his Church. All at your expense and the expense of the majority of Americans.
His interest is very limited - and his vision for America empty. He seems to have no core whatsoever - he needs to borrow that from Ryan. That I believe, is why he is such a hack at foreign policy and so wooden as a politician. He has no interest in things beyond his Bain and your Pain.
Truth is, Mitt is not the right guy. He is not even a business man. He is a pirate dressed in a business suit. And after looting the treasuries of umpteen hundred companies and milking their cash and dumping their humans into the street, he has buried the treasure in the Caribbean. Under the Romney skull and bones..... except them's your bones.....
And Ryan is his idiotologist with the appropriate idiotology to do more of this on a much larger scale. And aside from growing Mitt's immense wealth, by eating America's lunch and dinner. the GOP and Ryan will, among other moral restrictions to your freedom, be supervising the bedrooms of the nations by night.
Look at just the issue of abortion and Todd Akin's stunning comments in broad day light as though everyone should agree with him. What to me is the obvious conclusion here for the Republican Party, is it should immediately change its views and its Party Platform on this matter.
It should trot out all the people concerned with the damage this is doing to the Party and have them tell everyone, and especially women, that they understand the problem and they will fix it. And then they must fix it forthwith.
Of course the GOP, God's Own Party these days, is not even thinking about doing that at all. They are just trying to cut off the part that is exposed - Akin; "abort" him if you will, and keep lying through their teeth about their real intentions.
The Republicans are looking to shackle people with bad policies and have them die sooner and younger with religious idiotology, and with poor social and "for profit" rather than "for life" health care. Especially the older people and anyone that is "needy" or "weak".
Republicans seem to believe that the weaker, the older, the poor, the women, the troubled, and so on, should get to Heaven early where God can take care of them. Too expensive here. Gets in the way of tax reductions, wealth, and the superiority of the w(h)ealthy class.
So, their rallying cry is indeed "take the country back", and they indeed will take it back. Way back - not just to before womens' rights and human rights, but all the way back to cave man days and to an early grave.
This is their vision for the greatest nation on earth....one too poor to care for its old, too heartless to care for its weak, too biased to treat women as equals and partners in life, too self righteous and "Godly" to actually do good.
Tragedy really.
Post Script: If Romney became President, look for his hundreds of millions to turn into billions in his so called "blind trust". Indeed, it is more like a one eyed trust. He gets to look in and call the shots on his money, while his money can't be seen.
"Mr. Romney's Cayman Islands and Bermuda corporations also probably allowed him to avoid limitations on deductions for investment expenditures that would otherwise apply. So we don't need any more tax returns to know that Mr. Romney is an Olympic-level athlete at the tax avoidance game. Rich people don't send their money to Bermuda or the Cayman Islands for the weather.
Moreover, we have no clue whether Mr. Romney paid any gift tax on transfers, now valued at $100 million, to a trust he set up in 1995 for the benefit of his five sons. Until this year, the federal gift tax had a lifetime exemption of $1 million, and it taxed gifts in excess of that amount at rates between 29 and 44 percent. A gift of $100 million to one's children could, therefore, require paying a tax of as much as $29 million to $44 million.
But every good tax professional knows that gift tax returns are rarely audited, except after the transferor's death. And normally the I.R.S. cannot challenge such a return after three years from its filing. But if the values of the gifts were not properly appraised and disclosed on Mr. Romney's gift tax returns, a challenge may still be possible. If he did not file any gift tax return, he would still be liable for the tax, plus interest and penalties.
Based on his aggressive tax planning, revealed in the 2010 returns he has released and his approval of a notably dicey tax avoidance strategy in 1994 when he headed the audit committee of the board of Marriott International, my bet is that — if Mr. Romney filed a gift tax return for these transfers at all — he put a low or even zero value on the gifts, certainly a small fraction of the price at which he would have sold the transferred assets to an unrelated party. Otherwise, he should be happy to release his gift tax returns. According to a partner at Mr. Romney's trustee's law firm, valuing carried interests, such as Mr. Romney's interests in the private equity company Bain Capital, at zero for gift tax purposes was common advice given to clients like Mr. Romney in the 1990s and early 2000s." Michael J. Graetz, a professor of tax law at Columbia, was the deputy assistant Treasury secretary for tax policy from 1990 to 1991, and an assistant to the Treasury secretary in 1992, under the first President Bush.
http://www.nytimes.com/2012/07/31/opinion/the-mysteries-of-mitt-romneys-financial-records.html
http://www.law.columbia.edu/fac/Michael_Graetz
Did Senator McCain have any economic or business credential to defend or to praise Romney's business Record?
Romney is a successful businessman in raising profits for himself and his investors. Mitt Romney bought GST steel in a 1993 deal that netted Bain Capital millions in profits despite the collapse of the steel company, destroying jobs and leaving taxpayers on the hook for bailing out the company's pension fund. The nature of his own "success" is paradoxical in that his investors' profits came at the expense of the welfare of some his own employees and GST Steel. It's not the way that the president runs the country.
Our free enterprise is not cruel as McCain and some businessmen thought; our great politicians foresaw: The self-destruction of capitalism as seen by Karl Marx would occur when a large gap forms between the very rich and the poor working class, a catalyst for social unrest and a revolution.
It is no question that Romney's Bain Capital record is a losing presidential issue
Regardless of his record as a job killer for the GST Steel company, where is Romney's record as a job creator during his tenure as governor and current status as an investor in Bain Capital, while he promises that he will create more jobs for Americans if he is elected?
In contrast to Romney's record as a job creator, Obama has reduced 4.2 percent of unemployment during three and a half year- 12.5 percent of unemployment on Dec 5, 2008 to 8.3 percent today. Moreover, starting in 2010, we have had annual net Growth in "Made In America" manufacturing jobs in contrast to the annual net losses we had every single year many years before. More than 210,000 "Made In America" manufacturing were created in 2010, more than 233,000 in 2011, and more than 120,000 in the first 3 months of 2012.
According to the AP Associated Press, a political committee supporting President Barack Obama, Priorities USA Action, is out with a new ad accusing Mitt Romney of making millions while shutting down an Indiana paper plant, following a series of ads attacking Romney's Bain Capital record in Colorado. Florida, Ohio, Pennsylvania and Virginia.
On June 22, 2012 the Washington Post's Tom Hamburger reported:
"During the nearly 15 years that Romney was actively involved in running Bain, a private equity firm that he founded, it owned companies that were pioneers in the practice of shipping work from the United States to overseas call centers and factories making computer components, according to filings with the Securities and Exchange Commission. While economists debate whether the massive outsourcing of American jobs over the last generation was inevitable, Romney in recent months has lamented the toll it's taken on the U.S. economy. He has repeatedly pledged he would protect American employment by getting tough on China. ...
[A] Washington Post examination of securities filings shows the extent of Bain's investment in firms that specialized in helping other companies move or expand operations overseas. While Bain was not the largest player in the outsourcing field, the private equity firm was involved early on, at a time when the departure of jobs from the United States was beginning to accelerate and new companies were emerging as handmaidens to this outflow of employment."
Romney's campaign refused to comment on that day, but "Tonight's story in the Washington Post exposed Mitt Romney's breathtaking hypocrisy. He has campaigned all over this country, vowing that he would be an advocate for American jobs. But tonight we learned that he made a fortune advising companies on how to outsource jobs to China and India. Maybe that explains why, despite his campaign rhetoric, Romney continues to support tax policies that would reward companies who send American jobs overseas." said Obama senior adviser David Axelrod.
Later Mitt Romney called the Washington Post's report " "fundamentally flawed," defended his former company, Bain Capital, after a Washington Post report claimed the venture capitalist firm invested in companies that outsourced jobs. Calling the report "fundamentally flawed," and "outsourcing" does not necessarily mean that jobs were sent overseas, which is known as "offshoring."
Indeed, Romney's answer did not address many critical facts from Tom Hamburger's report. http://www.washingtonpost.com/business/economy/romneys-bain-capital-invested-in-companies-that-moved-jobs-overseas/2012/06/21/gJQAsD9ptV_print.html
Romney's credentials as a job creator is questionable based on his equity investment in Bain Capital. Mitt Romney bought GST steel in a 1993 deal that netted Bain Capital millions in profits despite the collapse of the steel company, destroying jobs and leaving taxpayers on the hook for bailing out the company's pension fund. The nature of his own "success" is paradoxical in that his investors' profits came at the expense of the welfare of some his own employees and GST Steel. It's not the way that a should President run the country.
"It's no surprise that Massachusetts was losing manufacturing jobs twice as fast as the rest of the country while Governor Romney was in charge," Biden said at a stop in Davenport that kicked off a multi-day campaign swing for the vice president.
"The private equity firm, co-founded and run by Mitt Romney, held a majority stake in more than 40 United States-based companies from its inception in 1984 to early 1999, when Mr. Romney left Bain to lead the Salt Lake City Olympics. Of those companies, at least seven eventually filed for bankruptcy while Bain remained involved, or shortly afterward, according to a review by The New York Times. In some instances, hundreds of employees lost their jobs. In most of those cases, however, records and interviews suggest that Bain and its executives still found a way to make money.", http://dyn.politico.com/tag/bain-capita
http://www.nydailynews.com/news/election-2012/mitt-romney-put-shut-tax-allegations-harry-reid-back-article-1.1128255?comment=true
There is a reason for the hearsay: Based on Romney's sequential behavior.
- Mystery of $100 million in IRA : How can he have $100 million in the IRA;? and A gift of $100 million to one's children could, therefore, require paying a tax of as much as $29 million to $44 million.Did he really pay to IRS?
http://www.nytimes.com/2012/07/31/opinion/the-mysteries-of-mitt-romneys-financial-records.html
- "the Republican candidate paid a 14 percent tax rate on $21.7 million in income in 2010 - far lower than the rate paid by many Americans because his earnings comes from investments rather than wages. Vanity Fair noted that Romney has continued to receive large payments from Bain Capital since leaving the private equity firm in 1999.",
http://www.nydailynews.com/news/election-2012/romney-wealth-hidden-offshore-accounts-report-article-1.1107126#ixzz1zaNZQNKa
"I have paid taxes every year, and a lot of taxes, so Harry is wrong," Romney told reporters....Please show your tax return during 10 years to prove your claim, Mr. Romney.