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Archive for the ‘Scandal’ Category

© Ruth Tomlinson/Robert Harding World Imagery/Corbis (beach); by Justin Sullivan/Getty images (inset).

BURIED TREASURE Grand Cayman, where Bain Capital maintains at least 138 funds. Inset, Mitt Romney tries to spot his La Jolla home from the campaign plane

Vanity Fair

August 2012

For all Mitt Romney’s touting of his business record, when it comes to his own money the Republican nominee is remarkably shy about disclosing numbers and investments. Nicholas Shaxson delves into the murky world of offshore finance, revealing loopholes that allow the very wealthy to skirt tax laws, and investigating just how much of Romney’s fortune (with $30 million in Bain Capital funds in the Cayman Islands alone?) looks pretty strange for a presidential candidate.

A person who worked for Mitt Romney at the consulting firm Bain and Co. in 1977 remembers him with mixed feelings. “Mitt was … a really wonderful boss,” the former employee says. “He was nice, he was fair, he was logical, he said what he wanted … he was really encouraging.” But Bain and Co., the person recalls, pushed employees to find out secret revenue and sales data on its clients’ competitors. Romney, the person says, suggested “falsifying” who they were to get such information, by pretending to be a graduate student working on a proj­ect at Harvard. (The person, in fact, was a Harvard student, at Bain for the summer, but not working on any such proj­ects.) “Mitt said to me something like ‘We won’t ask you to lie. I am not going to tell you to do this, but [it is] a really good way to get the information.’ … I would not have had anything in my analysis if I had not pretended.“It was a strange atmosphere. It did leave a bad taste in your mouth,” the former employee recalls.

This unsettling account suggests the young Romney—at that point only two years out of Harvard Business School—was willing to push into gray areas when it came to business. More than three dec­ades later, as he tried to nail down the Republican nomination for president of the United States, Romney’s gray areas were again an issue when he repeatedly resisted calls to release more details of his net worth, his tax returns, and the large investments and assets held by him and his wife, Ann. Finally the other Republican candidates forced him to do so, but only highly selective disclosures were forthcoming.

Even so, these provided a lavish smorgasbord for Romney’s critics. Particularly jarring were the Romneys’ many offshore accounts. As Newt Gingrich put it during the primary season, “I don’t know of any American president who has had a Swiss bank account.” But Romney has, as well as other interests in such tax havens as Bermuda and the Cayman Islands.

To give but one example, there is a Bermuda-based entity called Sankaty High Yield Asset Investors Ltd., which has been described in securities filings as “a Bermuda corporation wholly owned by W. Mitt Romney.” It could be that Sankaty is an old vehicle with little importance, but Romney appears to have treated it rather carefully. He set it up in 1997, then transferred it to his wife’s newly created blind trust on January 1, 2003, the day before he was inaugurated as Massachusetts’s governor. The director and president of this entity is R. Bradford Malt, the trustee of the blind trust and Romney’s personal lawyer. Romney failed to list this entity on several financial disclosures, even though such a closely held entity would not qualify as an “excepted investment fund” that would not need to be on his disclosure forms. He finally included it on his 2010 tax return. Even after examining that return, we have no idea what is in this company, but it could be valuable, meaning that it is possible Romney’s wealth is even greater than previous estimates. While the Romneys’ spokespeople insist that the couple has paid all the taxes required by law, investments in tax havens such as Bermuda raise many questions, because they are in “jurisdictions where there is virtually no tax and virtually no compliance,” as one Miami-based offshore lawyer put it.

That’s not the only money Romney has in tax havens. Because of his retirement deal with Bain Capital, his finances are still deeply entangled with the private-equity firm that he founded and spun off from Bain and Co. in 1984. Though he left the firm in 1999, Romney has continued to receive large payments from it—in early June he revealed more than $2 million in new Bain income. The firm today has at least 138 funds organized in the Cayman Islands, and Romney himself has personal interests in at least 12, worth as much as $30 million, hidden behind controversial confidentiality disclaimers. Again, the Romney campaign insists he saves no tax by using them, but there is no way to check this.

Bain Capital is the heart of Romney’s fortune: it was the financial engine that created it. The mantra of his campaign is that he was a businessman who created tens of thousands of jobs, and Bain certainly did bring useful operational skills to many companies it bought. But his critics point to several cases where Bain bought companies, loaded them with debt, and paid itself extravagant fees, thereby bankrupting the companies and destroying tens of thousands of jobs.

Come August, Romney, with an estimated net worth as high as $250 million (he won’t reveal the exact amount), will be one of the richest people ever to be nominated for president. Given his reticence to discuss his wealth, it’s only natural to wonder how he got it, how he invests it, and if he pays all his taxes on it.

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Is a Cheney Cover-Up Scandal Brewing?

By Nick Baumann and David Corn, Mother Jones. Posted May 7, 2009.

Cheney may responsible for deep-sixing an important torture memo — an act that could be a crime. Will Dems bring the truth to light?

Who in the George W. Bush White House tried to shred a memo challenging the use of torture?

On April 21, Philip Zelikow, who was counselor to Secretary of State Condoleezza Rice during the Bush administration, revealed on Foreign Policy‘s “Shadow Government” blog that he wrote a memo in 2005 disputing the conclusions of Bush Justice Department lawyers that torture was legal. The existence of such a memo was a surprise. But Zelikow also disclosed that the “White House attempted to collect and destroy all copies of my memo.”

This story is not over. Zelikow tells Mother Jones that he doesn’t know for sure who in the White House ordered the suppression of his memo, but he says that his “supposition at the time” was that the office of Vice President Dick Cheney was behind the cover-up. In an email exchange with Mother Jones, Zelikow notes that Cheney’s office did not have the authority to request that his memo be deep-sixed: “They didn’t run the interagency process. Such a request would more likely have come from the White House Counsel’s office or from NSC staff.” But that request did not reach him in written form. “It was conveyed to me, and I ignored it,” Zelikow recalls. But he suspected that Team Cheney was probably behind it.

Zelikow, who is scheduled to testify before a Senate judiciary subcommittee on Tuesday Wednesday, also notes that his memo was not the only one raising questions about the administration’s legal rationale supporting so-called “enhanced interrogation techniques”: “There were a number of papers, mainly arguing for alternative legal frameworks.” But his memo, he adds, was “a more direct assault on [the Bush Justice Department's] own interpretation of American law.”

(UPDATE: The Senate judiciary subcommittee just formally announced the testimony, which will be on Wednesday, not Tuesday, as earlier reports had indicated.)

Congressional Democrats are already seeking any surviving copies of Zelikow’s memo. They might now also want to request these other papers. (No such documents have been declassified or released so far.)

Cheney’s office was reportedly the hub of the Bush administration’s torture program. And Neil Kinkopf, a law professor at Georgia State University, who served in the Clinton administration’s Office of Legal Counsel, notes, “People in the White House — Dick Cheney for example; David Addington, his legal adviser — didn’t want the existence of dissent to be known. It’s not hard to imagine David Addington playing very hardball internal politics and not only wanting to prevail over the view of Zelikow but to annihilate it. It would be perfectly consistent with how he operated.”

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by Geezer Power

TPM

By Elana Schor – March 16, 2009, 2:52PM

I just spoke with Rep. Alan Grayson (D-FL), a freshman on the House Financial Services Committee who’s become a fast-rising star thanks to his tenacious advocacy for transparency in bailout lending by the Federal Reserve.

Grayson joined fellow Democrats as well as Republicans in blasting AIG for its refusal to give up hundreds of millions of dollars in bonus payments. He painted the government’s choice as a stark one, using the metaphor of treating a wound versus amputating a limb.

“It’s not clear to me at all that we’re taking the correct approach by allowing AIG to continue to operate, regardless of who owns it,” Grayson told me. “At this point, ownership is becoming an amorphous concern when comes to a company that borrows millions and millions without any prospect of paying it back. … Do we continue to allow the bleeding or not?”

Converting AIG from a ward of the state in all but name to an outright arm of the government would be a politically controversial move, given the level of apprehension in Washington over calls to nationalize failing banks.

But Grayson views the dilemma facing lawmakers as a common-sense decision: AIG executives who made more than a million dollars while running the company into the ground should immediately be fired. “The people who caused the problem are not going to be able to solve it,” he said.

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Ted Haggard New Gay Sex Allegations

ERIC GORSKI | January 24, 2009 01:23 AM EST | AP

DENVER — Disgraced evangelical leader Ted Haggard’s former church disclosed Friday that the gay sex scandal that caused his downfall extends to a young male church volunteer who reported having a sexual relationship with Haggard _ a revelation that comes as Haggard tries to repair his public image.

Brady Boyd, who succeeded Haggard as senior pastor of the 10,000-member New Life Church in Colorado Springs, told The Associated Press that the man came forward to church officials in late 2006 shortly after a Denver male prostitute claimed to have had a three-year cash-for-sex relationship with Haggard.

Boyd said an “overwhelming pool of evidence” pointed to an “inappropriate, consensual sexual relationship” that “went on for a long period of time … it wasn’t a one-time act.” Boyd said the man was in his early 20s at the time. He said he was certain the man was of legal age when it began.

Reached Friday night, Haggard declined to comment and said all interviews would have to be arranged through a publicist for HBO, which is airing a documentary about him this month.

Boyd said the church reached a legal settlement to pay the man for counseling and college tuition, with one condition being that none of the parties involved discuss the matter publicly.

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