How Rotten Is Romney?

12 Jul

Mitt Romney Ken Doll Mitt Romney strikes me as a dangerous Ken doll: he looks like the perfect chief executive, if only I could trust he wouldn’t pander to anyone promising to elect him. Beneath all that plastic, it’s hard not to suspect Romney is rotten – a campaign in Scott Galupo’s estimation that is, “…a breathtakingly cynical, borderline nihilistic pursuit of power on behalf of a tiny sliver of the population.”

Elsewhere Galupo argues, that “How Mitt Romney governs, on almost any given issue of substance, will always be entangled with suspicions about why he’s governing that way. And that rottenness will attach to him permanently, undermining his legitimacy.” Galupo sketches how a Romney presidency will pander to all the Republican barons, like the Tea Party and Wall Street. There’s also Romney’s most recent NAACP performance where he pandered poorly, by promising jobs, even as he threatened to repeal the Affordable Care Act. The real rot, though, might lie at the heart of his identity as a candidate, his wealth as a symbol of his success – since he is by any standard a failed politician.

Nicolas Shaxson investigates Romney’s money, and what the frustration that process generated says about Romney as a candidate and the financialization of the American economy.

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.

Among a litany of disturbing revelations, there’s this one example I found quite pertinent to the resume of a man seeking to be president of the United States.

A $3 million Swiss bank account appeared in the 2010 returns, then winked out of existence in 2011 after the trustee closed it, as if to remind us of George Romney’s warning that one or two tax returns can provide a misleading picture. Ed Kleinbard, a professor of tax law at the University of Southern California, says the Swiss account “has political but not tax-policy resonance,” since it-like many other Romney investments-constituted a bet against the U.S. dollar, an odd thing for a presidential candidate to do. The Obama campaign provided a helpful world map pointing to the tax havens Bermuda, Luxembourg, and the Cayman Islands, where Romney and his family have assets, each with the tagline “Value: not disclosed in tax returns.”

This underscores another point Shaxson makes on Democracy Now!

AMY GOODMAN: Mitt Romney makes more than the median U.S. household income in just five hours. In an average work year, there are 2,080 work hours. He made $21.7 million in 2010. The median household income is about $50,000. It will take the median household 433 years to make what Romney made in 2010. And, Nick Shaxson, now that’s not illegal, by any means. It puts him certainly in a very different category than other Americans. But you end your piece by talking about-saying that “Bain Capital has said it did everything required by the U.S. government … U.S. law doesn’t require Bain to enforce the tax laws of its investors’ home countries, but the presence of Swiss trustees, Bahamas trusts, [and] Panama corporations would raise red flags with any tax authority.” It’s what Mitt Romney says about this, you say, is what’s of concern. Nicholas?

NICHOLAS SHAXSON: Yes. This is a very important point. People see offshore tax havens as kind of, you know, shady little islands somewhere, and there’s certain element of truth to that. But one of the things that I explore in my book, Treasure Islands, is that, over the decades, over the past few decades, particularly since the 1970s, the United States has itself been turning itself, quite deliberately, into a tax haven in its own right, a gigantic tax haven, attracting foreign money, a lot of illicit foreign money, from overseas through offering things such as special tax exemptions and secrecy, financial secrecy. The United States is one of the biggest offerers of financial secrecy in the world. Both at a federal level, these facilities are offered, and at a state level, with states such as Delaware and Nevada and Wyoming kind of offering very, very low-cost, but very strong forms of secrecy through corporations. And this is a profoundly difficult thing.

And one of the-one of many vehicles through which this illicit money can come in is the private equity business. There is no requirement on private equity companies to enforce the tax laws of other countries. A filing that I uncovered during my research was-showed exactly these strange entities in the Bahamas and in, you know, Swiss trustees and Panama. All of these places are renowned tax havens, renowned places where-which offer-one of their big selling points is secrecy. And these investors that came in, we don’t know exactly who they are. We have some ideas. We know that some of them came from El Salvador, a country which at the time was suffering a terrible civil war. We don’t know if these investors were evading their home countries’ taxes, but it’s possible. And the presence of these, you know, Panama, Swiss and Bahamas entities certainly does raise red flags, and it is profoundly worrying.

This sounds like what’s really happening with TPP.

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