By Betsy Woodruff
Friday, August 24, 2012
Good news for Senator Harry Reid: If he’s a little bored
while waiting for Mitt Romney to release his tax returns, there are plenty of
other elected officials — in his own party, to boot! — who merit the same
eyebrow-raising he’s directed at the presumptive GOP presidential nominee. The
Senate majority leader has expressed consternation about the fact that Romney
has some money in offshore accounts, which probably reduces his tax burden.
According to the Huffington Post, Reid quipped, “Most Americans don’t have the
benefit of Swiss bank accounts or tax shelters in the Cayman Islands and
Bermuda.” And Gawker just published more than 950 pages of Bain documents
related to Romney’s offshore holdings, saying they detail his use of “exotic
tax-avoidance schemes available only to the preposterously wealthy.”
Some of the “preposterously wealthy” Americans who do use
such “schemes” include Senators Dianne Feinstein (D., Calif.), Richard
Blumenthal (D., Conn.), Frank Lautenberg (D., N.J.), and John Kerry (D., Mass.).
That should be music to Reid’s ears, since his transparency crusade might be a
little easier to pull off within his own party.
He could start with Feinstein. OpenSecrets.org lists her
as the seventh-wealthiest senator, with a net worth between $44 million and $94
million, according to her latest disclosure forms. And, just like Romney, she
keeps a portion of it in offshore accounts. Her most recent reports say she has
an unspecified amount (at least $1 million) “held independently by the spouse
or independent child” in Coral Growth Investments, Ltd., in St. Peter Port,
Guernsey. Guernsey, a tax haven, is a small island in the English Channel that
early this year drew the ire of a British Labour-party leader for helping
wealthy Brits dodge taxes. The California senator also has between $500,000 and
$1 million in a fund called Cevian Capital II L.L.C. in Jersey, another of the
Channel Islands. According to her latest forms, that holding generated between
$15,000 and $50,000 in capital gains, interest, and dividends. Feinstein has
another $1,000 to $15,000 in Mauritius, an island nation in the Indian Ocean
off Madagascar that is an up-and-coming tax haven.
Like Feinstein, Richard Blumenthal is on the Senate
Judiciary Committee. Also like Feinstein, he has sheltered funds from taxes in
the past — $15,000 to $50,000 in a hedge fund held by his wife in the Cayman
Islands, to be exact. That might not sound like a huge number, but his most
recent disclosure forms say he made $50,000 to $100,000 from the fund in capital
gains, dividends, and interest. A Blumenthal staffer said the fund was sold at
the end of April 2011, an action taken after the time frame covered by his most
recent available disclosure forms.
Lautenberg appears to be in a similar situation. The New
Jerseyan is the fifth-wealthiest senator, with a net worth that, in 2006, was
six times the Senate’s average. His most recent forms show that his wife’s
family has between $500,000 and $1 million in Port Louis, Mauritius. The money
is in a real-estate private-equity fund that does its actual investing in
India, and the earnings it generates are subject to taxes, as one of his
representatives told National Review Online.
“The Senator’s wife’s family trust invested in a real
estate fund that is fully transparent with a website and a reputable board of
directors, and income on the investment is taxable,” said the senator’s
communications director, Caley Gray. Which makes them just like Mitt Romney’s
offshore investments. All Americans, including Romney and Lautenberg, pay
applicable taxes on investments they report to the IRS, but often they
deliberately set up these investments in places like Mauritius because these
countries’ laws can help reduce their tax burdens.
Then there’s John Kerry, the richest person in the
Senate. He is considered wealthy because of the fortune of his wife, ketchup
heiress Teresa Heinz Kerry, whose wealth came largely from her previous
husband, Henry John Heinz III. The senator’s 2010 disclosure forms (the latest
available online) show that she had at least $2 million in a fund in Guernsey
at filing time. Kerry’s communications director said that according to his 2011
returns, which aren’t online yet, the fund is no longer one of her assets.
Perhaps while Reid
is lambasting Romney for his offshore accounts, he could find a moment to
politely ask these colleagues to release their returns on the same grounds. And
who knows? Maybe Reid’s anonymous source has some insight into the taxpaying
status of Senate Democrats, too.
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