Thursday, July 05, 2012

The Anti-American Business Model of Mitt Romney

Tom Hamburger, reporting in the Washington Post, tells how Mitt Romney earned his millions. He did it pushing the sharp end of the job exporting business model that's destroyed our jobs base in the last few decades. He continues to earn millions a year from his anti-working-man investments in Bain Capital. Tom Hamburger:

"Mitt Romney’s financial company, Bain Capital, invested in a series of firms that specialized in relocating jobs done by American workers to new facilities in low-wage countries like China and India.

"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."

Hamburger's carefully reported article describes Romney's harshly anti-American business model. He made his pile by impoverishing and unemploying thousands of American workers, and, perhaps more importantly, by showing other business leaders how to do it. What other business leaders hesitated to do, Romney did. If other businesses were too patriotic to ship American jobs overseas, Romney and his like would beat them by doing so. A very cynical kind of leadership. A race to the bottom, toward the ultimate business model based upon fearful, impoverished workers with no rights and no voice.

Worse still, once Romney has earned his millions where do those millions go to live? He carefully shields them from taxation that might build roads and schools here in the U.S., hiding them in secretive offshore banks in the Cayman Islands, the Bahamas and Switzerland, as reported in the August Vanity Fair magazine. Not only has he offshored American jobs, he has offshored the wealth he earned by breaking down the American industrial base.

"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."

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