Romney’s offshore holdings detailed
Up to $32 million tucked in accounts
WASHINGTON — Republican presidential candidate Mitt Romney owns investments worth between $7 million and $32 million in offshore -based holdings, which are often used legitimately by private equity firms to attract foreign investors.
Such offshore accounts also can enable wealthy investors to defer paying U.S. taxes on some assets, according to tax experts.
An Associated Press review of Romney’s financial records identified at least six funds set up in the Cayman Islands, a Caribbean island chain that has been used as a base for international investments because of low tax rates and financial secrecy.
Romney has acknowledged that some of his investments are based in the Caymans, but he has not identified all of the specific accounts and the amounts based there. There is no indication Romney uses the accounts to dodge any U.S. tax obligations.
The Caymans have often been associated with individuals and corporations seeking to avoid paying U.S. taxes. However, it is legal for U.S. residents to own investment accounts that are set up there — if they file the proper forms with the Internal Revenue Service and pay the appropriate taxes.
Independent tax policy experts said Romney’s use of the Cayman-based investments was legal, but some criticized the strategy as a province of wealthy investors allowed by a tax code studded with loopholes.
“The bottom line is, they’re taking advantage of a system that’s f lawed,” said Nicole Tichon, director of Tax Justice Network USA, part of a global network promoting tax transparency. “It may be legal, but these are loopholes that show problems in our tax code.”
The six Romney offshore holdings are in investment funds run by Bain Capital, the private equity powerhouse he led in the 1980s and 1990s. The six funds are listed only by name and a range of amounts in Romney’s financial records.
Five of the Cayman-based funds are included within a blind trust for Romney’s wife, Ann, and worth between $2.8 million and $7.6 million.
A sixth fund, called Bain Capital Investment Partners Trust Associates lll, is part of Romney’s IRA retirement account and worth between $5 million and $25 million.