Posted by AzBlueMeanie:
Best practices for a politician is full disclosure. But Willard "Mittens" Romney has opted to run the most secretive and deceptive campaign for president since Richard M. Nixon. The result will be a death by a thousand cuts as the drip-drip-drip of media disclosures and "no comment" from the Romney campaign will continue.
Romney spent Wednesday on the campaign trail once again questioning President Obama as an "other," not American but "foreign." This is an old GOP tactic to question the Americaness and patriotism of anyone who does not share their extremist conservative views, i.e., the majority of Americans.
It is Mittens Romney who has bona fide foreign connections, from Swiss bank accounts, to a blocker corporation in Bermuda, to bank accounts in the tax avoidance haven of the Caymen Islands. Then there is Sheldon Adelson's money from Macao pouring into the Romney and GOP Super PACs. There is also the better part of three years Romney spent in Paris, France as a draft dodger during the Vietnam war, but I digress.
Romney's foreign connections are again in the news today with this report from the Los Angeles Times, Bain Capital started with help of offshore investors:
When Mitt Romney launched Bain Capital in 1984, he struggled at first to raise enough money for the untested venture.
So he and his partners tapped an eclectic roster of investors, raising more than a third of their first $37-million investment fund from wealthy foreigners.
Most of the foreign investors' money came through corporations registered in Panama, then known for tax advantages and unusual banking secrecy.
Previously unreported details, documented in Massachusetts corporate filings and other public records, show that Bain Capital was enmeshed in the largely opaque world of international high finance from its very inception.
The documents don't indicate any wrongdoing, and experts say that such financial vehicles are common for wealthy foreign investors. But the new details come as President Obama has criticized Romney for profiting from Bain Capital's own offshore investment entities, which are unavailable to most Americans.
Romney has had some shady business associates:
The offshore funds do provide tax advantages for foreign investors, allowing Bain to attract billions of dollars.
"The world of finance is not as simple as some would have you believe," Romney said in an interview this week with National Review Online.
The first outside investor in Bain was a leading London financier, Sir Jack Lyons, who made a $2.5-million investment through a Panama shell company set up by a Swiss money manager, further shielding his identity. Years later, Lyons was convicted in an unrelated stock fraud scandal.
About $9 million came from rich Latin Americans, including powerful Salvadoran families living in Miami during their country's brutal civil war.
* * *
Romney faced unusual complications when he launched Bain Capital, a spinoff of Bain & Co., the Boston consulting firm he joined when he graduated from Harvard Business School.
At the time, U.S. officials were publicly accusing some exiles in Miami of funding right-wing death squads in El Salvador. Some family members of the first Bain Capital investors were later linked to groups responsible for killings, though no evidence indicates those relatives invested in Bain or benefited from it.
Romney has said he checked the foreign investors' backgrounds. His campaign and Bain Capital declined to provide specifics.
* * *
when Romney and his partners started the firm, Bain & Co. founder Bill Bain — worried the new venture could fail — barred them from soliciting current clients or corporations that would have to publicly disclose the investment, according to an early Bain Capital employee.
Bain partners put in $12 million of their own money, then sought the rest from wealthy individuals.
Records show the first investment in Bain Capital — $1.25 million in June 1984 — was in the name of Jean Overseas Ltd., registered in Panama by Marcel Elfen, a Swiss money manager. Later, the investment was doubled.
The Panamanian shell company apparently was a vehicle for Lyons, the British businessman and philanthropist. Lyons died in 2008.
[His son] David Lyons said that wealthy Europeans like his father often invested through offshore shell corporations. "It allowed some confidentiality," he said. "It allowed a lot of things."
Jack Lyons worked as an outside consultant for Bain & Co., but that ended when he and three others were charged in the Guinness Affair, a stock scandal that rocked Britain. Convicted of fraud in 1990, he was spared prison time due to his failing health, but was stripped of his knighthood.
* * *
Other early investors included Robert Maxwell, the British publishing baron, who invested $2 million. After his drowning death in 1991, investigators discovered Maxwell had stolen hundreds of millions of dollars from his company's pension funds.
* * *
Romney and Bill Bain were initially "terrified of bringing in Central Americans," Strachan told the Boston Globe in August 1994. "They were afraid of drug money."
Reassured by Strachan, Romney flew to Miami to meet the group in 1984.
"My friends were impressed by Mitt and the team and signed up for 20% of the fund," Strachan wrote in his self-published memoir, "Finding a Path." He did not respond to requests for comment.
The group included some of El Salvador's wealthiest people: coffee grower Miguel A. Dueñas; members of the De Sola family, also coffee exporters; and Ricardo Poma, whose family conglomerate now owns car dealerships and luxury hotels across Central America. Other investors included Frank Kardonski, who co-founded the Panama Stock Exchange, and Diego Ribadeneira, now Ecuador's ambassador to Peru.
Most of the money they put into Bain Capital was through corporations set up in Panama with names such as Velof Trust, Jolla and Universal Selling Co.
* * *
The use of an offshore corporation to invest in a U.S. business shields foreign investors from estate taxes, but not income taxes, said Steven H. Hagen, a Miami lawyer who provides tax advice to offshore companies and international investors.
At the time, El Salvador was being torn apart in a civil war that ultimately left tens of thousands dead. The Bain investors — some of whom had their plantations seized and family members targeted — were waiting out the war in Miami.
* * *
Among the Bain investors were Francisco R.R. de Sola and his cousin Herbert Arturo de Sola, whose brother Orlando de Sola was suspected by State Department officials and the CIA of backing the right-wing death squads, according to now-declassified documents.
Orlando de Sola, who has denied supporting the death squads, is now serving a four-year prison term for unrelated fraud charges. In an interview at the prison in Metapan, El Salvador, he said he did not benefit from the family investment in Bain Capital.
Before Bain, the family's holdings were based in El Salvador, he said. "I would say their relationship with Bain Capital was a step to diversify into foreign investments. But I insist to you, I was not part of it."
The other Latin American investors declined or did not respond to requests to comment.
Nice group of friends you got there, Mittens. Did you ever visit them in prison? Or do you prefer to pretend that you were never business partners once upon a time.