5 Things You Need to Know About Mitt Romney's Shady Investments Before Election Day
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The company, Imagitas, had been co-founded by a former executive at Bain and Co., with $5 million in backing from Bain Capital. Paul Ryan's brother, Toby, had also been a senior manager at Bain and Co., working in the same building as Romney, before leaving to become a vice president of Imagitas.
Romney didn't award the contract, but according to the Telegraph, “New state employees were obliged to prevent conflicts of interest with existing contracts. The following year, [Romney] began declaring that his holdings were in a so-called 'blind trust' controlled by his lawyer.”
But, again, experts said it wasn't blind enough:
Victor Fleischer, a law professor at the University of Colorado specializing in private equity, said it was “possible but unlikely” that Mr Romney could have completely prevented himself from benefiting from Imagitas.
4. Not All Of His Controversial Investments are in the Visually Impaired Trust
During the GOP primary, Newt Gingrich attacked Romney for holding real estate investments that he said helped crash the economy. Romney shot back: “First of all, my investments are not made by me. My investments for the last 10 years have been in a blind trust, managed by a trustee. Secondly, the investments that they made, we learned about this, as we made our financial disclosure, had been in mutual funds and bonds. I don't own stock in either. There are bonds that the investor has held through mutual funds.”
The argument went unchallenged, but a factcheck by the National Journal provides a case-study in why reporters shouldn't blithely accept these kinds of claims:
Yet, according to Romney's financial disclosure forms, not all of his mutual funds were part of a blind trust.The Boston Globe reported in September that Romney owned between $250,001 and $500,000 in a mutual fund called the Government Obligation Fund that invests in debt notes of various government entities, including mortgage giants Fannie Mae and Freddie Mac, and he made between $15,001 and $50,000 in interest from those investments.
Since those assets were considered a charitable trust rather than a blind trust, Romney could have reviewed them himself.
5. Crony Trust
Cleta Mitchell, a Washington election lawyer, told ABC that a true blind trust shouldn't serve any goal but making money. "What you're saying to the government is, I don't have any control over this, my spouse doesn't, and neither do my dependent children... The filer says, 'I don't know what's in it. I just get income from it.'"
But it appears that the Romneys' blind trusts have invested in strategic ways – to help friends and family. Nicholas Shaxson writes, “It’s certainly true that under Malt the trusts don’t appear to be as blind as they might be: for instance, in 2010 the Romneys invested $10 million in the start-up of the Solamere Founders Fund, co-founded by their eldest son, Tagg, and Spencer Zwick, Romney’s onetime top campaign fund-raiser; Solamere is now in the Ann Romney blind trust.”
As Matthew Mosk notes, “it would be hard to explain how Romney's independent investment fund would orchestrate ...[an] investment with his son's firm without violating the terms of a standard blind trust -- terms that typically prohibit communication with family members.”
Romney Must Be Laughing
Romney spokeswoman Andrea Saul said that the candidate's limited disclosure “completely and accurately describes Governor Romney’s assets as required by the law.” But according to the Washington Post, “several outside experts across the political spectrum... say Romney’s disclosure is the most opaque they have encountered, with some suggesting the filing effectively defeats the spirit of disclosure requirements.”