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Did Romney enable company's abusive tax shelter?

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posted on Aug, 8 2012 @ 11:49 PM
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reply to post by JBA2848
 

Dear JBA2848,

We seem to be getting further and further afield from the topic in the OP, but if you don't care, I don't see why I should.

I think you accidentally posted the wrong link.

Here they are in the news when two attorney's at the office went to jail for insider tradeing on information from Mitt Romney on a Bain deal with China that Congress stopped because of National Security.
There is nothing in the article that said anyone went to jail, there talking about a deal with Canada, not China, and there is no mention of Congress and National security.


We know who his tax guy is. Ropes & Gray LLP.
Do you have evidence that they were Bain's attorneys when Romney was there? Or at the Mariott? Or are his tax attorneys?

With respect,
Charles1952




posted on Aug, 9 2012 @ 12:01 AM
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reply to post by charles1952
 

His tax attorney.
articles.boston.com...



R. Bradford Malt is best known in legal circles as the chairman of Boston’s largest law firm, Ropes & Gray LLP. But last week, Malt burst into the national spotlight as the trustee responsible for overseeing Mitt Romney’s vast fortune and making controversial decisions to invest some of it in a Swiss bank account and funds based in exotic locales like the Cayman Islands.


The three guys from his office found guilty.
www.reuters.com...



Emanuel Goffer, 32, was found guilty by a Manhattan federal court jury in June along with his brother, Zvi Goffer, and a third trader, Michael Kimelman.

The case came from a wide-ranging government probe of insider trading by hedge funds and traders, an investigation noted for the use of FBI wiretaps. The same probe also led to the conviction at a separate trial of Galleon Group founder Raj Rajaratnam, who is set to be sentenced next week.


Congress stopped the deal. The three guys insider traded on the information befor it went public.
www.businessweek.com...



This isn’t exactly a shocker: Huawei has suffered a major setback* in its bid to buy a stake in 3Com. The Chinese telecom-equipment company has been trying for months to be the junior partner in a deal led by Bain Capital to take over 3Com in a proposed $2.2 billion deal. (I wrote about why Huawei would be interested in 3Com here.)

It didn’t take long for opposition to the deal to build in the U.S., though, as lawmakers in Washington griped about the security implications of a Chinese company allegedly tied to the People’s Liberation Army (a charge that Huawei has consistently denied) gaining access to a second-tier American company. (Here’s a link to something I wrote about that opposition back in October.) And now the companies are withdrawing their application to the Committee on Foreign Investment in the U.S.*

edit on 9-8-2012 by JBA2848 because: (no reason given)



posted on Aug, 9 2012 @ 12:21 AM
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reply to post by JBA2848
 

Dear JBA2848,

Thanks, I didn't know about those links.

But what do they have to do with Romney? I've learned that his money is in a blind trust which he has absolutely no control over, and that some people from the lawyer's office got jailed for insider trading, another thing Romney had no control over.

And on the third deal, Bain and the others withdrew their plan and are figuring out another way to make it work. Romney has no involvement in that either.

This seems like kind of a reach.

With respect,
Charles1952



posted on Aug, 9 2012 @ 12:32 AM
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reply to post by charles1952
 



But what do they have to do with Romney? I've learned that his money is in a blind trust which he has absolutely no control over


The idea that Romney would turn his fortune over to a lawyer and that he would have "absolutely no control over" it, is just... Let's just say guys like Romney don't get that wealthy by handing over their money to lawyers and being oblivious to what and where it went.

But to reiterate the OP, Romney was the driving force behind Marriott's illicit tax shelter scheme that involved phony transactions, and cost the company over 200 million in penalties with the IRS.



posted on Aug, 9 2012 @ 12:49 AM
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reply to post by charles1952
 


A blind trust that accidently invested in his sons business when he need money?

www.addictinginfo.org...



Romney’s claim of ignorance, however, is questionable at best, given that his blind trust does not appear to be all that blind. As we’ve reported previously, Romney’s blind trust is run by R. Bradford Malt, his longtime lawyer who is the President of your Bermuda company Sankaty. While that alone may not be enough to demonstrate a lack of blindness, one of the investments that Mr. Malt made with the trust was to put $10 million into a company named Solamere, which was co-founded by Romney’s son Tagg and Romney’s National Finance Chair for his campaign, Spencer Zwick.



posted on Aug, 9 2012 @ 01:06 AM
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reply to post by Blackmarketeer
 

Dear Blackmarketeer,

You're certainly giving me enough to keep me busy. I may not answer with all you'd like, but we can play tomorrow if you'd care to.

The idea that Romney would turn his fortune over to a lawyer and that he would have "absolutely no control over" it, is just... Let's just say guys like Romney don't get that wealthy by handing over their money to lawyers and being oblivious to what and where it went.
one of the articles with a link talking about this said that Romney did have that degree of trust in this man who had been working with him for more than a decade. I don't see a reason to doubt it.

But to reiterate the OP, Romney was the driving force behind Marriott's illicit tax shelter scheme that involved phony transactions, and cost the company over 200 million in penalties with the IRS.

From somebody's link:

In September, 2000, IRS reversed its position on contingent liabilities and issued Notice 2000-44 and in 2003, it issued a retroactive regulation, IRC Reg. 1-752-6, consistent with its reversal of position. Thus, the son of Boss offsetting-option transaction has been eliminated through changes in the tax regulations.
So it became improper to use son of boss in Sep. 2000. He wasn't there then.

Some one else posted a link to "Creator of Son of BOSS" and the link went to the Mariott founder's wiki article. No where did it say he had created it. But his chain did use it. Remember the other 1800 users.

I noticed some one saying that $220 million was levied against Mariott. I couldn't find a link to it. Not denying it, I just don't know.

Sorry, got to go.

With respect,
Charles1952



posted on Aug, 9 2012 @ 01:50 AM
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Originally posted by JBA2848
reply to post by charles1952
 


They had to pay $29,000,000.00 in fines to the IRS while Romney was in charge of there taxes.
I say it was his fault.

It was worst than I thought.



During his time on the committee, Marriott implemented the Son of BOSS shelter attacked by the Department of Justice, bought a synthetic fuels business reliant on tax credits criticized by Congress as a tax shelter and took deductions that eventually led to a $220 million settlement with the IRS on another issue.


$220 million settlement with the IRS. Boy was I off!
edit on 8-8-2012 by JBA2848 because: (no reason given)


The link from the OP was the source for this.
www.bloomberg.com...



posted on Aug, 9 2012 @ 02:03 AM
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What was Romney's job? Did he do it well? Did he break any laws? Every single one of us taxpayers looks for every single possible method to pay less taxes. It seems Romney is being singled out at being very good at understanding finance and doing an incredible job WITHOUT breaking the law? Seems like the kind of guy I would want helping to bring in revenue, you know, the kind of guy who understands the system. Show me what he did that was illegal, all I see is a brilliant guy who understands the system and gets the job done for his constituents. Can't wait till that constituent is me.



posted on Aug, 9 2012 @ 02:04 AM
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reply to post by charles1952
 



So it became improper to use son of boss in Sep. 2000. He wasn't there then.


That was covered in the OP article. Romney implemented "Son of BOSS" at Marriott in 1994. There were no laws against it, per se, at that time. The IRS simply didn't fathom such a complex scheme existed. It was later determined how much of a tax cheat it was, and made illegal (2000).

However, Romney was still with Marriott, he didn't leave the board until 2002. He served 1993-2002. And note, it was soon after he joined that board Marriott began using the "Son of BOSS" tax scheme, along with a few other dubious tax schemes.

More on those:


While Romney was on the board, Marriott engaged in a number of corporate tax avoidance schemes—including one of the largest and costliest tax schemes in U.S. history. Here are four ways Romney’s corporate experience paid off for Marriott:

  • Son of Boss tax shelter: Marriott executed a Son of Boss trade in mid-1994—a scheme that manufactures “a gigantic tax loss out of thin air” to offset actual gains “without any economic risk, cost, or loss.” Marriott later filed a return claiming an artificial loss to lower the company’s taxable income. Son of Boss schemes were notorious, involving about 1,800 people and costing the IRS an estimated $6 billion, and was described as “perhaps the largest tax avoidance scheme in history.”

  • “Spray and pray”: Marriott purchased four synthetic fuel plants in 2001 in order to benefit from federal tax credits for synthetic fuels, a strategy which was dubbed “spray and pray”. In 2002, the company legally claimed $159 million of those credits, reducing their effective tax rate to just 6.8 percent—far below the normal corporate rate of 35%. Even Sen. John McCain criticized Marriott’s behavior: “One of the greatest beneficiaries of this tax shelter—and that is all that it is, a tax shelter—is a very profitable hotel chain: Marriott.’’

  • Profit-shifting to Luxembourg: In 2009, Marriott collected $229 million in revenue—primarily from royalty, licensing and franchising fees—at its Luxembourg subsidiary, Global Hospitality Licensing S.à.r.l. The subsidiary reported having only one employee. By the end of 2011, the company $451 million in offshore earnings that it left overseas to delay paying US income taxes. Under Romney’s proposed corporate tax plan, Marriott would never have to pay U.S. taxes on those earnings.

  • Questionable deductions: The IRS challenged $1 billion in deductions Marriott took related to an employee stock ownership program from 2000 to 2002. The company eventually agreed to pay about $220 million of what it owed in income taxes, excise taxes, and interest to the IRS and a number of states.

(source)




You're certainly giving me enough to keep me busy.


Well if you're going to run around playing damage control for Romney, then you're going to have a busy time of it. You know it's not to late for the GOP to nominate Paul.
edit on 9-8-2012 by Blackmarketeer because: (no reason given)



posted on Aug, 9 2012 @ 02:09 AM
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reply to post by OccamsRazor04
 



What was Romney's job? Did he do it well? Did he break any laws? Every single one of us taxpayers looks for every single possible method to pay less taxes. It seems Romney is being singled out at being very good at understanding finance and doing an incredible job WITHOUT breaking the law?


Did he do his job well? He cost Marriott millions in penalties. I'd say not. And what he did while there, became illegal. He's a tax cheat. Plain and simple.



posted on Aug, 9 2012 @ 02:58 PM
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reply to post by Blackmarketeer
 

Dear Blackmarketeer,

Just a couple of random thoughts, if you don't mind. It was mentioned that the law firm who was associated with Bain by being their tax attorneys, had some employees who were jailed for insider trading. What struck me were the words "Tax attorneys." I was dumbstruck. Of course! They had tax attorneys! For me that ended this whole discussion. If there is any question at all about whether a tax scheme is legal, you take it to your tax attorneys, not your auditors, that, to me, is obvious. If the tax attorneys approve it, then the auditors make sure the books are prepared in accordance with that decision. Stupid of me not to think of that earlier.


And what he did while there, became illegal. He's a tax cheat. Plain and simple.
A person uses a legal exemption to be excused from the draft. Afterwards, the rules get changed and the exemption he used no longer exists. Obviously, then "He's a draft dodger. Plain and simple."

With respect,
Charles1952



posted on Aug, 9 2012 @ 03:33 PM
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reply to post by charles1952
 


Ahh, the trouble with your attempt to lay off the blame from Romney is that Romney in this case was the person who implemented the Son-of-BOSS scheme. He didn't pawn it off on someone else. Read again the article in the OP.


A person uses a legal exemption to be excused from the draft. Afterwards, the rules get changed and the exemption he used no longer exists. Obviously, then "He's a draft dodger. Plain and simple."


That's a rather poor analogy if you don't mind my saying. What Romney did was use a set of questionable practices, including the use of FICTITIOUS losses, to evade Marriott paying taxes on legitimate profits. When the IRS uncovered the scheme, it wrote a more extensive set of laws to prevent it from being used in the future. At the time Romney implemented it, there were no specific criminal statutes in the United States Code.

A better analogy would be to compare what Charles Ponzi did. There were no laws against running a "ponzi" scheme when he pulled it off. Technically, that meant a ponzi scheme was legal at the time. But he, just as Romney surely did, both knew what they were doing was highly unethical, and a "cheat".

Look at the terms the DoJ used to describe Romney's Son of BOSS tax dodge: “fictitious,” “artificial,” “spectral,” “illusion”, and a “scheme.” Not something any ethical person would have done.
edit on 9-8-2012 by Blackmarketeer because: (no reason given)



posted on Aug, 9 2012 @ 04:19 PM
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reply to post by Blackmarketeer
 

Dear Blackmarketeer,

I'm really grateful, this is a lengthy and civil discussion. The sort of thing I was hoping for from ATS.

From the OP's second link:

In January 1994, an investment banker faxed a presentation to a longtime Marriott tax-department executive, according to a court filing. The proposal laid out how the company could use a series of newly created partnerships to trigger a tax loss without any real economic harm.
I don't see how we get from there to saying an audit committee guy (Romney) was the driving force. Maybe, I suppose, but it wouldn't have left the tax department office if he thought it was dangerous, he would have trash canned it. So it left the tax office with at least unstated approval.

I'll get caught up with the other posts in a while. I've got a meeting to attend.

With respect,
Charles1952




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