SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
CapitolFax.com
To subscribe to Capitol Fax, click here.
*** UPDATED x1 - Quinn responds *** Rauner says Quinn, teachers benefit from Cayman Islands investments

Wednesday, Aug 6, 2014

* From a Bruce Rauner campaign press release

In his desperate attempt to distract voters from his 67% income tax hike, record job losses, skyrocketing property taxes and multiple criminal investigations, Pat Quinn has painted himself into a corner.

The governor’s own pension fund — just like the state pension fund for teachers and all state workers — is heavily invested overseas, including in the Cayman Islands.

Pat Quinn either needs to apologize to Bruce Rauner for lying about the facts or apologize to Illinois teachers and state workers for calling them unpatriotic. If Pat Quinn refuses to apologize and tell the truth, he should immediately move to divest all state investments from companies and funds domiciled overseas, including in the Cayman Islands.

Individual teachers and state workers didn’t make those particular investment decisions, so that’s a stretch.

I do agree, however, that Quinn calling Rauner “unpatriotic” yesterday was a new low in this campaign. Questioning your opponent’s patriotism is a despicable act. And nothing good ever comes of it.

* Anyway, some examples

Pat Quinn Is A Member Of The General Assembly Retirement System, Which Is Managed By The Illinois State Board Of Investment. “The Illinois State Board of Investment (ISBI or Board) has fiduciary responsibility for managing the pension assets of the General Assembly Retirement System, the Judges’ Retirement System of Illinois and the State Employees’ Retirement System of Illinois.”(http://www2.illinois.gov/isbi/Pages/default.aspx)

The Illinois State Board Of Investment Had $2.3 Billion Invested In Overseas Companies As Of March 31, 2014. (“Statements of Net Assets,” Illinois State Board Of Investment, 3/31/14)

The Illinois State Board Of Investment Invests With Advent International GPE VI-A, Which Is Domiciled In The Caymans. (“Consultants, Investment Advisers, and Other Contractors,” Illinois State Board of Investments, Accessed 8/5/14)

* And

The Illinois Teachers Retirement System Invests $8.3 Billion In Companies Based Overseas. (Comprehensive Annual Financial Report – FY2013, Teachers Retirement System, p.38)

The Illinois Teachers Retirement System Has $433.5 Million Invested In Private Equity Funds That Are Domiciled In The Caymans.

…Adding… From the Rauner campaign…

Quinn appoints 6 members of the TRS Board and 5 members of the ISBI.

Click here for all the documenting links and more.

…Adding More… 47th Ward makes a valid point…

Pension funds aren’t subject to income taxes. Individuals and corporations are. No comparison. Apples and bowling balls, etc.

Unfortunately I think Rauner will be able to muddy this enough so that the truth remains obscured. It’s another false equivalence, which is the same as lying. But it’s a neat trick if you can get away with it.

…Adding still more… Rauner campaign regarding the above comment…

Pension funds can be subject to taxes, which is one reason why they may be in some place like the Caymans. Caymans can help pension funds on tax issues but they don’t provide individuals with tax advantages.

*** UPDATE *** The Quinn campaign response…

“This is a total canard by a Republican billionaire who has chosen the Cayman Islands as a place to stash his money and is hiding his tax records from voters.

“The Governor’s future pension is fixed and the payout won’t be impacted by the performance of any individual investments. State pension boards are also completely independent.

“By contrast, Mr. Rauner has personally funneled millions of dollars to funds in the Cayman Islands to avoid taxes.

“We’d love to reply with specific numbers but unfortunately we can’t because Mr. Rauner has not released his income tax records, including schedules. We have no idea what his sources of income are, what investments he has, and what loopholes he’s used to drastically lower his tax burden by more than half.

“Governor Quinn’s bank accounts are all located in Illinois, United States of America.”

Additional Background:

As those familiar with state government know, the Governor of Illinois makes no policy decisions related to any pension boards nor the firms selected to manage investments. These boards are independent by law and the Governor of Illinois has no involvement whatsoever in their investment decisions, as required by law.

Furthermore, Governor Quinn signed a pension board reform law to clean up corruption after swindler Stuart Levine - who Mr. Rauner had on his payroll - corrupted the system.

Unlike Governor Quinn, Bruce Rauner personally makes his own investment decisions. Rauner’s investments are NOT managed by a blind trustee, which even Mitt Romney had.

- Posted by Rich Miller        


69 Comments
  1. - Formerly Known As... - Wednesday, Aug 6, 14 @ 11:37 am:

    If it’s good enough for the state to invest in, it should be acceptable for anyone to invest in.


  2. - 47th Ward - Wednesday, Aug 6, 14 @ 11:38 am:

    ===Questioning your opponent’s patriotism is a despicable act.===

    +1


  3. - OneMan - Wednesday, Aug 6, 14 @ 11:41 am:

    Well that’s different, duh….

    I would suspect the Quinn campaign is ready for this counter argument, right….


  4. - dupage dan - Wednesday, Aug 6, 14 @ 11:45 am:

    Did Quinn’s campaign staff not know Illinois pensions, etc, are invested in the Cayman Islands? Did the campaign staff think that Rauner wouldn’t pick up on it?


  5. - Wally - Wednesday, Aug 6, 14 @ 11:45 am:

    Touche!


  6. - Mason born - Wednesday, Aug 6, 14 @ 11:46 am:

    –Questioning your opponent’s patriotism is a despicable act. And nothing good ever comes of it.–

    Well said although I suspect it will seem tame by November.


  7. - CircularFiringSquad - Wednesday, Aug 6, 14 @ 11:46 am:

    The pension funds aren’t trying to dodge US/IL taxes so no one care where they invest….we do care where FLIP and his plane pal, Mr. ReBoot, stash their cash.


  8. - facts are stubborn things - Wednesday, Aug 6, 14 @ 11:47 am:

    It is all about sound bites, and not substance.


  9. - VanillaMan - Wednesday, Aug 6, 14 @ 11:47 am:

    When attacking an opponent, it is just not good to cut to the bone like Quinn did.

    Yesterday I saw a need for Rauner to demand an apology, which is what he did ask for today.

    However -
    How much better it would have been for QUINN to have began this morning by apologizing to Rauner for questioning his patriotism? That would have been so cool for Quinn to have done that without being asked.

    This could have been a win-win for Quinn by doing that. Instead he got a win-lose out of it.


  10. - PublicServant - Wednesday, Aug 6, 14 @ 11:48 am:

    Well, I think the big difference here is the motivation. Rauner’s is tax avoidance, first and foremost. The Investment Funds interest is asset diversification and income.


  11. - The Captain - Wednesday, Aug 6, 14 @ 11:49 am:

    We should move all of the state’s money and teachers to the Cayman Islands. I hope they’re ready for us, WE’RE COMING!!!


  12. - so... - Wednesday, Aug 6, 14 @ 11:51 am:

    ==The pension funds aren’t trying to dodge US/IL taxes so no one care where they invest….we do care where FLIP and his plane pal, Mr. ReBoot, stash their cash.===

    Actually, pension funds ARE trying to avoid taxes by operating in the Caymans. Specifically the UBIT or Unrelated Business Income Tax. See: http://taxvox.taxpolicycenter.org/2012/01/20/why-do-u-s-investment-funds-operate-in-tax-havens/


  13. - 47th Ward - Wednesday, Aug 6, 14 @ 11:51 am:

    ===The pension funds aren’t trying to dodge US/IL taxes so no one care where they invest===

    The sometimes indecipherable CFS hits the nail on the head. Pension funds aren’t subject to income taxes. Individuals and corporations are. No comparison. Apples and bowling balls, etc.

    Unfortunately I think Rauner will be able to muddy this enough so that the truth remains obscured. It’s another false equivalence, which is the same as lying. But it’s a neat trick if you can get away with it.


  14. - Mason born - Wednesday, Aug 6, 14 @ 11:52 am:

    No offense public but those same reasons for sers apply to Rauner. Do you have tape of him stating that??


  15. - so... - Wednesday, Aug 6, 14 @ 11:52 am:

    ==Well, I think the big difference here is the motivation. Rauner’s is tax avoidance, first and foremost. The Investment Funds interest is asset diversification and income.==

    Nope, and nope. Rauner doesn’t avoid any taxes by investing in the Caymans. He has to pay taxes on his worldwide income. But pension funds absolutely avoid taxes by operating in the Caymans. See this link from my previous comment: http://taxvox.taxpolicycenter.org/2012/01/20/why-do-u-s-investment-funds-operate-in-tax-havens/


  16. - OneMan - Wednesday, Aug 6, 14 @ 11:56 am:

    ==== The pension funds aren’t trying to dodge US/IL taxes so no one care where they invest ==

    So let me get this right, you can argue that an investment vehicle is designed to avoid taxes and that is wrong and causes problems for the state due to reduced revenues and the like…

    However, if you don’t pay taxes it’s then perfectly fine to invest in those same investments..

    Yep, makes perfect sense to me….


  17. - Cassiopeia - Wednesday, Aug 6, 14 @ 12:00 pm:

    I’m very impressed with this response.

    I don’t think anyone on Team Quinn had a clue about these foreign investments.

    This is what happens when you have a ultra liberal chief strategist as Quinn does.


  18. - Anon. - Wednesday, Aug 6, 14 @ 12:00 pm:

    ==47th Ward makes a valid point…==

    Maybe not in the way he or she intended. The fact that foreign investments look good to a tax-exempt investor is evidence against the claim that Rauner’s fully disclosed foreign investments were just tax dodges rather .


  19. - Formerly Known As... - Wednesday, Aug 6, 14 @ 12:00 pm:

    == I would suspect the Quinn campaign is ready for this counter argument, right ==

    They should be if they read the Capfax comments http://capitolfax.com/2014/08/04/sun-times-uncovers-cayman-islands-investments-by-rauner-rauners-firm-and-rauners-charity/#comment-11584701

    http://capitolfax.com/2014/08/04/sun-times-uncovers-cayman-islands-investments-by-rauner-rauners-firm-and-rauners-charity/#comment-11584722

    The most surprising thing about this is that a campaign normally so efficient in responding didn’t have something out until day 2 or 3 of this attack. That, plus the fact the Quinnsters haven’t found a way to completely bungle the issue yet.


  20. - OneMan - Wednesday, Aug 6, 14 @ 12:03 pm:

    Pension funds aren’t subject to income taxes. Individuals and corporations are. No comparison. Apples and bowling balls, etc.

    Unfortunately I think Rauner will be able to muddy this enough so that the truth remains obscured. It’s another false equivalence, which is the same as lying. But it’s a neat trick if you can get away with it.

    No, sorry I don’t think it is a legitimate point.

    If the argument is that an investment is questionable/bad/whatever because it is structured to avoid taxes but it is ok for an entity, one of the same that is being potentially ‘denied’ taxes to invest in because it is avoiding taxes.

    It would be like complaining that he was a majority shareholder in a tobacco company and that was bad, but it is ok for the state to own shares in that same firm because pension funds don’t smoke even though the state is subject to the costs associated with smoking.

    or

    In even a simpler form, complaining because a guy doesn’t mow his lawn and it hurts your property values but also not mowing your own lawn and that is ok, because it is only your own property value you are impacting.


  21. - too obvious - Wednesday, Aug 6, 14 @ 12:05 pm:

    Betting against America is the better, simple theme. Worked against Mitt.


  22. - 47th Ward - Wednesday, Aug 6, 14 @ 12:06 pm:

    ===The fact that foreign investments look good to a tax-exempt investor is evidence against the claim that Rauner’s fully disclosed foreign investments were just tax dodges rather===

    Well OK then. And thanks to the secrecy provided by the banking laws in the Cayman’s, we’ll just have to take an investor’s word for how much he or she earned. You know, voluntary self-reporting of income and assets. The IRS has no ability to audit these accounts, so it’s up to the investor to fully disclose every dollar earned.

    And I’m not calling Bruce Rauner a tax cheat or a liar, either. I believe he reports every nickel he’s earned to the IRS, just like I do, heck just like all of us.


  23. - Louis G. Atsaves - Wednesday, Aug 6, 14 @ 12:07 pm:

    So, if the those pension funds had invested their billions in cash in Illinois instead of the Cayman Islands, would the Illinois economy been better off? Would a bunch of local banks that went under (see Giannoulias’ bank) been saved and still around if that cash was placed in those banks instead of Cayman banks? Would more jobs have been created? More corporations created hiring more individuals? More sales taxes collected from increased consumer consumption?

    Nice to turn some of those anti-Rauner arguments from yesterday back around. How’s that old expression go? When you point one accusatory finger at someone, the remaining three point back at you?

    The unpatriotic stuff has got to stop. Quinn’s campaign needs to sincerely apologize for starting that ugliness and move on, otherwise things will only get worse with an already ugly campaign this year.


  24. - Wally - Wednesday, Aug 6, 14 @ 12:07 pm:

    If you play poker in Chicago, in the Cayman Islands, in France and in Australia and win in each place and are a US citizen, you pay taxes on your winnings.


  25. - too obvious - Wednesday, Aug 6, 14 @ 12:08 pm:

    Also legitimate to say Rauner is not doing what he could be doing to create jobs here and to improve Illinois. He wants people to suffer as much as possible because he thinks will help him politically. Rauner complains about the mess but won’t lift a finger to help. Same reason he lobbied hard against the only serious pension reform on the table.


  26. - OneMan - Wednesday, Aug 6, 14 @ 12:26 pm:

    Also legitimate to say Rauner the pension funds is are not doing what he could be doing to create jobs here and to improve Illinois.

    Why yes, obviously any dollar being invested by the pension funds that are not direct investments in Illinois are not necessarily producing jobs here in Illinois. It seems that they are focused on extending the suffering of those in Illinois, for example the pension funds could invest 100% in Illinois public debt both at the state and local levels, reducing borrowing costs for government at all levels freeing up more tax dollars to do things that create jobs.

    Just so I get your argument too obvious, your beef is he isn’t 100% invested in Illinois?


  27. - A guy... - Wednesday, Aug 6, 14 @ 12:27 pm:

    Look how muddy things are on this thread here where people pay an incredible amount of attention. Imagine how much more unclear it is out in voterland. All they know now is that Rauner and our Pension funds utilize the Cayman Islands for their funds and the pension funds may have even more invested. It’s a wash, until an out of touch Governor calls him “unpatriotic” for utilizing the same facility the state does.
    Bad Research. Bad move Governor.
    Calling someone Unpatriotic in the mainstream news is even worse than calling someone a “dope” on CF. A million times worse!


  28. - OneMan - Wednesday, Aug 6, 14 @ 12:29 pm:

    The Governor’s future pension is fixed and the payout won’t be impacted by the performance of any individual investments

    However how much the state needs to pay into the systems will be directly impacted by the performance of the investments and it is the payments into the system that are the crux of the pension challenge in Illinois are they not?


  29. - so... - Wednesday, Aug 6, 14 @ 12:29 pm:

    ==Well OK then. And thanks to the secrecy provided by the banking laws in the Cayman’s, we’ll just have to take an investor’s word for how much he or she earned. You know, voluntary self-reporting of income and assets. The IRS has no ability to audit these accounts, so it’s up to the investor to fully disclose every dollar earned.==

    Actually, now that you bring it up, the Caymans reports U.S.-tied earnings to the IRS. See: http://www.forbes.com/sites/robertwood/2013/11/29/caymans-costa-rica-sign-u-s-tax-evasion-pact-fatca-gets-even-fatter/


  30. - Wally - Wednesday, Aug 6, 14 @ 12:31 pm:

    If you have accounts outside the US that have more than $10k, I believe, in them you have to file an annual report with the IRS outlining the details where they are located. So much for the secrecy.


  31. - Anonymoiis - Wednesday, Aug 6, 14 @ 12:31 pm:

    ==Just so I get your argument too obvious, your beef is he isn’t 100% invested in Illinois?==

    His beef is simply that he hates Rauner


  32. - Mason born - Wednesday, Aug 6, 14 @ 12:32 pm:

    –3. It takes investment dollars out of the Illinois economy - leading to a loss in potential growth here.–

    http://capitolfax.com/2014/08/06/quinns-animated-internet-video-explains-rauners-cayman-islands-investments/

    Pat how are the pension funds helping il economy?

    Even if no tax impact for the investments PQ went overboard equating foreign investment with unpatriotic activities. Now it’s fair to ask how the states investments are “patriotic” when an individuals are not.

    Gov. Appoints the majority of the ISBI and .46% of TRS seems like that is some considerable influence.


  33. - PublicServant - Wednesday, Aug 6, 14 @ 12:34 pm:

    ===Rauner doesn’t avoid any taxes by investing in the Caymans. He has to pay taxes on his worldwide income.===

    And we just have to trust him when he reports on the capital gains he’s made huh? He’d never under report those gains even though there’s no way to verify them huh? Got it.


  34. - Formerly Known As... - Wednesday, Aug 6, 14 @ 12:35 pm:

    == Betting against America is the better, simple theme ==

    The State of Illinois is “betting against America” by “unpatriotically” “stashing money” in the Caymans?

    Glass houses on this one.

    Like I said yesterday, both parties are hypocrites on this issue. Just look at the differing reactions from each party to Penny Pritzker, Bruce Rauner, or any number of others.


  35. - OneMan - Wednesday, Aug 6, 14 @ 12:37 pm:

    Public Servant, might I suggest you read

    http://www.forbes.com/sites/robertwood/2013/11/29/caymans-costa-rica-sign-u-s-tax-evasion-pact-fatca-gets-even-fatter/


  36. - OneMan - Wednesday, Aug 6, 14 @ 12:47 pm:

    Also if your two arguments are ‘he only appoints some of the board members’ and ‘he doesn’t personally profit’ than heck he can get out of all sorts of stuff.

    I mean it wasn’t like he was running the safe neighborhood program….


  37. - Oswego Willy - Wednesday, Aug 6, 14 @ 12:51 pm:

    - Anonymoiis -,

    How about address the issue, not have a drive-by attack of another commenter…

    It’s like Rauner supporters here can’t win the argument and make it about the commenter.


  38. - VanillaMan - Wednesday, Aug 6, 14 @ 12:51 pm:

    Didn’t Penny Pritzker get rich by saving S&H Green Stamps?

    Hey - isn’t that a blast from the past!

    Yeah - when we really step back from the politibabble being thrown around, there are as many rich Democrats would will end up getting cut up just as bad as Republicans by the canned hash being pumped out by the class warriors!

    Hey Penny - what’s in your wallet?
    Your political friends want more of it!


  39. - Old Hippy - Wednesday, Aug 6, 14 @ 12:52 pm:

    Doesn’t Madigan’s firm specialize in avoiding real estate tax?


  40. - OneMan - Wednesday, Aug 6, 14 @ 12:54 pm:

    Ok the OW…

    So what is Too Obvious’ argument then.

    That by not being completely invested in Illinois Rauner is harming Illinois?

    Then logically if that is the argument, couldn’t you then argue the same of Illinois’ pension funds?


  41. - Aaron62287 - Wednesday, Aug 6, 14 @ 12:59 pm:

    “It’s like Rauner supporters here can’t win the argument and make it about the commenter.”

    Too funny. Have yet to read one comment that’s pro-Quinn rather than Anit-Rauner.


  42. - Arthur Andersen - Wednesday, Aug 6, 14 @ 1:00 pm:

    47, see “so’s” posts above. UBTI is a major issue for public pensions and other tax-exempt investors. Even with US investments, a poorly executed corporate structure for investments like hotels or shopping malls (where there is an ongoing business operated by the investor “inside” its real estate investment) can bring UBTI penalties to tax-exempt investors.

    Let’s also remember that when the ISBI signed up with Advent Capital as mentioned above, that ain’t stashing money in a Cayman Islands bank. PE firms minimize uninvested cash on hand.


  43. - A guy... - Wednesday, Aug 6, 14 @ 1:00 pm:

    ===It’s like Rauner supporters here can’t win the argument and make it about the commenter.===

    Give it a rest Willie. The victim stuff is beyond old. Make your argument, even 50 times. Leave the pejorative stuff out. It cheapens you


  44. - fed up - Wednesday, Aug 6, 14 @ 1:03 pm:

    Public servent.

    And we just have to trust him when he reports on the capital gains he’s made huh? He’d never under report those gains even though there’s no way to verify them huh? Got it

    Kind of like were supposed to trust Quinn on his Violence/vote getting inititive. You know the one Quinn refuses to discuss, refused to testify in front of the state committee investigating it. The one the feds are investigating.


  45. - CircularFiringSquad - Wednesday, Aug 6, 14 @ 1:03 pm:

    “The sometimes indecipherable CFS”
    Huh?
    One just needs to get used to the nicknames and a few typos — it is a blog.
    Today’s lesson remains the true need for Flip Rauner to study the breath taking backflip by Walgreen’s who after months of prep, like millions of spending walked away from the inversion scheme. For that scheme to go south as quickly as it did says Walgreen caught help from rank and file customers and sensed the millions dodged in taxes would not out weigh losses from customers nationwide.
    Failing to learn anything from the Mitt Romney disaster shows just how poorly Flip spends money and takes advice.


  46. - Oswego Willy - Wednesday, Aug 6, 14 @ 1:05 pm:

    ===That by not being completely invested in Illinois Rauner is harming Illinois?===

    I have no idea what - too obvious -’s argument is…

    However…

    ===Then logically if that is the argument, couldn’t you then argue the same of Illinois’ pension funds?===

    I think - 47th Ward - makes the case…

    =Pension funds aren’t subject to income taxes. Individuals and corporations are. No comparison. Apples and bowling balls, etc.

    Unfortunately I think Rauner will be able to muddy this enough so that the truth remains obscured. It’s another false equivalence, which is the same as lying. But it’s a neat trick if you can get away with it.===

    If - Anonymoiis - wants to go down that road…

    For me, it’s the political optics of a possible Romney/Rauner, versus Rauner trying to use the false equivalence.

    If Rauner wanted the Romney comparison, we would have heard that already.

    All good, - OneMan -


  47. - Oswego Willy - Wednesday, Aug 6, 14 @ 1:08 pm:

    ===Give it a rest Willie. The victim stuff is beyond old. Make your argument, even 50 times. Leave the pejorative stuff out. It cheapens you.===

    There’s the Tom Hagen Rauner I know and love;

    “Be quiet, or get steamrolled. We’re louder, and louder wins.”

    lol


  48. - Demoralized - Wednesday, Aug 6, 14 @ 1:08 pm:

    You need to be a tax lawyer or an accountant to understand any of this. Most people are simply shaking their heads and have no earthly idea what anybody is talking about. Neither one can explain their side of the argument in an easy to understand way. I’m starting to hear the “wah, wah, wah” of the Charlie Brown teacher every time this subject comes up.


  49. - Mason born - Wednesday, Aug 6, 14 @ 1:13 pm:

    Demoralized

    I think you hit it on the head. Which i think is why this response from Rauner will work. If we boil it down it appears (assuming of course BR can get it out there) PQ says BR invests in the Caymans and that is bad but PQ does it too. Kind of makes PQ look the hypocrite.


  50. - jocko - Wednesday, Aug 6, 14 @ 1:13 pm:

    ===…apologize to Illinois teachers and state workers for calling them unpatriotic.===

    Bruce forgot to add that some of his best friends were teachers and state workers. /s

    I’m surprised the Quinn camp hasn’t made more out of Bruce lying to the Tribune Board.


  51. - Wally - Wednesday, Aug 6, 14 @ 1:16 pm:

    Quite to the contrary Demoralized, several have explained things very well and included links to support their positions.


  52. - Walter Mitty - Wednesday, Aug 6, 14 @ 1:17 pm:

    It’s already backfired on Quinn. AGAIN, are his people secretly working for Rauner??! How do you question someones patriotism, and a day later the fund you are overseeing is in the same country? Anybody who tries to muddy this beyond a major PQ gaffe is not being objective at all. Rauner does not need to muddy this. I think earlier this week when Rauners team was chided for the first gaffe… I think this answers that. Well played.


  53. - Demoralized - Wednesday, Aug 6, 14 @ 1:24 pm:

    @Wally:

    Nobody in the general public is looking at links. And if they’ve explained it well then I’ve missed it. They may have explained it so somebody who already has an idea about these things understands. But I guarantee you that my parents wouldn’t have a clue what they are talking about. My parents are the average voters they need to worry about.


  54. - Demoralized - Wednesday, Aug 6, 14 @ 1:28 pm:

    @Wally:

    Also, I think you are suffering from the “facts” syndrome some fall into. It’s something I talked about in relation to VMan’s comments on low information voters yesterday. You can’t just say you have the “facts” and then look in disbelief when somebody doesn’t respond. If you aren’t dealing with the emotion of this and explaining things in simple terms then you are losing the political battle.


  55. - Anon. - Wednesday, Aug 6, 14 @ 1:37 pm:

    ==Well OK then. And thanks to the secrecy provided by the banking laws in the Cayman’s, we’ll just have to take an investor’s word for how much he or she earned.==

    Wordslinger: FATCA


  56. - 47th Ward - Wednesday, Aug 6, 14 @ 1:39 pm:

    ===UBTI is a major issue for public pensions===

    AA, you’re the CPA, not me. Help me understand though, is UBIT the only tax levied on pension funds, is that what Rauner’s response was referring to?

    Unrelated Business Income Taxes. Can you give me an example of how a pension fund might find itself generating unrelated business income? Can anyone help me understand how common (or uncommon) this is?

    Because I’m not buying this notion that pension funds with Cayman Island accounts are the same thing as individual or corporate investors with Cayman Island accounts. They aren’t the same at all, yet Rauner and his team would have us believe otherwise, as if Quinn is doing exactly what Rauner is doing.

    You can fool some of the people some of the time…but not me.


  57. - wordslinger - Wednesday, Aug 6, 14 @ 1:53 pm:

    Guidelines for complying with FATCA in the Caymans came out all of two weeks ago. Let’s see how it goes.


  58. - VanillaMan - Wednesday, Aug 6, 14 @ 1:58 pm:

    Bring out the caged chickens!


  59. - so... - Wednesday, Aug 6, 14 @ 2:14 pm:

    ======UBTI is a major issue for public pensions===

    AA, you’re the CPA, not me. Help me understand though, is UBIT the only tax levied on pension funds, is that what Rauner’s response was referring to?

    Unrelated Business Income Taxes. Can you give me an example of how a pension fund might find itself generating unrelated business income? Can anyone help me understand how common (or uncommon) this is?

    Because I’m not buying this notion that pension funds with Cayman Island accounts are the same thing as individual or corporate investors with Cayman Island accounts. They aren’t the same at all, yet Rauner and his team would have us believe otherwise, as if Quinn is doing exactly what Rauner is doing.

    You can fool some of the people some of the time…but not me.===

    Basically it is when a tax-exempt entity, such as a pension fund, engages in the operation of a business that is unrelated to the entity’s purpose. For example, if a pension fund owned and operated a pizza place.

    The reason the UBIT tax exists is to prevent tax exempt entities from unfairly competing with taxable companies.

    If a pension fund were just investing in stocks, it wouldn’t be a problem. But since pension funds frequently invest in private equity funds, which own and operate companies, UBIT can often be incurred.

    There is a much more in depth primer here: http://www.mcguirewoods.com/news-resources/publications/taxation/Overview%20Unrelated%20Business%20Income%20Tax.pdf


  60. - Phenomynous - Wednesday, Aug 6, 14 @ 2:15 pm:

    If it’s “not patriotic” to invest (stash) funds in the Caymen Islands then the State isn’t patriotic either.

    If it’s “not patriotic” to avoid taxes by investing in the Caymen Islands then fix the tax code.


  61. - Arthur Andersen - Wednesday, Aug 6, 14 @ 2:35 pm:

    47, AA is no CPA, handle notwithstanding. I know a little bit about investments, though. UBIT is the only Federal tax I am aware of that a public pension fund may be subject to.

    Again, “so” above has a link that gives a great overview of the issue for pensions and guys like Rauner.

    My favorite UBIT example is domestic. Pension fund buys a hotel and operates it under one entity. IRS wants UBIT on the income from the operations of the hotel as it is an “unrelated business” to the pension’s investing in assets to pay future benefits. To avoid UBIT, an operating entity separate from the equity investment in the hotel must be created, without ownership by the pension fund. (Simplified for brevity.)


  62. - Rod - Wednesday, Aug 6, 14 @ 3:18 pm:

    When I did my long comment on the Sun Times story the other day I indicated that the Caymen Island was going to get way too complex to yield much benefit to the Quinn campaign. Its happening already. I am not a Rauner supporter, but in this situation Rauner has done nothing either illegal or unethical.

    Neither Pat Quinn nor Bruce Rauner served in the US military, so this stuff about patriotism rings a little shallow coming from both sides. Neither of these two heroes gave up any part of their lives to defend this nation, it would be wise if they both left the argument over who is more patriotic out of this race.


  63. - ... - Wednesday, Aug 6, 14 @ 3:28 pm:

    Why does Rauner deserve any attention on comments concerning the investment of tax revenue for which he doesn’t pay into? It isn’t his money since he avoids and dodges it; it is our money, since we pay into it, and we would all like to see the largest return on that investment.

    If doing so means investing in companies in countries that won’t tax the return of those investments, on one end, from funds that are not taxed on the other end, then so be it; I applaud the fiscal and economic wisdom of the independent board making that decision.

    Sure, we all want money invested in companies here in the US, but if those companies aren’t yielding the greater return on the investment, whether it is because it is taxed or it fails to create new jobs here in IL, then such investments are not providing the maximum utility of those funds.

    But, none the less, if Rauner has an issue with this, I have a suggestion: How about he offers the State a large donation of his personal wealth, similar to the offer he extended to the Credit Unions recently, in order to match the tax-free return on those investments and offset what we would lose from divestment…and then, we can all call it even for him legally-exploiting the system to avoid carrying his weight for the services that are so important to our citizens, including IL veterans and retired law enforcement, our state’s economy, in particular it transportation system, and the needs of the IL’s youth and underprivileged, who incase he hasn’t noticed have all been hurt since the recession.

    Quinn may have flaws, but at least he is a genuine guy. At least he cares about the State and makes a good-faith effort. They say, “the devil you know (and I by no means think Gov. Quinn is a devil, quite the contrary in fact) is better than the devil you don’t.”

    People would be wise to remember issues like these that demonstrate Rauner’s desire for personal advantage and gain, and compare that with the selflessness and dedication of the current Gov., regardless of the State’s current difficulties.

    Gov. Quinn is a guy who doesn’t always seek media attention, especially through deceit and misdirects; rather, as most don’t know, he is the guy who shows up at every IL Veteran’s funeral unannounced and without media hype, or paid “watchers.” Despite a busy schedule and pressing issues, the guy has made a commitment to this simple and selfless, but ever so meaningful, routine for for his State’s sons and daughters and their families since the start of our most recent wars and before any other public official–in the country–was doing it. That’s integrity and character–”doing what is right when no one is watching” and not drawing attention to yourself for your own gain.

    I will choose that candidate, and all his flaws and mishaps, over someone who intentionally distorts an issue and misleads the public on matters of his own personal gain. I have no use for that guy…especially, in civic affairs.


  64. - Mason born - Wednesday, Aug 6, 14 @ 3:30 pm:

    Rod

    Also not a fan of either but i don’t think Rauner ever addressed PQ’s Patriotism. If he did I don’t think Rich covered it.


  65. - Pete - Wednesday, Aug 6, 14 @ 4:12 pm:

    “The Governor’s future pension is fixed and the payout won’t be impacted by the performance of any individual investments. State pension boards are also completely independent.
    _____________________________________
    Isn’t this why the state of Illinois is in such a mess and the Supreme Court is hearing cases about Pension reform?

    The payout is fixed. That’s the problem. When the fund doesn’t perform, the tax-payers are on the hook. I think that the governor needs to evaluate the staff that are allowed to reply on his behalf. This response adds gas to the fire that is the current state of funding pensions in Illinois which is where Quinn is weakest with the current and retired state employees.


  66. - sal-says - Wednesday, Aug 6, 14 @ 4:13 pm:

    == Questioning your opponent’s patriotism is a despicable act. ==

    As usual, I seem to be out of touch here. I thought of ‘patriotism’ immediately when reading the Cayman Islands post here.

    pa·tri·ot·ism:
    . devoted love, support, and defense of one’s country; national loyalty.
    . nationalism devotion to one’s own country and concern for its defense.

    It connects with me; I have no problem with Quinn’s remarks and here’s why.

    Clearly, I’m not a 1%’er or above and am not ‘offshore investments’ and taxes smart like many commentators here seem to be. And I clearly see significant differences between a public entity investments like the IL pension system investments, and a private citizen 1%’ers investments, like a Rauner.

    So, I, as what I consider an ‘average bloke’, wonder why many 1%’er types have offshore accounts in places like the Caymans. And many/most/all of us ‘average blokes’ don’t. The 1%’ers are the folks who have relatively unlimited access to high-priced, smart accountants and lawyers. So, I suspect that these folks are doing these investments not just because they love the Cayman Islands. I do suspect some ulterior motive.

    Please.


  67. - Anonymoiis - Wednesday, Aug 6, 14 @ 4:13 pm:

    ==But, none the less, if Rauner has an issue with this, ==

    I think this and your entire post missed the point and argument of this whole thing. Rauner isn’t the one raising an issue over funds being invested overseas, he’s pointing out the hypocrisy of Quinn having an issue with it


  68. - Pete - Wednesday, Aug 6, 14 @ 4:15 pm:

    Why does Rauner deserve any attention on comments concerning the investment of tax revenue for which he doesn’t pay into? It isn’t his money since he avoids and dodges it; it is our money, since we pay into it, and we would all like to see the largest return on that investment.
    _____________________________________________

    Right. So as OUR elected official he needs to comment on it. It’s not about Quinn or Rauner, it’s about their plan to deal with the government that we are electing them to lead.


  69. - Yellow Dog Democrat - Wednesday, Aug 6, 14 @ 4:53 pm:

    “Buy American” is patriotic.

    “Buy Cayman” is not.

    Does that make Rauner unpatriotic? no.

    It is simply an example of him putting his personal interests ahead of the interests of his country and it’s citizens.

    The trouble for Rauner is that it is the latest in a string of examples.

    And frankly, bringing us back to pensions to remind everyone that you made millions of the pension system and extending the free media on this one baffles me.

    “Rauner defends overseas investments” is not a great headline.


Sorry, comments for this post are now closed.


* Proft busts caps in Bertino-Tarrant race
* Today's quotable
* Funding stuff that works
* Question of the day
* Caption contest!
* More complicated than it already looks
* Caught in a vicious cycle
* How can we miss you if you won't go away?
* Rules bent a bit to move ConAgra headquarters to Chicago
* Trump raises money in Illinois for out of state candidates, while NRSC jumps in for Kirk
* *** UPDATED x1 CPS responds *** CTU says 95 percent voted to strike
* Video gaming could be a huge revenue generator for state, Chicago
* Let's tone it down a little
* Safe Roads backers begin TV blitz
* Kasper speaks
* The transformation is almost complete
* Caps off in comptroller's race
* SUBSCRIBERS ONLY - Supplement to today’s edition
* Yesterday's blog posts

Support CapitolFax.com
Visit our advertisers...

...............

...............

...............
<


Search This Blog...

Search the 98th General Assembly By Bill Number
(example: HB0001)

Search the 98th General Assembly By Keyword

  
* Hello, leaked Google Pixel
* HP Elite x3 Anniversary Update fixes camera issues that held sales
* Honor 6X rumored for launch October 18 with dual cameras
* ChargeTech brings PLUG to Indiegogo: 250W of power, two AC outlets
* Lenovo lays off about 1,000, mostly in Motorola
* Huawei ‘Nexus’ tablet may be a second Andromeda device
* If Google buys Twitter, there’s a perfect spot for it in YouTube

* Shields snaps 10-start winless run vs. Rays
* Morneau's 3 RBIs back Shields in 1st W since July
* Morneau's 3 RBIs back Shields in 1st W since July
* Chance concert at U.S. Cellular is a success
* Eaton hopes for return to lineup on Tuesday
* Rodon's shutdown start captures road series
* 50th big league start is large for stellar Rodon

...............


Main Menu
Home
Illinois
YouTube
Pundit rankings
Obama
Subscriber Content
Durbin
Burris
Blagojevich Trial
Advertising
Updated Posts
Polls

Archives
September 2016
August 2016
July 2016
June 2016
May 2016
April 2016
March 2016
February 2016
January 2016
December 2015
November 2015
October 2015
September 2015
August 2015
July 2015
June 2015
May 2015
April 2015
March 2015
February 2015
January 2015
December 2014
November 2014
October 2014
September 2014
August 2014
July 2014
June 2014
May 2014
April 2014
March 2014
February 2014
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013
May 2013
April 2013
March 2013
February 2013
January 2013
December 2012
November 2012
October 2012
September 2012
August 2012
July 2012
June 2012
May 2012
April 2012
March 2012
February 2012
January 2012
December 2011
November 2011
October 2011
September 2011
August 2011
July 2011
June 2011
May 2011
April 2011
March 2011
February 2011
January 2011
December 2010
November 2010
October 2010
September 2010
August 2010
July 2010
June 2010
May 2010
April 2010
March 2010
February 2010
January 2010
December 2009
November 2009
October 2009
September 2009
August 2009
July 2009
June 2009
May 2009
April 2009
March 2009
February 2009
January 2009
December 2008
November 2008
October 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
January 2008
December 2007
November 2007
October 2007
September 2007
August 2007
July 2007
June 2007
May 2007
April 2007
March 2007
February 2007
January 2007
December 2006
November 2006
October 2006
September 2006
August 2006
July 2006
June 2006
May 2006
April 2006
March 2006
February 2006
January 2006
December 2005
April 2005
March 2005
February 2005
January 2005
December 2004
November 2004
October 2004

Blog*Spot Archives
November 2005
October 2005
September 2005
August 2005
July 2005
June 2005
May 2005

Syndication

RSS Feed 2.0
Comments RSS 2.0
WordPress

Loading


* SALMAGUNDI: Rauner's video session a good, safe.....
* Rauner goes 'DC' on his political foes - SaukVa.....
* Gott supports governor in AFSCME contract battl.....
* Blumenthal: State can't afford union's demands,.....
* Parkhurst says 'Stop the tax hikes' - Kankakee .....


* Man convicted in 1995 double murder freed, facing retrial
* US attorney says probe of Chicago police is largest ever
* Moody's pushes CPS credit rating deeper into junk status
* Man charged in shooting at popular Chicago tourist spot
* Study: Illinois video gaming has generated about $785M
* Study: Illinois video gaming has generated about $785M
* Some retired educators in suburban Chicago receive bonuses
* Illinois man to plead not guilty in wife's 1990 death
* Chicago teachers vote to authorize strike in contract talks
* Police: Hammond officer shot, injured armed suicidal man

* Chicago teachers vote to authorize strike in contract talks
* First Gold Star Families Day observed at Capitol
* Donation lifts fundraising caps in Illinois comptroller race
* Planning underway locally for Illinois' 200th birthday
* Attack on state senator leads to arrest of murder suspects
* Illinois Supreme Court overturns law allowing 6-member juries
* Local unemployment of 4.6 percent still lowest in state
* Elderly frozen-treat seller gets $380,000 from GoFundMe page
* Creation of Amish history museum in central Illinois underway
* Privately funded Executive Mansion work will follow traditional wage, bidding rules

* U.S. attorney says probe of Chicago police is largest ever
* Fact check: Trump, Clinton deny their own words in debate
* Beer wars heat up as Miller Lite calls out Bud Light by name in ads
* Bats needs to close this deal before somebody buys CBOE
* Variable pay could be headed up for Chicago workers in 2017


* Abreu stays hot, Shields snaps drought as Sox top Rays
* Late Marlins ace Fernandez has numbers to win Cy Young
* Man shot in East Garfield Park
* Fantasy Fools: Defenses can score, too
* Teen boy shot in Gage Park
* Editorial: CSU goes silent after sending president packing
* Editorial: Blustering Trump sucks air out of the room
* Trump injects Chicago crime into debate: ‘A war-torn country?’
* Sweet: The Trump that showed up: rambling, unprepared
* Almora waits patiently for answers about future with Cubs


* Windsor school 'tasting menu' a big hit with students
* First presidential debate fact check
* Kyle Hendricks extends mastery, Kris Bryant tops 100 RBIs in Cubs' 100th win
* Winners and losers from the first presidential debate
* Moderator Lester Holt works to keep control of debate
* Attacks fly in first presidential debate as Clinton's jabs put Trump on defensive
* Reactions from around America to first presidential debate
* Monday's recap: Cubs 12, Pirates 2
* 9 shot on West, South sides, including boy, 15
* Clinton vs. Trump: Score their debate as a cliffhanger


The widget AQL4JYGHIY powered by Feed Informer does not exist.


* Their View: Where is today's RFK?
* Chicago teachers vote to authorize strike in contract talks
* First Gold Star Families Day observed at Capitol
* Donation lifts fundraising caps in Illinois comptroller race
* Deckle McLain: Rise of bots can't be ignored in economy
* Bernard Schoenburg: Interesting twists in Troemper-Reid circuit judge race
* Statehouse Insider: Do you remember where you were during Rauner's Facebook Live session?
* Compass for Kids supports at-risk children
* Innovate Springfield gives boost to new businesses
* Eric Zarnikow: Aid changes mean students should act now


* Construction begins on Benton's new police station
* Chicago Farmer's New Album Almost Too Good
* Watch party lets new voters decide
* N-G prep football top 10, Week 6 preview
* Area prep statistics: Girls' tennis (Sept. 27)
* Area prep statistics: Boys' soccer (Sept. 27)
* Area prep statistics: Girls' swimming and diving (Sept. 27)
* Postcards from Bob: Starting the trip
* Fourth and long: Megginson doing well
* Tate: Football on downward slope in Illinois


* Parents chastise, support U-46 board on transgender locker room issue
* Girls tennis: Lake County roundup
* Girls golf: Lake County roundup
* AP Fact Check: First presidential debate
* Chicago Cubs hit century mark in wins

* House lawmakers overcome hurdle on key tra...
* Rodney Davis talks funding with Bloomingto...
* The agency that fought Illiana gets a new ...
* Rep. Dold takes educational cruise down Ch...
* Lawmakers decry high turnover rate of VA h...
* CBD Oil, and politics
* Simon considering state Senate bid
* Killer Congressman Tom MacArthur trying to...
* Shutdown? State may not notice
* Rep. Bob Dold

* Government action on for-profit college ac......

* Overhills forfeits football win against So......
* Polls: GOP Closing Fast on Senate Seats - ......
* Polls: GOP Closing Fast on Senate Seats - ......

* EXTRA: Aaaughh!!!!!!!!!!!!!!
* Eagles Bulding Starbucks To Close October 5th
* Eagles Building Starbucks To Close October 5th
* Trump vs Clinton in dead heat; Monday night's debates could be crucial
* Trump vs Clinton in dead heat; Monday night's debate could be crucial
* Gill Fights To Get Back On Ballot In Illinois' 13th Congressional Distict
* Lake County Jail Workers Union Voices Concerns Over Long Hours, Safety
* Cartoon Of The Day
* Oral Arguments On Landmark Clean Power Plan To Be Heard Tuesday
* Report: Income Inequality Is Worse For Black Workers Today Than In 1979


* Governor Rauner Proclaims First Gold Star Family Day in Illinois
* IDNR Announces Campsite Reservations Open for Sites in Solar Eclipse Zone - Southern Illinois Will Experience Total Solar Eclipse Aug. 21, 2017
* IDOT Hiring in Preparation of Winter Weather - Temporary help needed to assist with snow-and-ice removal, public urged to apply
* Illinois Department of Insurance Reminds ‘Land of Lincoln Health’ Customers to Enroll In New Coverage - The deadline for ‘Land of Lincoln Health’ customers to enroll in a new plan is September 30, 2016; Consumers could experience a gap in health care cove
* Governor Rauner Celebrates Illinois’ Hunting Heritage on National Hunting and Fishing Day




      Hosted by MCS SUBSCRIBE to Capitol Fax Advertise Here Mobile Version Contact Rich Miller