Who knew?
Wednesday, Oct 17, 2012 - Posted by Rich Miller
* Last night, Gov. Mitt Romney said this in response to President Barack Obama’s claim that Romney had invested in some Chinese companies…
“Any investments I have over the last eight years have been managed by a blind trust. And I understand they do include investments outside the United States, including in — in Chinese companies,” Romney said.
Romney then asked: “Mr. President, have you looked at your pension?”
Obama responded: “I don’t look at my pension. It’s not as big as yours so it doesn’t take as long.”
Romney then charged that Obama holds investments in companies based in foreign countries
“Look at your pension,” Romney said. “You also have investments in Chinese companies. You also have investments outside the United States. You also have investments through a Cayman’s trust.”
* From Fox News…
Asked to substantiate the nominee’s claim, the Romney campaign pointed primarily to the president’s Illinois pension fund.
According to Obama’s latest financial disclosure form, the assets in that account are between $50,000 and $100,000. And the 2011 report from the Illinois State Board of Investment listed dozens of Chinese companies from China Mobile to China Oilfield Services.
It’s unclear how many of those Chinese firms are in Obama’s specific portfolio. The board estimates that across all its funds, 19 percent of the assets are in foreign securities.
What Fox doesn’t mention is that the “president’s Illinois pension fund” is via the Illinois General Assembly Retirement System. From the Washington Post…
To our mind, there’s a qualitative difference between a pension-plan investment portfolio and earning returns from contemporary stock investments.
The Romney campaign explains that his point was that international investments are a crucial part of investing today — and that just as Obama has no control over the investments made by his pension fund, Romney has no control over investments made by funds that are part of his blind trust. The Romney campaign says that 19 percent of the Illinois pension fund’s investments are in foreign companies, including dozens of Chinese companies.
“Obama has a pension, managed by the IL Pension fund. He has no control over how they invest it, and they invest some of it in Chinese companies,” a Romney spokesman said. “Romney has a blind trust. He has no control over how the trustee invests it, and the trustee invests some of it in funds that invest in Chinese companies.”
So, will Democratic and Republican legislative challenges now start beating up incumbents for investing in China and having money in a “Cayman’s trust”? Stay tuned, campers.
That’s snark, of course.
Then again, the state House Democrats have been sending mailers blasting just about every Republican candidate for wanting to decimate Medicare and Social Security. At least the Chinese/Cayman claim is somewhat based in reality.
- Michelle Flaherty - Wednesday, Oct 17, 12 @ 3:51 pm:
How about a law that prohibits any investment in China. That should put the nail in the coffin of the pension systems
- MrJM - Wednesday, Oct 17, 12 @ 3:56 pm:
“My opponent enjoys chicken lo mein so… you know…”
– MrJM
- OneMan - Wednesday, Oct 17, 12 @ 3:57 pm:
If you own a mutual fund, invest in a 401K etc. odds are you are invested in China.
Pure and simple..
- J - Wednesday, Oct 17, 12 @ 3:59 pm:
$20 says we see at least 1 pension fund investment related mail piece some time before election day.
- Anon - Wednesday, Oct 17, 12 @ 4:09 pm:
Senator Obama was one of the 4 elected members of the General Assembly Retirement System charged with making investment decisions.
- Rich Miller - Wednesday, Oct 17, 12 @ 4:17 pm:
Anon, he split in 2005.
- Disconnect - Wednesday, Oct 17, 12 @ 4:39 pm:
pretty funny to see Dems on this issue, like Bustos. Everyone with investments gets it pounded into them about diversification, including overseas. Hopefully this silly issue gets taken off the table in the future.
- 47th Ward - Wednesday, Oct 17, 12 @ 4:39 pm:
===“You also have investments in Chinese companies. You also have investments outside the United States. You also have investments through a Cayman’s trust.”===
Yep, these are exactly the same.
You’d think a businessman with a Harvard MBA would understand that a $100,000 in a pension plan is different than $100,000,000 in a blind trust.
I guess he missed that day in class or something.
- John Galt - Wednesday, Oct 17, 12 @ 4:50 pm:
Yep. It’s a silly argument. Pretty much anybody getting a pension–including people getting Social Security–have “investments in foreign countries”–likely China too.
If anything, that’s a symptom of a bigger problem, not a problem in and of itself. Prudent investments means diversification of funds and investing in strong assets. If China is where it’s at for investment purposes, then so be it.
The root problem is: “why is China the place to invest?” Investment decisions are lagging indicators of public policy. It’s true for when companies choose not to invest in Illinois, and it’s also true for why companies choose not to invest in the US & invest in China instead.
So it really is a silly issue generally. But if it were to be considered seriously we ought to look at the root cause, not just the symptomatic effects.
- Excessively Rabid - Wednesday, Oct 17, 12 @ 5:26 pm:
Things that should go: legislative pension system. Social Security and a deferred comp match, that’s all, and the individual chooses the funds. Problem solved. You’re welcome.
- Anonymous - Wednesday, Oct 17, 12 @ 5:42 pm:
False equivilency.
Most of Romney’s considerable wealth was made via off-shore accounts and companies entirely controlled by him, and by other investments directly made by him in companies he leveraged by selling assets and moving jobs to China — all BEFORE he set up the current blind trust.
Of course that’s too complicated for some voters to understand.
- Arthur Andersen - Wednesday, Oct 17, 12 @ 5:50 pm:
Fox’s reporting is a bit off point.
See 40 ILCS 5/2.153.
GA members, or any participants in any State pension system, do NOT own shares of stock. They have an “undivided interest” in the assets of the fund.
It’s in the eye of the beholder, I suppose, but that statute could be read to either support or refute Romney’s point.
- western illinois - Wednesday, Oct 17, 12 @ 5:52 pm:
Anon is right of course but there is a very good chance Obama is Bain ionvestory That is where the so called private equity firms get the equity
- OneMan - Wednesday, Oct 17, 12 @ 6:05 pm:
Ummm, you don’t make money in off-shore accounts, there is no secret bank for rich people on some island someplace paying 10% a year interest (a classic ponzi scheme btw to claim that).
So anonymous, just for reference if someone comes and tells you they can make you money just like Mitt did by putting money in off-shore accounts, it is likely a scam.
- Arthur Andersen - Wednesday, Oct 17, 12 @ 6:10 pm:
Western, you have got to be kidding.
Obama an investor in Bain Capital funds?
Don’t you think we might have heard about that by now?
Geez.
- Leave a Light on George - Wednesday, Oct 17, 12 @ 6:25 pm:
“Things that should go: legislative pension system. Social Security and a deferred comp match, that’s all, and the individual chooses the funds. Problem solved. You’re welcome.”
???
I was in deferred comp for a lot of years. All the $ that went into it was mine. State didn’t match anything. I had to make the investment choices from among the available funds.
- mushroom in the dark - Wednesday, Oct 17, 12 @ 7:02 pm:
CAT in China
http://china.cat.com/cda/layout?m=63735&x=7
So if you own CAT stock…..
QED
- steve schnorf - Wednesday, Oct 17, 12 @ 7:21 pm:
I don’t think the legislators on the GARS board make investment decisions, I think the State Board of Investments does, but I could be wrong
- Arthur Andersen - Wednesday, Oct 17, 12 @ 7:41 pm:
Steve, you are correct.
- railrat - Wednesday, Oct 17, 12 @ 8:58 pm:
dont pension funds have fiduciary responsability to its participants? vs. an agressive approach to making income/profit regardless of effect?
- western illinois - Wednesday, Oct 17, 12 @ 9:26 pm:
AA I was being snarky ….Pension funds provide most of the equity that Bain gets. I think Oregon was a big Bain investor. If Illinois were a Bain investor then Obama would be by the same logic that he is a China investor. Mitt Romney and all these PE guys get rich because they cant lose. They make their money by fees at every stage and get the debt and equity from others
The State Pension funds are one of their biggest sources.
- Excessively Rabid - Wednesday, Oct 17, 12 @ 9:42 pm:
LALOG - Deferred comp plans commonly include some sort of match. Since I’m talking about an imaginary system that will probably never exist, I get to set the rules, OK?
- mythoughtis - Wednesday, Oct 17, 12 @ 9:48 pm:
Where would you suggest that the money is invested instead? It is not financially prudent to invest ALL of a portfolio in the USA.
- Arthur Andersen - Wednesday, Oct 17, 12 @ 10:23 pm:
Western, that would be hard to discern from your original post.
Not that you are apparently overly concerned with facts.
I am no apologist for Romney or Bain Capital, but I do like the correct information.
Public pensions account for around 10% of the invested capital in Bain, far from a majority. FWIW, Oregon has never invested a dime with them. You may be thinking of another big PE firm that starts with “B.” Foundations and Endowments invested a larger slice, including a number of university endowments and AA’s personal favorite, The Oprah Winfrey Foundation.
L
- Arthur Andersen - Wednesday, Oct 17, 12 @ 10:27 pm:
Oops.
The sole Illinois public pension investment in a Bain fund was by the Illinois Municipal Retirement Fund through a “fund of funds” investment vehicle and totalled around $2 million.
- Sideliner - Thursday, Oct 18, 12 @ 9:10 am:
IL should be so lucky as to have Bain as a major component of the state pension systems investments.
I don’t see where the IL GA on either side of the aisle can lay claim to any superior fiscal chops, but maybe IL has come roaring back and everyone missed it.