*** UPDATE *** From Rauner campaign spokesman Mike Schrimpf…
When Bruce spoke with the Tribune, he said he wasn’t aware of GTCR Funds in the Caymans - that’s because all of their main funds are indeed based in the U.S. Nonetheless, the campaign followed up twice with the Tribune making that same point and offering to help determine what the discrepancy was. They never followed up on it, despite repeated inquiries.
So, apparently, the Trib reporters were asking about Cayman Islands investments and yet didn’t circle back to hear the Rauner explanation for any discrepancies between the original comment and what the Tribune supposedly found.
If true, then this could very well be a “gotcha” story.
[ *** End Of Update *** ]
During a June interview, the Tribune asked Rauner about the SEC documents that listed GTCR’s Cayman investments. “I don’t think that’s true,” Rauner said at the time. “No GTCR fund that I’m aware of has its base in the Cayman Islands.”
On Sunday, however, Rauner offered a different answer when asked about the firm’s Cayman investments: “GTCR has its own structure for just a couple of investments. When they invest in overseas companies, they set up that particular structure.”
* From the Quinn campaign…
This is not the first time that Rauner has changed his story after being confronted with evidence to the contrary. Earlier this year, Rauner denied using clout and making a call to the then-head of Chicago Public Schools to get special treatment at the exclusive Walter Payton Prep High School. After Rauner changed his story several times, the outgoing Inspector General of CPS confirmed last month that special treatment is exactly what Rauner got.
In addition, Rauner is running television attack ads that feature false headlines that his campaign either made up or doctored.
* But let’s get back to the Tribune article…
The GTCR Cayman investments appear to be in financial instruments typically referred to as blocker funds or alternative investment vehicles that are legally walled off for tax purposes from related investments based in the United States. The arrangement helps non-profit institutional investors avoid taxes.
But experts say it typically provides no tax advantage for individual American investors like Rauner, who are required by U.S. law to pay taxes on all income earned worldwide.
“It’s a common structure that in my view is not abusive in the way that people might think when they see the name Cayman Islands,” explained Victor Fleischer, a professor who teaches tax law at the University of San Diego and has written extensively about tax avoidance strategies.
Even so, the New York Times reported in 2012 that Romney, who publicly released two years worth of complete tax returns during his presidential run, may have used offshore investments to avoid some special taxes in a different way. The newspaper said it involved debt financing that could have been levied against Romney’s normally tax exempt Individual Retirement Account.
We’d know a lot more if Rauner would do as Romney did and release all of his tax forms - which is probably exactly why he’s refusing to do so.