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*** 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.
* Oops…
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.
posted by Rich Miller
Tuesday, Aug 5, 14 @ 9:23 am
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Gov. Sgt. Schultz is at it again. The hands-on businessman who knows nothing about his business holdings.
Comment by wordslinger Tuesday, Aug 5, 14 @ 9:31 am
fix the tax code.
Comment by facts are stubborn things Tuesday, Aug 5, 14 @ 9:31 am
To those who don’t support him, no explanation will be good enough. To those who do, this one works fine. To anyone in the middle, it’s wait and see.
Comment by A guy... Tuesday, Aug 5, 14 @ 9:34 am
For a guy touting his experience as a manager, he sure doesn’t know much about what it is his companies do. Talk about a ghost payroller.
Comment by Jimbo Tuesday, Aug 5, 14 @ 9:35 am
Either way , He Lied !
Comment by x ace Tuesday, Aug 5, 14 @ 9:40 am
@A guy…
For those of you who support him, any explanation is good enough. To those who don’t, this is just another lousy excuse from Horrible Candidate X. To anyone in the middle, if they pay attention the answer is pretty clear.
Comment by Ducky LaMoore Tuesday, Aug 5, 14 @ 9:41 am
- A Guy … -,
lol…
Is that a preemptive strike to another post that “Your Guy” is just dishonest when speaking unless you can prove otherwise.
I find the lemmings that turn to Rauner talking points as gospel so comical;
“To those who don’t support him, no explanation, or lie, or untruth will be good enough to fool you to be lemmings. To those who do, this one works fine, because we lemmings are already going against our better selves, do we double down every time we need to . To anyone in the middle, it’s wait and see if either Rauner will fool you.”
Better.
Comment by Oswego Willy Tuesday, Aug 5, 14 @ 9:41 am
In Are Eye.
Comment by Phenomynous Tuesday, Aug 5, 14 @ 9:44 am
Raunerbots and trolls coming in 3,2,1…
Amen to wordslinger.
Did Rauner also say he was unaware of what was happening in the nursing homes? The nursing home company, THI, was majority-owned by GTCR. It appears that his company did in fact run the nursing homes in 2006.
http://republicannewswatch.com/wp/wp-content/uploads/2014/07/GTCR-Bennett-2006-Memorandum.pdf
Rauner needs to release his full tax returns so we can see where our tax dollars went.
Comment by Grandson of Man Tuesday, Aug 5, 14 @ 9:46 am
“Talking Point 6104-M;
Say, those who won’t believe, won’t believe, those who believe, will believe with all their hearts, those unsure will decide soon enough.
This is called the ‘Easter Bunny’ Talking Point.
You don’t believe in the ‘Magic’ of the Easter Bunny, you believe in the ‘Slip and Sue Magic’ of the Easter Bunny, or you still write the Easter Bunny, to be safe.”
Kinda like that, - A Guy… -?
Comment by Oswego Willy Tuesday, Aug 5, 14 @ 9:47 am
It is time for Rauner to bring in Romney to campaign with him in Illinois. Since his loss in 2012, Romney has witnessed an increase in repeated polling indicating that voters today would choose him over Obama if the election was held today. Romney would win easily.
This is because since 2012, government has increasingly appeared to be operated by incompetents and liars. Voters have responded to these developments cynically. This includes the President’s home state of Illinois.
Being Romney in 2014 isn’t being Romney in 2012. What was toxic in 2012, isn’t in 2014. A campaign where voters increasingly are demanding government efficiency, effectiveness and success, after years of unbalanced budgets, rock-bottom bond rates and failure makes being Mitt Romney a plus for Bruce Rauner.
If critics really gave it much thought - a Mitt Romney governor would today be as popular in Illinois, as a Mitt Romney governor was popular in true blue Massachusetts in 2002, when Illinois was first electing Rod Blagojevich instead.
Rauner is no Romney, but then Quinn is no Obama. It is time for Rauner to take advantage of the new respect given to the loser of the 2012 presidential campaign. It is time to turn the tables on him by the change in the mood within an electorate tired of Illinois government incompetence and bring Romney into his campaign as a spokesman.
Choke on that OW!
Comment by VanillaMan Tuesday, Aug 5, 14 @ 9:47 am
i`m in the middle waiting to see rauner`s tax returns,and admendments
Comment by Anonymous Tuesday, Aug 5, 14 @ 9:50 am
Romney only released two years of tax returns - 2010 and 2011 and received a ton of criticism for not releasing more.
Comment by And I Approved This Message Tuesday, Aug 5, 14 @ 9:54 am
I get ‘fused sometimes…
===Rauner is no Romney, but then Quinn is no Obama. It is time for Rauner to take advantage of the new respect given to the loser of the 2012 presidential campaign. It is time to turn the tables on him by the change in the mood within an electorate tired of Illinois government incompetence and bring Romney into his campaign as a spokesman.===
Romney stumping for Rauner, fictitiously, would be GOOD for Rauner?
=== Since his loss in 2012, Romney has witnessed an increase in repeated polling indicating that voters today would choose him over Obama if the election was held today. Romney would win easily.===
Where is this poll, specific to Illinois, ’cause Rich had a poll about the Billionaire thing, and it appears both Rauners, and they poll test everything, rubs so far away from the Romney comparison, he risks spraining an ankle…
Your world seems fun, when Rauner stumps with Romney here or says, “I am Illinois’ Romney” I won’t be choking on anything, except my laughter at these cooked-up theories that you have.
Comment by Oswego Willy Tuesday, Aug 5, 14 @ 9:55 am
VM: With all due respect, Romney rising with respect to Obama is not the same as Romney rising.
Comment by Skeptic Tuesday, Aug 5, 14 @ 9:56 am
BR: “I have money buried in all of my backyards too, so what?”
Comment by Abraham Froman Tuesday, Aug 5, 14 @ 9:57 am
Seriously, not a huge fan of Rauner, but I care much more about what Quinn is doing with my money than what Rauner is doing with his.
Comment by Phenomynous Tuesday, Aug 5, 14 @ 9:57 am
I wish I had enough money that I forgot about stashing a couple million in the Caymans. Damn their average beaches of pristine sand and water!
Comment by Toure's Latte Tuesday, Aug 5, 14 @ 9:57 am
====“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.====
Sir Ducky and Wilbur…This is what I read above. It appears this fella is an expert. He’s decimating your narratives. It’s not what you want to hear, so you don’t. That’s very foolish and heading toward deliberately ignorant. Own that.
Comment by A guy... Tuesday, Aug 5, 14 @ 9:59 am
The good professor says in general these accounts are set up to help “non-profit institutional investors to avoid taxes.” Yes that’s one of many uses for Cayman Islands holdings. But it doesn’t necessarily appear relevant here.
A better use is for them to hold other offshore earnings, like from the GTCR Bermuda insurance holdings (which themselves were set up by large underwriters and reinsurers to avoid other taxation and restrictions like full reporting and prudent reserves.) Romney used them in two other entirely different tax avoidance or delay strategies.
No way is this simple, no matter how you spin it.
The Tribune dug that professor up for Rauner support — without explaining how GTCR itself qualifies as a “non-profit institutional investorIt doesn’t Perhaps they were set up entirely for independent clients who were.
A beautiful diversion by the Tribune, though.
Without knowing exactly how and for whose benefit these funds were used, we still don’t know.
Comment by walker Tuesday, Aug 5, 14 @ 10:00 am
Skeptic is right, that poll had Hilary beating Romney by a significant margin.
Comment by Phenomynous Tuesday, Aug 5, 14 @ 10:01 am
Note that the Rauner’s comment specifies that none of this had any effect on his “personal” tax situation. But didn’t the corporation on whose board he sat dodge tax responsibility with the Cayman moves? Is he absolved of any responsibility for that? I honestly don’t know.
Comment by Great Caesar's Ghost Tuesday, Aug 5, 14 @ 10:02 am
- A guy… -,
It’s the difference between perception and reality;
Example?
You want to be perceived as Mr. Ed, reality, you are sounding like another end of the horse…
Perception? “Bruce Rauner bold face lied about having money stashed away in the Caymans, like Mitt Romney.
Reality? Bruce Rauner’s vast portfolio has so many investments, to break it down in a snapshot, it might have bad optics…
Doesn’t inoculate either Rauner from the Romney comparisons or the Ads to follow, hammering and shaking an image not too flattering.
That’s politics.
Comment by Oswego Willy Tuesday, Aug 5, 14 @ 10:04 am
To the Update,
===If true, then this could very well be a “gotcha” story.===
Trib got “beat” on the Sun-Times front page story, and Bruce is swell and all, but headlines still sell paper, and run up view clicks on the internet.
First rule, be friendly with the press, they are not your friends. If it’s you or their job, it their job. Respect it, it’s not personal.
Comment by Oswego Willy Tuesday, Aug 5, 14 @ 10:12 am
So, do we want our businesspersons and entrepreneurs and others to be able to invest in the Caymans and other offshore venues or not. Because we can’t order foreign countries to stop receiving those investments. Of course, we could impose some version of sanctions on our own citizens, I suppose. Should we impose (national)sanctions on such investments? Good luck with that. Americans like wealth and most think they could be wealthy someday. The President’s effort to slightly raise taxes on the wealthy encountered great resistance, and not just from the rich, many of whom actually applauded his efforts. We are the enemy here-not
Bruce Rauner.
Comment by Cassandra Tuesday, Aug 5, 14 @ 10:13 am
===Trib got “beat” on the Sun-Times front page story===
I think the Rauner people thought the Trib took a pass after looking at Quinn oppo reports. Trib revisited when the CS-T fronted it Sunday.
Comment by Rich Miller Tuesday, Aug 5, 14 @ 10:20 am
“We are the enemy here-not
Bruce Rauner.”
I agree. Thousands if not millions of Americans would virtually gouge people’s eyes out so that the wealthy don’t pay more in taxes and are able to offshore their investments. The Kochs and GOP would have much less power today if not for scores of poor, middle class and upper middle class people fighting for them.
I would perhaps be more lenient to Rauner, but he dripped with hatred for people like me. He threatened to fire state workers and shut down the government. He called union leaders corrupt and demonized them. He slammed pensions and salaries after profiting immensely from them.
At least with unions, we fight for each other. On Rauner’s side and others’ side, people like Scott Reeder fight for the super-wealthy.
It’s like when the Athenians fought the Persians in ancient times, only worse. The Athenians fought for one-another’s freedom. The Persians had many subjects fighting for them, basically slaves, except the slaves had to fight against their will, whereas the bots and gomies fight more than willingly for the Kochs and others like them.
Comment by Grandson of Man Tuesday, Aug 5, 14 @ 10:24 am
===I think the Rauner people thought the Trib took a pass after looking at Quinn oppo reports. Trib revisited when the CS-T fronted it Sunday.===
That is more likely.
The Sunday Sun-Times pushed the Trib, and having what they had, ran with it without circling back.
Thanks for clarifying.
Comment by Oswego Willy Tuesday, Aug 5, 14 @ 10:25 am
@A guy:
Your comments still suggest you are completely oblivious to the optics of it. As I said yesterday, the truth doesn’t matter. Perception does. The average person only hears and sees a guy shipping his money offshore. If I were running against him I would hammer that narrative home.
Comment by Demoralized Tuesday, Aug 5, 14 @ 10:39 am
I guess “hands on” doesn’t mean intellectually engaged. He’s much too busy making money to think while he’s making money.
Comment by Sir Reel Tuesday, Aug 5, 14 @ 10:48 am
==== Demoralized - Tuesday, Aug 5, 14 @ 10:39 am:
@A guy:
Your comments still suggest you are completely oblivious to the optics of it. As I said yesterday, the truth doesn’t matter. Perception does. The average person only hears and sees a guy shipping his money offshore. If I were running against him I would hammer that narrative home.===
Demo, not oblivious at all. Let’s see what they see. That’s what I would suggest. As Slinger calls them the “between the 40 yard line voters”; I’ve found them to be people who are either very thoughtful and do a lot of research, or people who don’t think about who they’re voting for until nearly election day. Everyone is chasing them. We’ll see what they see. I get the optics.
Comment by A guy... Tuesday, Aug 5, 14 @ 10:54 am
@A guy:
It’s not an issue for me. But if he doesn’t handle this better it could be a thorn in his side. When you start talking investments most people’s eyes glaze over. He could put this to bed if he just came out and showed what was invested and what taxes were paid on those investments in 8th grade math speak. That’s what I would do.
Comment by Demoralized Tuesday, Aug 5, 14 @ 11:00 am
According to yesterday’s story it wasn’t just through GTCR that Rauner had Cayman investments:
So not only did he have GTCR investments in the Caymans but he also had personal investments there and investments through the family foundation. When he denied that GTCR had Cayman investments to the Trib back in June it was at best a careful (albeit inaccurate) parse and at worst intentionally dishonest.
Either way he’s on the record with the Trib telling them that GTCR didn’t have Cayman investments when the truth is that a) GTCR had Cayman investments, b) he had Cayman investments through his personal funds and c) his family foundation had Cayman investments. That is quite a trifecta. This goes directly to his credibility.
Comment by The Captain Tuesday, Aug 5, 14 @ 11:01 am
I suspect he might soon do what you would do. To get the explanation exactly right could entail a little research. Whatever comes next, I’d make sure it was accurate.
Comment by A guy... Tuesday, Aug 5, 14 @ 11:05 am
–Romney has witnessed an increase in repeated polling indicating that voters today would choose him over Obama if the election was held today. Romney would win easily.–
What do you get for that. Green Stamps? A lifetime supply of Rice-A-Roni?
If I recall, Romney had plenty of polls showing him winning the election pretty handily. Smart guys like George Will, Karl Rove, Michael Barone, etc., had him pushing 300 electoral votes.
If only wishing made it so……
Comment by Anonymous Tuesday, Aug 5, 14 @ 11:12 am
As long as the State of Illinois has over $60 million invested in at least one of the exact same Cayman Island investments, it is difficult to accept any proclamations of outrage as sincere.
Comment by Formerly Known As... Tuesday, Aug 5, 14 @ 11:14 am
Rich and Willy:
Rauner knew the S-T story was coming.
He shoulda known the Tribune would have been right behind.
I would have gone back to the Tribune and nudged them.
As for Fleischer, he is an intellectually honest fellow who argued Romney failed to pay his taxes.
But before pronouncing on Rauner, he should see his full taxes as well as the instruments of the company.
It is likely that Rauner was skipping out on truckloads of taxes by concealing management fees as carried interest.
Comment by Yellow Dog Democrat Tuesday, Aug 5, 14 @ 11:25 am
Formerly Known As: You are right, as long as those Illinois investments weren’t handled by Rauner’s firm.
That could be spun pretty badly.
I don’t recall exactly, but I thought Rauner’s own campaign initially used the same line of defense, while referring to pension fund investments. I notice they haven’t returned to that line.
Comment by walker Tuesday, Aug 5, 14 @ 11:28 am
walker - that is an excellent and important point. If Rauner’s firm invested that money on behalf of the state, it looks bad for him even if the state approved the investment or he tries saying “I was taking care of the state’s money just as well as my own”.
If that was an investment made by the state of its own choice, then it somewhat nullifies the attack on Rauner.
Both parties are hypocrites on this. When “my guy” does it, everything is fine. When “your guy” does it, we are outraged. Penny Pritzker, Bruce Rauner, and many more.
Comment by Formerly Known As... Tuesday, Aug 5, 14 @ 11:40 am
Let’s call it like it is. Rauner is a congenital liar. How much evidence do some people need?
Comment by too obvious Tuesday, Aug 5, 14 @ 11:54 am
@too obvious:
“Natural born salesman.”
YDD
Comment by Yellow Dog Democrat Tuesday, Aug 5, 14 @ 12:25 pm
so if the issue is he has so much money he can’t know everyplace he puts it….or he has people who manage his money and he does not ask them questions…what does this say about leading state government. If he is in power will he say the agency directors manage the money so he does not know what contracts they establish, will he say that he doesn’t know where the money went when pension payments are made. It is called accountability. If you don’t have accountability in your personal life what makes us think he will have this with our public funds.
Comment by illinifan Tuesday, Aug 5, 14 @ 12:58 pm
For those “in the middle” voters, the more these negatives leak out and Rauner’s typical response is “Gee, I didn’t handle the day to day operations” or “The was a management problem, and I wasn’t involved in management”, the more they will move their votes to Quinn or none of the above (if there ever was a race that needed that option!). The daily barrage of Rauner TV commercials is already contributing to making people sick of this race (Quinn’s TV presence is nil on my local stations, but Rauner is there almost every hour of the day, doubling down during news broadcasts). If the press continues to ask the tough questions, people will see one of those commercials and think “that sure doesn’t sound like the guy the reporters are hammering every night”. Might even make a few do a little reading on Rauner, which, for non-bots, is not a good thing for his chances to win the race.
Comment by Roadiepig Tuesday, Aug 5, 14 @ 1:00 pm
Roadiepig, that was fascinating. Please read us another story. Ugh
Comment by A guy... Tuesday, Aug 5, 14 @ 1:48 pm
Is Bruce Rauner a pirate? He buries gold in the Caribbean. I love pirates! Except for the one’s who rob me and make me walk the plank. But they’re not real pirates, right? Those are hedge fund managers, lol. Pirates stole gold from Spanish plunders of the Aztecs and Incas. Who is Rauner gonna plunder? Who is gonna pay for his mess?
Comment by James Knell Tuesday, Aug 5, 14 @ 2:34 pm
FKA and Walker, that State investment in a Cayman domiciled entity was not made through Rauner’s firm. It’s an equity or common stock holding and GTCR doesn’t do that type of investing,
There you go.
I’m no Raunerbot-just a guy, pardon the expression lol, that invested a nice chunk of OPM over the years in dozens of PE firms including GTCR. I don’t think Rauner was trying to BS the Tribbies when he answered that question about GTCR not having funds based in the Caymans. The “offshore” funds are such a small percentage of the total fund and are useful to only a subset of the limited partners that were I in his shoes, I probably would have said the same thing. Seems like gotcha to me.
Comment by Arthur Andersen Tuesday, Aug 5, 14 @ 5:15 pm
And one more thing-that new Trib web site is a total piece of crap. Thanks for linking to the old one.
Comment by Arthur Andersen Tuesday, Aug 5, 14 @ 5:31 pm
Thanks AA. Good to know.
Comment by walker Tuesday, Aug 5, 14 @ 5:34 pm
AA:
I am kind of surprised that Rich hasn’t done a piece on the new Tribune site yet.
It’s definitely sleeker looking, but a bit of a clunker to drive.
Ever come downstairs in the morning to discover your wife moved your favorite coffee mug?
Where is the editorial page? Can ya’ll link to today’s board editorial on the homepage…even if Rich and I are the only ones who care?! please!!
Comment by Yellow Dog Democrat Tuesday, Aug 5, 14 @ 9:02 pm
–And one more thing-that new Trib web site is a total piece of crap. Thanks for linking to the old one.–
Six years ago, David Geffen offered $2 billion for the LA Times, just one newspaper in the Tribbie empire. The Tribbies passed.
Oops.
Now, the market says you could buy up the whole Tribbie newspaper lineup for under $500 million. And the arrow is pointing down.
Zell isn’t responsible for changes in the marketplace. but he sure did milk all the cash he could out of the Trib (raiding the ESOP) plus ash-canning some great reporters and editors.
They don’t call him the Gravedancer for nothing.
Another bustout artist — take the cash, put nothing back in, walk away under corporate protection when it all, inevitably, goes south, take responsibility for noting.
Sound like someone you know?
By the way, have you seen the PBS “American Masters” on David Geffen? Horatio Alger story, writ large.
Comment by wordslinger Wednesday, Aug 6, 14 @ 12:59 am