Teh Republican Candidate has Millions Invested in Cayman Islands Companies
Which surprises you the most: A) That Bruce Rauner diverted some of his millions to the Cayman Islands, Mitt Romney-style; B) That Pat Quinn immediately jumped on the news to cast Rauner as a villainous tax dodger; C) None of the above?
The correct answer is "C."
Rauner, running for governor on the Republican ticket, vows to slash state income taxes over several years and impose fees on items he deems non-essential (like your golf membership). He has used a still-legal corporate tax loophole to reduce the amount he owed the federal government. He has yet to release his full 2013 tax returns despite demands for public transparency. Now come reports that Rauner (legally) stashed a portion of his fortune in the no-tax Caribbean island favored by America's one percent -- and like white on rice, Quinn's campaign is all over it.
"Republican billionaire Bruce Rauner doesn't just use exotic methods to dodge taxes — he even uses exotic, offshore locations," said Quinn rep Brooke Anderson in one of her signature snappy soundbites. "Whether Mr. Rauner's tax dodge is legal is beside the point. It's wrong."
Another financial skeleton out of the closet, the Winnetka-based venture capitalist moved to defend himself after the Chicago Sun-Times reported that he invested in five holdings companies including three linked to GTCR, the private equity firm he founded three decades ago and led until he stepped down in 2012 to run for governor.
Stating the obvious, University of Illinois law professor Richard Kaplan told the paper: "I'd think someone who anticipates being in the public eye wouldn't be in the Cayman Islands because the question to be asked is, 'Why would you have invested there?’'"
And how exactly does Rauner argue himself out of this one?
"The main GTCR funds are incorporated in the United States. GTCR creates offshore subsidiary funds when investing in non-U.S. companies,” his spokesman, Mike Schrimpf, explained to the Sun-Times. "Doing so helps fulfill fiduciary duties to state pension funds and other investors. GTCR investments in domestic companies are kept in the United States. Bruce's personal tax rate and state tax obligations are not impacted by where the GTCR subsidiary funds are located.”
At a campaign event over the weekend, Rauner himself spoke out, saying: "At no point have I tried to avoid taxes or done these things that they're trying to spin. GTCR has its own structure for just a couple of investments. When they invest in overseas companies, they set up that particular structure. It doesn't impact our personal tax rate whatsoever."
That didn't stop the paper from splashing the Caymans-themed story across Sunday's edition alongside the headline "RAUNER'S CASH PARADISE?"