“Mythical Republican Reform”: Will Romney Pretend to Have a Health Plan?
The health-care ruling has exposed a delicate dance within the Republican Party. Romney does not want to run on the health-care issue. To the extent that he wants to invoke the issue, it’s to flay Obama for having focused on it as a distraction from the economy, not as an ideological crusade against Big Government. But conservative activists want to be sure that, if Romney wins, he will commit his political capital to repealing the Affordable Care Act. Thus their current focus on demanding that Romney pledge to repeal the law (see Avik Roy, Keith Hennessey, Rich Lowry, and David Brooks, among many others).
The interesting thing about these conservatives’ arguments is that they are all committed, to varying degrees, to upholding the pretense that the Republican Party really wants to impose a more technocratically sound version of health-care reform. To be sure, they insist they are advocating a vastly different philosophical vision centered around self-empowerment and free markets and other wonderful things. But all of them say, or imply, that they share the basic goals of the Affordable Care Act, which is to make coverage available to all Americans and to control cost inflation. So, for instance, Lowry argues, “The two central selling points of the law — insuring millions more people and keeping people with pre-existing conditions from getting locked out of insurance — can be addressed with policies that are cheaper and less disruptive (a tax credit for purchase of insurance and high-risk pools, respectively).”
I see two problems with this hopeful scenario, both fatal.
The first is that the mythical Republican reform plan is really hard to pass. Conservatives may think they have a cheaper way to fix the system, but it still costs money. And Republicans have never appropriated any money to cover the uninsured. Indeed, all their plans divert money that already exists to cover people who need health care for other purposes. Conservatives hopefully propose turning the health-care tax deduction into a more progressive tax credit. Great idea! Except the plans put forward by Romney and Paul Ryan plow the savings from eliminating that tax deduction back into lower tax rates. And it leaves no budgetary provision for high-risk pools or any other mechanism to subsidize coverage for the poor and sick.
Now, you could suppose that maybe this is all one giant oversight. Republicans failed to craft an alternative plan during the health-care debate, then voted to just straight repeal Obamacare with no replacement, then voted for a budget that just straight repeals Obamacare with no replacement, but when they have power, then they’ll really come up with a plan.
But where is the evidence that they have any desire to do so? Sunday, the two most powerful Republicans in Congress appeared on interview shows and were asked what they plan to do for the uninsured. Mitch McConnell hilariously danced and weaved, admitting that covering the uninsured is “not the issue”: http://youtu.be/QvZvNSKrOZ4
Paul Ryan, as he is apt to do, offered a much smoother take, couching his position in philosophical abstractions:
What — what Mrs. Kennedy and others were saying is this is new government-granted right. We disagree with the notion that our rights come from government, that the government can now grant us and define our rights.
Those are ours. Those come from nature and God, according to the Declaration of Independence, a huge difference in philosophy.
What this blather actually means is that he does not accept that the government has an obligation to ensure that all Americans have access to health care.
If Republicans really wanted to replace Obamacare with some more “market-friendly” alternative, then there’s a simple way they could go about it. They could promise to repeal the law only if they packaged the repeal with a replacement that did not increase the number of uninsured. But they’ll never do that, because the magic, cheaper free-market alternative does not exist, and the GOP has no interest in diverting resources to cover the poor and sick.
Hennessey, who lays out the most specific vision for repealing Obamacare, asserts, “Repeal and replacement should be separate legislative efforts.” This means, of course, that the actual plan is first to get rid of Obamacare, then pretend to work on a replacement before eventually discovering that it’s expensive and unpopular. Oh well. The only interesting question here on any level is why so many conservatives feel bound to pretend that the Republicans really are going to formulate some other plan to care for the poor and sick.
By: Jonathan Chait, Daily Intel, July 4, 2012
“Secrecy Shrouded Money”: What’s In Romney’s Offshore Accounts?
Mitt Romney has been very reluctant to release his tax returns. In all his previous campaigns he refused to release any of them. This time, under pressure, he has given us only the last two years.
But he must disclose more. If you want to know why, read Nicholas Shaxson’s piece in the new issue of Vanity Fair. In it, Shaxson raises important questions about some strange aspects of Romney’s financial history:
§ What is in Romney’s offshore accounts? He has sheltered much of his wealth in tax havens such as Bermuda, but he has not disclosed anything about those investments. For instance, Shaxson writes, “There is a Bermuda-based entity called Sankaty High Yield Asset Investors Ltd., which has been described in securities filings as ‘a Bermuda corporation wholly owned by W. Mitt Romney.’ He set it up in 1997, then transferred it to his wife’s newly created blind trust on January 1, 2003, the day before he was inaugurated as Massachusetts’s governor…. Romney failed to list this entity on several financial disclosures, even though such a closely held entity would not qualify as an ‘excepted investment fund’ that would not need to be on his disclosure forms. He finally included it on his 2010 tax return. Even after examining that return, we have no idea what is in this company, but it could be valuable, meaning that it is possible Romney’s wealth is even greater than previous estimates.”
§ Why is Romney still being paid by Bain Capital? He left the firm more than ten years ago. Given its varied investments, could the fact that he is still being paid by them create a conflict of interest in office? Shaxson writes, “Though he left the firm in 1999, Romney has continued to receive large payments from it—in early June he revealed more than $2 million in new Bain income. The firm today has at least 138 funds organized in the Cayman Islands, and Romney himself has personal interests in at least 12, worth as much as $30 million, hidden behind controversial confidentiality disclaimers.”
§ Why has Romney opened foreign bank accounts, such as a Swiss account with $3 million that appeared on his 2010 returns but not his 2011 returns? How much has he kept in offshore accounts in the past? Was he betting against the strength of the US dollar? How might such financial interests affect his policies as president?
§ Are Romney’s blind trusts really blind? Their trustee is Bradford Malt, his personal lawyer. Malt invested $10 million of Romney’s money in the Solamere Founders Fund, co-founded by his son Tagg and Spencer Zwick, a Romney campaign fundraiser. Malt’s and Romney’s claims that this is coincidental and Romney knew nothing of it strains credulity. If Romney knows what his blind trusts invest in, how might his investments influence his political decisions?
§ How much has Romney invested with Elliot Associates? Shaxson reports, “Elliott buys up cheap debt, often at cents on the dollar, from lenders to deeply troubled nations such as Congo-Brazzaville, then attacks the debtor states with lawsuits to squeeze maximum repayment. Elliott is run by the secretive hedge-fund billionaire and G.O.P. super-donor Paul Singer, whom Fortune recently dubbed Mitt Romney’s ‘Hedge Fund Kingmaker.’ (Singer has given $1 million to Romney’s super-pac Restore Our Future.) It is hard to know the size of these investments. Romney’s financial disclosure form lists 25 of them in an open-ended category, ‘Over $1 million,’ including Solamere and Elliott, and they are not broken down further.”
§ How did Romney build a $102 million Individual Retirement Account (IRA)? Did he avoid paying taxes in doing so? During Romney’s fifteen years at Bain Capital taxpayers were allowed to put only $2,000 annually into IRAs and $30,000 into another fund. Romney won’t say how his account generated such astronomical returns. The only explanation anyone has come up with, offered by Wall Street Journal reporter Mark Maremont, is that Romney stuffed his account with deliberately undervalued shares of Bain stock. Incidentally, Bain is still contributing to Romney’s and his wife’s IRAs.
§ Did Bain serve as a tax haven for foreign criminals? As Shaxson explains, “Private equity is one channel for this secrecy-shrouded foreign money to enter the United States, and a filing for Mitt Romney’s first $37 million Bain Capital Fund, of 1984, provides a rare window into this. One foreign investor, of $2 million, was the newspaper tycoon, tax evader, and fraudster Robert Maxwell, who fell from his yacht, and drowned, off of the Canary Islands in 1991 in strange circumstances, after looting his company’s pension fund. The Bain filing also names Eduardo Poma, a member of one of the ‘14 families’ oligarchy that has controlled most of El Salvador’s wealth for decades; oddly, Poma is listed as sharing a Miami address with two anonymous companies that invested $1.5 million between them. The filings also show a Geneva-based trustee overseeing a trust that invested $2.5 million, a Bahamas corporation that put in $3 million, and three corporations in the tax haven of Panama, historically a favored destination for Latin-American dirty money—’one of the filthiest money-laundering sinks in the world,’ as a US Customs official once put it.”
Shaxson does not allege that Romney or Bain has ever broken the law. But the public has a right to know about the ethics and probity, not mere legality, of Romney’s personal and professional financial history. Romney has made business experience the central pitch of his candidacy, so how can he claim that how he manages his money is irrelevant?
By: Ben Adler, The Nation, July 3, 2012
“Caught In Another Lie”: Mitt Romney Invested In Medical Waste Firm That Disposed Of Aborted Fetuses
Mitt Romney’s Bain problem just got a lot worse.
According to a new report by Mother Jones’ David Corn, Bain Capital made a $75 million investment in Stericycle — a medical waste disposal firm that has been attacked by right wing groups for disposing of aborted fetuses — while Romney was still actively involved in the company in 1999. This news is sure to upset social conservatives, and it also directly contradicts Romney’s account of when he left Bain.
Romney’s connection to Stericycle was first reported in January by The Huffington Post, but the story never gained traction because Bain Capital claimed that Romney left the firm to run the Winter Olympics in February of 1999 — meaning that he had nothing to do with the deal. According to SEC documents unearthed by Corn, however, Romney was still actively involved in the firm’s leadership through the end of that year:
The SEC filing lists assorted Bain-related entities that were part of the deal, including Bain Capital (BCI), Bain Capital Partners VI (BCP VI), Sankaty High Yield Asset Investors (a Bermuda-based Bain affiliate), and Brookside Capital Investors (a Bain offshoot). And it notes that Romney was the “sole shareholder, Chairman, Chief Executive Officer and President of BCI, BCP VI Inc., Brookside Inc. and Sankaty Ltd.”
The document also states that Romney “may be deemed to share voting and dispositive power with respect to” 2,116,588 shares of common stock in Stericycle “in his capacity as sole shareholder” of the Bain entities that invested in the company. That was about 11 percent of the outstanding shares of common stock. (The whole $75 million investment won Bain, Romney, and their partners 22.64 percent of the firm’s stock—the largest bloc among the firm’s owners.) The original copy of the filing was signed by Romney.
Another SEC document filed November 30, 1999, by Stericycle also names Romney as an individual who holds “voting and dispositive power” with respect to the stock owned by Bain. If Romney had fully retired from the private equity firm he founded, why would he be the only Bain executive named as the person in control of this large amount of Stericycle stock?
As Corn points out, the SEC documents have implications that reach farther than Stericycle. The Romney campaign repeated its assertion that Romney left Bain in February 1999 when rebutting a recent Washington Post story reporting that Bain acquired companies that outsourced jobs. According to these SEC filings, that is not true.
The issue here is not that Romney was investing with a company that disposed of aborted fetuses; after all, abortion is legal, something must be done with the medical waste produced by them, and according to Corn the investment was quite profitable for Bain and its investors.
The issue is that Romney has once again been caught in a lie about his past, and once again he has given voters a reason to be suspicious over his record at Bain — which he’s used as the central thesis of his campaign.
Romney is already having a difficult time talking about his tenure as governor of Massachusetts, given that he is now running against the signature achievement of his term. If voters reject his version of the Bain Capital story as well, then it is hard to see what his campaign’s message could be moving forward.
By: Henry Decker, The National Memo, July 2, 2012
“Where There’s Smoke, There’s Fire”: Mitt Romney’s Bain Timeline Doesn’t Add Up
It turns out that the implications of David Corn’s explosive scoop about how Mitt Romney misrepresentedhis role in Bain’s investment in a medical-waste firm that disposed of aborted fetuses goes far beyond that specific investment. The short version of that story is that while Romney claimed publicly to have had no role in the investment because it took place after he started working on the Salt Lake Olympics, he actually had an active role in the investment, according to legal documents obtained by Corn.
Where there’s smoke there’s fire, and as Salon’s Alex Seitz-Wald points out, if Romney lied about that investment, then he also appears to have lied in his official financial disclosure forms filed with the government.
Twice, first in 2007 during his earlier presidential bid and again this year, Romney filed personal disclosure forms with the Office of Government Ethics which explicitly state that Romney left Bain in early 1999. “Mr. Romney retired from Bain Capital on February 11, 1999 to head the Salt Lake Organizing Committee. Since February 11, 1999, Mr. Romney has not had any active role with any Bain Capital entity and has not been involved in the operations of any Bain Capital entity in any way,” his ethics filings from June state.
But as Corn’s report details, that timeline doesn’t add up. Romney personally signed documents after February of 1999 related to the human-waste disposal deal and SEC documents also indicate he was a key investor in the deal. Moreover, according to contemporaneous public reports from Bain and the Boston Herald, Romney did not sever all ties or management responsibilities when he assumed his job running the winter Olympics.
Bottom line: Romney’s story doesn’t compute, and given that the credibility of all the defenses he makes to Bain criticism depend on whether or not you take his word, he’s got a real problem developing—if the media is paying attention.
By: Jed Lewison, Daily Kos, July 2, 2012
“Tying Themselves Into Knots”: Romney Adviser Contradicts A GOP Talking Point
Some Republicans knew that nominating a governor who had signed a healthcare reform law with an individual insurance mandate would be a problem. It would muddy their anti-Obamacare message, they warned, even if Mitt Romney could claim that he supports mandates only at the state level. Well, their fears were well-founded.
Consider the gaffe made by Eric Fehrnstrom, a top Romney campaign adviser, on MSNBC Monday morning. As I reported on Sunday night, Republicans and conservatives have tried to make the best of the Supreme Court’s decision to uphold the Affordable Care Act by saying that if it is justified under Congress’s taxing power, then it must be a tax increase, and a massive one at that.
But Romney, who signed a law that, just like the ACA, imposes a penalty on individuals who don’t buy insurance, does not like to admit that he raised taxes. (That’s why, as governor of Massachusetts, he mostly sought to increase revenue through new and higher user fees, including preposterously cruel ones, such as imposing a $10 fee for a certificate of blindness.)
These conflicting lines got crossed when Ferhnstrom said, “The governor disagreed with the ruling of the Court, he agreed with the dissent that was written by Justice Scalia, that very clearly said that the mandate was not a tax. The governor believes what we put in place in Massachusetts was a penalty and he disagrees with the Court’s ruling that the mandate was a tax.” This flies in the face of claims by Congressional Republicans and conservative talking heads such as Rush Limbaugh, who say that the ACA is a tax. Fehrnstrom is also contradicting his own candidate who admitted back in 2008 that the penalty for not buying insurance in Massachusetts is a kind of tax.
But Congressional Republican aides tell the Washington Post’s Greg Sargent that they can continue to make this argument even as the Romney campaign says the opposite. He writes:
You’d think the fact that the GOP presidential nominee’s campaign has now confirmed that Obamacare’s mandate is not a tax would undercut the use of this talking point by GOP Congressional officials, right?
You’d be wrong. One senior Congressional aide tells me that Republicans will continue to describe it in those terms. And a second senior GOP Congressional aide emails that there is no contradiction here.…
The Romney campaign and Republican Congressional officials alike both agree with Scalia’s argument that the mandate is not a tax in the sense that claiming it is a tax makes it Constitutional, even as Republican officials continue to argue that the mandate is a tax in the sense that SCOTUS said it was in the course of upholding the law.
It’s a clever argument, and a sort of technically consistent. But, as Sargent’s Post colleague Rachel Weiner points out, “That line of attack is more easily maintained by Republicans who never imposed any such mandate.” It’s irritating to see the GOP paying so little political penalty for their complete flip-flop on the individual mandate, but it’s satisfying to see that by nominating Romney they will at least tie themselves into knots over it.
By: Ben Adler, The Nation, July 2, 2012
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