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Not So “Friendly’s”: Tax Avoidance, Government Dependency, And Mitt Romney’s Boca Raton Host

Amid the ongoing uproar over Mitt Romney’s snooty remarks at a Florida fundraiser concerning the “47 percent” who pay no federal income taxes, the party’s high-rolling host hasn’t drawn quite as much attention as he deserves. As the head of private equity firm Sun Capital Partners, Marc Leder is a longtime associate of the Republican nominee – and a practitioner of the same dubious behavior that has smudged Romney’s reputation.

Lately Leder has been dogged by tabloid headlines recounting his nasty divorce and wild partying (replete with reported nudity and public sex around the pool at a summer house he rented on Long Island’s East End for $500,000). What he has in common with Romney, however, isn’t a taste for bacchanalian revels, of course, but a record of business and taxation practices that working Americans might find troubling.

At the moment, Leder is under investigation by New York State Attorney General Eric Schneiderman, who subpoenaed internal records from Sun Capital, Bain Capital, and several other private equity giants last July. Issued by the Attorney General’s taxpayer protection bureau, the subpoenas were evidently designed to probe whether Leder and other executives had misused “carried interest,” a method of reducing tax liability by converting management fees into investment income — which is taxed at the lower capital gains rate of 15 percent that keeps Romney’s taxes lower than the rate paid by many middle-income families. (Tax analysts say that Bain Capital records released last August indicate that the firm may have saved more than $200 million in federal taxes thanks to the carried-interest maneuver.)

If Leder did benefit from such aggressive practices, he would merely be typical of an industry where tax manipulations are not just widespread, but fundamental.

Equally common in private equity is profiting from bankrupted companies in which other stakeholders – especially workers and government – are left to cope with the loss. During the Republican primaries, Romney’s rivals helped to make Bain notorious for such practices – and his fundraiser Leder seems no different.

Although roughly 25 firms held by Sun have gone bankrupt, perhaps the best known example involves Friendly’s, the family restaurant and ice cream chain that went under at the hands of Sun Capital in 2010 after more than 70 years in business. After acquiring Friendly’s in 2007 for a premium price, Sun took the company into bankruptcy only three years later, supposedly due to rising milk prices.

But the Pension Benefit Guaranty Corporation – the federal agency that insures benefits to workers victimized by failed corporate pension plans – accused Sun of sinking Friendly’s to dump pension costs onto the government. By pushing the company’s pension burden onto federal taxpayers, who fund the PBGC, Sun could then reorganize Friendly’s in bankruptcy, get rid of laid-off workers and less profitable restaurants, and – as Romney likes to say – give the company a “turnaround.” So far, that is precisely what Sun appears to doing, and getting away with it.

So there on the videotape shot in Leder’s huge Boca mansion stood Romney, complaining about the income taxes that the working poor don’t pay and their dependence on government assistance, while the host surely nodded in agreement. At $50,000 a plate, the lobster was garnished with a nice helping of irony.

 

By: Joe Conason, The National Memo, September 24, 2012

September 25, 2012 Posted by | Election 2012 | , , , , , , , , | Leave a comment

“Mitt’s Snake-Bit Season”: The Worst Run Of Disasters This Side Of The Mayan Calendar

Our topic for today is: When Bad Things Happen to Mitt Romney.

Really, it’s been the worst run of disasters this side of the Mayan calendar. The Republicans’ woes started last Friday, when Ann and Mitt filmed a TV interview in which they entertained the kind of personal questions that most candidates learned to avoid after Bill Clinton did that boxers-versus-briefs thing. Asked what he wears to bed, Mitt said: “I think the best answer is: as little as possible.”

Euww.

Then, over the weekend, Romney aides began spilling their guts about how other staffers had screwed up the Republicans’ bounce-free convention. In an attempt to change the conversation, the campaign announced that it had just realized the nation wants Romney to say what he’d actually do as president. Voters “are eager to hear more details about policies to turn our economy around,” said an adviser, Ed Gillespie.

In search of just such specificity, the scoop-hungry Christian Broadcasting Network asked Paul Ryan if he would continue refusing to identify exactly what tax loopholes the Romney administration would close in order to turn our economy around.

“Yes,” said Ryan, who then veered into a disquisition about something that once happened to Tip O’Neill.

You may be wondering whatever became of Ryan, who was such a big sensation when Romney first picked him as a running mate. Since Tampa, he seems to have fallen off the face of the earth, resurfacing every now and then to put up another ad for re-election to his House seat in Wisconsin.

It’s not all that unusual for a vice-presidential candidate to go low-profile. And it is totally not true that Mitt Romney strapped Paul Ryan to the top of a car and drove him to Canada. Stop spreading rumors!

Next, Mother Jones published that video of the fund-raiser in Boca Raton in which Romney said that 47 percent of the country is composed of moochers who want to confiscate the earnings of hard-working stockbrokers and spend it on caviar and dialysis treatments.

“So my job is not to worry about those people. I’ll never convince them that they should take personal responsibility and care for their lives,” Romney decreed, undoubtedly more in sorrow than in anger.

Then, Republican Senate candidates in tight races began distancing themselves from the top of the ticket.

Ann Romney suggested Mitt was “taken out of context,” in what was undoubtedly meant as a helpful comment.

“All of us make mistakes,” said President Obama, in what probably wasn’t.

“Obviously inarticulate,” decreed Paul Ryan, popping up from a gopher hole somewhere in Nevada.

The fund-raiser, a $50,000-a-pop sit-down dinner, was hosted by Marc Leder, a financier who The New York Post reported as having a “wild party” last summer in the Hamptons “where guests cavorted nude in the pool” while “scantily dressed Russians danced on platforms.” You cannot blame Romney for that. If presidential candidates had to avoid all multimillionaires who held parties with naked guests and Russians on platforms, there would be no money for misleading TV commercials.

The video was a reminder of how ghastly this business of running for president can be. The guests seemed more interested in the breadbasket than the candidate. Romney was blathering away in the manner of somebody trying to stay awake during the 12th hour of a cross-country drive.

On Tuesday, moving to tamp down criticism that he was a conversational disaster area, Romney told Fox’s Neil Cavuto: “Well, we were, of course, talking about a campaign and how he’s going to get close to half the votes. I’m going to get half the vote, approximately. I hope — I want to get 50.1 percent or more.”

With that out of the way, Romney explained that his real point had not been to criticize people who don’t pay income taxes, but merely to point out that he wanted them to make more money. “I think people would like to be paying taxes,” added the quarter-billionaire whose own eagerness to be part of the solution is a matter of public record.

How did he let things slip out of control? Maybe the answer lies back with that Ann-and-Mitt interview, which was on “Live With Kelly and Michael.” Asked about his preferences when it came to heroines of low-end reality TV shows, the future presidential candidate enthusiastically announced: “I’m kind of a Snooki fan. Look how tiny she’s gotten. She’s lost weight and she’s energetic. I mean, just her sparkplug personality is kind of fun.”

It could be worse. He could have announced that he enjoys spending his free hours watching “Hoarders” marathons. But, still, it’s weird that Mitt Romney appears to think a lot about Snooki. Is it possible that while he’s being dragged around from one fund-raiser to the next, he spends his spare time watching “Jersey Shore” reruns in the limo?

That would explain so much.

 

By: Gail Collins, Op-Ed Columnist, The New York Times, September 19, 2012

 

September 20, 2012 Posted by | Election 2012 | , , , , , , , , | Leave a comment

   

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