Obama campaign: Romney 'blind trust' isn't blind enough, 'carried interest' an issue
June 7th, 2012
04:51 PM ET
2 years ago

Obama campaign: Romney 'blind trust' isn't blind enough, 'carried interest' an issue

(CNN) - Democrats called attention to Mitt Romney's personal financial arrangements on Thursday, suggesting on a conference call with reporters that he was being dishonest with the characterization of his "blind trust," and also claimed he may not be fully retired from the private equity company he founded.

"It's understandable, given the many years that he was involved with Bain and the pride he takes in his service there, that he may have some sort of an arrangement by which Bain believes that he is continuing to render valuable service in some way to them," Bob Bauer, the attorney for President Barack Obama's reelection campaign, said.

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He added that "no one is suggesting day-to-day management" is among the "range of ways in which he provides service" to Bain Capital, the firm from which Romney retired in 1999.

Federal tax law suggests this category of investments, known as carried interest, comes "in connection with the performance of services."

For Romney to continue to count income from these investments as carried interest, Bauer and Obama's campaign press secretary, Ben LaBolt, said, he may still be providing some type of service to the company. Otherwise, he suggested, Romney should be taxed differently.

The Internal Revenue Service has interpreted that provision broadly, and that Romney once performed "services" for Bain - when he ran the company, for example - would likely fit that requirement.

A financial disclosure Romney filed with the Federal Election Commission on June 1 reads, "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."

Tax documents released by Romney's campaign in January showed his effective tax rate in the two most recent years was approximately 14.5%.

A spokeswoman for Romney called the issue "another tired distraction by the Obama campaign."

The Obama campaign also took issue with the trust arrangement which has controlled Romney's finances for the last decade.

Romney has explained his that if elected president, the wealth of he and his wife would be converted from the current arrangement, overseen by a lawyer he hired, into a blind trust managed under federal ethics rules.

"If I'm president of the United States, I understand that all of my investments, and Ann's, will all be sold and bought again without us having any idea what's been purchased," he said at a March campaign event in Collinsville, Illinois. "So that's how you would hope that we would live without any particular conflict of interest."

In a statement to CNN on Thursday, Romney's spokeswoman, Andrea Saul, underscored a point the candidate has repeatedly made: that he does not control his investments.

"As has been reported for years, Governor and Mrs. Romney's assets are managed on a blind basis. They do not control the investment of these assets, which are under the control and overall management of a trustee," she said.

On the campaign trail in February, Romney explained that he instituted the trust arrangement upon his election as governor of Massachusetts in 2002.

"I said, look, I'm going to take what I have and give it to a blind trustee, someone who manages the money for me, not for me, not - without my knowing where they invest," he said in Portland, Maine. "And that's been the case for ten years."

But this version of blind isn't entirely so, Democrats charged Thursday.

"This gave him the appearance of keeping his investments at arms' length," said LaBolt, the Obama campaign spokesman. Bauer, the attorney, added: "The choice he's made is to have a blind trust that is not quite a blind trust, certainly by federal standards," because he knows who manages his investments.

That Romney continues to profit from Bain's investments – and that he knows this – itself makes the trust less blind, as some of the firm's investments become public.

In January, Romney's trust manager, Brad Malt, told reporters on a conference call that he makes financial decisions regarding Romney's wealth without his input.

"Each of these investments are in a blind trust. This means the decision[s are] made by me not Governor Romney," Malt said. "It is simply inaccurate to report that Gov. Romney has anything to do with these investments."

– CNNMoney.com's Jeanne Sahadi, Charles Riley, and Dan Primack and CNN's Shawna Shepherd and Gregory Wallace contributed to this report

Also see:

Romney reacts to Wisconsin recall vote

Texas a cash cow for Romney

Jill Biden weighs into 2016


Filed under: 2012 • Mitt Romney • Taxes
soundoff (46 Responses)
  1. The REAL Truth...

    Given that Mittens doesn't even manage his own assets – that is no doubt off-shored somewhere – I certainly don't trust him to manage the assets of this country. 'Nuf said.

    June 7, 2012 04:58 pm at 4:58 pm |
  2. rob

    The administration is flailing around now in a desparate attempt to deflect attention on the horrible week they had.

    June 7, 2012 05:09 pm at 5:09 pm |
  3. vic , nashville ,tn

    His trust may be blind not enough but voters are blind now they will vote for Romney

    June 7, 2012 05:11 pm at 5:11 pm |
  4. Penobscot

    Why doesn't Obama focus on creating jobs instead of how much money Romney has? Obama is the worst president in my lifetime.

    June 7, 2012 05:13 pm at 5:13 pm |
  5. B.

    Romney is a classic case of self- incrimination buy repeatedly denying or changing everything previously stated on issues concerning his business and his personal life, all on tape for the World to review, as it will be.

    Can you just imagine this guy attempting to pull that off as President and world leader?

    That probably works in business these days, but it can’t be except able in the White House.

    June 7, 2012 05:14 pm at 5:14 pm |
  6. sure thats what they say

    "Another tiring distraction." LOL, this brought to you by the group who refuses to refute "Birther" contributers, and who has so far told us that the only plan they have so far is to eliminate Obamacare. Can Mitt and company come up with a plan to present to people, and stop hideing?

    June 7, 2012 05:20 pm at 5:20 pm |
  7. NotFooledByDistractions

    At this point, I wouldn't believe romney if he told me the sky was blue. He lies just too fluently and too frequently for my taste.

    June 7, 2012 05:22 pm at 5:22 pm |
  8. MaryM

    Just remember people, we are all Americans. And the old saying is still true to this day. United, we all stand, Divided WE all fall.

    June 7, 2012 05:23 pm at 5:23 pm |
  9. Maggie

    Well, I wonder how much is Obama hiding? I am sure there is alot of information we do not know about Obama. Things do not really add up at all for him. I am sure there are alot of skeletons in his closet that we have yet to find out. Hope they come out soon!!!!!!!!!!!

    June 7, 2012 05:28 pm at 5:28 pm |
  10. Patriot Awesome

    Penobscot – Obama's the worst president in your lifetime? Are you 3 years old? I can firmly give Bush that crown and I was alive for Carter.

    June 7, 2012 05:28 pm at 5:28 pm |
  11. TomTom

    Who cares? This is such a lame attempt by Obama to distract us from the fact that he has COMPLETELY FAILED as a president. Time to send the cocaine-in-chief back to Chicago!

    June 7, 2012 05:32 pm at 5:32 pm |
  12. trixy04

    Wow, Talk about One Sided article. But then of course it was written by one of the Obama Brigade. Good job Obama Political Unit !!

    June 7, 2012 05:37 pm at 5:37 pm |
  13. Claudia, Houston, Tx

    I'd say the good old USA has been good to these Romneys, so how in the heck do people ever expect him to understand how bad it is for them. The rich don't want to understand the poor except for a tax exemption to the charity for the poor.

    June 7, 2012 05:38 pm at 5:38 pm |
  14. Thomas

    If Romney was a member of the KKK and it wouldn't matter to the right.

    As long as he beats Obama.

    Romney is like teflon , fortunately the truth is always reveald !

    June 7, 2012 05:38 pm at 5:38 pm |
  15. Woman In California

    If it smells crooked – it's Willard. Yet another thing he continues to hide from the American people (and get away with it). When is this draft dodger going to be held accountable to the American people for his lies starting with his taxes and so many, many other things? The president had to show us his finances yet Willard's are not open to discussion and review? I think not. Keep this lying unAmerican job killer OUT of the Oval Office or you'll be sorry.

    June 7, 2012 05:39 pm at 5:39 pm |
  16. fernace

    He may have no involvment in the decisions, but he knows what's going on & can make his preferences known! What's more disturbing are his taxhavens in Switzerland & Cayman Isles! I Expect a person who wants to be POTUS to Invest his tax$$ in this nation just as the average citizen has to! Taxes aren't a curse, they are an investment in our nation, lifestyles & childrens futures! For those who have more than they can spend in their lifetimes, to shirk that responsibility, is a travesty! For a Presidential nominee it's a dealbreaker! Does any1 really believe Romney would put All his $$$ in government hands? Hel.la No! None of us, even the most poverty stricken, would! I'm not mad at him for being a millionaire, I'm mad because he firmly believes there should be 1 rule for the general populace, while he & his mil & bil friends can make their own rules! That's a mindset that's detrimental to the majority of us, who pay our taxes & live w/in the rule of law! Obama 2012!

    June 7, 2012 05:43 pm at 5:43 pm |
  17. n

    Romney is only for rich Americans wake up if u vote for Romney I can promise u will be in the worst situation ever. What did he do for Massachusetts nothing! !!!!!!

    June 7, 2012 05:48 pm at 5:48 pm |
  18. Blindersoff

    @ Tom Tom, here in which lies the problem . . . You should care. Period. So much hate for this president, that people like yourself will cut off your nose to spite your face. America has lost its mind.

    June 7, 2012 05:54 pm at 5:54 pm |
  19. maf

    @ Maggie – What is it that you are waiting for??? 4+ years of vetting President Obama and there is nothing that the GOP (or the Clinton's for that matter) have thrown at him has caused but a bump in the road. If there was really something there, you can be sure the Party of NO would have exposed it already!!

    @ Penobscot – How many times do you have to hear or read it??? The President himself CAN NOT create jobs. That is the responsibility of both houses!! Why don't you ask your beloved GOP – who ran in 2010 entirely on a JOBS platform – WHERE ARE THE JOBS THEY PROMISED!!!

    Cantor, McConnell, Boehner, Priebus etal should be ashamed at the "moral failure" they have been responsible for.

    June 7, 2012 05:58 pm at 5:58 pm |
  20. Former Republican for President Obama

    Romney has investments in Iran and China and other countries. I read this today on The Huffington Post. CNN I am suprised you have not revealed this. Let the Romney vetting began. We are 5 months away from the election and plenty of time to find out who Romney really is. I feel sorry for the Romneynites when the truth is revealed about Romney they will not be able to handle it.

    June 7, 2012 06:03 pm at 6:03 pm |
  21. Dominican mama 4 Obama

    There are so many things wrong with Romney's background, utterings, and judgment,or lack of, that it will indeed be quite difficult for the Obama campaign to zoom in on just a few of his "shortcomings".
    Five sons, F-I-V-E, all kept out of serving in the military, just like their daddy. Although it is fast becoming common knowledge that Romney had a propensity for dressing up as a police officer and impersonating an officer while in college. Funny, I thought that was against the law. And yet Romney's team is all for having our sons and daughters fight their wars while they are safely esconced at home riding up and down their car elevator.
    His wife Ann, in spite of the fact that they go around saying how bad the economy is has no compunction to dressing to the nines in baubles and designer clothing when mingling with the unemployed, waving a bejeweled wrist to the crowd whilst her husband assures those on unemployment that he is one of them.
    Oh yes, and let's not forget the fact that it wasn't until the GOP finally gave up on trying to get anyone, ANYONE, else to run for the nomination besides Romney and the other clowns that they suddenly decided to stop holding their nose, and making an about -face everytime the Mormon with the Magic Underwear entered their midst.
    Romney wants to be President so badly that he has agreed to the rigid terms given to him by the GOP Teatard Koch hierarchy inreturn for their corporate support: say what we want you to say, lie without blinking, and do what we tell you to do.
    He lies! He flips! He's vacuous and disconnected! The first Mormon puppet folks! Step right up, see him dance!

    Obama 2012. Because the alternative doesn't care about AMERCIA or you.

    June 7, 2012 06:03 pm at 6:03 pm |
  22. ST

    Now I understand why educated folks are not sold to Romney. They are intelligent enough to form their own opinions and not just listening him say: "I know how to do it, I am a businessman, I know how to create jobs"! How????

    June 7, 2012 06:06 pm at 6:06 pm |
  23. Former Republican, now an Independent

    This only one of many things being concealed about Romney. He still has not released the tax information demanded by the other republican candidates. Funny, how they have all shut up about this withheld information now that they are hoping to get a VP ride.

    June 7, 2012 06:12 pm at 6:12 pm |
  24. Woman In California

    Why doesn't Obama focus on creating jobs instead of how much money Romney has? Obama is the worst president in my lifetime.

    Our president is concentrating on creating jobs. It's your bunch of bigots who can't seem to take off their "colored glasses" and work with him.

    Why is it poor republians such as yourself continue to vote republican knowing they care absolutely nothing at all for you or about you?

    June 7, 2012 06:20 pm at 6:20 pm |
  25. Marty

    I would rather have someone that knows how to make money than a community organizer.
    Go Romney!

    June 7, 2012 06:27 pm at 6:27 pm |
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