More Romney Money Uncovered?

It turns out Mitt Romney has been hiding his true wealth. He has a shell company in Bermuda named Sankaty High Yield Asset Investors Ltd. Because of the way the law is written (i.e., the wealthy lobbied Congress to make it that way), Romney wasn't required to disclose the investment.

But he's obviously hiding something, because of the tricks he's been playing:

Sankaty was transferred to a trust owned by Romney’s wife, Ann, one day before he was sworn in as Massachusetts governor in 2003, according to Bermuda records obtained by The Associated Press. The Romneys’ ownership of the offshore firm did not appear on any state or federal financial reports during Romney’s two presidential campaigns. Only the Romneys’ 2010 tax records, released under political pressure earlier this year, confirmed their continuing control of the company.

What is Sankaty? It's not really clear, and Romney refuses to say. But in the past it has been used as a slush fund for Bain Capital's financial machinations:

Named for a historic Massachusetts coastal lighthouse, Sankaty was part of a cluster of similarly named hedge funds run by Bain Capital, the private equity firm Romney founded and led until 1999. The offshore company was used in Bain’s $1 billion takeover of Domino’s Pizza and other multimillion-dollar investment deals more than a decade ago.

Today Romney's financial advisers have valued Sankaty at less than $1,000. But this is misleading:

While Sankaty no longer plays an active role in Bain’s current deals, private equity experts said such holdings could provide significant income to Romney under his 10-year separation agreement from Bain, which expired in 2009. Investment funds typically churn “carried interest,” profit shares due to the managers of the funds that often range as much as 20 percent of a fund’s annual profit — known as “the carry.” Even after investment funds are exhausted, profit shares and other late earnings from those stakes can continue to stream, arriving as lucrative “tails,” tax experts say. In some circumstances, the analysts added, offshore companies like Sankaty could also offer limited tax deferral advantages.

Which means Romney could still reap a ton of money from Sankaty. Last month he got a $1.9 million "true-up" payment from another asset in his separation deal with Bain. Thus, millions of dollars could erupt from Sankaty at any time.

The tax code is riddled with loopholes and exemptions that allow wealthy people like Mitt Romney to avoid paying taxes on literally trillions of dollars. The rest of us have to make up that missing revenue to pay for all that disaster relief for people hit by wave after wave of tornadoes, violent storms and wildfires, in addition to regularly budgeted items like defense and highway maintenance.

Mitt Romney obviously sees nothing wrong with this situation. His wealthy billionaire pals, ones like Sheldon Adelson who have business interests overseas and have been giving Republican PACs $10 million a pop, want to keep their special treatment going. They know Romney will never eliminate these tax gimmicks.

There's nothing wrong with being rich or legally using the tax code to maximize your income. Warren Buffett certainly does, but he has also acknowledged that it's outrageously unfair that he pays a lower tax rate than his secretary. And he's called for changes to the tax code to correct that injustice.

Mitt Romney, on the other hand, is still hiding his investments overseas, and refuses to release his tax records from his last years at Bain. If he were just an obscure businessman at Bain that would be fine. But he wants to be president of these United States.

A man who hides his true wealth, uses all these tax gimmicks and continues to defend those loopholes cannot be trusted to give all Americans an even break.