Obama campaign officials said Thursday that Republican presidential candidate Mitt Romney’s plan to set up a federal blind trust if he wins is insufficient to assure the public that he would not face conflicts of interest.
“There are a whole series of questions that need to be answered,” said former White House counsel Robert Bauer, who advises President Obama’s reelection team. He ticked off a list of concerns about Romney’s investment portfolio, including the candidate’s holdings in China and in foreign tax havens and his use of tax deductions intended to reward investment managers.
The comments were made in a telephone news conference with Bauer and campaign spokesman Ben LaBolt following an Associated Press report about Romney’s intention to set up the trust if elected.
Romney, a former governor of Massachusetts, has long said that his investments are managed by a blind trust certified in that state. However, that trust does not meet federal standards for independence, in part because it is directed by a friend of Romney’s who works for the law firm that represents the firm the candidate founded, Bain Capital.
The Romney campaign dismissed the criticism.
“Another day, another tired distraction by the Obama campaign,” spokeswoman Andrea Saul said in an e-mail. “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.”
In the past, presidential candidates have established federally acceptable blind trusts or disclosed their assets to the public for review. Citing a confidentiality agreement he has with Bain Capital, Romney has declined to disclose the underlying assets in accounts held by Bain.
Some of those assets are in Chinese firms, in offshore tax shelters or in companies that went bankrupt, leaving workers without full pension and insurance protection, according to reporting by The Washington Post and other publications.
When he ran for president in 2004, Sen. John F. Kerry (D-Mass.) declined to release some information about assets his wife held through investment firms that demanded confidentiality. But ethics lawyers from both parties have said Romney’s refusal to provide information on his federal disclosure forms is unprecedented.
“This pattern of withholding information has raised serious questions about exactly what conflicts of interest currently are raised by Romney’s foreign investments and how they will impact his policies and positions on the campaign trail,” Bauer said. The former White House counsel also called on Romney to release details of his retirement agreement with Bain Capital. The candidate has said on disclosure forms that he retired from the firm in February 1999 and negotiated a 10-year deal to continue to participate in Bain investments.
However, Romney’s tax filings for 2010, which he released under pressure this year, reveal that he continues to receive income from Bain beyond the 10-year period. He has said he will release his 2011 return when it is filed later this year.
LaBolt and Bauer called for more disclosure. They noted that Romney has received the “carried interest” deduction that allows private equity fund managers to receive income at the lower capital gains rate rather than the higher tax on earned income.
“The president doesn’t believe that millionaires and billionaires who make most of their money from investment should pay a lower tax than average Americans,” LaBolt said.