The purpose of disclosure
The 1978 Ethics in Government Act requires candidates to publicly disclose their wealth in broad ranges and to list the assets in most partnerships, trusts and pooled investment funds.
The purpose is to allow the public to identify potential conflicts of interest and the personal economic priorities of candidates and elected officials, said Fred Wertheimer, the longtime advocate who worked to enact the measure in the aftermath of the Watergate scandal.
Mitchell and several other Washington campaign lawyers say they advise candidates to reveal underlying assets, divest them if they cannot be disclosed or choose not to seek public office.
“My clients have had fund managers squawk about their ‘proprietary information’ and I’ve always been told, ‘There is no choice — the law requires disclosure,’ ” Mitchell said.
Canfield, the former Senate ethics lawyer, will not comment on Romney’s assets. But, he said, “I always counsel my clients to err on the side of disclosure” and to note on ethics forms “the same description of assets they would disclose to the IRS.” Doing so, he said, is in keeping with the spirit of the law and prevents embarrassing questions about discrepancies.
Romney’s tax forms showed holdings in a Swiss bank account, a real estate trust and nine offshore accounts not named on the public disclosure reports. In addition, 12 Bain accounts described as “fund” investments on the disclosure were identified as “partner” investments to the IRS.
Romney’s attorneys subsequently amended the disclosure to acknowledge the Swiss bank and the real estate accounts. The other assets, Romney aides said, were too small to report or had been listed, under other names, on the public disclosure. The general explanations were accepted by government ethics reviewers as were the amendments.
“Any document with this level of complexity and detail is bound to have a few trivial inadvertent issues,” Saul said at the time.
In his disclosure reports, Romney’s lawyers noted that he retired from Bain in 1999, is now a “passive investor” and “has not had any active role with any Bain entity.”
Romney’s tax returns indicate that he and his wife received “carried interest,” a controversial form of compensation that provides a share of profits to Bain managers and is taxed at the lower capital gains rate.
Romney’s compensation from ongoing Bain deals results from a retirement agreement when he left the company in 1999 allowing him a stake in Bain’s new investment funds for a decade after.
Research editor Alice Crites and news researcher Lucy Shackelford contributed to this report.