In a few weeks, this might be the Issue of the Election or the Story That Brought Romney Down. At this point, only time can tell.
Yesterday, the New York Times reported that New York Attorney General Eric Schneiderman has begun to send out subpoenas to investigate the tax situations in numerous private equity companies situated in the Big Apple, including Bain Capital, Republican hopeful Mitt Romney’s coup de grace and the subject of his Horatio Alger story.
According to the piece, the legal action is focused on the belief that these private equity companies “converted certain management fees collected from their investors into fund investments;” in a simpler diction, the companies are charged with writing off millions of dollars worth in taxes – Bain saving almost $200 million that could have gone to the state government’s tax base.
The investigation rides off the coattail of a trove of documents Gawker leaked last month that gave us all a glimpse into the dark, shady world that is Bain Capital and private equity. Downsizing, leveraged buyouts and dollar signs were in abundance as well as long lists of management fees skirted off into the capital gains domain. But although the documents provide the basis for the AG’s argument, the subpoenas came before the leak and have no connection to them.
Nonetheless, a look inside what made Mitt rich beyond belief with illegal implications could be destructive in the eyes of voters…. especially when all of his friends are involved, too.
Throughout the summer, the Voice provided you with the ‘Mitt Loves N.Y.’ series (written by yours truly) in which we profiled some of the richest Romney bankrollers in the Big Apple. One of the biggest discoveries that I found was this enormous web the Republican candidate had weaved across the private equity field; a circle of friends that reaped in treasure chests full of cash flow for the campaign. As I have mentioned before, fellow private equity profiteers seem to stick together.
So when I received word of Schneiderman’s investigation, I immediately recognized several of the names; I had written all about ’em just months before. With these connections established, this legal undertaking transforms into an enormously widespread indictment of the Romney SuperPAC known as Restore Our Future and the monies siphoned into Team Romney, all of which ties back to the Candidate himself. But all it takes is one crack, right?
Here are a two of the other donors now involved in Attorney General Eric Schneiderman’s ongoing investigation, with references to the names mentioned in the Times article. Check out the profiles for further insight into the Romney Web:
1. Kohlberg, Kravis, Roberts & Co. – Henry Kravis
2. Apollo Global Management – Marc Rowan
Now, Schneiderman’s motive for the investigation is still unknown; as an Obama supporter and an official leading the President’s mortgage crisis unit, he has been chastised for being too politically involved as a law enforcement agent. However, the Attorney General of a state cannot enforce federal tax law; therefore, the physical gains of the investigation would just be a shit ton of additional (and much needed) tax revenue for New York.
Be sure to keep this story in mind. It goes without saying that this will not be the first time you hear about Gotham’s reckoning before November.