Obama Posts Tax Returns on the Internet, Calls on Clinton to Follow Suit Immediately
Clintons’ investment in Cayman Islands firm shows need for full and prompt disclosure
CHICAGO, IL—Senator Barack Obama today posted his tax returns from 2000-2006 on his campaign website, demonstrating his continued commitment to transparency in government and changing business as usual in Washington. The returns are complete, including all schedules, and are now available to anyone to view. The Obama campaign urged Senator Clinton to join Senator Obama in making her returns public.
Full disclosure on Senator Clinton’s part is especially important because she recently loaned $5 million to her campaign, shortly after revelations surfaced that her husband was to receive a $20 million payout from Yucaipa, a supermarket holding company that invests in tax shelters in the Cayman Islands.
Senator Clinton has agreed to release her returns, but will only offer a target date at least three days before the Pennsylvania primary, and has not specified the level of detail.
“Senator Clinton recently claimed that she’s ‘the most transparent figure in public life,’ yet she’s dragging her feet in releasing something as basic as her annual tax returns,” said Obama Communications Director Robert Gibbs. “Senator Clinton can’t claim to be vetted until she allows the public the opportunity to see her finances—particularly with respect to any investment in tax shelters.”
The Clinton campaign’s vague commitment to release the returns and the Clintons’ known involvement with such investments as Yucaipa raise a number of questions.
1. Yucaipa Has A Financial Stake In Three Investment Entities Registered In The Cayman Islands. “Securities and Exchange Commission documents and financial- disclosure forms filed by Hillary Clinton show that Bill Clinton, 61, has a financial stake in three investment entities registered in the Cayman Islands by Burkle’s Yucaipa Cos. LLC. In 2004, Hillary Clinton, a New York senator, said she wanted to close the “loopholes’’ for “people who create a mailbox, or a drop, or send one person to sit on the beach in some island paradise and claim that it is their offshore headquarters.’’ [Bloomberg
à Question: If elected President, would Sen. Clinton propose or support legislation to block or curb any of Yucaipa’s current business or tax strategies?
2. Clinton Spokesman Claimed That Yucaipa Is Registered In Cayman So That Bill Clinton Can Pay US Taxes. “Jay Carson, a Clinton spokesman, said that while the former president hasn’t “severed ties’’ with Yucaipa, he “is taking steps to ensure’’ that “there will be an appropriate transition for those relationships’’ if his wife receives the 2008 Democratic presidential nomination. Carson, in an e-mail, said the funds are designed for foreign investors. “All three of these entities (which are related) are organized in the Cayman Islands so that each investor or partner pays the taxes they would owe in their home country,’’ he said. “For U.S. citizens like Bill Clinton, that means he pays U.S. taxes on his income from this fund, which he does.’’ [Bloomberg
à Question: Did Bill Clinton participate in the decision for Yucaipa to register any of these funds in the Cayman Islands? If so, did he argue for or against?
3. Clinton Spokesperson Will Not Answer Questions On Whether Bill Clinton Receives Equity Instead Of Cash, Allowing Him To Pay The Lower 15 % Capital Gains Tax Rate Instead Of Higher Income Tax Rate. “Carson said Bill Clinton’s payments from Yucaipa aren’t deferred and the former president pays tax on that income in the year in which it is earned. Steven Howard, a partner at Thacher Proffitt & Wood LLP in New York who advises investment firms, said private-equity firms such as Yucaipa often compensate advisers with a stake in the company rather than salary. “In Clinton’s case, he may be allocated equity instead of significant cash for services rendered,’’ Howard said. Carson didn’t respond to questions about whether Bill Clinton receives this form of compensation. Howard said equity allocations are taxed at the 15 percent capital-gains rate instead of as ordinary income, which is taxed at rates as high as 35 percent. He said the same benefit applies to so-called carried interest, a profit-sharing arrangement used by fund managers that Hillary Clinton and other Democrats have criticized and vow to curb.” [Bloomberg
à Question: Is Bill Clinton allocated equity? What is the effective tax rate that Bill Clinton pays on all income or gains from Yucaipa?
4. Clintons Won’t Explain Why Yucaipa Was Listed On Disclosure Forms As Based In Los Angeles Rather Than Cayman; Won’t Disclose When Sen. Clinton Became Aware Of Husband’s Offshore Deals. “Bloomberg’s questions to the campaign involved the nature and amounts of his compensation from Yucaipa, why the holdings were listed as Los Angeles-based rather than Cayman Islands entities, and when Hillary Clinton became aware that the funds were offshore. Carson didn’t address those questions. Yucaipa spokesman Frank Quintero referred all questions about the former president’s role to the Clintons’ spokespeople.” [Bloomberg
à Question: Why do the Clintons consider Yucaipa to be a Los Angeles-based company when it is actually based in the Cayman Islands?
à Question: Why were the Clintons unable to answer the media’s questions in mid-December 2007?
Ironically, Senator Clinton herself made the release of her opponent’s tax returns a central issue when she ran for the Senate in 2000. Numerous Democratic presidential candidates in recent years have released their tax returns, including Senator Kerry, Senator Edwards, General Clark, Senator Lieberman, and Congressman Kucinich.
With the next primary only weeks away and sure to see significant spending from the Clinton campaign, now is the time for Senator Clinton to keep faith with the voters, release her tax returns, and allow these questions to be answered in full. In the meantime, you can view Senator Obama’s 2000-2006 tax returns HERE
Clinton has claimed that releasing her tax returns is unnecessary because she has filed the personal financial disclosure forms that all Senators are required by to submit. But there are key facts that the personal financial disclosure form alone does not disclose, including:
Ø The amount the Clintons make as a couple;
Ø Senator and President Clinton’s effective tax rate;
Ø What loopholes, if any, they used to reduce it;
Ø The actual amount of President Clinton’s income and not just the range;
Ø What stock have they sold, and how much did they made from it;
Ø The amount they made from their stock dividends;
Ø The deductions they took for losses related to stock sales;
Ø The household employment taxes they paid for employees;
Ø The personal exemptions they took; and
Ø The charitable contributions they have made.
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