Private Equity

I found this explanation of the process of private equity companies like Bain Capital quite informative. I do realize that there are some businesses that go through the process and come out stronger in the end but the bottom line seems to be that the private equity company makes huge profits at the expense of the taxpayers whether the takeover is successful or not. In some instances I understand that being unsuccessful is even far more profitable. And let’s not even consider that much of the wealth gained is swiftly moved offshore to avoid even more taxes.

Watch Robert Reich explain:

What is buried in Mitt’s backyard?

This is from AP but I grabbed it from the Washington Post:

Mystery Bermuda-based company and other undisclosed Romney assets hint at larger wealth

WASHINGTON — For nearly 15 years, Republican presidential candidate Mitt Romney’s financial portfolio has included an offshore company that remained invisible to voters as his political star rose.

Based in Bermuda, Sankaty High Yield Asset Investors Ltd. was not listed on any of Romney’s state or federal financial reports. The company is among several Romney holdings that have not been fully disclosed, including one that recently posted a $1.9 million earning — suggesting he could be wealthier than the nearly $250 million estimated by his campaign.

The omissions were permitted by state and federal authorities overseeing Romney’s ethics filings, and he has never been cited for failing to disclose information about his money. But Romney’s limited disclosures deprive the public of an accurate depiction of his wealth and a clear understanding of how his assets are handled and taxed, according to experts in private equity, tax and campaign finance law.

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.

The mystery surrounding Sankaty reinforces Romney’s history of keeping a tight rein on his public dealings, already documented by his use of private email and computer purges as Massachusetts governor and his refusal to disclose his top fundraisers. The Bermuda company had almost no assets, according to Romney’s 2010 tax returns. But such partnership stakes could still provide significant income for years to come, said tax experts, who added that the lack of disclosure makes it impossible to know for certain.

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