About Those Charitable Donations

I wouldn’t call this a “bombshell,” because we already know Romney’s finances are riddled with slight of hand gimmicks, but a report released by Bloomberg today casts serious shade on Mitt Romney’s claims of donating significant portions of his wealth to charity and calls into question his morals. If he has any.

In 1997, Congress cracked down on a popular tax shelter that allowed rich people to take advantage of the exempt status of charities without actually giving away much money.

Individuals who had already set up these vehicles were allowed to keep them. That included Mitt Romney, then the chief executive officer of Bain Capital, who had just established such an arrangement in June 1996. […]

In this instance, Romney used the tax-exempt status of a charity — the Mormon Church, according to a 2007 filing — to defer taxes for more than 15 years. At the same time he is benefitting, the trust will probably leave the church with less than what current law requires, according to tax returns obtained by Bloomberg this month through a Freedom of Information Act request.

In general, charities don’t owe capital gains taxes when they sell assets for a profit. Trusts like Romney’s permit funders to benefit from that tax-free treatment, said Jonathan Blattmachr, a trusts and estates lawyer who set up hundreds of such vehicles in the 1990s. […]

Romney’s CRUT, which is only a small part of the $250 million that Romney’s campaign cites as his net worth, has been paying him 8 percent of its assets each year. As the Romneys have received these payments, the money that will potentially be left for charity has declined from at least $750,000 in 2001 to $421,203 at the end of 2011.

To recap — Romney claims that his generous donations to charities are justification for his low tax rate, but the truth is at least one of the charities set up by Mitt Romney in the 1990s is paying him dividends.

Such a maneuver is no longer legal, but his money-pot “charity” was grandfathered into the today’s system.

The Bloomberg report describes this as “renting from your favorite charity of its exemption from taxation,” and that “the Romneys get theirs off the top and the charity gets what’s left,” meaning that Mitt Romney receives a guaranteed payout from this “charity” while the Mormon Church receives very little.

This all makes sense if your idea of charity is allowing rich people to pretend they’re donating just to funnel money through a tax-exempt washer, which I have no doubt is a belief held by Willard M. Romney.

Mitt Romney wants you to believe he knows what it’s like to stand outside in the rain and ring a bell, but what he’s not telling you is that he’s pocketing dividends from every dollar in the pot.

Contacted by Bloomberg for a response, the Romney campaign responded by saying “The trust has operated in accordance with the law.”

It was legal. But if you or I did this today, it would probably be called money laundering.

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  • roxsteady

    Actually, I think this is a bombshell Ash! Remember that Harry Reid said that he was told that Romney paid no taxes for 10 years? Perhaps this is what his source was referring to? Wow! This man is a real sleaze bag. I hope this gets widely reported but, with this awful Hurricane, I’m not sure that it will.

    • Victor_the_Crab

      Yeah, the MSM ain’t gonna touch that. All attention will be on Hurricane Sandy, and after, how President Obama should be blamed for any perceived mess in its tracks in order that they can tighten the presidential race even more for next week, fucking bastards.

  • http://phydeauxpseaks.blogspot.com Bob Rutledge

    So, in Rmoney-speak, “worthy cause” = “fund that funnels money back into my pockets”.

    No surprise there.

  • http://www.facebook.com/profile.php?id=100000494194882 Cathy Stanton

    I don’t feel too bad for the Morman Church since they are hoping to get what Joseph Smith promised them: A Morman in the White House.

  • Brutlyhonest

    There is no bottom to how low they go. Or to how stacked in their favor the tax code is. I seem to recall a lot of the very rich giving money to their own “charitable” foundations that then give the money to things that aren’t exactly charities. And it’s all legal.

  • BuffaloBuckeye

    Ah, Mitt.

    As a teenager, I could probably be described as a hawkish right winger. As I attended collee, and matured, I moved to The Center. I am now in my 60’s and am now unabashedly well to the left.

    When GWB was president, I had profound political disagreements with him and the GOP; but compartmentalizing, I probably could sit down and have a beer with GWB.

    With romney, aside from obvious differences on governance; there is no way I could have a beer with mitt. He is, to me, the most cynical, repulsive candidate (as well as person) that I have ever seen. I am well beyond hate with this FSOAB.