August 24, 2012 4:00 A.M. By Betsy Woodruff
Reid’s Glass House
Democratic senators have offshore accounts.
Good news for Senator Harry Reid: If he’s a little bored while waiting for Mitt Romney to release his tax returns, there are plenty of other elected officials — in his own party, to boot! — who merit the same eyebrow-raising he’s directed at the presumptive GOP presidential nominee. The Senate majority leader has expressed consternation about the fact that Romney has some money in offshore accounts, which probably reduces his tax burden. According to the Huffington Post, Reid quipped, “Most Americans don’t have the benefit of Swiss bank accounts or tax shelters in the Cayman Islands and Bermuda.” And Gawker just published more than 950 pages of Bain documents related to Romney’s offshore holdings, saying they detail his use of “exotic tax-avoidance schemes available only to the preposterously wealthy.”
Some of the “preposterously wealthy” Americans who do use such “schemes” include Senators Dianne Feinstein (D., Calif.), Richard Blumenthal (D., Conn.), Frank Lautenberg (D., N.J.), and John Kerry (D., Mass.). That should be music to Reid’s ears, since his transparency crusade might be a little easier to pull off within his own party.
He could start with Feinstein. OpenSecrets.org lists her as the seventh-wealthiest senator, with a net worth between $44 million and $94 million, according to her latest disclosure forms. And, just like Romney, she keeps a portion of it in offshore accounts. Her most recent reports say she has an unspecified amount (at least $1 million) “held independently by the spouse or independent child” in Coral Growth Investments, Ltd., in St. Peter Port, Guernsey. Guernsey, a tax haven, is a small island in the English Channel that early this year drew the ire of a British Labour-party leader for helping wealthy Brits dodge taxes. The California senator also has between $500,000 and $1 million in a fund called Cevian Capital II L.L.C. in Jersey, another of the Channel Islands. According to her latest forms, that holding generated between $15,000 and $50,000 in capital gains, interest, and dividends. Feinstein has another $1,000 to $15,000 in Mauritius, an island nation in the Indian Ocean off Madagascar that is an up-and-coming tax haven.
Like Feinstein, Richard Blumenthal is on the Senate Judiciary Committee. Also like Feinstein, he has funds sheltered from taxes — $15,000 to $50,000 in a hedge fund in the Cayman Islands, to be exact. That might not sound like a huge number, but his most recent disclosure forms say he made $50,000 to $100,000 from the fund in capital gains, dividends, and interest.
Lautenberg appears to be in the same boat. The New Jerseyan is the fifth-wealthiest senator, with a net worth that, in 2006, was six times the Senate’s average. His most recent forms show that his wife’s family has between $500,000 and $1 million in Port Louis, Mauritius. The money is in a real-estate private-equity fund that does its actual investing in India, and the earnings it generates are subject to taxes, as one of his representatives told National Review Online.
“The Senator’s wife’s family trust invested in a real estate fund that is fully transparent with a website and a reputable board of directors, and income on the investment is taxable,” said the senator’s communications director, Caley Gray. Which makes them just like Mitt Romney’s offshore investments. All Americans, including Romney and Lautenberg, pay applicable taxes on investments they report to the IRS, but often they deliberately set up these investments in places like Mauritius because these countries’ laws can help reduce their tax burdens.
Then there’s John Kerry, the richest person in the Senate. He is considered wealthy because of the fortune of his wife, ketchup heiress Teresa Heinz Kerry, whose wealth came largely from her previous husband, Henry John Heinz III. The senator’s 2010 disclosure forms (the latest available online) show that she had at least $2 million in a fund in Guernsey at filing time. Kerry’s communications director said that according to his 2011 returns, which aren’t online yet, the fund is no longer one of her assets.
Perhaps while Reid is lambasting Romney for his offshore accounts, he could find a moment to politely ask these colleagues to release their returns on the same grounds. And who knows? Maybe Reid’s anonymous source has some insight into the taxpaying status of Senate Democrats, too.
— Betsy Woodruff is a William F. Buckley Fellow at the National Review Institute