Thursday, August 09, 2012 7:57:46 AM
Mitt Romney Started Bain Capital With Money From Families Tied To Death Squads
By Ryan Grim and Cole Stangler
Posted: 08/08/2012 9:38 am Updated: 08/09/2012 12:21 am
In 1983, Bill Bain asked Mitt Romney to launch Bain Capital, a private equity offshoot of the successful consulting firm Bain & Company. After some initial reluctance, Romney agreed. The new job came with a stipulation: Romney couldn't raise money from any current clients, Bain said, because if the private equity venture failed, he didn't want it taking the consulting firm down with it.
When Romney struggled to raise funds from other traditional sources, he and his partners started thinking outside the box. Bain executive Harry Strachan suggested that Romney meet with a group of Central American oligarchs who were looking for new investment vehicles as turmoil engulfed their region.
Romney was worried that the oligarchs might be tied to "illegal drug money, right-wing death squads, or left-wing terrorism," Strachan later told a Boston Globe reporter, as quoted in the 2012 book "The Real Romney." But, pressed for capital, Romney pushed his concerns aside and flew to Miami in mid-1984 to meet with the Salvadorans at a local bank.
It was a lucrative trip. The Central Americans provided roughly $9 million -- 40 percent -- of Bain Capital's initial outside funding, the Los Angeles Times reported recently [ http://articles.latimes.com/2012/jul/19/nation/la-na-bain-creation-20120719 (better link http://www.latimes.com/news/nationworld/nation/la-na-bain-creation-20120719,0,192124.story ) (at http://investorshub.advfn.com/boards/read_msg.aspx?message_id=77685891 )]. And they became valued clients.
"Over the years, these Latin American friends have loyally rolled over investments in succeeding funds, actively participated in Bain Capital's May investor meetings, and are still today one of the largest investor groups in Bain Capital," Strachan wrote in his memoir in 2008. Strachan declined to be interviewed for this story.
When Romney launched another venture that needed funding -- his first presidential campaign -- he returned to Miami.
"I owe a great deal to Americans of Latin American descent," he said at a dinner [ http://www.cfr.org/us-election-2008/governor-romneys-remarks-miami-dade-lincoln-day-dinner/p13480 ] in Miami in 2007. "When I was starting my business, I came to Miami to find partners that would believe in me and that would finance my enterprise. My partners were Ricardo Poma, Miguel Dueñas, Pancho Soler, Frank Kardonski, and Diego Ribadeneira."
Romney could also have thanked investors from two other wealthy and powerful Central American clans -- the de Sola and Salaverria families, who the Los Angeles Times and Boston Globe have reported were founding investors in Bain Capital.
While they were on the lookout for investments in the United States, members of some of these prominent families -- including the Salaverria, Poma, de Sola and Dueñas clans -- were also at the time financing, either directly or through political parties, death squads in El Salvador. The ruling classes were deploying the death squads to beat back left-wing guerrillas and reformers during El Salvador's civil war.
The death squads committed atrocities on such a mass scale for so small a country that their killing spree sparked international condemnation. From 1979 to 1992, some 75,000 people were killed in the Salvadoran civil war, according to the United Nations. In 1982, two years before Romney began raising money from the oligarchs, El Salvador's independent Human Rights Commission reported [ http://www.nytimes.com/1982/09/01/world/el-salvador-reports-its-casualties.html ] that, of the 35,000 civilians killed, "most" died at the hands of death squads. A United Nations truth commission [ http://www.usip.org/publications/truth-commission-el-salvador ] concluded in 1993 that 85 percent of the acts of violence were perpetrated by the right, while the left-wing Farabundo Martí National Liberation Front, which was supported by the Cuban government, was responsible for 5 percent.
When The Huffington Post asked the Romney campaign about Bain Capital accepting funds from families tied to death squads, a spokeswoman forwarded a 1999 Salt Lake Tribune article to explain the campaign's position on the matter. She declined to comment further.
"Romney confirms Bain had investors in El Salvador. But, as was Bain's policy with any big investor, they had the families checked out as diligently as possible," the Tribune wrote. "They uncovered no unsavory links to drugs or other criminal activity."
Nobody with a basic understanding of the region's history could believe that assertion.
By 1984, the media had thoroughly exposed connections between the death squads and the Salvadoran oligarchy, including the families that invested with Romney. The sitting U.S. ambassador to El Salvador charged that several families, including at least one that invested with Bain, were living in Miami and directly funding death squads. Even by 1981, El Salvador's elite, largely relocated to Miami, were so angered by the public perception that they were financing death squads that they reached out to the media to make their case. The two men put forward [ http://news.google.com/newspapers?nid=1144&dat=19810420&id=p9YeAAAAIBAJ&sjid=DV0EAAAAIBAJ&pg=6936,1830453 ] to represent the oligarchs were both from families that would invest in Bain three years later. The most cursory review of their backgrounds would have turned up the ties.
The connection between the families involved with Bain's founding and those who financed death squads was made by the Boston Globe in 1994 and the Salt Lake Tribune in 1999. This election cycle, Salon first raised [ http://www.salon.com/2012/01/20/the_roots_of_bain_capital_in_el_salvador/ (first item at at http://investorshub.advfn.com/boards/read_msg.aspx?message_id=71169968 )] the issue in January, and the Los Angeles Times filled out [ http://articles.latimes.com/2012/jul/19/nation/la-na-bain-creation-20120719 (better link http://www.latimes.com/news/nationworld/nation/la-na-bain-creation-20120719,0,192124.story ) (at http://investorshub.advfn.com/boards/read_msg.aspx?message_id=77685891 )] more of the record earlier this month.
There is no shortage of unsavory links. Even the Tribune article referred to by the Romney campaign reports that "about $6.5 million of $37 million that established the company came from wealthy El Salvadoran families linked to right-wing death squads."
The Salaverria family, whose fortune came from producing cotton and coffee, had deep connections to the right-wing Nationalist Republican Alliance (ARENA), a political party that death-squad leader Roberto D'Aubuisson founded in the fall of 1981. The year before, El Salvador's government had pushed through land reforms and nationalized the coffee trade, moves that threatened a ruling class whose financial and political dominance was built in large part on growing coffee. ARENA controlled and directed death squads during its early years.
On March 24, 1980, Oscar Romero, the archbishop of San Salvador and an advocate of the poor, was celebrating Mass at a chapel in a small hospital when he was assassinated on D'Aubuisson's orders [ http://www.elfaro.net/es/201003/noticias/1416/?st-full_text=0 ], according to a person involved in the murder who later came forward.
The day before, Romero, an immensely popular figure, had called on the country's soldiers to refuse the government's orders to attack fellow Salvadorans.
"Before another killing order is given," he advised in his sermon, "the law of God must prevail: Thou shalt not kill."
Oscar Romero [this video ( http://www.youtube.com/watch?v=2dvT1rrDBTI ) embedded at this point in piece; the brief info at YouTube included here]
The last words of Oscar Romero, said at a hospital Mass shortly before an assassin entered via a back door and shot him (Audio-recording of a Sister present at the Mass).
Archbishop Oscar Romero, March 24 1980
In 1984, Robert White, the former U.S. ambassador to El Salvador, named two Salaverria brothers -- Julio and Juan Ricardo -- as two of six Salvadoran exiles in Miami who had directly funded death squads, repeating in sworn congressional testimony a claim he'd made earlier as ambassador. The group became known as the "Miami Six." White testified that a source close to the Miami Six had notified the U.S. embassy of their activities in January 1981.
White was pushed out of his job by the incoming Reagan administration in 1981; he was considered insufficiently supportive of the Salvadoran ruling class. (D'Aubuisson endorsed Ronald Reagan [ http://www.youtube.com/watch?v=0e-jnwAwIKE (next below)]
"The Salaverria family were very well-known as backers of D'Aubuisson," White told The Huffington Post. "These guys were big-money contributors. ... They were total backers of D'Aubuisson and the extremist solution, including death squads."
Alfonso Salaverria was a close associate of Orlando de Sola, a leading death-squad figure, and, like him, supported D'Aubuisson.
The Salaverria family also violently resisted land reform efforts. When the Salvadoran government seized about 140 of the country's largest farms in March 1980, 73-year-old Raul Salaverria was the only landowner to openly resist, the Washington Post reported at the time. A brief exchange of gunfire between government forces and Salaverria's people resulted in two injuries, and 1,500 weapons were allegedly found on the property.
Eight years later, workers in an agrarian reform co-operative whose land once belonged to the Salaverrias barely escaped an assassination attempt. "Members of the co-op suspect the former owners, the Salaverria family, were behind the violence," a 1988 Human Rights Watch report said. The family denied involvement.
Francisco de Sola and his cousin, Herbert Arturo de Sola, also invested early in Bain, according to the Los Angeles Times. Two other members of the de Sola family were "limited partners," according to the Boston Globe, but the Romney campaign declined to provide The Huffington Post with their names. The de Sola family was one of El Salvador's most powerful coffee growers and a financier of the ARENA party.
Herbert's brother was the notorious Orlando de Sola, who resisted the peace negotiations toward the end of the civil war. The Romney campaign acknowledges Orlando de Sola's connection to death squads but insists he is not representative of the de Sola family investors. While Romney told the Tribune in 1999 that the backgrounds of the families had been checked diligently, he had explained to the Boston Globe in 1994 that Bain's due diligence included only the backgrounds of the individual investors, not their family members. "We investigated the individuals' integrity and looked for any obvious signs of illegal activity and problems in their background, and found none. We did not investigate in-laws and relatives." Deflecting the association with Orlando, Strachan, whom Romney had charged with vetting the investors, described him that same year to the Globe as "the black sheep of the family. ... He was kicked out of the family business."
Yet there is strong evidence that Orlando was anything but a black sheep in the de Sola family. Indeed, he was a leading public face of the Salvadoran elites in Miami, speaking, for example, on behalf of [ http://news.google.com/newspapers?nid=1291&dat=19810416&id=kQJVAAAAIBAJ&sjid=HJQDAAAAIBAJ&pg=4520,3295537 ] the El Salvador Freedom Foundation, the organization which arranged a U.S. press conference for D'Aubuisson as part of its public relations activities on behalf of the oligarchs and ARENA. An Associated Press story from April 1981 [ http://news.google.com/newspapers?nid=1291&dat=19810416&id=kQJVAAAAIBAJ&sjid=HJQDAAAAIBAJ&pg=4520,3295537 ] includes Orlando de Sola and Alfonso Salaverria speaking on behalf of the oligarchs in exile. The story also makes reference to White's charges regarding the funding of death squads, indicating that the charges were already well known by that point.
But the ties run deeper still. In 1990, Orlando de Sola, D'Aubuisson and founding Bain investor Francisco de Sola allegedly assassinated two left-wing activists then in Guatemala, according to a report by that country's government [ http://www.unhcr.org/refworld/country,,HRW,,SLV,,467fca32c,0.html#P471_122033 ], which cited its intelligence sources. The activists had just held a meeting with then-Sen. Chris Dodd (D-Conn.), who was attempting to broker a Salvadoran peace deal.
Francisco de Sola later pleaded his and his cousin Orlando's innocence [ http://www.foia.cia.gov/docs/DOC_0000049191/DOC_0000049191.pdf ] to the U.S. ambassador. The Inter-American Commission on Human Rights looked further into the killings and concluded that elements of the Salvadoran right were indeed the mostly likely assassins, but said that it couldn't confirm the guilt of the de Solas or D'Aubuisson. It deemed the investigation incomplete and called for a deeper look. The three men were never charged.
Francisco de Sola is now president of the Salvadoran Foundation for Economic and Social Development. His assistant, Ada Chang, said that he was traveling and unavailable to comment, but she confirmed to HuffPost that he had been accused of murdering the two leftists in 1990. Whether he committed the crime or not, the fact that Guatemalan intelligence would associate him with Orlando de Sola and D'Aubuisson, and place them in Guatemala together, casts further doubt on Strachan's claim that Orlando de Sola was merely a "black sheep" who had been "kicked out of the family business."
Orlando de Sola, who is serving an unrelated prison sentence for fraud, told the Los Angeles Times that he did not personally benefit from the Bain investments. "I would say their relationship with Bain Capital was a step to diversify into foreign investments," he said of his family.
Ricardo Poma was the first investor Romney thanked when he traveled to Miami in 2007. The head of the Poma Group, he became one of the three members of the Bain Capital investment committee, according to Strachan's memoir. The Poma family were financiers of D'Aubuisson's ARENA party.
The Regalado-Dueñas family, like many of El Salvador's other powerful clans, amassed much of their wealth and political power through the coffee industry. Along with the Alvarez family, they also helped to found Banco Comercial, one of the biggest banks in El Salvador.
The Regalado-Dueñas and Alvarez families were leading supporters of ARENA. Arturo Dueñas "regularly supplied" the head of an ARENA-affiliated "paramilitary unit ... with a variety of official Salvadoran documents," according to a redacted 1984 CIA document [ http://big.assets.huffingtonpost.com/deathsquadCIA.pdf ], which uses the euphemism for death squad. (Salvadoran government documents were used by death squads to assemble lists of people to kill.)
Miguel Dueñas and Ricardo Poma did not respond to requests for comment. The Salaverria brothers are dead, according to Ambassador White.
Jeffery Paige, author of "Coffee and Power: Revolution and the Rise of Democracy in Central America" and a professor at the University of Michigan, has studied the political economy of Central American oligarchies. Romney's claim to have checked out the backgrounds of the families and come away satisfied befuddles Paige.
"These people benefited from one of the most exploitative and repressive agricultural systems in Latin America. That's why they had a revolution," Paige said. "This money, certainly there wasn't much concern where it came from and what these people had done to make that money."
Sergio Bendixen, who now does polling for President Barack Obama, spent a significant amount of time in El Salvador in the early '80s, doing political polling for Univision. He said that he met D'Aubuisson on many occasions and found him to be one of the warmest, most charming and charismatic people he has ever met. But he said D'Aubuisson was also very upfront about what he saw as the justifiable use of death squads.
"There were 10 or 30 bodies in the street every morning," Bendixen recalled of his time there. "D'Aubuisson said it was necessary. The message needed to be sent [that] if you were associated with the communists or socialists, you had to be killed. He said it was an instrument in keeping the violence down, because others would see the consequences."
Bendixen suggested that a cursory look would have shown Romney what those families were involved with. "If anybody tries to tell you there was a line, a Chinese wall, between ARENA and the death squads, that's just not the way it was," he said.
The Salvadoran elite in Miami talked openly at the time, he said, of supporting the death squads battling the rebels. It wasn't a source of shame, Bendixen recalled, but a source of pride. "They were proud of the fact that they were supporting their country against the communists," he said.
As Romney now seeks support from the Latino community in his campaign for president, his knowledge of Bain's all-too-few degrees of separation from Salvadoran death squads may become a topic of interest.
"Under Ronald Reagan, the U.S. sent billions of dollars to the murderous regime, which utilized that aid to fund the military and death squads in an effort to preserve the unjust privileges of the Salvadoran oligarchy," said Arturo J. Viscarra, an immigration lawyer, who, like many other Salvadorans, emigrated to the United States in order to escape the civil war. He said his family left the country in 1980 after his father began receiving death threats.
"To now learn that a man that may become president of the U.S. deserves some of his success due to the incredible inequality that the U.S. helped to preserve in El Salvador is ironic," Viscarra said. "It's morbidly funny.”
The U.S. involvement in the bloodshed is now seen as a black mark on the nation's record. When President Obama visited Central America in March 2011, he made a symbolic stop at Romero's grave, lighting a candle for the archbishop.
Romney, however, has shown no public remorse for signing up such investors, although the concept of culpability is not foreign to him. When he returned to Miami in 2007, he condemned those who had financed torture and other human rights abuses during the Salvadoran civil war -- just not those he was connected to.
"These friends didn't just help me; they taught me," Romney said. "Ricardo's brother had been tortured and murdered by rebel terrorists in El Salvador. Miguel himself had been chained to a floor in Guatemala for weeks and tortured. And their torturers were financed by Fidel Castro. I learned from these friends about the human cost when Castro has money."
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Did Romney enable company's abusive tax shelter?
When Mitt Romney was audit chair at Marriott International, the company engaged in a series of abusive tax shelter activities.
By Peter C. Canellos and Edward D. Kleinbard, Special to CNN
updated 11:36 AM EDT, Wed August 8, 2012
Editor's note: Peter C. Canellos, a lawyer, is former chair of the New York State Bar Association Tax Section. Edward D. Kleinbard is a professor at Gould School of Law at the University of Southern California. He is the former chief of staff of Congress's Joint Committee on Taxation.
(CNN) -- Mitt Romney's refusal to release tax returns in the critical years of his income accumulation has done little to dispel the legitimate concern that arises from hints buried in his scant disclosure to date: Did he augment his wealth through highly aggressive tax stratagems of questionable validity?
One relevant line of inquiry, largely ignored so far, is to examine what exists in the public record regarding his attitude toward tax compliance and tax avoidance. While this examination is hampered because his dealings through his private equity company, Bain Capital, are kept shrouded, there are other indicators.
A key troubling public manifestation of Romney's apparent insensitivity to tax obligations is his role in Marriott International's abusive tax shelter activity [ http://www.bloomberg.com/news/2012-02-22/romney-as-auditing-chairman-saw-marriott-son-of-boss-tax-shelter-defy-irs.html ].
Romney has had a close, long-standing, personal and business connection with Marriott International and its founders. He served as a member of the Marriott board of directors for many years. From 1993 to 1998, Romney was the head of the audit committee of the Marriott board.
During that period, Marriott engaged in a series of complex and high-profile maneuvers, including "Son of Boss," a notoriously abusive prepackaged tax shelter that investment banks and accounting firms marketed to corporations such as Marriott. In this respect, Marriott was in the vanguard of a then-emerging corporate tax shelter bubble that substantially undermined the entire corporate tax system.
Son of Boss and its related shelters represented perhaps the largest tax avoidance scheme in history, costing the U.S. many billions in lost corporate tax revenues. In response, the government initiated legal challenges that resulted in complete disallowance of the losses claimed by Marriott and other corporations.
In addition, the Son of Boss transaction was listed by the Internal Revenue Service as an abusive transaction, requiring specific disclosure and subject to heavy penalties. Statutory penalties were also made more stringent to deter future tax shelter activity. Finally, the government brought successful criminal prosecutions against a number of individuals involved in Son of Boss and related transactions not associated with Marriott, including principals at major law and accounting firms.
In his key role as chairman of the Marriott board's audit committee, Romney approved the firm's reporting of fictional tax losses exceeding $70 million generated by its Son of Boss transaction. His endorsement of this stratagem provides insight into Romney's professional ethics and attitude toward tax compliance obligations.
Like other prepackaged corporate tax shelters of that era, Marriott's Son of Boss transaction was an entirely artificial transaction, bearing no relationship to its business. Its sole purpose was to create a gigantic tax loss out of thin air without any economic risk, cost or loss -- other than the fee Marriott paid the promoter.
The Son of Boss transaction was vulnerable to attack on at least two grounds.
First, the transaction's promoters and consumers relied on a strained technical statutory analysis. Second, the Son of Boss deal violated the fundamental tax principle that the tax law ignores transactions unless they have a motivating business purpose and a substantial nontax economic effect.
In the Marriott case, the IRS raised both arguments and won on the first interpretive issue.
The Court of Claims (affirmed by the Court of Appeals) rejected Marriott's technical analysis, finding no reliable argument or authority to support it. The court therefore did not need to reach the issue of business purpose and economic substance. In subsequent decisions, involving similar transactions but other parties, the courts have sustained the second line of attack as well, finding the claimed losses to be fictitious.
The complete judicial rejection of the Son of Boss tax scheme was entirely predictable. In mid-1994, for example, roughly contemporaneously with Marriott's execution of its Son of Boss trade and well before Marriott filed its return claiming the artificial loss, the highly respected Tax Section of the New York Bar Association filed a public comment with the U.S. Treasury and IRS urging rejection of the technical claims made by promoters of such schemes.
In his key position as head of the board's audit committee, Romney was required under the securities laws and his fiduciary duties to review the transaction. In fact, it has been publicly reported that Romney was the Marriott Board member most acquainted with the transaction and to whom the other board members turned for advice. This makes sense because aggressive tax-driven financial engineering was a large part of what Romney (and Bain) did for a living. For these reasons, it is fair to hold him accountable for Marriott's spurious tax reporting.
Romney's campaign staff has attempted to deflect responsibility, arguing that he relied on Marriott's tax department and advisers.
This claim is disingenuous. In a transaction of this magnitude, sensitivity and questionableness, the prudent step would be to secure advice to the audit committee and the board from experienced and independent tax counsel, who would certainly have cautioned that the Marriott position was risky and not supported by precedent or proper statutory interpretation.
Moreover, on the key issue of the business purpose and economic substance, Romney was, or should have been, aware of the facts that the transaction had its genesis solely in tax avoidance and was a "marketed" tax shelter.
He had an insider's perspective on the motivation and lack of substance in the transaction, as well as the financial sophistication to understand the tax avoidance involved. Romney failed in his duties to Marriott and its shareholders and acted to undermine the fairness of the tax system.
No one could accuse Romney of lacking the intelligence and analytical skills to have dealt with this transaction appropriately. Indeed, his strengths in this regard were the reason the other board members relied on him.
What emerges from this window into corporate tax compliance behavior is the picture of an executive who was willing to go to the edge, if not beyond, to bend the rules to seek an unfair advantage, and then hide behind the advice of so-called experts to deflect criticism when a scheme backfires.
The opinions expressed in this commentary are solely those of Peter C. Canellos and Edward D. Kleinbard [each one a genuine expert's expert, by the way].
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Related
Opinion: Why won't Romney release more tax returns?
http://www.cnn.com/2012/07/18/opinion/kleinbard-canellos-romney-tax/index.html
Reid puts GOP in a bind over Romney's taxes
http://www.cnn.com/2012/08/07/politics/reid-romney-taxes/index.html
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© 2012 Cable News Network. Turner Broadcasting System, Inc.
http://www.cnn.com/2012/08/08/opinion/canellos-kleinbard-romney-taxes/index.html [with comments]
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Embracing Sheldon Adelson
By THOMAS B. EDSALL
August 6, 2012, 12:56 am
There are two things that set Mitt Romney’s presidential campaign apart: his caution [ http://campaignstops.blogs.nytimes.com/2012/06/19/romney-the-cautious/ ] and his secretiveness [ http://www.huffingtonpost.com/2012/07/25/scott-walker-romney-campaign_n_1701255.html ].
The presumptive Republican nominee refuses to release [ http://www.nationaljournal.com/2012-presidential-campaign/romney-digs-in-refuses-to-release-more-tax-returns-20120717 ] his pre-2010 tax returns, will not identify [ http://www.usatoday.com/news/politics/story/2012-05-25/mitt-romney-bundlers/55202324/1 ] his major fundraisers and bundlers and wiped all computer records of staff emails [ http://www.boston.com/news/politics/articles/2011/11/17/before_leaving_governors_office_in_2006_mitt_romneys_staff_eliminated_e_mail_records/?p1=News_links ] clean at the end of his term as governor of Massachusetts in 2006.
Romney’s rationale is that material like this could be used by the Obama campaign to discredit him. In an interview published a few weeks ago, Romney told National Review [ http://www.nationalreview.com/corner/309673/romney-tax-returns-i-m-simply-not-enthusiastic-about-giving-them-hundreds-or-thousands ]:
In the political environment that exists today, the opposition research of the Obama campaign is looking for anything they can use to distract from the failure of the president to reignite our economy. And I’m simply not enthusiastic about giving them hundreds or thousands of more pages to pick through, distort, and lie about.
So what was this ever-so-guarded, moralistic (“I want to clean up the moral pollution [ http://www.huffingtonpost.com/marc-cooper/direct-from-ames-the-gops_b_60074.html ] on TV and the Internet”) politician doing at a $50,000-a-couple fundraiser in Jerusalem with Sheldon G. Adelson — proprietor of one of the largest, if not the largest, gambling and casino operations in the world — seated in the honored position at his side?
Adelson and his company are under investigation [ http://www.reuters.com/finance/stocks/LVS/key-developments/article/2102514 ] by the Securities and Exchange Commission and the Department of Justice on allegations of foreign bribery. In addition, the United States Attorney’s office in Los Angeles is investigating whether Adelson’s Las Vegas Sands Corporation failed to alert authorities to millions of dollars transferred to casinos in violation of money-laundering laws, the Wall Street Journal reported [ http://professional.wsj.com/article/SB10000872396390444320704577566803521121134.html?mod=WSJ_WSJ_US_News_5&mg=reno64-wsj ] on August 4.
In its 2011 Annual Report [ http://files.shareholder.com/downloads/ABEA-242MDE/1998719164x0x564189/05AE746E-AF52-4E5E-8221-9E20F02760F5/LVS_2011_Annual_Report.pdf ], the Sands Corp., of which Adelson is chairman and C.E.O., disclosed that
On Feb. 9, 2011, L.V.S.C. received a subpoena from the S.E.C. requesting that we produce documents relating to our compliance with the Foreign Corrupt Practices Act. We have also been advised by the Department of Justice that it is conducting a similar investigation. Any violation of the F.C.P.A. could have a material adverse effect on our financial condition.
Adelson and other officials of the Sands Corp. have denied they have done anything wrong [ http://www.pbs.org/wgbh/pages/frontline/criminal-justice/new-questions-about-sheldon-adelsons-casino-operations-in-macau/ ].
There is a succinct answer to the question of why Romney would take the risk of closely associating himself with the immensely controversial Adelson: 10 million dollars — the amount Adelson and his wife have contributed [ http://www.opensecrets.org/pacs/lookup2.php?strID=C00490045&cycle=2012 ] to the super Pac supporting Romney, Restore Our Future.
The Adelsons are the largest donors to the Romney PAC. They have providing just over 12 percent of the $82.2 million Restore Our Future has raised so far. Romney’s personal wealth is an estimated $250 million [ http://www.washingtonpost.com/politics/romney-says-claim-he-hasnt-paid-taxes-in-10-years-untrue-tells-reid-to-put-up-or-shut-up/2012/08/02/63420530-dd05-11e1-8ad1-909913931f71_story.html ], but the former governor is determined not to self-finance his quest for the presidency.
Adelson’s cash is more than enough to persuade Romney to swallow his pride and embrace the man who, earlier in the campaign, spent millions on a different candidate. It was Adelson who financed Newt Gingrich’s populist attack ads [ http://www.nytimes.com/2012/01/09/us/politics/pro-gingrich-pac-plans-tv-ads-against-romney.html?pagewanted=all ], which portrayed Romney, the former C.E.O. of Bain Capital, as a “predatory capitalist.” The Adelson-financed attacks were instrumental in bringing about Romney’s defeat in the South Carolina primary in January and they laid the groundwork for the attacks Obama is subjecting Romney to now.
The source of Adelson’s huge campaign contributions would appear to create a conflict with Romney’s Mormon convictions. The official website of the Church of Jesus Christ of Latter-Day Saints states: “The Church opposes gambling in any form [ http://www.mormonnewsroom.org/article/gambling ], including government-sponsored lotteries.”
What Mormons Believe [ http://whatmormonsbelieve.org/mormons_gambling.html ], an unofficial web site explicating the positions of the Church declares:
The Mormon Church has always opposed gambling in every form, including government-sponsored lotteries. Mormon prophets and leaders have counseled the members over time, to avoid gambling of any type. Doing so, leads one away from righteousness and into the hands of Satan. The Mormon belief is that it is an addictive behavior and leads only to destructive habits and practices. It undermines the value of work and motivates one to think that they can get something for nothing. In time, the gambler will deny themselves, as well as their family the basic needs of life. They will oft times steal from others to finance their addiction, which in turn leads to stealing, robbery, etc.
Adelson is number eight on the Forbes 400 [ http://www.forbes.com/forbes-400/ ], a list of the 400 richest people in America, with a fortune of $21.5 billion amassed largely through an international collection of gambling venues.
Romney has been fortunate that the reporting on the inquiries into Adelson’s finances by the S.E.C. and the Justice Department has been limited in scope. Most coverage of Adelson’s contributions has not included any reference to either of these investigations.
Much of the most interesting reporting on the investigations has been done by ProPublica [ http://www.propublica.org/article/inside-the-investigation-of-leading-republican-money-man-sheldon-adelson (seventh item at http://investorshub.advfn.com/boards/read_msg.aspx?message_id=77569760 )], working jointly with “Frontline” and the Investigative Reporting Program of the University of California at Berkeley.
The majority of the allegations against Adelson emerged in connection with an ongoing wrongful dismissal lawsuit against Sands filed in 2010 by Steven Jacobs, former C.E.O. of Sands China. Emails and other documents posted by ProPublica on July 16 raised questions about the role of Leonel Alves, a legislator and lawyer in Macau who was hired as an outside counsel to Las Vegas Sands.
These emails revealed concerns among Adelson’s legal advisers that a large payment for legal services to Alves would set off warning bells in the sections of the Securities and Exchange Commission and Justice Department that watch out for violations of the Foreign Corrupt Practices Act.
The anti-bribery provisions of the F.C.P.A., according to the Department of Justice [ http://www.justice.gov/criminal/fraud/fcpa/docs/lay-persons-guide.pdf ], “make it unlawful for a U.S. person, and certain foreign issuers of securities, to make a corrupt payment to a foreign official for the purpose of obtaining or retaining business for or with, or directing business to, any person.” Alves is a member of the local Macau legislature, serves on a 10-member council that advises Macau’s chief executive, and is a member of the Chinese People’s Political Consultative Conference, which advises the government of China.
In a Sept. 30, 2009 email, Alves wrote to Jacobs [ http://s3.documentcloud.org/documents/399393/email-from-leonel-alves-to-steve-jacobs-sept-30.pdf ] that at the 60th anniversary of the People’s Republic of China “someone high ranking in Beijing approached me before the official dinner and invited me 2 handle issues related to the Venetian [ http://www.venetian.com/ ]’s projects in Macau.” Alves wrote Jacobs, “There is an amount to be agreed by Mr. Adelson to settle the 2 issues. The amount to be paid to resolve the serviced apartments issue will be paid to a mutually accepted escrow agent and delivered to the gentleman upon official approval in the Official Gazette authorizing the sale of the serviced apartment.”
On Dec. 10, 2009, in another email to Jacobs [ http://s3.documentcloud.org/documents/399392/email-from-leonel-alves-to-steve-jacobs-re.pdf ], Alves wrote that he was returning to Beijing the next day and “will have chance to talk with my friends there.” Alves warned, however, that “what they request is extremely expensive (US300 m, which includes closing the Taiwanese case).”
It is not clear from the email what was done about the request for $300 million.
In a separate matter, Jacobs, in a March 11, 2010 email to Al Gonzalez [ http://www.propublica.org/article/emails-on-alves-employment-and-payment#email3 ], who was then general counsel at Las Vegas Sands, said that he had told Alves that a bill for services at three times the normal rate could not be paid in full because “we were worried that there could be F.C.P.A. issues related to this.” Roughly three weeks later, Jacobs wrote, “I was instructed by SGA [Adelson’s initials] and MAL [Michael A. Leven, president of Las Vegas Sands] to pay and close out the matter,” ProPublica, Frontline and Berkeley investigators disclosed.
The next day, March 12, 2010, Gonzalez wrote back to Jacobs: “You know from various conversations we’ve had and emails we’ve exchanged that I did not believe it appropriate to pay LA [Leonel Alves] three times his normal rates,” before adding, “I wish you would have advised me so I could have intervened.”
A month later, in April of 2010, Gonzalez resigned as general counsel to Sands. On July 23, Sands fired Jacobs as C.E.O. of Sands China, and soon the battleground shifted to the courts.
Ron Reese, Sands vice president for public relations, declined to comment, but pointed me to stories of past denials of wrongdoing by company officials, including Adelson. On March 28, Adelson declared [ http://www.macaubusiness.com/news/sheldon-adelson-opens-fire-on-steve-jacobs/8351/ ] in a speech in Macau that the Jacobs suit “is pure threatening, blackmailing and extortion. That is what it is all about.” Speaking at the J.P. Morgan Gaming, Lodging, Restaurant & Leisure Management Access Forum, Adelson said:
When the smoke clears, I am 1,000 percent positive that there won’t be any fire below it. What they will find is a foundation of lies and fabrications that were designed for the sole purpose of trying to make a settlement for a lot more money than what he [Jacobs] felt he was entitled to.
The Adelson-Jacobs feud turned up hotly-disputed allegations even more out of sync with Romney’s religious and moral convictions after Jacobs filed a request for documents charging that Adelson had initiated a “prostitution strategy” to draw customers to the Macau facilities. The Jacobs filing read [ http://www.forbes.com/sites/stevenbertoni/2012/07/09/sheldon-adelson-fires-back-against-prostitution-allegations/ ]:
As background, shortly after my arrival to Macau in May 2009, I launched “Operation Clean Sweep,” designed to rid the casino floor of loan sharks and prostitution. This project was met with concern as L.V.S.C. Senior Executives informed me that the prior prostitution strategy has been personally approved by Adelson.
Adelson denied the allegation, telling Forbes: “Would I jeopardize being the 7th richest man in the US and the 14th or 15th richest person in the world to push prostitution? For what? I’m already the most profitable company in consumer services ever. What do I have to win?”
By July 20, the situation got even messier. Adelson sued Jacobs in Florida for defamation [ http://www.chicagotribune.com/news/politics/sns-rt-us-democraticgroup-apology-adelsonbre87200v-20120802,0,3265880.story ] for making statements that “impugn Mr. Adelson’s integrity and harm his reputation.” In addition, Adelson threatened to sue the Democratic Congressional Campaign Committee for issuing press releases linking Adelson’s contributions to “Chinese prostitution money.”
On August 2, the D.C.C.C. backtracked [ http://www.usatoday.com/news/politics/story/2012-08-03/sheldon-adelson-dccc/56762554/1 ], publicly declaring “In press statements issued on June 29 and July 2, 2012, the D.C.C.C. made unsubstantiated allegations that attacked Sheldon Adelson, a supporter of the opposing party.” The D.C.C.C. said, “This was wrong. The statements were untrue and unfair, and we retract them.”
On the legal front [ http://www.chicagotribune.com/news/politics/sns-rt-us-democraticgroup-apology-adelsonbre87200v-20120802,0,3265880.story ], Nevada District Court Judge Elizabeth Gonzalez will hold a hearing on August 30 to determine whether Las Vegas Sands Corp withheld key documents in Jacobs’ wrongful termination case.
It would be interesting to know what Romney has to say about Adelson’s gambling business and his difficulties with the S.E.C., the Justice Department and the D.C.C.C., but Romney’s campaign did not respond to repeated requests for comment.
The toughest charges leveled against Romney as a politician have been distinctly personal: that he lacks authenticity [ http://www.businessinsider.com/14-bald-faced-mitt-romney-flip-flops-that-were-dug-up-by-john-mccain-2012-1?op=1 ]; that he is “a phony [ http://decoded.nationaljournal.com/2011/10/cain-underscores-romneys-authe.php ]”; that “there are two Mitt Romneys [ http://www.youtube.com/watch?v=LcVzMkCZGMk ]”; that he is duplicitous [ http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/08/04/romney-tax-plan-on-table-debt-collapses-table/ ]; that he is a hypocrite [ http://www.salon.com/2012/06/29/how_romneycare_is_like_obamacare_on_taxes/ ] and a flip-flopper [ http://firstread.nbcnews.com/_news/2012/02/18/10443519-santorum-accuses-romney-of-hypocrisy-on-earmarks?lite ], even on the most serious issues.
Romney is currently polling ahead [ http://www.gallup.com/poll/156134/Obama-Character-Edge-Offsets-Romney-Economic-Advantage.aspx ] of Obama on a number of key questions. Voters prefer Romney’s approach to the deficit (51-41), jobs (50-44) and taxes (49-45). But when it comes to questions of character, Obama crushes Romney: on likability (60-30); on understanding the problems faced in voters’ daily lives (50-39); and on honesty and trustworthiness, two issues that go to the heart of Romney’s problems, Obama holds an 8 point advantage (47-39).
Perhaps the least effective tools with which to address this liability are the caution and secretiveness that have become Romney’s trademarks. At a minimum, Romney could tell us how he reconciles the values he says he stands for with the basis on which Adelson’s fortune is built.
Thomas B. Edsall, a professor of journalism at Columbia University, is the author of the book “The Age of Austerity: How Scarcity Will Remake American Politics [ http://www.amazon.com/Age-Austerity-Scarcity-American-Politics/dp/0385535198 ],” which was published earlier this year.
© 2012 The New York Times Company
http://campaignstops.blogs.nytimes.com/2012/08/06/embracing-sheldon-adelson/ [with comments]
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Nearly Half Of Americans Die Without Money, Study Finds
In this July 26, 2012, photo, Neta Homier looks over bills in her home in Toledo, Ohio. Homier says she relies on Social Security to pay her bills.
By Bonnie Kavoussi
Posted: 08/06/2012 11:52 am Updated: 08/06/2012 11:55 am
Nearly one in two Americans -- 46 percent -- die "with virtually no financial assets," or less than $10,000, according to a recent study [ http://www.nber.org/papers/w17824.pdf?new_window=1 ] by economics professors at MIT, Dartmouth and Harvard. In fact, 19 percent of Americans die with "zero" financial assets, the study found. (Hat tip: the Washington Post's Wonkblog [ http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/08/03/study-nearly-half-of-americans-die-with-virtually-no-financial-assets/ ].)
The study found that many of these people with modest assets rely "almost entirely" on Social Security benefits to survive [ http://www.nber.org/papers/w17824.pdf?new_window=1 ], own no housing property, and are in poor health. People with zero financial assets and an annuity income of less than $30,000 were in the bottom health quartile before they died, while those in households with financial assets of at least $25,000 and an annuity income of $30,000 to $40,000 were in the 43rd health percentile before they died, according to the study.
Poorer Americans die younger [ http://www.nber.org/papers/w17824.pdf?new_window=1 ], in part because they cannot pay for medical emergencies, according to the study. And before death, poorer Americans' quality of life is significantly lower than the quality of life of their richer counterparts.
Many of these Americans who die without assets in effect outlive whatever retirement savings they may have.
Most Americans do not save enough, and half of Americans are not saving at all for retirement [ ], according to a recent study by LIMRA, a financial services trade association. Younger people are particularly unlikely to save for retirement [ ], in part because many have less financial education, lower earnings and student loan debt.
Americans need [ http://www.huffingtonpost.com/2012/07/19/unemployed-401k-retirement-savings_n_1685773.html ] about $1 million in retirement savings to generate $40,000 per year in retirement income, according to Kiplinger. So it is best to start saving early.
Copyright © 2012 TheHuffingtonPost.com, Inc.
http://www.huffingtonpost.com/2012/08/06/americans-die-without-money_n_1746862.html [with comments]
===
Azature's $250,000 Black Diamond Nail Polish Is World's Most Expensive Nail Lacquer
http://www.huffingtonpost.com/2012/08/06/azature-black-diamond-worlds-most-expensive-nail-polish_n_1747474.html [with comments]
*
The Killer Whale Submarine
http://www.hammacher.com/Product/11990
===
19 Things We Know More About Than Mitt Romney's Tax Returns
08/07/2012
King Tut's Penis
Coca-Cola's Secret Formula
The Bermuda Triangle
How To Speak Prairie Dog
Donald Trump's 'Hair'
Area 51
What Space Smells Like
The God Particle
Why Sloths Are Bad At Balance And Stuff
What Dinosaur Sex Looked Like
How To Survive The Zombie Apocalypse
What Ryan Lochte's Mom Knows About His Sex Life
Mitt Romney's Car Elevator
President Obama's Annoying Stoner Habit
"When a joint was making the rounds, he often elbowed his way in, out of turn, shouted 'Intercepted!' and took an extra hit."
Magnets
Easter Island's Moai
How Alicia Silverstone Feeds Her Baby
Amelia Earhart's Final Resting Place
John Boehner's Tan
[more at] http://www.huffingtonpost.com/2012/08/07/mitt-romney-taxes_n_1736813.html [with comments]
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Indigestion for ‘les Riches’ in a Plan for Higher Taxes
August 7, 2012
http://www.nytimes.com/2012/08/08/business/global/frances-les-riches-vow-to-leave-if-75-tax-rate-is-passed.html [ http://www.nytimes.com/2012/08/08/business/global/frances-les-riches-vow-to-leave-if-75-tax-rate-is-passed.html?pagewanted=all ] [with comments]
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Mitt Romney Campaign Inadvertently Slams Ronald Reagan In New Ad
August 6th, 2012
The Mitt Romney campaign has launched a new ad aimed at discrediting President Obama‘s handling of the United States’ relationship with Israel, bashing the President for not visiting Israel during the first three and a half years of his presidency. Entitled “Cherished Relationship,” the ad highlights that fact, plus Romney’s recent declaration that Jerusalem is “Israel’s capital.”
The problem is, no Republican president since Richard Nixon has visited Israel within that time frame, and Ronald Reagan never made a presidential visit to Israel. ...
[...]
http://www.mediaite.com/online/mitt-romney-campaign-inadvertently-slams-ronald-reagan-in-new-ad/ [with comments]
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What Romney Got Wrong in Israel
The presidential candidate's simplistic narratives about innate greatness fail to explain either Israel's accomplishments or America's challenges.
Aug 6 2012
http://www.theatlantic.com/international/archive/2012/08/what-romney-got-wrong-in-israel/260754/ [with comments]
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Mitt Romney’s “culture” war
Republican presidential candidate, former Massachusetts Gov. Mitt Romney, speaks at a campaign event in Bow, N.H., Friday, July 20, 2012.
(Credit: AP/Charles Dharapak)
His comment about Palestinians wasn't a gaffe: It was part of his concerted efforts to demonize his opponents
By Erik Nielson
Sunday, Aug 5, 2012 07:00 AM CDT
In his latest overseas gaffe [ http://www.huffingtonpost.com/2012/07/30/mitt-romney-palestinians_n_1718496.html ], Mitt Romney pontificated on the economic disparities between Israelis and Palestinians. Ignoring Israel’s role in perpetuating these differences, Romney instead offered a clear and simple explanation: “Culture makes all the difference.” These remarks, as well as his suggestion that if president he’d park the U.S. embassy in the highly contested city of Jerusalem, have surprised many in the U.S. and abroad and have drawn accusations of everything from ignorance to outright racism.
But Romney’s statement that Israelis’ cultural superiority explains their economic success — and, by extension, that the “backward” Palestinians are to blame for their failures — isn’t particularly surprising. Not only does it smack of the familiar Republican tactic of demonizing victims, but it’s also consistent with Romney’s strategy of “othering” Obama in similar ways, often using coded concepts of shared culture to exploit or create unease about Obama’s race. Just a few days earlier, one of Romney’s aides made the mistake of revealing a bit too much of this strategy when he told a member of the British press [ http://www.telegraph.co.uk/news/worldnews/mitt-romney/9424524/Mitt-Romney-would-restore-Anglo-Saxon-relations-between-Britain-and-America.html ], “We are part of an Anglo-Saxon heritage,” going on to note that the White House “didn’t fully appreciate the shared history we have.” It wasn’t hard to read between the lines. America’s first black president, the son of a Kenyan father, doesn’t understand our culture.
Taken in isolation, these comments could easily be dismissed as the blunders of a poorly managed campaign or a clumsy candidate. But against the backdrop of Republicans’ tireless attempts to undermine Obama’s legitimacy — not to mention Romney’s ongoing rhetorical efforts to portray him as “foreign” — what we find instead is that they are part of a broader effort to exoticize the president so that his race can remain an issue throughout the 2012 election season.
Even before he took office, Obama was forced to prove his “American-ness” to a rabid group of “birthers” who, even when confronted with irrefutable evidence, found it easier to believe Obama was at the center of a major conspiracy to violate the Constitution than accept that he was the natural-born citizen he claimed to be. Sadly, this movement still has high-profile adherents, including immigrant hunter Joe Arpaio and Chapter 11 guru Donald Trump, the latter of whom has vowed to make Obama’s birth a central element in the election. Rather than distance himself from Trump, Romney has recently embraced him, in the process giving a proverbial wink to attacks that center on Obama’s fundamental right to hold office.
It is perhaps the basic sense that Obama has no right to be the American president that has fueled the surprising, perhaps unprecedented, disrespect he has been forced to endure. We all remember when Republican Rep. Joe Wilson shouted “You lie” during an Obama speech to Congress; when right-wing Supreme Court Justice Samuel Alito shook his head like a petulant child during the following year’s State of the Union; when Speaker John Boehner refused to allow the president to address a joint session of Congress in 2011; and when Jan Brewer wagged her fingers in the president’s face earlier this year. Although he has governed as a centrist — to the chagrin of many progressives — Obama has drawn the vitriol of a radical. It is not uncommon to hear Republican politicians decry him as a traitor; it’s almost expected at right-wing campaign events. In fact, at a May 2012 Romney event in Ohio [ http://www.buzzfeed.com/zekejmiller/romney-silent-as-woman-says-obama-should-be-tried ], a woman in the crowd said of Obama, “I do believe he should be tried for treason.” Mitt didn’t object. At all.
Perhaps one of the reasons why words like “treason” seem to come so easily for some Republicans is that many are convinced, facts be damned, that Obama is a Muslim and therefore some kind of enemy to our Judeo-Christian culture. According to a recent poll [ http://www.pewforum.org/Politics-and-Elections/Little-Voter-Discomfort-with-Romney%E2%80%99s-Mormon-Religion.aspx ], more than a third (34 percent) of conservative Republicans now believe Obama is a Muslim; that’s a dramatic increase over 2008, when only 16 percent were stupid enough to think so.
While Mitt Romney has not fed this misconception directly, his Obama-isn’t-a-real-American rhetoric can’t be helping. As David Corn points out [ http://www.motherjones.com/politics/2012/04/ted-nugent-conservatives-mitt-romney ], one of Romney’s favorite lines — which he’s hammered home repeatedly on the stump — is that Obama “doesn’t understand America.” During a New Hampshire event [ http://www.seacoastonline.com/articles/20120101-NEWS-201010311 ] earlier this year, Romney repeated this claim, and then went on to make one of his oft-invoked threats: that Obama will turn the U.S. into a “European-style welfare state.” Perhaps it’s just a coincidence that Romney likes to spice up the rhetoric of “otherness” with a dash of “welfare” here and there, but a cynical observer might find something more racially sinister at work.
There was certainly something insidious in the recent comments made by John Sununu, one of Romney’s advisers, last month. First he made an appearance on Fox News and said that Obama “has no idea how the American system functions” because “he spent his early years in Hawaii smoking something [and] spent the next set of years in Indonesia.” Remind us of the black president’s marijuana use? Check. Make him sound exotic and foreign? Check. But the real beauty was in a Romney campaign conference call later on, during which he said [ http://www.huffingtonpost.com/2012/07/17/john-sununu-obama_n_1679803.html ], “I wish this president would learn how to be an American.” He did try to wiggle out of that one afterward, but given his bombast throughout the day, it’s pretty clear he was saying what he meant.
And, as Rachel Maddow recently demonstrated [ http://video.msnbc.msn.com/the-rachel-maddow-show/48235051#48235051 ], Romney has been joining in with his new favorite word, “foreign,” to describe Obama. As Maddow notes, while John McCain, the previous Republican candidate, has consistently taken the high ground against tactics like this, Romney has made a beeline for the gutter. “This idea of criticizing and attacking success, of demonizing those in all walks of life who have been successful,” he said at an Ohio event last month, “is something which is so foreign to us, we simply can’t understand it.” This line, or some permutation of it, has been popping up a lot in Romney’s speeches. He accuses Obama of “demonizing” the successful, yet he seems to be demonizing anyone who doesn’t fit his narrow view of what makes us American.
Recent polls [ http://www.washingtonpost.com/politics/swing-state-poll-romney-still-struggling-to-convince-voters-he-cares/2012/08/01/gJQAjKoAPX_story.html ] show that Romney’s tactic isn’t working, particularly in crucial swing states. With just a few months to go, it remains to be seen how much lower he will go to win the election. In May of this year, the New York Times exposed an advertising plan [ http://www.nytimes.com/interactive/2012/05/17/us/politics/17donate-document.html ] commissioned by a Republican super PAC that proposed attacking Obama on Jeremiah Wright, again. Romney repudiated the plan at the time, but with the edge going to Obama, we’ll see if Wright’s name reenters the fray.
Of course, if it does, then the door will be open for attacks on a candidate’s religious affiliations, and whatever damage Jeremiah Wright can do, the Mormon Church — with its reputation for secrecy, its legacy of bigotry and its own set of “foreign” cultural practices — can do more. Surely that’s a road Mitt Romney doesn’t want to go down.
Then again, who knows? This is the same guy whose sense of what’s culturally right is so strong that it compels him to do what’s morally wrong. Standing in front of a group of wealthy Israeli donors and praising their cultural superiority was a surprisingly inept bit of politics, but the underlying message of bigotry is perfectly consistent with his American narrative as well. He didn’t say the Palestinians were inferior, just as he never says Obama’s race makes him un-American. He doesn’t have to.
Copyright © 2012 Salon Media Group, Inc.
http://www.salon.com/2012/08/05/mitt_romneys_culture_war/ [with comments]
===
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By Ryan Grim and Cole Stangler
Posted: 08/08/2012 9:38 am Updated: 08/09/2012 12:21 am
In 1983, Bill Bain asked Mitt Romney to launch Bain Capital, a private equity offshoot of the successful consulting firm Bain & Company. After some initial reluctance, Romney agreed. The new job came with a stipulation: Romney couldn't raise money from any current clients, Bain said, because if the private equity venture failed, he didn't want it taking the consulting firm down with it.
When Romney struggled to raise funds from other traditional sources, he and his partners started thinking outside the box. Bain executive Harry Strachan suggested that Romney meet with a group of Central American oligarchs who were looking for new investment vehicles as turmoil engulfed their region.
Romney was worried that the oligarchs might be tied to "illegal drug money, right-wing death squads, or left-wing terrorism," Strachan later told a Boston Globe reporter, as quoted in the 2012 book "The Real Romney." But, pressed for capital, Romney pushed his concerns aside and flew to Miami in mid-1984 to meet with the Salvadorans at a local bank.
It was a lucrative trip. The Central Americans provided roughly $9 million -- 40 percent -- of Bain Capital's initial outside funding, the Los Angeles Times reported recently [ http://articles.latimes.com/2012/jul/19/nation/la-na-bain-creation-20120719 (better link http://www.latimes.com/news/nationworld/nation/la-na-bain-creation-20120719,0,192124.story ) (at http://investorshub.advfn.com/boards/read_msg.aspx?message_id=77685891 )]. And they became valued clients.
"Over the years, these Latin American friends have loyally rolled over investments in succeeding funds, actively participated in Bain Capital's May investor meetings, and are still today one of the largest investor groups in Bain Capital," Strachan wrote in his memoir in 2008. Strachan declined to be interviewed for this story.
When Romney launched another venture that needed funding -- his first presidential campaign -- he returned to Miami.
"I owe a great deal to Americans of Latin American descent," he said at a dinner [ http://www.cfr.org/us-election-2008/governor-romneys-remarks-miami-dade-lincoln-day-dinner/p13480 ] in Miami in 2007. "When I was starting my business, I came to Miami to find partners that would believe in me and that would finance my enterprise. My partners were Ricardo Poma, Miguel Dueñas, Pancho Soler, Frank Kardonski, and Diego Ribadeneira."
Romney could also have thanked investors from two other wealthy and powerful Central American clans -- the de Sola and Salaverria families, who the Los Angeles Times and Boston Globe have reported were founding investors in Bain Capital.
While they were on the lookout for investments in the United States, members of some of these prominent families -- including the Salaverria, Poma, de Sola and Dueñas clans -- were also at the time financing, either directly or through political parties, death squads in El Salvador. The ruling classes were deploying the death squads to beat back left-wing guerrillas and reformers during El Salvador's civil war.
The death squads committed atrocities on such a mass scale for so small a country that their killing spree sparked international condemnation. From 1979 to 1992, some 75,000 people were killed in the Salvadoran civil war, according to the United Nations. In 1982, two years before Romney began raising money from the oligarchs, El Salvador's independent Human Rights Commission reported [ http://www.nytimes.com/1982/09/01/world/el-salvador-reports-its-casualties.html ] that, of the 35,000 civilians killed, "most" died at the hands of death squads. A United Nations truth commission [ http://www.usip.org/publications/truth-commission-el-salvador ] concluded in 1993 that 85 percent of the acts of violence were perpetrated by the right, while the left-wing Farabundo Martí National Liberation Front, which was supported by the Cuban government, was responsible for 5 percent.
When The Huffington Post asked the Romney campaign about Bain Capital accepting funds from families tied to death squads, a spokeswoman forwarded a 1999 Salt Lake Tribune article to explain the campaign's position on the matter. She declined to comment further.
"Romney confirms Bain had investors in El Salvador. But, as was Bain's policy with any big investor, they had the families checked out as diligently as possible," the Tribune wrote. "They uncovered no unsavory links to drugs or other criminal activity."
Nobody with a basic understanding of the region's history could believe that assertion.
By 1984, the media had thoroughly exposed connections between the death squads and the Salvadoran oligarchy, including the families that invested with Romney. The sitting U.S. ambassador to El Salvador charged that several families, including at least one that invested with Bain, were living in Miami and directly funding death squads. Even by 1981, El Salvador's elite, largely relocated to Miami, were so angered by the public perception that they were financing death squads that they reached out to the media to make their case. The two men put forward [ http://news.google.com/newspapers?nid=1144&dat=19810420&id=p9YeAAAAIBAJ&sjid=DV0EAAAAIBAJ&pg=6936,1830453 ] to represent the oligarchs were both from families that would invest in Bain three years later. The most cursory review of their backgrounds would have turned up the ties.
The connection between the families involved with Bain's founding and those who financed death squads was made by the Boston Globe in 1994 and the Salt Lake Tribune in 1999. This election cycle, Salon first raised [ http://www.salon.com/2012/01/20/the_roots_of_bain_capital_in_el_salvador/ (first item at at http://investorshub.advfn.com/boards/read_msg.aspx?message_id=71169968 )] the issue in January, and the Los Angeles Times filled out [ http://articles.latimes.com/2012/jul/19/nation/la-na-bain-creation-20120719 (better link http://www.latimes.com/news/nationworld/nation/la-na-bain-creation-20120719,0,192124.story ) (at http://investorshub.advfn.com/boards/read_msg.aspx?message_id=77685891 )] more of the record earlier this month.
There is no shortage of unsavory links. Even the Tribune article referred to by the Romney campaign reports that "about $6.5 million of $37 million that established the company came from wealthy El Salvadoran families linked to right-wing death squads."
The Salaverria family, whose fortune came from producing cotton and coffee, had deep connections to the right-wing Nationalist Republican Alliance (ARENA), a political party that death-squad leader Roberto D'Aubuisson founded in the fall of 1981. The year before, El Salvador's government had pushed through land reforms and nationalized the coffee trade, moves that threatened a ruling class whose financial and political dominance was built in large part on growing coffee. ARENA controlled and directed death squads during its early years.
On March 24, 1980, Oscar Romero, the archbishop of San Salvador and an advocate of the poor, was celebrating Mass at a chapel in a small hospital when he was assassinated on D'Aubuisson's orders [ http://www.elfaro.net/es/201003/noticias/1416/?st-full_text=0 ], according to a person involved in the murder who later came forward.
The day before, Romero, an immensely popular figure, had called on the country's soldiers to refuse the government's orders to attack fellow Salvadorans.
"Before another killing order is given," he advised in his sermon, "the law of God must prevail: Thou shalt not kill."
Oscar Romero [this video ( http://www.youtube.com/watch?v=2dvT1rrDBTI ) embedded at this point in piece; the brief info at YouTube included here]
Uploaded by camdic on Sep 3, 2009
The last words of Oscar Romero, said at a hospital Mass shortly before an assassin entered via a back door and shot him (Audio-recording of a Sister present at the Mass).
Archbishop Oscar Romero, March 24 1980
In 1984, Robert White, the former U.S. ambassador to El Salvador, named two Salaverria brothers -- Julio and Juan Ricardo -- as two of six Salvadoran exiles in Miami who had directly funded death squads, repeating in sworn congressional testimony a claim he'd made earlier as ambassador. The group became known as the "Miami Six." White testified that a source close to the Miami Six had notified the U.S. embassy of their activities in January 1981.
White was pushed out of his job by the incoming Reagan administration in 1981; he was considered insufficiently supportive of the Salvadoran ruling class. (D'Aubuisson endorsed Ronald Reagan [ http://www.youtube.com/watch?v=0e-jnwAwIKE (next below)]
in 1984.) When contacted by phone recently, White reiterated his claim about the Salaverria brothers, but said he couldn't reveal his source's identity in order to protect the source.
"The Salaverria family were very well-known as backers of D'Aubuisson," White told The Huffington Post. "These guys were big-money contributors. ... They were total backers of D'Aubuisson and the extremist solution, including death squads."
Alfonso Salaverria was a close associate of Orlando de Sola, a leading death-squad figure, and, like him, supported D'Aubuisson.
The Salaverria family also violently resisted land reform efforts. When the Salvadoran government seized about 140 of the country's largest farms in March 1980, 73-year-old Raul Salaverria was the only landowner to openly resist, the Washington Post reported at the time. A brief exchange of gunfire between government forces and Salaverria's people resulted in two injuries, and 1,500 weapons were allegedly found on the property.
Eight years later, workers in an agrarian reform co-operative whose land once belonged to the Salaverrias barely escaped an assassination attempt. "Members of the co-op suspect the former owners, the Salaverria family, were behind the violence," a 1988 Human Rights Watch report said. The family denied involvement.
Francisco de Sola and his cousin, Herbert Arturo de Sola, also invested early in Bain, according to the Los Angeles Times. Two other members of the de Sola family were "limited partners," according to the Boston Globe, but the Romney campaign declined to provide The Huffington Post with their names. The de Sola family was one of El Salvador's most powerful coffee growers and a financier of the ARENA party.
Herbert's brother was the notorious Orlando de Sola, who resisted the peace negotiations toward the end of the civil war. The Romney campaign acknowledges Orlando de Sola's connection to death squads but insists he is not representative of the de Sola family investors. While Romney told the Tribune in 1999 that the backgrounds of the families had been checked diligently, he had explained to the Boston Globe in 1994 that Bain's due diligence included only the backgrounds of the individual investors, not their family members. "We investigated the individuals' integrity and looked for any obvious signs of illegal activity and problems in their background, and found none. We did not investigate in-laws and relatives." Deflecting the association with Orlando, Strachan, whom Romney had charged with vetting the investors, described him that same year to the Globe as "the black sheep of the family. ... He was kicked out of the family business."
Yet there is strong evidence that Orlando was anything but a black sheep in the de Sola family. Indeed, he was a leading public face of the Salvadoran elites in Miami, speaking, for example, on behalf of [ http://news.google.com/newspapers?nid=1291&dat=19810416&id=kQJVAAAAIBAJ&sjid=HJQDAAAAIBAJ&pg=4520,3295537 ] the El Salvador Freedom Foundation, the organization which arranged a U.S. press conference for D'Aubuisson as part of its public relations activities on behalf of the oligarchs and ARENA. An Associated Press story from April 1981 [ http://news.google.com/newspapers?nid=1291&dat=19810416&id=kQJVAAAAIBAJ&sjid=HJQDAAAAIBAJ&pg=4520,3295537 ] includes Orlando de Sola and Alfonso Salaverria speaking on behalf of the oligarchs in exile. The story also makes reference to White's charges regarding the funding of death squads, indicating that the charges were already well known by that point.
But the ties run deeper still. In 1990, Orlando de Sola, D'Aubuisson and founding Bain investor Francisco de Sola allegedly assassinated two left-wing activists then in Guatemala, according to a report by that country's government [ http://www.unhcr.org/refworld/country,,HRW,,SLV,,467fca32c,0.html#P471_122033 ], which cited its intelligence sources. The activists had just held a meeting with then-Sen. Chris Dodd (D-Conn.), who was attempting to broker a Salvadoran peace deal.
Francisco de Sola later pleaded his and his cousin Orlando's innocence [ http://www.foia.cia.gov/docs/DOC_0000049191/DOC_0000049191.pdf ] to the U.S. ambassador. The Inter-American Commission on Human Rights looked further into the killings and concluded that elements of the Salvadoran right were indeed the mostly likely assassins, but said that it couldn't confirm the guilt of the de Solas or D'Aubuisson. It deemed the investigation incomplete and called for a deeper look. The three men were never charged.
Francisco de Sola is now president of the Salvadoran Foundation for Economic and Social Development. His assistant, Ada Chang, said that he was traveling and unavailable to comment, but she confirmed to HuffPost that he had been accused of murdering the two leftists in 1990. Whether he committed the crime or not, the fact that Guatemalan intelligence would associate him with Orlando de Sola and D'Aubuisson, and place them in Guatemala together, casts further doubt on Strachan's claim that Orlando de Sola was merely a "black sheep" who had been "kicked out of the family business."
Orlando de Sola, who is serving an unrelated prison sentence for fraud, told the Los Angeles Times that he did not personally benefit from the Bain investments. "I would say their relationship with Bain Capital was a step to diversify into foreign investments," he said of his family.
Ricardo Poma was the first investor Romney thanked when he traveled to Miami in 2007. The head of the Poma Group, he became one of the three members of the Bain Capital investment committee, according to Strachan's memoir. The Poma family were financiers of D'Aubuisson's ARENA party.
The Regalado-Dueñas family, like many of El Salvador's other powerful clans, amassed much of their wealth and political power through the coffee industry. Along with the Alvarez family, they also helped to found Banco Comercial, one of the biggest banks in El Salvador.
The Regalado-Dueñas and Alvarez families were leading supporters of ARENA. Arturo Dueñas "regularly supplied" the head of an ARENA-affiliated "paramilitary unit ... with a variety of official Salvadoran documents," according to a redacted 1984 CIA document [ http://big.assets.huffingtonpost.com/deathsquadCIA.pdf ], which uses the euphemism for death squad. (Salvadoran government documents were used by death squads to assemble lists of people to kill.)
Miguel Dueñas and Ricardo Poma did not respond to requests for comment. The Salaverria brothers are dead, according to Ambassador White.
Jeffery Paige, author of "Coffee and Power: Revolution and the Rise of Democracy in Central America" and a professor at the University of Michigan, has studied the political economy of Central American oligarchies. Romney's claim to have checked out the backgrounds of the families and come away satisfied befuddles Paige.
"These people benefited from one of the most exploitative and repressive agricultural systems in Latin America. That's why they had a revolution," Paige said. "This money, certainly there wasn't much concern where it came from and what these people had done to make that money."
Sergio Bendixen, who now does polling for President Barack Obama, spent a significant amount of time in El Salvador in the early '80s, doing political polling for Univision. He said that he met D'Aubuisson on many occasions and found him to be one of the warmest, most charming and charismatic people he has ever met. But he said D'Aubuisson was also very upfront about what he saw as the justifiable use of death squads.
"There were 10 or 30 bodies in the street every morning," Bendixen recalled of his time there. "D'Aubuisson said it was necessary. The message needed to be sent [that] if you were associated with the communists or socialists, you had to be killed. He said it was an instrument in keeping the violence down, because others would see the consequences."
Bendixen suggested that a cursory look would have shown Romney what those families were involved with. "If anybody tries to tell you there was a line, a Chinese wall, between ARENA and the death squads, that's just not the way it was," he said.
The Salvadoran elite in Miami talked openly at the time, he said, of supporting the death squads battling the rebels. It wasn't a source of shame, Bendixen recalled, but a source of pride. "They were proud of the fact that they were supporting their country against the communists," he said.
As Romney now seeks support from the Latino community in his campaign for president, his knowledge of Bain's all-too-few degrees of separation from Salvadoran death squads may become a topic of interest.
"Under Ronald Reagan, the U.S. sent billions of dollars to the murderous regime, which utilized that aid to fund the military and death squads in an effort to preserve the unjust privileges of the Salvadoran oligarchy," said Arturo J. Viscarra, an immigration lawyer, who, like many other Salvadorans, emigrated to the United States in order to escape the civil war. He said his family left the country in 1980 after his father began receiving death threats.
"To now learn that a man that may become president of the U.S. deserves some of his success due to the incredible inequality that the U.S. helped to preserve in El Salvador is ironic," Viscarra said. "It's morbidly funny.”
The U.S. involvement in the bloodshed is now seen as a black mark on the nation's record. When President Obama visited Central America in March 2011, he made a symbolic stop at Romero's grave, lighting a candle for the archbishop.
Romney, however, has shown no public remorse for signing up such investors, although the concept of culpability is not foreign to him. When he returned to Miami in 2007, he condemned those who had financed torture and other human rights abuses during the Salvadoran civil war -- just not those he was connected to.
"These friends didn't just help me; they taught me," Romney said. "Ricardo's brother had been tortured and murdered by rebel terrorists in El Salvador. Miguel himself had been chained to a floor in Guatemala for weeks and tortured. And their torturers were financed by Fidel Castro. I learned from these friends about the human cost when Castro has money."
Copyright © 2012 TheHuffingtonPost.com, Inc.
http://www.huffingtonpost.com/2012/08/08/mitt-romney-death-squads-bain_n_1710133.html [with comments] [h/t (linked in) http://investorshub.advfn.com/boards/read_msg.aspx?message_id=78339120 (to have this updated/expanded version here in full, links and all)]
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Did Romney enable company's abusive tax shelter?
When Mitt Romney was audit chair at Marriott International, the company engaged in a series of abusive tax shelter activities.
By Peter C. Canellos and Edward D. Kleinbard, Special to CNN
updated 11:36 AM EDT, Wed August 8, 2012
Editor's note: Peter C. Canellos, a lawyer, is former chair of the New York State Bar Association Tax Section. Edward D. Kleinbard is a professor at Gould School of Law at the University of Southern California. He is the former chief of staff of Congress's Joint Committee on Taxation.
(CNN) -- Mitt Romney's refusal to release tax returns in the critical years of his income accumulation has done little to dispel the legitimate concern that arises from hints buried in his scant disclosure to date: Did he augment his wealth through highly aggressive tax stratagems of questionable validity?
One relevant line of inquiry, largely ignored so far, is to examine what exists in the public record regarding his attitude toward tax compliance and tax avoidance. While this examination is hampered because his dealings through his private equity company, Bain Capital, are kept shrouded, there are other indicators.
A key troubling public manifestation of Romney's apparent insensitivity to tax obligations is his role in Marriott International's abusive tax shelter activity [ http://www.bloomberg.com/news/2012-02-22/romney-as-auditing-chairman-saw-marriott-son-of-boss-tax-shelter-defy-irs.html ].
Romney has had a close, long-standing, personal and business connection with Marriott International and its founders. He served as a member of the Marriott board of directors for many years. From 1993 to 1998, Romney was the head of the audit committee of the Marriott board.
During that period, Marriott engaged in a series of complex and high-profile maneuvers, including "Son of Boss," a notoriously abusive prepackaged tax shelter that investment banks and accounting firms marketed to corporations such as Marriott. In this respect, Marriott was in the vanguard of a then-emerging corporate tax shelter bubble that substantially undermined the entire corporate tax system.
Son of Boss and its related shelters represented perhaps the largest tax avoidance scheme in history, costing the U.S. many billions in lost corporate tax revenues. In response, the government initiated legal challenges that resulted in complete disallowance of the losses claimed by Marriott and other corporations.
In addition, the Son of Boss transaction was listed by the Internal Revenue Service as an abusive transaction, requiring specific disclosure and subject to heavy penalties. Statutory penalties were also made more stringent to deter future tax shelter activity. Finally, the government brought successful criminal prosecutions against a number of individuals involved in Son of Boss and related transactions not associated with Marriott, including principals at major law and accounting firms.
In his key role as chairman of the Marriott board's audit committee, Romney approved the firm's reporting of fictional tax losses exceeding $70 million generated by its Son of Boss transaction. His endorsement of this stratagem provides insight into Romney's professional ethics and attitude toward tax compliance obligations.
Like other prepackaged corporate tax shelters of that era, Marriott's Son of Boss transaction was an entirely artificial transaction, bearing no relationship to its business. Its sole purpose was to create a gigantic tax loss out of thin air without any economic risk, cost or loss -- other than the fee Marriott paid the promoter.
The Son of Boss transaction was vulnerable to attack on at least two grounds.
First, the transaction's promoters and consumers relied on a strained technical statutory analysis. Second, the Son of Boss deal violated the fundamental tax principle that the tax law ignores transactions unless they have a motivating business purpose and a substantial nontax economic effect.
In the Marriott case, the IRS raised both arguments and won on the first interpretive issue.
The Court of Claims (affirmed by the Court of Appeals) rejected Marriott's technical analysis, finding no reliable argument or authority to support it. The court therefore did not need to reach the issue of business purpose and economic substance. In subsequent decisions, involving similar transactions but other parties, the courts have sustained the second line of attack as well, finding the claimed losses to be fictitious.
The complete judicial rejection of the Son of Boss tax scheme was entirely predictable. In mid-1994, for example, roughly contemporaneously with Marriott's execution of its Son of Boss trade and well before Marriott filed its return claiming the artificial loss, the highly respected Tax Section of the New York Bar Association filed a public comment with the U.S. Treasury and IRS urging rejection of the technical claims made by promoters of such schemes.
In his key position as head of the board's audit committee, Romney was required under the securities laws and his fiduciary duties to review the transaction. In fact, it has been publicly reported that Romney was the Marriott Board member most acquainted with the transaction and to whom the other board members turned for advice. This makes sense because aggressive tax-driven financial engineering was a large part of what Romney (and Bain) did for a living. For these reasons, it is fair to hold him accountable for Marriott's spurious tax reporting.
Romney's campaign staff has attempted to deflect responsibility, arguing that he relied on Marriott's tax department and advisers.
This claim is disingenuous. In a transaction of this magnitude, sensitivity and questionableness, the prudent step would be to secure advice to the audit committee and the board from experienced and independent tax counsel, who would certainly have cautioned that the Marriott position was risky and not supported by precedent or proper statutory interpretation.
Moreover, on the key issue of the business purpose and economic substance, Romney was, or should have been, aware of the facts that the transaction had its genesis solely in tax avoidance and was a "marketed" tax shelter.
He had an insider's perspective on the motivation and lack of substance in the transaction, as well as the financial sophistication to understand the tax avoidance involved. Romney failed in his duties to Marriott and its shareholders and acted to undermine the fairness of the tax system.
No one could accuse Romney of lacking the intelligence and analytical skills to have dealt with this transaction appropriately. Indeed, his strengths in this regard were the reason the other board members relied on him.
What emerges from this window into corporate tax compliance behavior is the picture of an executive who was willing to go to the edge, if not beyond, to bend the rules to seek an unfair advantage, and then hide behind the advice of so-called experts to deflect criticism when a scheme backfires.
The opinions expressed in this commentary are solely those of Peter C. Canellos and Edward D. Kleinbard [each one a genuine expert's expert, by the way].
*
Related
Opinion: Why won't Romney release more tax returns?
http://www.cnn.com/2012/07/18/opinion/kleinbard-canellos-romney-tax/index.html
Reid puts GOP in a bind over Romney's taxes
http://www.cnn.com/2012/08/07/politics/reid-romney-taxes/index.html
*
© 2012 Cable News Network. Turner Broadcasting System, Inc.
http://www.cnn.com/2012/08/08/opinion/canellos-kleinbard-romney-taxes/index.html [with comments]
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Embracing Sheldon Adelson
By THOMAS B. EDSALL
August 6, 2012, 12:56 am
There are two things that set Mitt Romney’s presidential campaign apart: his caution [ http://campaignstops.blogs.nytimes.com/2012/06/19/romney-the-cautious/ ] and his secretiveness [ http://www.huffingtonpost.com/2012/07/25/scott-walker-romney-campaign_n_1701255.html ].
The presumptive Republican nominee refuses to release [ http://www.nationaljournal.com/2012-presidential-campaign/romney-digs-in-refuses-to-release-more-tax-returns-20120717 ] his pre-2010 tax returns, will not identify [ http://www.usatoday.com/news/politics/story/2012-05-25/mitt-romney-bundlers/55202324/1 ] his major fundraisers and bundlers and wiped all computer records of staff emails [ http://www.boston.com/news/politics/articles/2011/11/17/before_leaving_governors_office_in_2006_mitt_romneys_staff_eliminated_e_mail_records/?p1=News_links ] clean at the end of his term as governor of Massachusetts in 2006.
Romney’s rationale is that material like this could be used by the Obama campaign to discredit him. In an interview published a few weeks ago, Romney told National Review [ http://www.nationalreview.com/corner/309673/romney-tax-returns-i-m-simply-not-enthusiastic-about-giving-them-hundreds-or-thousands ]:
In the political environment that exists today, the opposition research of the Obama campaign is looking for anything they can use to distract from the failure of the president to reignite our economy. And I’m simply not enthusiastic about giving them hundreds or thousands of more pages to pick through, distort, and lie about.
So what was this ever-so-guarded, moralistic (“I want to clean up the moral pollution [ http://www.huffingtonpost.com/marc-cooper/direct-from-ames-the-gops_b_60074.html ] on TV and the Internet”) politician doing at a $50,000-a-couple fundraiser in Jerusalem with Sheldon G. Adelson — proprietor of one of the largest, if not the largest, gambling and casino operations in the world — seated in the honored position at his side?
Adelson and his company are under investigation [ http://www.reuters.com/finance/stocks/LVS/key-developments/article/2102514 ] by the Securities and Exchange Commission and the Department of Justice on allegations of foreign bribery. In addition, the United States Attorney’s office in Los Angeles is investigating whether Adelson’s Las Vegas Sands Corporation failed to alert authorities to millions of dollars transferred to casinos in violation of money-laundering laws, the Wall Street Journal reported [ http://professional.wsj.com/article/SB10000872396390444320704577566803521121134.html?mod=WSJ_WSJ_US_News_5&mg=reno64-wsj ] on August 4.
In its 2011 Annual Report [ http://files.shareholder.com/downloads/ABEA-242MDE/1998719164x0x564189/05AE746E-AF52-4E5E-8221-9E20F02760F5/LVS_2011_Annual_Report.pdf ], the Sands Corp., of which Adelson is chairman and C.E.O., disclosed that
On Feb. 9, 2011, L.V.S.C. received a subpoena from the S.E.C. requesting that we produce documents relating to our compliance with the Foreign Corrupt Practices Act. We have also been advised by the Department of Justice that it is conducting a similar investigation. Any violation of the F.C.P.A. could have a material adverse effect on our financial condition.
Adelson and other officials of the Sands Corp. have denied they have done anything wrong [ http://www.pbs.org/wgbh/pages/frontline/criminal-justice/new-questions-about-sheldon-adelsons-casino-operations-in-macau/ ].
There is a succinct answer to the question of why Romney would take the risk of closely associating himself with the immensely controversial Adelson: 10 million dollars — the amount Adelson and his wife have contributed [ http://www.opensecrets.org/pacs/lookup2.php?strID=C00490045&cycle=2012 ] to the super Pac supporting Romney, Restore Our Future.
The Adelsons are the largest donors to the Romney PAC. They have providing just over 12 percent of the $82.2 million Restore Our Future has raised so far. Romney’s personal wealth is an estimated $250 million [ http://www.washingtonpost.com/politics/romney-says-claim-he-hasnt-paid-taxes-in-10-years-untrue-tells-reid-to-put-up-or-shut-up/2012/08/02/63420530-dd05-11e1-8ad1-909913931f71_story.html ], but the former governor is determined not to self-finance his quest for the presidency.
Adelson’s cash is more than enough to persuade Romney to swallow his pride and embrace the man who, earlier in the campaign, spent millions on a different candidate. It was Adelson who financed Newt Gingrich’s populist attack ads [ http://www.nytimes.com/2012/01/09/us/politics/pro-gingrich-pac-plans-tv-ads-against-romney.html?pagewanted=all ], which portrayed Romney, the former C.E.O. of Bain Capital, as a “predatory capitalist.” The Adelson-financed attacks were instrumental in bringing about Romney’s defeat in the South Carolina primary in January and they laid the groundwork for the attacks Obama is subjecting Romney to now.
The source of Adelson’s huge campaign contributions would appear to create a conflict with Romney’s Mormon convictions. The official website of the Church of Jesus Christ of Latter-Day Saints states: “The Church opposes gambling in any form [ http://www.mormonnewsroom.org/article/gambling ], including government-sponsored lotteries.”
What Mormons Believe [ http://whatmormonsbelieve.org/mormons_gambling.html ], an unofficial web site explicating the positions of the Church declares:
The Mormon Church has always opposed gambling in every form, including government-sponsored lotteries. Mormon prophets and leaders have counseled the members over time, to avoid gambling of any type. Doing so, leads one away from righteousness and into the hands of Satan. The Mormon belief is that it is an addictive behavior and leads only to destructive habits and practices. It undermines the value of work and motivates one to think that they can get something for nothing. In time, the gambler will deny themselves, as well as their family the basic needs of life. They will oft times steal from others to finance their addiction, which in turn leads to stealing, robbery, etc.
Adelson is number eight on the Forbes 400 [ http://www.forbes.com/forbes-400/ ], a list of the 400 richest people in America, with a fortune of $21.5 billion amassed largely through an international collection of gambling venues.
Romney has been fortunate that the reporting on the inquiries into Adelson’s finances by the S.E.C. and the Justice Department has been limited in scope. Most coverage of Adelson’s contributions has not included any reference to either of these investigations.
Much of the most interesting reporting on the investigations has been done by ProPublica [ http://www.propublica.org/article/inside-the-investigation-of-leading-republican-money-man-sheldon-adelson (seventh item at http://investorshub.advfn.com/boards/read_msg.aspx?message_id=77569760 )], working jointly with “Frontline” and the Investigative Reporting Program of the University of California at Berkeley.
The majority of the allegations against Adelson emerged in connection with an ongoing wrongful dismissal lawsuit against Sands filed in 2010 by Steven Jacobs, former C.E.O. of Sands China. Emails and other documents posted by ProPublica on July 16 raised questions about the role of Leonel Alves, a legislator and lawyer in Macau who was hired as an outside counsel to Las Vegas Sands.
These emails revealed concerns among Adelson’s legal advisers that a large payment for legal services to Alves would set off warning bells in the sections of the Securities and Exchange Commission and Justice Department that watch out for violations of the Foreign Corrupt Practices Act.
The anti-bribery provisions of the F.C.P.A., according to the Department of Justice [ http://www.justice.gov/criminal/fraud/fcpa/docs/lay-persons-guide.pdf ], “make it unlawful for a U.S. person, and certain foreign issuers of securities, to make a corrupt payment to a foreign official for the purpose of obtaining or retaining business for or with, or directing business to, any person.” Alves is a member of the local Macau legislature, serves on a 10-member council that advises Macau’s chief executive, and is a member of the Chinese People’s Political Consultative Conference, which advises the government of China.
In a Sept. 30, 2009 email, Alves wrote to Jacobs [ http://s3.documentcloud.org/documents/399393/email-from-leonel-alves-to-steve-jacobs-sept-30.pdf ] that at the 60th anniversary of the People’s Republic of China “someone high ranking in Beijing approached me before the official dinner and invited me 2 handle issues related to the Venetian [ http://www.venetian.com/ ]’s projects in Macau.” Alves wrote Jacobs, “There is an amount to be agreed by Mr. Adelson to settle the 2 issues. The amount to be paid to resolve the serviced apartments issue will be paid to a mutually accepted escrow agent and delivered to the gentleman upon official approval in the Official Gazette authorizing the sale of the serviced apartment.”
On Dec. 10, 2009, in another email to Jacobs [ http://s3.documentcloud.org/documents/399392/email-from-leonel-alves-to-steve-jacobs-re.pdf ], Alves wrote that he was returning to Beijing the next day and “will have chance to talk with my friends there.” Alves warned, however, that “what they request is extremely expensive (US300 m, which includes closing the Taiwanese case).”
It is not clear from the email what was done about the request for $300 million.
In a separate matter, Jacobs, in a March 11, 2010 email to Al Gonzalez [ http://www.propublica.org/article/emails-on-alves-employment-and-payment#email3 ], who was then general counsel at Las Vegas Sands, said that he had told Alves that a bill for services at three times the normal rate could not be paid in full because “we were worried that there could be F.C.P.A. issues related to this.” Roughly three weeks later, Jacobs wrote, “I was instructed by SGA [Adelson’s initials] and MAL [Michael A. Leven, president of Las Vegas Sands] to pay and close out the matter,” ProPublica, Frontline and Berkeley investigators disclosed.
The next day, March 12, 2010, Gonzalez wrote back to Jacobs: “You know from various conversations we’ve had and emails we’ve exchanged that I did not believe it appropriate to pay LA [Leonel Alves] three times his normal rates,” before adding, “I wish you would have advised me so I could have intervened.”
A month later, in April of 2010, Gonzalez resigned as general counsel to Sands. On July 23, Sands fired Jacobs as C.E.O. of Sands China, and soon the battleground shifted to the courts.
Ron Reese, Sands vice president for public relations, declined to comment, but pointed me to stories of past denials of wrongdoing by company officials, including Adelson. On March 28, Adelson declared [ http://www.macaubusiness.com/news/sheldon-adelson-opens-fire-on-steve-jacobs/8351/ ] in a speech in Macau that the Jacobs suit “is pure threatening, blackmailing and extortion. That is what it is all about.” Speaking at the J.P. Morgan Gaming, Lodging, Restaurant & Leisure Management Access Forum, Adelson said:
When the smoke clears, I am 1,000 percent positive that there won’t be any fire below it. What they will find is a foundation of lies and fabrications that were designed for the sole purpose of trying to make a settlement for a lot more money than what he [Jacobs] felt he was entitled to.
The Adelson-Jacobs feud turned up hotly-disputed allegations even more out of sync with Romney’s religious and moral convictions after Jacobs filed a request for documents charging that Adelson had initiated a “prostitution strategy” to draw customers to the Macau facilities. The Jacobs filing read [ http://www.forbes.com/sites/stevenbertoni/2012/07/09/sheldon-adelson-fires-back-against-prostitution-allegations/ ]:
As background, shortly after my arrival to Macau in May 2009, I launched “Operation Clean Sweep,” designed to rid the casino floor of loan sharks and prostitution. This project was met with concern as L.V.S.C. Senior Executives informed me that the prior prostitution strategy has been personally approved by Adelson.
Adelson denied the allegation, telling Forbes: “Would I jeopardize being the 7th richest man in the US and the 14th or 15th richest person in the world to push prostitution? For what? I’m already the most profitable company in consumer services ever. What do I have to win?”
By July 20, the situation got even messier. Adelson sued Jacobs in Florida for defamation [ http://www.chicagotribune.com/news/politics/sns-rt-us-democraticgroup-apology-adelsonbre87200v-20120802,0,3265880.story ] for making statements that “impugn Mr. Adelson’s integrity and harm his reputation.” In addition, Adelson threatened to sue the Democratic Congressional Campaign Committee for issuing press releases linking Adelson’s contributions to “Chinese prostitution money.”
On August 2, the D.C.C.C. backtracked [ http://www.usatoday.com/news/politics/story/2012-08-03/sheldon-adelson-dccc/56762554/1 ], publicly declaring “In press statements issued on June 29 and July 2, 2012, the D.C.C.C. made unsubstantiated allegations that attacked Sheldon Adelson, a supporter of the opposing party.” The D.C.C.C. said, “This was wrong. The statements were untrue and unfair, and we retract them.”
On the legal front [ http://www.chicagotribune.com/news/politics/sns-rt-us-democraticgroup-apology-adelsonbre87200v-20120802,0,3265880.story ], Nevada District Court Judge Elizabeth Gonzalez will hold a hearing on August 30 to determine whether Las Vegas Sands Corp withheld key documents in Jacobs’ wrongful termination case.
It would be interesting to know what Romney has to say about Adelson’s gambling business and his difficulties with the S.E.C., the Justice Department and the D.C.C.C., but Romney’s campaign did not respond to repeated requests for comment.
The toughest charges leveled against Romney as a politician have been distinctly personal: that he lacks authenticity [ http://www.businessinsider.com/14-bald-faced-mitt-romney-flip-flops-that-were-dug-up-by-john-mccain-2012-1?op=1 ]; that he is “a phony [ http://decoded.nationaljournal.com/2011/10/cain-underscores-romneys-authe.php ]”; that “there are two Mitt Romneys [ http://www.youtube.com/watch?v=LcVzMkCZGMk ]”; that he is duplicitous [ http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/08/04/romney-tax-plan-on-table-debt-collapses-table/ ]; that he is a hypocrite [ http://www.salon.com/2012/06/29/how_romneycare_is_like_obamacare_on_taxes/ ] and a flip-flopper [ http://firstread.nbcnews.com/_news/2012/02/18/10443519-santorum-accuses-romney-of-hypocrisy-on-earmarks?lite ], even on the most serious issues.
Romney is currently polling ahead [ http://www.gallup.com/poll/156134/Obama-Character-Edge-Offsets-Romney-Economic-Advantage.aspx ] of Obama on a number of key questions. Voters prefer Romney’s approach to the deficit (51-41), jobs (50-44) and taxes (49-45). But when it comes to questions of character, Obama crushes Romney: on likability (60-30); on understanding the problems faced in voters’ daily lives (50-39); and on honesty and trustworthiness, two issues that go to the heart of Romney’s problems, Obama holds an 8 point advantage (47-39).
Perhaps the least effective tools with which to address this liability are the caution and secretiveness that have become Romney’s trademarks. At a minimum, Romney could tell us how he reconciles the values he says he stands for with the basis on which Adelson’s fortune is built.
Thomas B. Edsall, a professor of journalism at Columbia University, is the author of the book “The Age of Austerity: How Scarcity Will Remake American Politics [ http://www.amazon.com/Age-Austerity-Scarcity-American-Politics/dp/0385535198 ],” which was published earlier this year.
© 2012 The New York Times Company
http://campaignstops.blogs.nytimes.com/2012/08/06/embracing-sheldon-adelson/ [with comments]
===
Nearly Half Of Americans Die Without Money, Study Finds
In this July 26, 2012, photo, Neta Homier looks over bills in her home in Toledo, Ohio. Homier says she relies on Social Security to pay her bills.
By Bonnie Kavoussi
Posted: 08/06/2012 11:52 am Updated: 08/06/2012 11:55 am
Nearly one in two Americans -- 46 percent -- die "with virtually no financial assets," or less than $10,000, according to a recent study [ http://www.nber.org/papers/w17824.pdf?new_window=1 ] by economics professors at MIT, Dartmouth and Harvard. In fact, 19 percent of Americans die with "zero" financial assets, the study found. (Hat tip: the Washington Post's Wonkblog [ http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/08/03/study-nearly-half-of-americans-die-with-virtually-no-financial-assets/ ].)
The study found that many of these people with modest assets rely "almost entirely" on Social Security benefits to survive [ http://www.nber.org/papers/w17824.pdf?new_window=1 ], own no housing property, and are in poor health. People with zero financial assets and an annuity income of less than $30,000 were in the bottom health quartile before they died, while those in households with financial assets of at least $25,000 and an annuity income of $30,000 to $40,000 were in the 43rd health percentile before they died, according to the study.
Poorer Americans die younger [ http://www.nber.org/papers/w17824.pdf?new_window=1 ], in part because they cannot pay for medical emergencies, according to the study. And before death, poorer Americans' quality of life is significantly lower than the quality of life of their richer counterparts.
Many of these Americans who die without assets in effect outlive whatever retirement savings they may have.
Most Americans do not save enough, and half of Americans are not saving at all for retirement [ ], according to a recent study by LIMRA, a financial services trade association. Younger people are particularly unlikely to save for retirement [ ], in part because many have less financial education, lower earnings and student loan debt.
Americans need [ http://www.huffingtonpost.com/2012/07/19/unemployed-401k-retirement-savings_n_1685773.html ] about $1 million in retirement savings to generate $40,000 per year in retirement income, according to Kiplinger. So it is best to start saving early.
Copyright © 2012 TheHuffingtonPost.com, Inc.
http://www.huffingtonpost.com/2012/08/06/americans-die-without-money_n_1746862.html [with comments]
===
Azature's $250,000 Black Diamond Nail Polish Is World's Most Expensive Nail Lacquer
http://www.huffingtonpost.com/2012/08/06/azature-black-diamond-worlds-most-expensive-nail-polish_n_1747474.html [with comments]
*
The Killer Whale Submarine
http://www.hammacher.com/Product/11990
===
19 Things We Know More About Than Mitt Romney's Tax Returns
08/07/2012
King Tut's Penis
Coca-Cola's Secret Formula
The Bermuda Triangle
How To Speak Prairie Dog
Donald Trump's 'Hair'
Area 51
What Space Smells Like
The God Particle
Why Sloths Are Bad At Balance And Stuff
What Dinosaur Sex Looked Like
How To Survive The Zombie Apocalypse
What Ryan Lochte's Mom Knows About His Sex Life
Mitt Romney's Car Elevator
President Obama's Annoying Stoner Habit
"When a joint was making the rounds, he often elbowed his way in, out of turn, shouted 'Intercepted!' and took an extra hit."
Magnets
Easter Island's Moai
How Alicia Silverstone Feeds Her Baby
Amelia Earhart's Final Resting Place
John Boehner's Tan
[more at] http://www.huffingtonpost.com/2012/08/07/mitt-romney-taxes_n_1736813.html [with comments]
===
Indigestion for ‘les Riches’ in a Plan for Higher Taxes
August 7, 2012
http://www.nytimes.com/2012/08/08/business/global/frances-les-riches-vow-to-leave-if-75-tax-rate-is-passed.html [ http://www.nytimes.com/2012/08/08/business/global/frances-les-riches-vow-to-leave-if-75-tax-rate-is-passed.html?pagewanted=all ] [with comments]
===
Mitt Romney Campaign Inadvertently Slams Ronald Reagan In New Ad
August 6th, 2012
The Mitt Romney campaign has launched a new ad aimed at discrediting President Obama‘s handling of the United States’ relationship with Israel, bashing the President for not visiting Israel during the first three and a half years of his presidency. Entitled “Cherished Relationship,” the ad highlights that fact, plus Romney’s recent declaration that Jerusalem is “Israel’s capital.”
The problem is, no Republican president since Richard Nixon has visited Israel within that time frame, and Ronald Reagan never made a presidential visit to Israel. ...
[...]
http://www.mediaite.com/online/mitt-romney-campaign-inadvertently-slams-ronald-reagan-in-new-ad/ [with comments]
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What Romney Got Wrong in Israel
The presidential candidate's simplistic narratives about innate greatness fail to explain either Israel's accomplishments or America's challenges.
Aug 6 2012
http://www.theatlantic.com/international/archive/2012/08/what-romney-got-wrong-in-israel/260754/ [with comments]
===
Mitt Romney’s “culture” war
Republican presidential candidate, former Massachusetts Gov. Mitt Romney, speaks at a campaign event in Bow, N.H., Friday, July 20, 2012.
(Credit: AP/Charles Dharapak)
His comment about Palestinians wasn't a gaffe: It was part of his concerted efforts to demonize his opponents
By Erik Nielson
Sunday, Aug 5, 2012 07:00 AM CDT
In his latest overseas gaffe [ http://www.huffingtonpost.com/2012/07/30/mitt-romney-palestinians_n_1718496.html ], Mitt Romney pontificated on the economic disparities between Israelis and Palestinians. Ignoring Israel’s role in perpetuating these differences, Romney instead offered a clear and simple explanation: “Culture makes all the difference.” These remarks, as well as his suggestion that if president he’d park the U.S. embassy in the highly contested city of Jerusalem, have surprised many in the U.S. and abroad and have drawn accusations of everything from ignorance to outright racism.
But Romney’s statement that Israelis’ cultural superiority explains their economic success — and, by extension, that the “backward” Palestinians are to blame for their failures — isn’t particularly surprising. Not only does it smack of the familiar Republican tactic of demonizing victims, but it’s also consistent with Romney’s strategy of “othering” Obama in similar ways, often using coded concepts of shared culture to exploit or create unease about Obama’s race. Just a few days earlier, one of Romney’s aides made the mistake of revealing a bit too much of this strategy when he told a member of the British press [ http://www.telegraph.co.uk/news/worldnews/mitt-romney/9424524/Mitt-Romney-would-restore-Anglo-Saxon-relations-between-Britain-and-America.html ], “We are part of an Anglo-Saxon heritage,” going on to note that the White House “didn’t fully appreciate the shared history we have.” It wasn’t hard to read between the lines. America’s first black president, the son of a Kenyan father, doesn’t understand our culture.
Taken in isolation, these comments could easily be dismissed as the blunders of a poorly managed campaign or a clumsy candidate. But against the backdrop of Republicans’ tireless attempts to undermine Obama’s legitimacy — not to mention Romney’s ongoing rhetorical efforts to portray him as “foreign” — what we find instead is that they are part of a broader effort to exoticize the president so that his race can remain an issue throughout the 2012 election season.
Even before he took office, Obama was forced to prove his “American-ness” to a rabid group of “birthers” who, even when confronted with irrefutable evidence, found it easier to believe Obama was at the center of a major conspiracy to violate the Constitution than accept that he was the natural-born citizen he claimed to be. Sadly, this movement still has high-profile adherents, including immigrant hunter Joe Arpaio and Chapter 11 guru Donald Trump, the latter of whom has vowed to make Obama’s birth a central element in the election. Rather than distance himself from Trump, Romney has recently embraced him, in the process giving a proverbial wink to attacks that center on Obama’s fundamental right to hold office.
It is perhaps the basic sense that Obama has no right to be the American president that has fueled the surprising, perhaps unprecedented, disrespect he has been forced to endure. We all remember when Republican Rep. Joe Wilson shouted “You lie” during an Obama speech to Congress; when right-wing Supreme Court Justice Samuel Alito shook his head like a petulant child during the following year’s State of the Union; when Speaker John Boehner refused to allow the president to address a joint session of Congress in 2011; and when Jan Brewer wagged her fingers in the president’s face earlier this year. Although he has governed as a centrist — to the chagrin of many progressives — Obama has drawn the vitriol of a radical. It is not uncommon to hear Republican politicians decry him as a traitor; it’s almost expected at right-wing campaign events. In fact, at a May 2012 Romney event in Ohio [ http://www.buzzfeed.com/zekejmiller/romney-silent-as-woman-says-obama-should-be-tried ], a woman in the crowd said of Obama, “I do believe he should be tried for treason.” Mitt didn’t object. At all.
Perhaps one of the reasons why words like “treason” seem to come so easily for some Republicans is that many are convinced, facts be damned, that Obama is a Muslim and therefore some kind of enemy to our Judeo-Christian culture. According to a recent poll [ http://www.pewforum.org/Politics-and-Elections/Little-Voter-Discomfort-with-Romney%E2%80%99s-Mormon-Religion.aspx ], more than a third (34 percent) of conservative Republicans now believe Obama is a Muslim; that’s a dramatic increase over 2008, when only 16 percent were stupid enough to think so.
While Mitt Romney has not fed this misconception directly, his Obama-isn’t-a-real-American rhetoric can’t be helping. As David Corn points out [ http://www.motherjones.com/politics/2012/04/ted-nugent-conservatives-mitt-romney ], one of Romney’s favorite lines — which he’s hammered home repeatedly on the stump — is that Obama “doesn’t understand America.” During a New Hampshire event [ http://www.seacoastonline.com/articles/20120101-NEWS-201010311 ] earlier this year, Romney repeated this claim, and then went on to make one of his oft-invoked threats: that Obama will turn the U.S. into a “European-style welfare state.” Perhaps it’s just a coincidence that Romney likes to spice up the rhetoric of “otherness” with a dash of “welfare” here and there, but a cynical observer might find something more racially sinister at work.
There was certainly something insidious in the recent comments made by John Sununu, one of Romney’s advisers, last month. First he made an appearance on Fox News and said that Obama “has no idea how the American system functions” because “he spent his early years in Hawaii smoking something [and] spent the next set of years in Indonesia.” Remind us of the black president’s marijuana use? Check. Make him sound exotic and foreign? Check. But the real beauty was in a Romney campaign conference call later on, during which he said [ http://www.huffingtonpost.com/2012/07/17/john-sununu-obama_n_1679803.html ], “I wish this president would learn how to be an American.” He did try to wiggle out of that one afterward, but given his bombast throughout the day, it’s pretty clear he was saying what he meant.
And, as Rachel Maddow recently demonstrated [ http://video.msnbc.msn.com/the-rachel-maddow-show/48235051#48235051 ], Romney has been joining in with his new favorite word, “foreign,” to describe Obama. As Maddow notes, while John McCain, the previous Republican candidate, has consistently taken the high ground against tactics like this, Romney has made a beeline for the gutter. “This idea of criticizing and attacking success, of demonizing those in all walks of life who have been successful,” he said at an Ohio event last month, “is something which is so foreign to us, we simply can’t understand it.” This line, or some permutation of it, has been popping up a lot in Romney’s speeches. He accuses Obama of “demonizing” the successful, yet he seems to be demonizing anyone who doesn’t fit his narrow view of what makes us American.
Recent polls [ http://www.washingtonpost.com/politics/swing-state-poll-romney-still-struggling-to-convince-voters-he-cares/2012/08/01/gJQAjKoAPX_story.html ] show that Romney’s tactic isn’t working, particularly in crucial swing states. With just a few months to go, it remains to be seen how much lower he will go to win the election. In May of this year, the New York Times exposed an advertising plan [ http://www.nytimes.com/interactive/2012/05/17/us/politics/17donate-document.html ] commissioned by a Republican super PAC that proposed attacking Obama on Jeremiah Wright, again. Romney repudiated the plan at the time, but with the edge going to Obama, we’ll see if Wright’s name reenters the fray.
Of course, if it does, then the door will be open for attacks on a candidate’s religious affiliations, and whatever damage Jeremiah Wright can do, the Mormon Church — with its reputation for secrecy, its legacy of bigotry and its own set of “foreign” cultural practices — can do more. Surely that’s a road Mitt Romney doesn’t want to go down.
Then again, who knows? This is the same guy whose sense of what’s culturally right is so strong that it compels him to do what’s morally wrong. Standing in front of a group of wealthy Israeli donors and praising their cultural superiority was a surprisingly inept bit of politics, but the underlying message of bigotry is perfectly consistent with his American narrative as well. He didn’t say the Palestinians were inferior, just as he never says Obama’s race makes him un-American. He doesn’t have to.
Copyright © 2012 Salon Media Group, Inc.
http://www.salon.com/2012/08/05/mitt_romneys_culture_war/ [with comments]
===
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upon the Right of Election, 1790
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