Romney’s Tax Secrecy: Did He Get Away With It?

Romney’s Tax Secrecy: Did He Get Away With It?

In January, in a South Carolina debate just before that state’s primary, Newt Gingrich hit Mitt Romney hard for releasing barely any of his tax returns: “Look, he’s got to decide and the people of South Carolina have to decide. But if there’s anything in there that is going to help us lose the election, we should know it before the nomination. And if there’s nothing in there, why not release it?” The audience applauded, and when Gingrich proceeded to trounce Romney at the polls the following Saturday, voters told me that Romney’s secrecy about his tax returns was part of their decision—they didn’t necessarily care what tax rate Romney paid, but they didn’t like his declaration that it wasn’t any of their business.

Back then, it seemed only a matter of time before Romney would buckle to pressure and release a critical mass of returns—if not the 12 years worth that his father released when he ran for president, then at least, say, five or six. But here we are, with just five days until the election, and Romney has released no more than the two years he agreed to release back during the primaries. This has left voters in near-total darkness about basic questions about his very recent past. As tax experts have noted, there are any number of reasons why Romney doesn’t want to release more of his taxes—it’s possible he participated in an IRS amnesty program for secret foreign bank accounts; it’s more possible he gamed the system to avoid taxes on his huge retirement account and his sons’ $100 million trust fund, or that he paid very, very low rates these past couple years as a result of a tax code that favors people like him whose income is mainly taxed as capital gains. (In releasing his belated 2011 returns in September, Romney asserted, without providing any evidence, that he had not paid an effective rate lower than 13 percent during the past decade.) Just this week, Bloomberg News offered a new shred of insight, into the way that Romney used the Mormon church to shelter some of his investment gains from taxes. But the fact is, barring some future leak, we’re simply not going to find out what was so worrisome in Romney’s taxes from only a few years ago.

Not only that, Romney has—unlike candidates Barack Obama, George W. Bush and John McCain—refused to identify his “bundlers,”the hundreds of people who have each raised hundreds of thousands of dollars for him.

 

…..1. Has the press fallen down on the job? A reporter who’s spent time traveling with Romney confirms what I suspected, that the pack gave up a long time ago trying to get the campaign to cough up the bundler lists and additional tax records. It’s not hard to see why: at some point, the campaign’s refusal to disclose comes to be seen as an old story, and a reporter risks being seen as a pest for persisting in the demand. Still, it seems like the press—not just the traveling pack, but everyone—could have done more to stay on the case, to be, as Grist’s Dave Roberts argued for a few months ago, “prosecutors for the truth,” constantly pressing the case for transparency on the public’s behalf. Devine recalls a time the 1988 presidential campaign when someone very high up at the New York Times — he thinks it may even have been the then-publisher, the recently deceased Arthur Sulzberger —sent Devine a letter at the Dukakis campaign and demanded the release of all of running mate Lloyd Bentsen’s financial and health records, beyond the little the campaign had put out. The campaign called back and said it was reluctant to do so. As Devine recalls, the Times executive “said, ‘We’d like the records and if we don’t get them, it’s going to be a problem, okay? Bye.’ I was like, ‘Oh, shit.’” The campaign got the records together and released them. Why isn’t anyone doing the equivalent today? “Maybe there’s nobody like that anymore,” said Devine. “But maybe if everyone got together, the TV networks and the major newspapers, and demanded it…”

….3. Did Romney really get away with something? On one level, the answer clearly seems to be yes: Romney has managed to get through an entire campaign for president without having to give up the basic information his predecessors did, information that could have been seriously damaging to his prospects, and now finds himself a lucky break or two from the White House. But the strategists are quick to argue that this elusiveness came at a cost. Romney’s secretiveness about his taxes, they say, was a major element of the unflattering frame the Obama campaign managed to construct around him for most of the campaign, of a self-interested plutocrat who was not to be trusted. “He paid a price,” Jordan said. “When these issues were front and center, as he was becoming known to the American public, this oddness, this secrecy, this penchant did help to shape his image in significant ways….The image of him as being secretive and behaving in sort of unprecedentedly plutocratic ways has sunk in.” Again, Devine agrees. “He’s gotten away with it, but it’s hurt him,” he said. He noted that Obama’s stubborn polling lead in Ohio is almost surely due in part to effective attacks over on the summer on Bain Capital and the few things that have emerged about Romney’s taxes, including his accounts in the Cayman Islands and Switzerland, which were so memorably targeted in this ad. “In terms of getting away with it,” concludes Devine,“it’s only something can get away with if…you’ve won the election.”

Which brings us to the final question, whether Romney’s evasion of the norms has exploded them for good. Jordan says the answer to that is quite simple: check the results on Tuesday. “Whether it’s a precedent that others follow depends on whether he wins or loses,” he said. If Romney loses, part of the explanation will be “that he was an odd man who insisted on doing things no one else tried to do —and that will be an object lesson.” Devine, though, hopes that regardless of the outcome, there would be a general reckoning after the election with what had been allowed to occur. “In the future, to run for president of the United States and not disclose your personal finances is a real travesty,” he said. “We’ve got to insist on this.”