Bermuda

US: Gingrich targets offshore jurisdictions


By added on 09/01/2012

GOP front-runner Mitt Romney, portraying himself as a “jobs creator” in the Republican Presidential primary race, will be depicted as a man who routinely exploited off-shore financial centres including Bermuda and put thousands of Americans out of work in a new series of attack ads being unveiled by rival Newt Gingrich’s supporters today, reports Bernews.

Voters in South Carolina, Florida and New Hampshire — which all hold primary elections this month — will likely see the ad campaign which is being backed by a group supporting former Speaker of the US House of Representatives Mr Gingrich.

Mr Romney — who finished atop the pack in a dead-heat with former Pennsylvania Senator Rick Santorum in Iowa’s first-in-the-nation straw poll last week — is widely considered the man to beat in the Republican primaries.

Mr Gingrich, a favourite of the Republican’s social and fiscal conservative wing, is hoping to slow Mr Romney’s momentum with strong showings in early Southern primaries in South Carolina and Florida [the two men are pictured together at top].

Former Massachusetts Governor Mr Romney has already conceded Bain Capital, the Boston equity firm he headed in the ’80s and ’90s, legally used funds in both Bermuda and Cayman to help investors avoid paying US taxes.

Critics in both the Republican and Democratic ranks have countered that he should not have exploited tax loopholes in off-shore financial centres at all, regardless of the legality of doing so.

The group backing Mr. Gingrich’s new attack ads receives financial support from some of America’s most ardent conservatives, according to a report in the “Los Angeles Times”.

The new ad campaign “will be strong and sustained,” according to one person familiar with the plan who declined to provide details.

The ads are expected to overtly criticise Bain Capital’s corporate ethos and its use of off-shore funds for tax avoidance. A general preview of the coming anti-Romney campaign provided to the “Los Angeles Times” included footage from a new documentary in which an announcer says Bain’s “greed was matched only a willingness to do anything to make millions in profits.”

“This new wave [of ads] may be a sign of how widespread the anger [at corporate America is], and underlines the likelihood of a 2012 campaign that is not only about debating credentials of candidates, but the nature of capitalism itself,” said the “Los Angeles Times”.

The ads will rely on footage from a film highly critical of Mr Romney that was just completed by his former ally, Jason Meath.

“Capitalism made America great — free markets, innovation, hard work — the building blocks of the American Dream.,” says the promotional material for the film. “But in the wrong hands some of those dreams can turn into nightmares. This film is about one raider and his firm and how they destroyed that dream for thousands of Americans and their families — Mitt Romney and Bain Capital.

Mr Romney, who has made his time as CEO of Bain Capital a centrepiece of his Presidential campaign, has criticised President Obama for not having experience in the “real economy” and opposed the 2008 bank bailouts under President George W. Bush and the Obama Administration”s rescue of the US auto industry.

But when Kansas City’s Worldwide Grinding Systems went belly-up less than a decade after Bain became its majority stakeholder, the company, which had been in operation since 1888, had to turn to a federal insurance agency to bailout its pension programme in large part because Bain had “saddled” it with “such a heavy debt load.”

And a Missouri steel company in which the former Massachusetts Governor’s Bain Capital was the majority shareholder also went bankrupt, laid off more than 750 workers and had to turn to the federal government for a bailout of its pension funds in 2001, according to a special report by the Reuters news agency this week.

Workers were denied the severance pay and health insurance they’d been promised, and their pension benefits were cut by as much as US$400 a month.

What’s more, a federal government insurance agency had to provide US$44 million to bail out the company’s underfunded pension plan.

Nevertheless, Bain profited on the deal, receiving US$12 million on its US$8 million initial investment and at least US$4.5 million in consulting fees.

Though he left Bain more than a decade ago, Mr Romney is still making millions a year from the firm thanks to a lucrative retirement package.

His campaign, meanwhile, finally admitted that its claims that Bain created 100,000 jobs under Mr Romney’s leadership were inflated.