Rauner Defends Dumping Dollars Into Off-Shore Accounts
By aaroncynic in News on Aug 4, 2014 9:30PM
Republican gubernatorial hopeful Bruce Rauner defended the very common smart business practice of funneling wealth into the Cayman Islands, telling Crain’s Chicago Business that “at no point” has he tried to evade taxes. On Friday, a Sun-Times report revealed of Rauner’s five holdings in the Cayman’s, three of them are tied to GTCR, the private equity firm he helped found. The fourth holding is tied to the Overlook Partners Fund, a personal investment by Rauner and the fifth is tied to the Rauner family’s foundation.
While the practice is legal and Rauner hasn’t been accused of criminal wrongdoing, Governor Pat Quinn’s campaign called out the business tycoon for the practice. “Republican billionaire Bruce Rauner doesn’t just use exotic methods to dodge taxes,” said campaign spokesperson Brooke Anderson. “He even uses exotic, offshore locations. Whether Mr. Rauner's tax dodge is legal is beside the point. It's wrong.”
Rauner told Crain’s:
“GTCR has its own structure for just a couple of investments. When they invest in overseas companies, they set up that particular structure. It doesn't impact our personal tax rate whatsoever.”
Rauner campaign spokesperson Mike Schrimpf said “Bruce has disclosed all this information to the federal government and is clearly in full compliance.”
While Rauner might be in full legal compliance, the practice itself allows major corporations and other wealthy individuals to skip out on paying taxes in the United States. According to a June report from the group Citizens for Tax Justice, U.S. based multinational corporations booking profits in tax shelters like the Cayman’s has allowed them to skip out on an estimated $90 billion in federal income taxes. For someone trying to save the Illinois economy with a tax plan that targets professional and business services - many of which are smaller businesses - sheltering profits from a company boasting a $10 billion investment portfolio seems somewhat duplicitous, at best.
Richard L. Kaplan, a law professor at the University of Illinois told the Sun-Times “I’d think someone who anticipates being in the public eye wouldn’t be in the Cayman Islands because the question to be asked is, ‘Why would you have invested there?”