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UPDATE: After Mitt Romney released his tax returns for 2010 and 2011, new evidence surfaced of his foreign bank accounts. We are adding that information to this report. Despite the new evidence, it still accounts for a small part of Romney's fortune, so our rating is unchanged.
The King of Bain documentary tells viewers, again and again, that Mitt Romney is a very wealthy man. The video, released by a super PAC backing Newt Gingrich, flashes dollar signs and suitcases full of cash, along with images of Wall Street landmarks, to hammer home its Romney-as-corporate-raider message.
Here, we’re looking into the film’s claim’s about Romney’s personal worth. At the end of the 28-minute film, white letters flash on a black background as somber piano music plays.
"Romney’s own financial statement shows his personal fortune to be at least a quarter billion dollars."
"No one knows for sure..."
"The bulk of Mitt Romney’s personal wealth remains in blind trusts and overseas bank accounts."
What we found is that some, but not all, of what’s in those statements is accurate.
The size of his fortune
Last year, Romney filed a financial disclosure Form 278 with the Office of Government Ethics, as required by all presidential candidates. It’s 28 pages long, listing bank accounts, mutual funds, stock holdings, speaker’s fees and more.
That form only requires filers to select a range, for example between $100,001 and $250,000, for the value of each asset. King of Bain cites a Washington Post story that said the top end of the range of Romney’s wealth is $264 million. The low end is $85 million.
In that same story, the Romney campaign told the Post that "a more accurate range" is between $190 million to $250 million.
So the King of Bain narrator’s statement that Romney is now worth "somewhere over a quarter of a billion dollars" goes right for the high end of the range cited by the Washington Post. But the actual amount could be considerably less.
Blind trusts and offshore accounts
Romney’s disclosure form includes an attachment addressing the blind trust issue. It states:
"Other than assets and income sources listed on page 1 of Schedule A, all of the assets listed in this Report are held by the W. Mitt Romney Blind Trust, the Ann D. Romney Blind Trust, Mr. Romney's IRA or Mrs. Romney's IRA (collectively, the 'Reporting Entities'). In each case, R. Bradford Malt, as Trustee (the 'Trustee'), has complete investment discretion over the assets held by these investment vehicles, except where the Trustee has delegated that discretion to third-party investment managers.
"The management of the assets of the Reporting Entities was deemed blind by the Massachusetts State Ethics Commission. Since January 1, 2003, neither Mr. Romney nor Mrs. Romney has had any control over any of the assets acquired or disposed of by the Reporting Entities and neither Mr. Romney nor Mrs. Romney has previously received any reports identifying specific assets currently held by any of the Reporting Entities."
Politicians commonly put their money in blind trusts while they hold office to prevent conflicts of interest. If they don’t know what investments they own, they can’t pass laws benefiting themselves, the theory goes.
Bill Allison, editorial director for the Sunlight Foundation, which advocates for openness in government, said that even though the rules aim to prevent self-dealing, they aren’t airtight.
"I think a lot of times politicians with blind trusts do have a pretty good idea what they own," he said. News stories have raised questions about the "blindness" of Romney’s trust.
Still, the intent of blind trusts is to avoid conflicts of interest. So the video is correct in stating that much of Romney’s wealth is in a blind trust -- all but about $1.5 million, according to the form.
But what about offshore accounts?
We asked Winning Our Future to provide us with support for that claim but didn't receive any.
The evidence emerged when Romney released two years of his personal tax returns in January 2012. The documents showed he previously had a Swiss bank account -- $3 million that a trust in his wife’s name reported holding in a Swiss money-market account, according to a story in the New York Times.
Malt, the trustee, told reporters that he had opened the account with the United Bank of Switzerland in 2003 and closed it in 2010. The Times said the interest it accrued in 2010, about $1,700, was reported on tax documents.
Malt told reporters the account was opened ''for diversification.''
''It is a bank account, nothing more, nothing less,'' he said, according to the Times.
The tax returns also revealed investments in low-tax locales including the Cayman Islands, Bermuda, Ireland and Luxembourg. But it’s impossible to tell how much of Romney’s fortune comes from his holdings in offshore funds and institutions, according to numerous news reports.
"You really can’t determine where his wealth is from tax returns because they’re just reporting income," Allison said.
Allison inspected Romney’s returns and noted that on his 2010 return, Romney reported $2.7 million in gross foreign income. That’s out of $27.3 million in total gross income.
"The thing that jumped out at me is that his foreign income is just a fraction of his total," Allison said.
He added that it’s possible that Romney has other foreign assets not reported on the tax return because they aren’t producing income.
Romney’s financial disclosure form lists other investments held by firms in Europe, including PNB Paribas, in France, and Rabobank Nederland, which is Dutch. But that type of investment isn't different from holdings in many people's 401(k) retirement savings funds.
Allison said that based on publicly available records, foreign assets and income do not "appear to be the bulk of his wealth."
"But the forms that we’re looking at really aren’t designed to answer these kind of questions," Allison added. "And that’s the problem with the disclosures we require of our presidential candidates."
Winning Our Future’s movie puts Romney’s personal fortune at $250 million and says most of it "remains in blind trusts and overseas bank accounts."
According to one analysis of Romney’s financial disclosure, his wealth may total $264 million -- but it may also be closer to $85 million. It’s clear that most of it has been held in blind trusts since 2003, which is common practice among elected officials to avoid conflicts of interest.
But the super PAC didn't provide, and we didn't find, good evidence that "the bulk" of Romney’s money is in overseas accounts. His tax returns show he previously had a Swiss account and that he made almost $3 million in foreign income in 2010. But the tax returns and financial disclosures indicate that a relatively small share of Romney’s wealth is overseas. Taken all together, we rate the claim Half True.
KingofBain.com, "When Mitt Romney Came to Town," Jan. 10, 2012
Mitt Romney financial disclosure form, filed Aug. 12, 2011, accessed via opensecrets.org
Washington Post, "Romney worth up to $264 million; earned up to $68,000 per speech before campaign," Aug. 12, 2011
ABC News, "Mitt Romney's Blind Trust Not So Blind," Dec. 19, 2011
Interview with Bill Allison, editorial director, Sunlight Foundation, Jan. 13, 2012 and Jan. 30, 2012
Los Angeles Times, "A fortune enhanced by U.S. tax code," Jan. 25, 2012, accessed via Nexis
Baltimore Sun, "Romney tax returns: A wealth of insight," Jan. 25, 2012, accessed via Nexis
New York Times, "Romneys' Swiss Account Captures Critics' Fancy," Jan. 25, 2012
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