In one of the president’s latest campaign commercials — an ominous spot that looks a bit like the trailer to a B-grade horror movie — Mitt Romney gets some flak for his offshore bank accounts. Apparently, keeping money in places like the Bahamas and the Cayman Islands is a sign that one might not be the most upstanding citizen.
This raises a question: Why do some of the president’s wealthiest donors use the same strategies this commercial decries?
At least five of the president’s “bundlers” — in lay terms, people who form groups with their acquaintances and pool funds in order to donate significant sums to campaigns — run firms that keep some of their money in tax havens such as Luxembourg, the Cayman Islands, and Bermuda. This is exactly the same behavior for which the president’s ad condemns Romney.
Though politicians don’t disclose the specific amount of money in each bundle, records give ranges of how much bundlers have funneled to the president’s reelection campaign, with $500,000 or more as the highest range displayed. Michael Sacks, one of the president’s top bundlers, is responsible for collecting at least $500,000 for Obama’s reelection campaign. Sacks is the CEO of Grosvenor Capital Management, a hedge fund that has offices in London, Tokyo, and Chicago, and he resides in the prosperous village of Winnetka, Ill., just north of Chicago. One of his funds, the Grosvenor Registered Multi-Strategy Fund, LLC, has authorized “certain in-kind transactions
” with the Grosvenor Multi-Strategy Offshore Fund, Ltd., a fund conveniently located in the lovely Cayman Islands — known for their sparkling beaches, for their first-class snorkeling, and for being one of the world’s largest offshore financial centers, as the president’s ad points out.
Sacks isn’t the only substantial Obama donor with a tropical outpost. Farallon Capital Management is one of the largest hedge funds in the world and has a handy location in the Caymans — and its founder, Tom Steyer, has directed between $50,000 and $100,000 to the president’s reelection efforts. His son Sam, while a student at Harvard in 2008, appears to have given $28,500 to the president as well. Generosity must run in the family.
Sacks and the Steyers, of course, aren’t the only ones participating in a system their chosen candidate vocally criticizes. New York’s Mark Gallogly, cofounder of Centerbridge Partners, has sent a bundle of $200,000 to $500,000 Obama’s way. And we can only guess what benefits Gallogly’s firm derives from Centerbridge Credit Partners Master, LP, a Cayman Islands corporation.