Once again, the media have played on arcane facts of Mitt Romney’s wealth, manipulating public misperceptions to provide campaign fodder where there is nothing at all.
The Washington Post had a story this past Thursday entitled “Romney using ethics exception to limit disclosure of Bain holdings.” The authors argue that Romney “has taken advantage of an obscure exception in federal ethics laws to avoid disclosing the nature and extent of his holdings” and “has made it difficult to know precisely where his money is invested, whether it is offshore or in controversial companies.” The Obama campaign hopped onto this story, with campaign manager Jim Messina claiming “Mitt Romney has put his personal financial assets in a black box and hid the key, attempting to play by a different set of rules than any candidate in recent history.”
None of the Post’s implications is fair or accurate. Here is the unadorned truth, which a close reading of the story will reveal: Mitt Romney has much of his net worth invested in funds about which he is legally prevented from disclosing certain information, so, after trying and being unable to break those agreements, he hasn’t done so, in compliance with federal ethics and election laws.
But instead of admitting that, a notable but hardly scandalous fact, the Post attempts to paint Romney’s essentially unavoidable legal situation as a malevolent exploitation of an arcane loophole. In order to do so, they cite “several outside experts across the political spectrum,” most prominently, Rick Santorum’s lawyer, who suggests that Romney’s “approach turns the whole purpose of the ethics statute on its ear.”
Of course, the only “approach” Romney has taken is disclosing the information about his investments he can, and not violating confidentiality agreements he has signed that prevent him from disclosing any more information.
At issue is not the actual funds Romney is invested in, which he’s had to disclose for tax and financial-disclosure purposes, but the underlying assets, that is, the companies which Bain funds own in whole or in part. For a range of very good reasons, it is entirely legal and industry-standard to keep these holdings private information.
The Post continually implies that Romney has intentionally exploited some kind of “loophole” or “exception” in order to keep his holdings private. But the story admits that, for one, Romney’s actions aren’t his own decision: His lawyers actually sought permission to disclose this information (and break his existing agreements), and were denied by Bain. This isn’t even like “taking advantage” of the carried-interest “loophole,” where one could (in theory) intentionally pay a higher tax rate: Romney can’t disclose this information. And, of course, this isn’t a loophole at all: It is entirely logical that politicians shouldn’t have to disclose information that, well, they can’t disclose.
This just happens to be a somewhat rare case, since alternative investments that require confidentiality agreements tend to be the province of the very wealthy. Santorum’s lawyer is cited explaining that the exception is a “‘double standard’ that allows very wealthy candidates to avoid disclosure because they are more likely to have their assets in accounts covered by a confidentiality agreement” — a line of argument one might expect to hear at Occupy Wall Street, but not as serious commentary on our laws. The Post, of course, is happy to join in the class-bashing and shadowy suggestions, claiming that it’s “difficult to know whether” Romney’s money is “offshore” — which we do know, actually, because he has told the IRS where all of his Bain accounts reside, so he can pay his taxes.
But the Post’s only legitimate contention basically rests on this: Romney is more secretive than everyone else, even if that’s only because he’s richer and has more money in private-equity (and therefore confidential) funds. As they admit, Romney is only the first presidential candidate to follow these rules “for such a large portion of his overall assets.” Perhaps this is because he is the first presidential candidate who is the founding partner of a private-equity firm.
People are entitled to disapprove of Mitt Romney because of the manner in which he acquired his wealth, just as, say, they are entitled to dislike Koch Industries if they don’t like their businesses. But the ostensibly objective media betrays its liberal bias when it darkly reports on Romney’s unique disclosure statements or the non-public nature of the Kochs’ earnings reports without noting that these are entirely standard practice, for a presidential candidate with these assets and a privately held corporation, respectively.
Thursday’s story prompted an effort by the Obama campaign to ask for fuller disclosure of his assets and tax returns, repeating meaningless accusations, with the Twitter hashtag “#WhatsRomneyHiding.” It seems safe to say that whatever Romney is hiding is probably not in the accounts and investments he’s disclosed to the IRS.