Mitt Romney's wealth in spotlight again after tax probe

New evidence of Republican candidate's low payments follows poor TV ratings

The source of Mitt Romney's personal wealth continues to generate awkward headlines after it emerged that regulators have subpoenaed Bain Capital, the private equity firm he once headed, during an investigation into its tax arrangements.

New York's Attorney General, Eric Schneiderman, is seeking internal documents that will establish whether Bain – along with 11 other firms – has been forgoing management fees in favour of investments in the funds which they manage. Investments are taxed at a far lower rate than ordinary income.

The practice falls into a legal grey area. Some lawyers consider it an aggressive but legitimate means of tax avoidance; others believe it strays beyond the bounds of legality. Bain Capital is believed to have used it to avoid paying around $220m (£138m) in taxes, according to The New York Times, which broke news of the subpoena at the weekend.

Mr Romney left Bain over a decade ago, but continues to profit handsomely from his ties to the firm, and in the past two years earned roughly $13m from his share of its profits. A spokesman yesterday insisted the tax strategy at the centre of Mr Schniederman's probe is "a totally legal practice".

Mr Romney's financial arrangements have been an electoral talking point for months. The Republican candidate, believed to be worth upwards of $250m, continues to ignore calls to follow the protocol followed by almost every modern predecessor by releasing up to a decade's worth of his federal tax returns.

Instead, his campaign has published information relating to just the past two years. It reveals Mr Romney has a Swiss bank account, squirrels some of his fortune away in such tax havens as the Cayman Islands, and last year paid 15 per cent tax, roughly half the rate of a middle-class American.

Democrats have used the issue to vilify the Republican, portraying him as a predatory capitalist whose wealth puts him out of touch with ordinary voters. They have speculated that in recent years the multimillionaire may have paid almost no income tax.

Mr Schniederman's subpoena, which was filed in July, gives further legs to that narrative. Critics, who point out that the Attorney General is a Democrat, have argued that the entire investigation is politically motivated.

There are nonetheless signs that negative attacks against Mr Romney are working. TV ratings for last week's Republican convention in Tampa were down 30 per cent from 2008, and early polls have put his post-convention "bounce" at between zero and four per cent, which is at the lower end of expectations.

Though Romney is believed to have performed competently, there is little sign that Tampa will result in a sea-change in this election. His speech accepting the Republican nomination was overshadowed by coverage of Clint Eastwood's bizarre appearance, in which he conducted a rambling conversation with an empty chair. Vice-presidential candidate Paul Ryan was meanwhile criticised by fact-checking organisations for a string of alleged inaccuracies in his speech.

On Saturday, the Republican ticket faced further embarrassment when Mr Ryan admitted that he "misspoke" in a recent interview, when he claimed to have completed a marathon in "two hours fifty-something". An investigation by Runner's World magazine had established that the candidate, a self-proclaimed fitness fanatic, had in fact only finished one marathon, in 1990. It took him more than four hours.

The mis-steps have delighted the Obama camp, which this week touches down in Charlotte, North Carolina, for the Democratic convention. However, the event also presents them with a pertinent challenge: after months of negative campaigning, they must outline a positive vision for their candidate's second term.

Highlights of the three-day event, which begins tomorrow, include a scheduled speech by Elizabeth Warren, the party's senatorial candidate in Massachusetts, who has been a stern critic of Wall Street excess, and an appearance by Bill Clinton.

What's brewing in the President's basement

When he puts his feet up at the end of another long, hard day, Barack Obama likes nothing better than to blow the top from a cold glass of home-made novelty beer.

The White House has released recipes for two home-brews to have come out of a micro-brewery which the President has established in his basement.

One is a light honey ale made from high-end hops imported from Kent and honey from the beehive on Obama's south lawn. The other, a Honey Porter, gets a darker, heavier texture from a dose of chocolate malt.

The recipes, along with a video showing the beer-making process, were revealed on the White House website after 25,000 people signed a petition asking to read them.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Arts and Entertainment
British musician Mark Ronson arrives for the UK premiere of the film 'Mortdecai'
music
Voices
Winston Churchill, then prime minister, outside No 10 in June 1943
voicesA C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
News
i100
Sport
footballBrighton vs Arsenal match report
Arts and Entertainment
Benedict Cumberbatch has spoken about the lack of opportunities for black British actors in the UK
film
News
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Austen Lloyd: Private Client Solicitor - Oxford

Excellent Salary : Austen Lloyd: OXFORD - REGIONAL FIRM - An excellent opportu...

Austen Lloyd: Clinical Negligence Associate / Partner - Bristol

Super Package: Austen Lloyd: BRISTOL - SENIOR CLINICAL NEGLIGENCE - An outstan...

Recruitment Genius: Sales Consultant - Solar Energy - OTE £50,000

£15000 - £50000 per annum: Recruitment Genius: Fantastic opportunities are ava...

Recruitment Genius: Compute Engineer

Negotiable: Recruitment Genius: A Compute Engineer is required to join a globa...

Day In a Page

Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea
America: Land of the free, home of the political dynasty

America: Land of the free, home of the political dynasty

These days in the US things are pretty much stuck where they are, both in politics and society at large, says Rupert Cornwell
A graphic history of US civil rights – in comic book form

A graphic history of US civil rights – in comic book form

A veteran of the Fifties campaigns is inspiring a new generation of activists
Winston Churchill: the enigma of a British hero

Winston Churchill: the enigma of a British hero

A C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
Growing mussels: Precious freshwater shellfish are thriving in a unique green project

Growing mussels

Precious freshwater shellfish are thriving in a unique green project
Diana Krall: The jazz singer on being friends with Elton John, outer space and skiing in Dubai

Diana Krall interview

The jazz singer on being friends with Elton John, outer space and skiing in Dubai
Pinstriped for action: A glimpse of what the very rich man will be wearing this winter

Pinstriped for action

A glimpse of what the very rich man will be wearing this winter
Russell T Davies & Ben Cook: 'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'

Russell T Davies & Ben Cook: How we met

'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'
Bill Granger recipes: Our chef serves up his favourite Japanese dishes

Bill Granger's Japanese recipes

Stock up on mirin, soy and miso and you have the makings of everyday Japanese cuisine
Michael Calvin: How we need more Eric Cantonas to knock some sense into us

Michael Calvin's Last Word

How we need more Eric Cantonas to knock some sense into us