The broad outlines of Romney's portfolio were signed off by him in annual disclosures in 20111 and 2012 to the federal Office of Government Ethics and the Federal Election Commission, and then shared with the media and with voters.
A federally "qualified diversified" blind trust would have much stricter standards, preventing Romney — and the American public — from knowing what is contained in his portfolio. The OGE would qualify both the trust and any nominee for trustee to make sure that the trust's contents were not disclosed.
"In order to be truly blind, an official cannot really know what investments are held in the blind trust," said Stephen D. Potts, an OGE director in the first Bush and Clinton administrations who later served as deputy White House counsel for President George W. Bush.
Even with a federal blind trust, Romney could continue to receive income from Bain throughout his presidency, if he's elected — even if he remains unaware of the specific payments. Rebecca Wilkins, a senior counsel with the Citizens for Tax Justice, a tax fairness advocacy group, pointed to an obscure note to the Internal Revenue Service that turned up at the end of the 2010 tax returns for a trust for Romney's wife, Ann.
In the note, Romney's trustee told the IRS that the trust would elect to begin receiving interest from a Bain Capital fund known as "Bain Capital Partners (AM) X, LP." Although the fund is not detailed further in the return, the AP has learned that the fund is a partnership that was set up in the Cayman Islands, a foreign base that could allow U.S. investors to defer some of their future taxes under certain circumstances.
The fund is apparently tied to Bain Capital's 2010 purchase of Air Medical Group Holdings, the largest independent U.S. provider of emergency air medical services. The deal cost Bain an estimated $1 billion.
Under typical private equity arrangements, the Romney trust could receive interest from the "Bain Capital Partners (AM) X" investment fund over the next five to seven years, Wilkins said — meaning that Romney's Bain Capital income might continue flowing through 2017.
And because that income is treated as long-term capital gains, Romney would pay taxes on the earn-outs at the 15 percent capital gains tax rate, well below the higher rates paid by many middle-class American taxpayers.
"He'll be getting this income for a long time," Wilkins said.
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