November 28, 2020

The Caucus: Romney Tax Returns Show $45 Million Income

Mitt Romney’s campaign released details of his federal tax returns on Tuesday morning, showing that he is likely to pay a total of $6.2 million in taxes on $45 million in income over the two tax years of 2010 and 2011. (View full returns here)

The details of the returns, confirmed by a senior campaign official, provide the most detailed view yet of his wealthy family’s finances. The disclosure comes after a barrage of pressure to release his returns — which Mr. Romney has never done, even when he was elected governor of Massachusetts.

The disclosure — reported early Tuesday by The Washington Post, The Wall Street Journal and financial wire services — showed a vast array of investments, from a recently closed Swiss bank account to holdings in Bermuda and the Cayman Islands, all underscoring the breadth and depth of his wealth, which has become a central issue in his bid for the Republican presidential nomination.

Mr. Romney said last week that his effective tax rate was “about 15 percent,” a figure lower than that of many affluent Americans. But his returns suggested that he paid an effective tax rate of nearly 14 percent.

In addition to his 2010 taxes, Mr. Romney is set to release estimates for his 2011 taxes, which he will file in April. The campaign will report that he will pay $3.2 million in taxes for 2011, for an effective tax rate of 15.4 percent. That is a slightly higher effective rate than he paid the year before, when he paid about $3 million to the Internal Revenue Service.

Mr. Romney, a Mormon, has long said that he had promised to give 10 percent of his income to his church. His tax return shows that over two years he and his wife, Ann, gave $7 million in charitable contributions, including $4.1 million to the Church of Jesus Christ of Latter-day Saints.

“I pay all the taxes that are legally required and not a dollar more,” Mr. Romney said during Monday night’s debate. “I don’t think you want someone as the candidate for president who pays more taxes than he owes.”

Mr. Romney also said that there were “no surprises” in his tax returns. Referring to the fact that nearly all of his income is taxed as capital gains at a 15 percent rate, rather than as earned income at rates of up to 35 percent, Mr. Romney questioned a proposal by Newt Gingrich, the former House speaker, to reduce capital gains taxes to zero.

“Under that plan, I’d have paid no taxes in the last two years,” Mr. Romney said.

The Romneys hold as much as a quarter of a billion dollars in assets, much of it derived from Mr. Romney’s time as founder and partner in Bain Capital, a private equity firm. And in federal financial disclosures Mr. Romney made when he began his presidential campaign he said those assets generated at least $9.6 million in income in 2010 and part of 2011, most of it from capital gains, dividends and interest on their investments.

Questions about Mr. Romney’s wealth have dogged him for weeks as his rivals for the Republican nomination assailed his tenure at Bain Capital and pressed for details about his taxes.

Mr. Romney hesitated repeatedly when asked whether he would release his tax returns, as his father had done when he was running for president several decades ago.

Initially, Mr. Romney said that he had no intention of releasing his tax returns, maintaining that the financial disclosure reports that all federal candidates must provide should suffice.

But the pressure grew stronger when Mr. Romney — apparently in an offhand, unplanned way — acknowledged that he pays about 15 percent in taxes, most of it on dividends and capital gains.

Following that statement, the pressure grew for Mr. Romney to release more information by making his tax returns public. Mr. Gingrich pressed him on the issue in two debates

Details about Mr. Romney’s tax payments, wealth and income will inevitably be compared with similar disclosures already made by Mr. Gingrich, as well the man Mr. Romney and Mr. Gingrich hope to unseat, President Obama.

Mr. Gingrich, who on Saturday won the Republican presidential primary in South Carolina, released his own tax returns last week showing that he and his wife, Callista, had an adjusted gross income of $3,162,424 from their various business ventures in 2010. They paid $994,708 in federal tax, according to the return, for an effective tax rate of 31.7 percent.

Mr. Obama and his wife, Michelle, released their tax returns in April, showing an adjusted gross income of $1,728,096 for 2010 — much of it from sales of his books “Dreams From My Father” and “The Audacity of Hope.” The Obamas paid $453,770 in federal taxes, for an effective tax rate of 26.3 percent.

During the debate, Mr. Romney had predicted that there would be little in his tax returns that would prove to be controversial.

“You’ll see my income, how much taxes I’ve paid, how much I’ve paid to charity,” Mr. Romney added in the debate. “You’ll see how complicated taxes can be. And will there be discussion? Sure. Will it be an article? Yeah. But is it entirely legal and fair? Absolutely. I’m proud of the fact that I pay a lot of taxes.”

But the documents are sure to be a source of ammunition for his Republican rivals and his Democratic critics, who have made his personal wealth an issue as he seeks the nomination of his party.

In a memorandum to reporters on Sunday, Bill Burton, a former deputy press secretary to Mr. Obama, hammered Mr. Romney for his initial unwillingness to release his returns.

“Even though he is worth hundreds of millions of dollars, Romney pays a lower tax rate than many middle class Americans,” said Mr. Burton, who now runs a “super PAC” on behalf of Mr. Obama.

“Romney also has access to complicated legal maneuvers involving offshore accounts and retirement savings that simply are not available to everyday Americans,” Mr. Burton said.

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Ford Contract With Union is Ratified

Local 600 in Dearborn, Mich., the largest local for the union, disclosed the development Tuesday on its Facebook page, citing national union officials. U.A.W. Local 862 in Louisville, Ky., said its members at two plants voted 53.3 percent in favor of the four-year agreement. The Louisville plants build pickups and sport-utility vehicles and employ 5,397 workers. Ford’s 40,600 American hourly workers were to conclude voting Tuesday.

Michele Martin, a spokesman for the union, did not immediately answer a voice message and an e-mail seeking comment.

U.A.W. members at Ford shifted from voting 53 percent against the contract last Friday to 63.2 percent in favor as of Tuesday morning. Ford is offering 12,000 new jobs, $6.2 billion in factory upgrades and bonus and profit-sharing payments per worker this year that total as much as $10,000. A lack of a wage increase was responsible for much of the initial opposition.

“People are saying there is room for improvement, but they’ll vote in favor of this contract because it means jobs,” said Jerome Williams, president of U.A.W. Local 2000, which represents 1,880 workers voting today at Ford’s Ohio van plant. “A few people are saying we gave up monetary concessions and other things that they’d like to see come back, and rightfully so. But the economic situation isn’t the best right now.”

The U.A.W. negotiated contracts for 113,000 workers for the first time since General Motors and Chrysler went bankrupt in 2009. G.M. workers endorsed a new deal last month and workers at Chrysler begin voting this week. Only workers at Ford, which avoided Chapter 11, could strike in these contract talks because G.M. and Chrysler employees agreed not to walk out as part of their government-backed rescues.

Ford has promised investments totaling $1.26 billion at the two Kentucky assembly plants. .

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Shares Tumble on Greece Fears

Stocks on Wall street tumbled again Tuesday morning, following drops in Asia and Europe, as fears over a major banking crisis in Europe mounted along with expectations that Greece could soon default, accelerating a global economic slowdown.

In early trading, the Standard Poor’s 500-stock index was down 1.24 percent to 1,085.63, dipping officially into bear market territory, defined as a 20 percent drop from the previous peak. The SP 500, considered a broad measure of stock performance, last peaked in April.

The Dow Jones industrial average lost 1.37 percent, and the Nasdaq fell 0.75 percent. The Dow was down 18.6 percent from its May peak, and the Nasdaq was off 19.8 percent from its April peak.

The Wall Street decline mimicked the one in Europe. In London, the FTSE 100 index was down 2.8 percent in afternoon trading, the DAX in Frankfurt was 3.5 percent lower, and the CAC 40 in Paris was down 2.9 percent.

Early Tuesday, finance ministers from the 17-nation euro zone postponed moves to release the next installment of aid to Greece, which means that Greece is now unlikely to receive 8 billion euros ($10.6 billion) before November.

European banking shares fell sharply, led by Dexia, whose value has plunged this week because of its exposure to Greek debt.

France and Belgium moved to shore up Dexia after it lost over 10 percent of its share price on Monday. The bank, one of the first European banks to be bailed out three years ago, held 3.8 billion euros of Greek sovereign bonds at the end of June, according to Reuters. The two countries issued a statement saying they would “take all necessary measures to ensure the safety of depositors and creditors.”

French and Belgian news reports suggested that the bank was considering selling some of its profitable assets and creating a bad bank to house its more troubled assets.

Dexia’s share prices were down 14.6 percent Tuesday.

“What you’re now beginning to see is they are now picking out the banks. Dexia is the weakest,” Justin Urquhart Stewart, director at Seven Investment Management, told Reuters.

“Politicians have to stand behind these banks — whether you call it state support, nationalization, you have to keep the financial system working otherwise we will end up with another credit crisis.”

The price that European governments pay to ensure their sovereign debt rose sharply across Europe, with the largest increases coming in France and Germany, who may be called to bail out weaker nations in the case of a financial crisis.

The MSCI World Index of equities fell 2.7 percent. The index has fallen more than 16 percent this year. The Nikkei 225 in Japan fell 1.05 percent, while the Hang Seng index in Hong Kong lost 3.4 percent to close at its lowest level since 2009.

American crude oil fell 2.65 percent to $75.50 a barrel.

The dollar rose to a fresh nine-month high against the euro, which fell as low as $1.3144, a nine-month trough, before recovering slightly to $1.3181.

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DealBook: Lehman Bankruptcy Takes Big Step Toward an End

Lehman Brothers’ headquarters in New York on the day it filed for bankruptcy in 2008.Mark Lennihan/Associated PressLehman Brothers’ headquarters in New York on the day it filed for bankruptcy in 2008.

A federal bankruptcy judge has blessed a plan by Lehman Brothers’ bankruptcy estate to pay out about $65 billion to creditors, in a major step to wind down the investment bank.

The approval by Judge James M. Peck of the federal bankruptcy court in Manhattan, who has overseen Lehman’s Chapter 11 case, paves the way for a vote by creditors sometime this fall.

Begun on Sept. 15, 2008, the Lehman bankruptcy case touched off the financial crisis that reshaped the banking landscape. Since then, the estate has sold off significant portions of the firm’s business and assets, seeking to recover some money for scores of institutions around the world.

The labyrinthine disclosure statement — months in the making — followed months of clashes between Lehman and its bondholders and other institutions to which the firm owes billions of dollars.

Lehman revised the scheme several times in order to earn the support of several major creditors, including Paulson Company, Elliott Management and Goldman Sachs.

Lehman’s disclosure statement for the plan will be sent to the estate’s 110,000 creditors, who will have 60 days to vote. A confirmation hearing is scheduled for Dec. 6, pending approval by creditors.

Lehman has said that it hopes to begin paying creditors by early next year, more than three years since it sank into bankruptcy. That is pending the shareholder vote and meeting certain financial milestones.

Final revisions to the disclosure statement came in as late as Tuesday morning, when lawyers for Wells Fargo agreed to drop objections to the plan. But other creditors, including the Bundesbank and the hedge fund Centerbridge Partners, still had objections.

Judge Peck overruled those objections for now, saying that they would be heard in the confirmation hearing.

He called the disclosure agreement’s approval “an extraordinary and noble achievement,” and said that the lawyers on both sides had done work that “borders on miraculous” by bringing major groups of creditors into agreement on a plan.

Lehman Brothers’ motion

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DealBook: Jury Deliberation Begins on Fate of Galleon Chief

Raj Rajaratnam, left, arrives at court with his lawyer, John Dowd.John Marshall Mantel for The New York TimesRaj Rajaratnam, left, arriving at court with his lawyer, John Dowd.

7:17 p.m. | Updated

The biggest insider trading case in a generation is now in the hands of a federal jury.

The fate of Raj Rajaratnam, the billionaire co-founder of the Galleon Group hedge fund, lies with the teachers, nurses and public servants from Westchester County, Manhattan and the Bronx sitting on the jury, which began deliberating on Monday. Mr. Rajaratnam stands accused of making more than $50 million by trading stocks using insider tips.

After nearly four hours of deliberation, the jurors retired for the day. They will resume on Tuesday morning.

Earlier on Monday, a prosecutor finished his rebuttal to the defense’s closing statements. The prosecutor, Jonathan Streeter, began by acknowledging the jury’s waning patience with the seven-week trial and promised to be brief.

Mr. Streeter left jurors with a final plea to rely on their common sense, not on the assertions made by a defense team that had “twisted itself into knots” to distract them from seeing what was clear from the evidence.

“The defense has asked you ignore logic, forget reality and suspend common sense,” he said.

The Galleon networkAzam Ahmed and Guilbert Gates/The New York Times Click on the above graphic to get a visual overview of the Galleon information network.

Judge Richard J. Holwell then charged the jurors, walking them through the 14 counts in the indictment against Mr. Rajaratnam, providing them with lengthy legal definitions for everything from reasonable doubt to conspiracy. The jurors sat at attention throughout the instructions.

As the focus of the case moved from the lawyers to the jurors, a shift could be detected among the courtroom artists. A mother and daughter team, in similar outfits of shiny black pants, metallic sweaters and red neckerchiefs, furiously sketched the scene ahead of a verdict.

The panel selected as its foreman a 56-year-old man from the Bronx who said he worked in graphic design at Apple. Joining him in deliberations are a retired bookkeeper and former Israeli Defense Forces volunteer, a customer service representative for the Metropolitan Transportation Authority and several education and school service employees.

During their deliberations on Monday, jurors asked the judge three questions, including whether they could be excused early because one juror had an appointment that began before 5 p.m., their typical dismissal time. The other questions pertained to exhibits presented by the two sides.

The courtroom scene shifted as those in the room waited for a verdict. Anxious lawyers milled about, hanging around the courtroom in case the jury had questions. Mr. Rajaratnam, for his part, appeared relaxed, sticking close by his defense team. The gaggle of reporters covering the trial killed the time reading The New Yorker or checking fantasy baseball statistics on their smartphones.

Television trucks from the cable news networks sat in front of the courthouse, their cameramen whiling away the day underneath makeshift white tents set up on Worth Street.

Tension in the courtroom spilled into the street briefly on Monday afternoon when Mr. Rajaratnam and his defense team left the courthouse, and a shoving match erupted between a photographer and Mr. Rajaratnam’s driver.

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Media Decoder: Amid Rumors She’s Leaving CBS, Couric Heads to Iraq

Postscript Appended

As reports continue to swirl about an impending departure from her anchor position at CBS News, Katie Couric is to embark Tuesday morning on a long-planned trip to Iraq, where she will report on the military and political situation eight years after Baghdad fell to invading American forces.

The trip, which CBS is expected to announce Tuesday, comes even as CBS and representatives of Ms. Couric repeat their recent denials of an imminent resolution of her current status at the network. Her contract with CBS ends June 4.

CBS would not confirm Ms. Couric’s plans for this week. But speculation about her future continues to center on an end to her role as the anchor of “The CBS Evening News” and a new career as host of a syndicated daytime talk show.

Several executives who have been involved in the negotiations about Ms. Couric’s future said Monday that no deal was in place yet for Ms. Couric’s exit, nor even a determination of her next television destination. Both CBS and NBC – among others — have offers out to Ms. Couric to syndicate a talk show with her as the star.

Those offers could include a continuing role in news away from the anchor chair. Two CBS news executives said that taking this kind of news-oriented trip to Iraq would be exactly the sort of thing Ms. Couric would be able to do under the terms of a new relationship with a network news division. “This would be an example of the new scenarios that would be possible for her,” said one executive, who asked not to be identified because the negotiations with Ms. Couric were continuing.

The syndication deal is expected to include some association with a network news division, so Ms. Couric would be able to continue to have a presence on news coverage. According to those involved in the talks, that could take the form of prime-time specials, perhaps fill-in stints on a morning news show, or even reporting assignments in the field.

Ms. Couric herself confirmed one aspect of the speculation about her future show: that her former boss at the “Today” show – and the former chief executive of NBC, Jeff Zucker — would be involved the production of the show.

In an interview with The New York Times magazine to run next Sunday, Ms. Couric said of the rumors that Mr. Zucker would play a role in her future show, “We talk a lot and, yes, we’ve been discussing the possibilities. That’s true.”

Postscript: April 4, 2011

An earlier version incorrectly stated that Ms. Couric would depart for Iraq on Monday night instead of on Tuesday morning.

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