Say, remember all of the fuss that got raised about Mitt Romney’s foreign accounts? Remember how his decisions to park money in the Caymans and in Switzerland showed that he wasn’t a patriotic American, or something?
As recently as 2010, Jack Lew, President Obama‘s nominee to be the next secretary of the Treasury, had $56,000 invested in a CitiGroup venture capital fund based in the Cayman Islands’ notorious Ugland House, a building whose mailboxes are home to nearly 19,000 corporate entities, many of them tax shelters.
The investment has been in public documents for years and drew no attention when Mr. Lew was confirmed to be deputy secretary of state in 2009 and director of the White House Office of Management and Budget in 2010.
But the fund is coming to light as Mr. Obama and Congressional Democrats are zeroing on taxes lost to off-shore entities, including hedge funds, as a way to stave off $1 trillion in across-the-board spending cuts set to begin March 1.
Aides in both parties said it was quite likely to come up during his confirmation hearing Wednesday. Senate Democrats are struggling to come up with a package of spending cuts and tax loophole closings that could stave off the automatic spending cuts — known as sequestration — for at least three months. Tax breaks for hedge fund managers and offshore tax shelters are a prime target.
The Finance Committee held hearings in 2008 burrowing in on Ugland House, a nondescript white building in George Town, Cayman Islands, that shelters a bewildering number of corporate headquarters.
“Today we will take a look at some ostensibly crowded halls, those of the Ugland House in the Cayman Islands,” Senator Max Baucus of Montana, the committee’s chairman, said, opening the hearing. “That is a remarkable five-story building that the G.A.O. tells us has some 18,857 tenants. Today we will examine whether many of those tenants are feasting at America’s taxpayers’ expense.”
“President Obama has been almost obsessively critical of offshore investments,” [Senator Charles] Grassley said. “He called Ugland House ‘either the biggest building or the biggest tax scam on record.’ That makes this Cayman Islands investment of his top official and now Treasury secretary nominee worthy of attention. The irony is thick. Members of the Finance Committee will question Mr. Lew about his foreign investments at the hearing.”
Now, let’s be clear about something. Unlike those who accused Mitt Romney of a lack of patriotism simply because of where his money was/is located, I am not about to make the same accusations when it comes to Jack Lew. That’s because I’m not a McCarthyite and that’s because Romney’s critics during the 2012 presidential election campaign proved the truth of Samuel Johnson’s saying: Patriotism really is the last refuge of the scoundrel, and I don’t feel like being a scoundrel, thank you very much.
But if Romney’s critics have any semblance of intellectual honesty, they will attack Lew as viciously as they attacked Romney. I doubt they will, of course. In addition to being scoundrels, they are likely hypocrites. They will hold their tongues and pretend that this story simply does not exist.
But that doesn’t mean that the rest of us ought to be silent about the story, or about the fact that there are a lot of port-side politicians and pundits who are as disingenuous and dishonest as they are demagogic.