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Clintons Have Three Cayman Island Accounts

From Bloomberg:

Ron Burkle, managing partner and founder of Yucaipa Cos., left, and former President Bill Clinton, right, stand side by side during the 2nd annual Clinton Global Initiative summit on Sept. 22, 2006, in New York.

Clinton’s Burkle Ties Include Funds in Cayman Islands

By Timothy J. Burger and Ryan J. Donmoyer

Dec. 17 (Bloomberg) — Former President Bill Clinton’s decision to reconsider a business relationship with California billionaire Ron Burkle reflects concern those financial dealings may embarrass his wife’s presidential candidacy.

Securities and Exchange Commission documents and financial- disclosure forms filed by Hillary Clinton show that Bill Clinton, 61, has a financial stake in three investment entities registered in the Cayman Islands by Burkle’s Yucaipa Cos. LLC.

In 2004, Hillary Clinton, a New York senator, said she wanted to close the “loopholes” for “people who create a mailbox, or a drop, or send one person to sit on the beach in some island paradise and claim that it is their offshore headquarters.”

The former president’s possible decision to move away from Burkle “is all tied up with the laws of appearance and the politics of perception,” said Linda Fowler, professor of government at Dartmouth College in Hanover, New Hampshire. “The world being what it is, people are attracted to the spouse of somebody with political power. The level of potential conflict is just that much higher with a former president and a senator who would be president.”

Moreover, added Fowler, “with this particular couple, somehow, the whole story doesn’t come out except in dribs and drabs.”

Bloomberg News last month submitted a list of questions to the Clinton campaign regarding the former president’s involvement in the three Caymans-based funds. The campaign didn’t respond to the queries until Dec. 13, after the New York Times reported that Clinton plans to dissolve his five-year partnership with Burkle, a longtime friend and important fund-raiser for both Clintons

Jay Carson, a Clinton spokesman, said that while the former president hasn’t “severed ties” with Yucaipa, he “is taking steps to ensure” that “there will be an appropriate transition for those relationships” if his wife receives the 2008 Democratic presidential nomination

The disclosures that Hillary Clinton, 60, is required to make as a lawmaker and candidate show that her husband has holdings in three Burkle-controlled funds — YGOF GP Ltd., Yucaipa Global Holdings and Yucaipa Global Partnership Fund LP — all listed at Yucaipa’s Los Angeles address. An October filing with the SEC by Burkle, Yucaipa’s lead partner, names YGOF as a Cayman Islands corporation and the latter two as Cayman Islands partnerships.

The amounts disclosed by Hillary Clinton are minimal, though a person familiar with the matter confirmed a report last year in The New York Times that Bill Clinton stands to make tens of millions of dollars with little risk if the Yucaipa funds he is involved in profit beyond a certain level

Paul Roth, an attorney with Schulte Roth & Zabel LLP in New York, said companies that organize outside the U.S. often do so because “it’s more attractive” to foreign investors, who can “make sure they’re not subject to U.S. taxation.” Foreign registration may also make it easier for U.S. tax-exempt entities such as pension funds to invest “in certain strategies,” he said.

These tax benefits — which are legal and common practice for many investment firms, particularly hedge funds — have drawn attention from lawmakers and candidates.

In a Dec. 13 debate, Hillary Clinton’s chief rival for the Democratic nomination, Senator Barack Obama of Illinois, said that as president he would crack down on corporate loopholes and tax savings, particularly those involving offshore transactions.

“There’s a building in the Cayman Islands that houses, supposedly, 12,000 U.S.-based corporations,” Obama said. “That’s either the biggest building in the world or the biggest tax scam in the world. And I think we know which one it is.”

Roth said U.S. law makes it difficult for Americans to avoid taxes on payments from offshore, though some hedge-fund managers use such entities to defer U.S. taxes on their compensation. A measure passed last week by the House would ban this practice. Obama, 46, was a Senate co-sponsor of the provision when it was introduced in February.

Carson said Bill Clinton’s payments from Yucaipa aren’t deferred and the former president pays tax on that income in the year in which it is earned…

Even if the Clintons have actually paid all the taxes due on this income (and that’s a big if), are they not helping others avoid paying their fair share of taxes — to enrich themselves?

Such hypocrisy. It boggles the mind.

But, alas, it is not at all surprising.

Nor is their mendacity. For note how Mr. Burkle is described in the only mention of him in either of the Clintons’ (ghostwritten) autobiographies, Bill’s My Life, pg 324:

[Chapter] Twenty-Seven

… On Sunday, May 3 [1992], I was in Los Angeles to speak to the Reverend Cecil “Chip” Murray’s First AME Church about the need to heal our racial and economic rifts. And I toured the damaged areas with Maxine Waters, who represented South Central Los Angeles in Congress. Maxine was a smart, tough politician who had endorsed me early, despite her long friendship with Jesse Jackson. The streets looked like a war zone, full of burned and looted buildings.

As we walked, I noticed a grocery store that appeared to be intact. When I asked Maxine about it, she said the store had been “protected” by people from the neighborhood, including gang members, because its owner, a white businessman named Ron Burkle, had been good to the community.

He hired local people, all the employees were union members with health insurance, and the food was of the same quality as that in Beverly Hills groceries and sold at the same prices. At the time, that was unusual: because inner-city residents are less mobile, their stores often had inferior food at higher prices.

I had met Burkle for the first time just a few hours earlier, and I resolved to get to know him better. He became one of my best friends and strongest supporters

You see, Bill Clinton only knows and likes Mr. Burkle because he is so good to the black and poor.


This article was posted by Steve on Monday, December 17th, 2007. Comments are currently closed.

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