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…” 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… Steven Howard, a partner at Thacher Proffitt & Wood LLP in New York who advises investment firms, said private-equity firms such as Yucaipa often compensate advisers with a stake in the company rather than salary. “In Clinton’s case, he may be allocated equity instead of significant cash for services rendered,” Howard said. Carson didn’t respond to questions about whether Bill Clinton receives this form of compensation. Howard said equity allocations are taxed at the 15 percent capital-gains rate instead of as ordinary income, which is taxed at rates as high as 35 percent…
You have to love stories like this one: they demonstrate once again that the Clintons regularly achieve a level of hypocrisy that few of us can ever aspire to. First, it’s clear that they see no problem with this arrangement–after all, Bill won’t divest his holdings until and unless Hillary becomes the Democratic nominee. But even better, the clear implication of the spokesman’s silence on the form of the compensation is that Clinton is receiving an equity share–which gets the favorable tax treatment that Democrats have been grandstanding about all year. (At least, until they collected so much in donations from hedge fund managers that they could no longer favor closing the loophole.) Who but the Clintons could manage such chutzpah? Mickey Kaus wrote on this several days ago:
I would be less skeptical of the severed-friendship part of HuffPo’s story if it wasn’t exactly what the Clintons would want to come out right about now. Unless Bill Clinton is a bigger fool than I think he is, he knew the complicated enterprise he was getting into when he got into business with Burkle, and he knew that at some point before the primaries he’d probably be well advised to officially distance himself, if only to avoid being associated with the behavior of every firm Burkle invested in
Kaus may be right. But even if the Clintons are being hypocritical about the taxation of companies that have ‘offshored’ their headquarters, they would merely be celebrating a proud tradition of the Democratic party. As we’ve noted here before, House Ways and Means Committee Chairman Charlie Rangel managed to introduce a bill to protect big supporters who’d done precisely this, even as he claimed to be cracking down on the practice. The silver lining for the Clintons is that this is only a serious problem if Hillary wins the Democratic nomination, and that’s no better than a 50-50 proposition right now.
