Illinois GOP gubernatorial candidate Bruce Rauner is under heightened scrutiny in light of new revelations regarding his use of investment funds in the Cayman Islands.
A dozen funds in total were set up in the Caribbean nation between June 2009 and July 2011 by private equity firm GTCR which, according to the Chicago Sun-Times, was chaired by Rauner at the time. He had a personal financial interest in three of those funds.
Bermuda and the Cayman Islands are popular tax shelters for U.S. corporations, as both island nations have no corporate income taxes, and disclosure requirements there are less stringent.
The Cayman Islands government agreed in August 2013 to comply with the Foreign Account Tax Compliance Act, which requires foreign financial entities to notify the U.S. Internal Revenue Service about American offshore accounts if they exceed $50,000. The intergovernmental agreement took effect in July.
Campaign spokesman Mike Schrimpf offered a full-fledged defense of Rauner to the paper:
Caribbean vehicles are common for private-equity funds as well as institutional investors like the Illinois’ pension fund that [Gov.] Pat Quinn is invested in, especially when the companies they are investing in already have international operations and headquarters ... Bruce was also comfortable with it because that kind of investment does not reduce the taxes paid by individual investors on their income. It didn’t reduce taxes on Bruce’s income, and it doesn’t reduce Pat Quinn’s taxes either.
Rauner has refused to release a certain portion of his tax returns further detailing the investments, and GTCR has remained mum on the matter.
Brooke Anderson, a spokeswoman for Gov. Pat Quinn's (D) campaign, responded to the revelations by saying that "not only does Republican billionaire Bruce Rauner stash his own riches in the Cayman Islands to avoid taxes, he also parked his firm’s money there."
"Mr. Rauner is great at gaming the system for his own financial benefit while the rest of us play by a different set of rules," she added.
Rauner was also caught on video saying in July that members of Quinn's campaign allegedly tried to kick him out of a Greek-American parade, and that it was the closest he has come "to punching somebody in this race." Quinn's campaign says that Rauner fabricated the incident.
Quinn, however, has been tainted in his re-election bid, as an anti-violence initiative of his is under a federal investigation on allegations of financial mismanagement.
HuffPost Pollster, which combines all publicly available polling data, has Rauner leading Quinn in the November general election: