WASHINGTON – For months, the Obama campaign has been pounding Mitt Romney for his offshore holdings and his investments in companies that send jobs overseas. So when the subject came up during Tuesday’s debate, Romney was eager to call out the president for doing the same thing.
“Let me give you some advice – look at your pension,” Romney told Obama. “You also have investments in Chinese companies … You also have investments through a Caymans trust, all right?”
Romney was correct, but it’s difficult to draw comparisons between the two politicians’ retirement accounts.
Obama’s financial disclosure lists an investment of between $50,001 and $100,000 in the Illinois state retirement system, dating from his years as a state legislator. That $11.5-billion fund has about $2.1 billion invested in companies based in other countries, including China, according to its most recent annual report.
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That’s typical, said Amy Borrus, deputy director of the Council of Institutional Investors. “Institutional investors have been putting more of their investments overseas, generally speaking, because returns have been better,” she said.
The pension fund also has committed $30 million to a private equity fund called Advent International Group VI, based in the Cayman Islands, a British territory in the Caribbean Sea. Offshore tax havens, such as the Caymans, shield the funds and investors from paying certain taxes.
“No plan participant, whether he or she is a state legislator or an orderly in a public hospital has any influence, or any role whatsoever in these investment decisions,” said William Atwood, executive director of the Illinois State Board of Investment, the agency that decides how to invest the pension money.
Obama’s pension is a defined benefit, not tied to the fund’s performance; he will be able to collect 27% of a legislator’s salary based on when he left, or about $11,500 a year, said a spokesman for the retirement system. Obama’s disclosure also shows he holds between $150,000 and $350,000 in the Vanguard 500 Index Fund, a mutual fund that seeks to track the broad S&P 500 stock index.
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By contrast, Romney’s most recent financial disclosure shows he has an IRA worth between $18 million and $87 million, a sizable part of his net worth of about $250 million. Both his general holdings and his IRA have millions invested in offshore accounts set up by Bain Capital, the private equity firm founded by Romney.
During the debate, Obama criticized Romney for investing in companies that were “pioneers of outsourcing to China” and for holding an investment in a company that manufactures surveillance gear used by China to “spy on its own folks.” Obama was referring to Uniview Technologies, owned by a Bain Capital fund that shows up in Romney’s holdings. The firm makes infared cameras and software that Chinese dissidents say is used to monitor their activities.
Romney said all his investments for the past eight years have been managed by a blind trust – and tried to make the point that Obama, like most investors, has money in foreign companies.
Obama took advantage of the opening to jab back, drawing audience laughter when he said that he rarely looks at his pension account: “It's not as big as yours,” he said.
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