By Jon Swaine – November 7, 2017
Leaked documents and newly obtained public filings show how the billionaire Mercer family built a $60m war chest for conservative causes inside their family foundations by using an offshore investment vehicle to avoid US tax.
The offshore vehicle was part of a network of companies in the Atlantic tax haven of Bermuda led by Robert Mercer, the wealth hedge-fund executive and Bannon patron whose spending helped put Trump in the White House and aided a resurgence of the Republican right.
Bill Parish, an Oregon-based investment adviser who has been consulted on the tax by US government investigators, said: “This is simple but ingenious. You take retirement plans or foundations, you invest them in a hedge fund, and even if the value rises 100%, you can sell off the investments with no tax consequences.”
Note: This story was based upon original research by Parish & Company. The Guardian had contacted me after reviewing work I did for Bloomberg and the Wall Street Journal regarding the Renaissance Technologies hedge fund in addition to the analysis of various political candidates financial statements including Mitt Romney, Hillary Clinton and Donald Trump.
Jon Swaine was particularly interested in taxation issues regarding offshore accounts and did a superb job of studying the impact of blocker corporations, tax exempt foundations and their related impacts on taxes, including the Unrelated Business Income Tax (UBIT).
What Swaine did not tell me was that they had the files from a Bermuda based law firm to corroborate the analysis. This analysis became the cornerstone piece in what the Guardian came to call the “Paradise Papers.”