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Romney's 'blind trust' isn't blind enough, Obama camp says

Romney's 'blind trust' isn't blind enough, Obama camp says

POSTED: Thursday, June 7, 2012 - 6:38pm

UPDATED: Friday, June 8, 2012 - 10:07am

(CNN) -- Democrats called attention to Mitt Romney's personal financial arrangements on Thursday, suggesting on a conference call with reporters that he was being dishonest with the characterization of his "blind trust" and may not be fully retired from the private equity company he founded.

"It's understandable, given the many years that he was involved with Bain and the pride he takes in his service there, that he may have some sort of an arrangement by which Bain believes that he is continuing to render valuable service in some way to them," Bob Bauer, the attorney for President Barack Obama's reelection campaign, said.

He added that "no one is suggesting day to day management" is among the "range of ways in which he provides service" to Bain Capital, the firm from which Romney retired in 1999.

Federal tax law suggests this category of investments, known as carried interest, comes "in connection with the performance of services."

For Romney to continue to count income from these investments as carried interest, Bauer and Obama's campaign press secretary, Ben LaBolt, said, he may still be providing some type of service to the company. Otherwise, he suggested, Romney should be taxed differently.

The Internal Revenue Service has interpreted that provision broadly, and that Romney once performed "services" for Bain - when he ran the company, for example - would likely fit that requirement.

A financial disclosure Romney filed with the Federal Election Commission on June 1 reads, "Since February 11, 1999, Mr. Romney has not had any active role with any Bain Capital entity and has not been involved in the operations of any Bain Capital entity in any way."

Tax documents released by Romney's campaign in January showed his effective tax rate in the two most recent years was approximately 14.5%.

A spokeswoman for Romney called the issue "another tired distraction by the Obama campaign."

Romney has explained his that if elected president, the wealth of he and his wife would be converted from the current arrangement into a blind trust managed under federal ethics rules.

"If I'm president of the United States, I understand that all of my investments, and Ann's, will all be sold and bought again without us having any idea what's been purchased," he said at a March campaign event in Collinsville, Illinois. "So that's how you would hope that we would live without any particular conflict of interest."

In a statement to CNN on Thursday, Romney's spokeswoman, Andrea Saul, underscored a point the candidate has repeatedly made: that he does not control his investments.

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