Yucaipa and Big Dog

Friday afternoon the Clinton campaign released Hillary & Bill's 2001-2006 Federal income tax returns. link As one might expect the Ex-President and the Senator made a lot of money writing books and making speeches in the years after Bill's Presidency. Aside from the large numbers there is one issue that jumps out after reviewing the returns, and that is Bill's relationship with Yucaipa Global Holdings (Yucaipa). This Cayman Islands based company paid Bill Clinton $2,500,000 in guaranteed payments in 2006. For tax purposes Yucaipa is considered a partnership. In a partnership, guaranteed payments are made for services rendered or for the use of capital. It appears Yucaipa's major investor is billionaire, Ron Burkle, so it is unlikely that Bill Clinton received guaranteed payments in return for his use of capital. As a result, it seems likely that Clinton performed services for Yucaipa and the guaranteed payments were compensation for these services.

If Yucaipa were based in the United States this relationship and compensation wouldn't rate a second glance, but Yucaipa is a Cayman Islands based entity. The Cayman Islands is one of the most popular tax havens in the world. From the link:

For the U.S. Treasury, offshore jurisdictions like the Cayman Islands pose a double problem: (1) they can offer American corporations and individuals attractive financial deals and access to capital markets at a much lower cost than U.S. banks in America, and (2) they can guarantee virtually complete secrecy about financial deals and assets held by Americans, in accordance with Cayman confidentiality laws (except in the case of criminal activity).

To sum up, Bill Clinton received millions of dollars in compensation from a partnership registered in a country whose laws will all but guarantee that the partners of the partnership remain unknown. If Bill Clinton were not married to a Presidential candidate I wouldn't care at all about this. Since he is married to someone who might be President next January I think we deserve some answers about this financial arrangement. My guess is we won't get those answers. The Clintons are very good at playing the press and the press is very bad at discussing issues, like this one, which can't be rendered down to a few sound bytes.

Cross posted at The Forvm

Tags: clinton, tax returns (all tags)

Comments

33 Comments

Tips, Flames, Other

Please read the linked articles they tell an interesting story.

by Blue Neponset 2008-04-05 05:48AM | 0 recs
Re: Yucaipa and Big Dog

Yeah. May turn out to be nothing, but given the Presidential candidate-thing you noted, plus the fact that this is more money than most Clinton or Obama supporters will make in their entire life, I'd say we deserve some answers.

I'd rec ya, but it seems that Obama supporters just aren't able to do that much 'round here. </tinfoilhat>

by ragekage 2008-04-05 05:56AM | 0 recs
Re: Yucaipa and Big Dog

We need to very seriously read more about Bill Clinton's Non-passive income.  What could be a bigger issue in america.  Non-passive income.  After this what size shoe does Bill Clinton wear.  Are they passive or non-passive shoes.  I think President Clinton is selling shoes in the Cayman Islands.

david

by giusd 2008-04-05 05:56AM | 0 recs
Re: Yucaipa and Big Dog

Way to go on totally ignoring the issue. Seriously, you're telling me nobody has a reason to be concerned about this at all? You Clinton supporters seem to be concerned about what Obama had for dinner last night, and how it'll make him unelectable. I think it's silly, but if you're concerned about it, then it's a valid concern for you.

At least with this, you can see the potential for WHY we are concerned. But us silly Obamabots/mites/dotes/whatevers, y'know, right?

by ragekage 2008-04-05 06:10AM | 0 recs
It isn't the most important thing ever...

...but I do think we deserves some answers.  A partnership in the Cayman Islands is a curious thing for a political figure to do.  There may be nothing to it but it raises other questions which, IMO, need to be answered.  

by Blue Neponset 2008-04-05 06:21AM | 0 recs
Re: It isn't the most important thing ever...

I don't know that the issue is that its a cayman partnership -- though I do find it curious that the Clintons did NOT release the K-1's that describe the partnership income.  I think the issue is who his partners are, who in addition to Mr. Burkle, appears to be a sovereign wealth fund from Dubai.

Here's what the WSJ had to say about the partner:

Mr. Clinton is also one of three owners of the global fund's general partner. The others are Mr. Burkle, who is the managing member, and an entity connected to the ruler of Dubai, Sheikh Mohammed bin Rashid al-Maktoum.

Severing the tie to Dubai, a U.S. ally, will remove a potentially tricky problem for Mrs. Clinton. Questions raised about the activities of sovereign wealth funds -- giant pools of money controlled by foreign governments -- have become a campaign issue, as the funds have made a spate of multibillion-dollar investments in such corporate giants as Citigroup Inc. and Merrill Lynch & Co. In a recent interview with The Wall Street Journal, Mrs. Clinton said such purchases are "a source of concern," partly because the foreign funds "lack transparency" and could be used by foreign governments as "instruments of foreign policy."

http://online.wsj.com/article/SB12009742 4021905843.html?mod=rss_whats_news_us

Given the national security issues that were implicated in the Dubai ports deal, the Clintons connections to Dubai will likely raise questions in light of their extensive involvement in lobbying for the deal contrary to Hillary's claimed opposition.

In the spring, when Sen. Hillary Rodham Clinton was denouncing the Dubai Ports World deal, a consulting firm run by her top advisers was quietly lobbying for a Dubai takeover of two U.S. defense plants, Newsday has learned.

The Glover Park Group, whose principals include Clinton insiders Howard Wolfson, Joe Lockhart and Gigi Georges, was paid about $100,000 to help the government-owned Dubai International Capital Corp. in its acquisition of the British engineering firm Doncasters Group Ltd.

http://www.newsday.com/sports/ny-usclin1 44890633sep14,0,2200423.story

Former president Bill Clinton has privately advised Dubai officials how to address US political concerns over a controversial ports deal, as his wife, Senator Hillary Clinton, publicly attacks the deal.

http://www.breitbart.com/article.php?id= 060302151101.0epolmxs&show_article=1

Given Clinton's apparent partnership with a sovereign wealth fund in Dubai, it raises obvious questions whether he had any financial interest in the port deal, which was nixed because it compromised the national security of our country.
 

by davey jones 2008-04-05 06:50AM | 0 recs
Re: It isn't the most important thing ever...

The K-1's aren't filed with the partner's return so I don't find it unusual that they weren't released.  

What Bill did to earn this money seems relevant, however.  

by Blue Neponset 2008-04-05 06:56AM | 0 recs
Re: It isn't the most important thing ever...

True, they aren't filed by the partners, but the partners definitely get them.  So they could release them if they wanted to.

by davey jones 2008-04-05 06:59AM | 0 recs
This is only getting worse

I just read at The Page (and he likes Hillary!) that of the 10 million in dontation - 1/2 went to the Clinton Foundation....Please someone with some time write a diary about this...so much for charitable giving. I mean we should figure what the tax breaks were on that donation and add that back to income.

Their press release makes sense now. Try to get ahead of it with some summary.

Typical Clinton transparency:

10 million in donations! Yeah right.

by Newcomer 2008-04-05 06:16AM | 0 recs
he donated to his own charity

crucify him.

If half his charitable giving went to his charity that still makes the Clinton's giving way bigger a percentage of their income than the Obamas who gave 1 percent of income until last year.

by TeresaINPennsylvania 2008-04-05 06:33AM | 0 recs
Re: he donated to his own charity

Uhh, this indicates most of that total came from the Clintons just last year, too.

Hmm. Interesting. Since you just bashed Obama for that, I'm certain you're now also upset at the Clintons for waiting until they were running a presidential campaign to up their charity donations. Right?

by ragekage 2008-04-05 06:43AM | 0 recs
PS
if he believes in his charity and asks that other people donate, why the hell would he not give too?
You'd be making a federal case about it either way.
by TeresaINPennsylvania 2008-04-05 06:35AM | 0 recs
Re: PS

When the Clinton's donate to themselves...they get 2 for the price of one. The foundation gets the money (and that can then be used to create all sort of connections and media attention) and they get to adjust their income and PAY LESS TAXES.

Look - I dont care if they are rich and I think its great that they donate to their Foundation - but you have to admit its just a tad bit sneaky.

AND the fact that the Campaign released the early warning shot with a summary that actually PRAISED this donation fraud...means that they understood it would come out and wanted to get ahead of it.

by Newcomer 2008-04-05 10:19AM | 0 recs
Re: Yucaipa and Big Dog

You said his partnership payments were $2.5 million.  Actually, if you look at the returns, his partnership payments are $2.5m  (2006), $5m (2005), $4m (2004) and $1m (2003), for a total of $12.5m over a four year period.

by davey jones 2008-04-05 06:25AM | 0 recs
Re: Yucaipa and Big Dog

The $2.5 mm was a guaranteed payment.  That is different from an investment return on a partnership.  Guaranteed payments are well, guaranteed you get them regardless of how well or poorly the Partnership performs.  

Also, income from partnerships isn't necessarily distributed to the parters each year so Clinton may not have received any cash money.  

This is a good example of why I think this issue will go away.   It is not easy to understand unless you have dealt with partnership taxes in the past.  

by Blue Neponset 2008-04-05 06:31AM | 0 recs
Re: Yucaipa and Big Dog

The payments are described as non-passive income from K-1.  Unfortunately, since the Clintons did not release the K-1's,we don't know the precise source.  But non-passive income doesn't sound like investment income to me.

by davey jones 2008-04-05 06:58AM | 0 recs
Re: Yucaipa and Big Dog
People are pouring over these accounts as write.
Expect more and more bombshells coming out in the next weeks.
The Clintons have done corrupt things.
by KathyM 2008-04-05 06:31AM | 0 recs
Re: Yucaipa and Big Dog

I don't think this rises to the corrupt level.  It may lean a bit toward shady but it also seems to be perfectly legal.  

by Blue Neponset 2008-04-05 06:33AM | 0 recs
Re: Yucaipa and Big Dog
If you run a offshore fund and your main contributor is a Arab sheikh and this fund pays you a average of $5m yearly.
You are giving something and people will want to know what that is.
by KathyM 2008-04-05 06:49AM | 0 recs
Re: Yucaipa and Big Dog

I agree, but that doesn't make it illegal or unethical.  

by Blue Neponset 2008-04-05 06:52AM | 0 recs
&quot;the Clintons have done corrupt things&quot;

lol, brilliant.

by TeresaINPennsylvania 2008-04-05 06:36AM | 0 recs
Re: Yucaipa and Big Dog

''What are they being paid for, and if it's the Sheikh of Dubai paying the husband of somebody who might be the next president of the United States, what do they think they're paying for.''

Very interesting.

by KathyM 2008-04-05 06:32AM | 0 recs
Re: Yucaipa and Big Dog

There is also at least one question of interest which hasn't been answered.  Ben Smith at the Politico:

''The interesting part, of course, is the roughly $18 million that the summary doesn't account for -- (though it is accounted for in the returns''.

The question which remains is whether the Senator release her most recent tax returns before the next election. It is certain these questions will be raised in the general election by McCain. Clinton sites the vetting she has endured as a primary qualification for the nomination. The release of all her taxes relates directly to that claim.

by KathyM 2008-04-05 07:07AM | 0 recs
Re: Yucaipa and Big Dog

The missing $18m is income from partnerships and investments, including approximately $12.6m from Yucaipa-related entities.

by davey jones 2008-04-05 07:13AM | 0 recs
Re: Yucaipa and Big Dog

That isn't full disclosure. Sorry.

by KathyM 2008-04-05 07:17AM | 0 recs
Re: Yucaipa and Big Dog

And when will BO supporters who said the Clinton's will never release their taxes correct the record.  NEVER.  It is just one smear after another and the facts do not matter.  BO supporters really do act just like FOX and Ken Starr.  Maybe we should look into whitewater again.  

david

by giusd 2008-04-05 07:23AM | 0 recs
Not all of us are like that

I think the press is scouring over them more than I would ever care to know.  I am sure they did nothing wrong because from way back in 2000 Sen. Clinton had the ambition to run for Pres.

shrug, I feel other issues are more important unless the press (who are the ones who ought to be looking into this) finds something like a dead body which they won't.

by Student Guy 2008-04-05 07:33AM | 0 recs
Re: Not all of us are like that

To many BO supporters have turned into Ken Starr democrats.

david

by giusd 2008-04-05 09:10AM | 0 recs
Re: Not all of us are like that

Calling people Ken Starr is not that effective. Your campaign already tried it and looked like jerks.

But...I have to add something since you bring it up. DId you see what the campaign released after the summary statements about the taxes:

<i>"There's a great of deal of speculation on the part of some that there was something being hidden in these taxes. The release today shows that is simply not the case.. . .The Clintons have now put out 30 years of tax returns.  While Senator Obama has a made a good start towards this [standard] by putting out several years, but he has a long way to go.  He talks about transparency but on the issue of taxes it is time for him to back it up."</i>

Did someone say Ken Starr.

ANd finally - finally - please explain to me how the campaign can applaud a 10 million contribution in charities that went to the Clinton Foundation and thus allowed them to adjust their gross income - while paying their own bills....this is what really rich people do...

by Newcomer 2008-04-05 10:24AM | 0 recs
Re: Not all of us are like that

And when democrats stop whining about rich people maybe we will win the WH.  And this type of smear campaign that was done all through the 90's and pushed by Ken Starr and IMHO BO supporters do this as well.  

If you have any proof of wrong doing present you case and if not this is nothing more than being a Ken Starr democrat. And i am waiting for some proof you know evidence and not smear.  

BO supporters look bad when they push foward smear and not proof. Again if you have any proof let me know.  Because what you do time and time and time and time again is suggest wrong doing and demand we prove that then was none.  I have seen this lots of time "ON FOX NEWS".

david

by giusd 2008-04-05 11:02AM | 0 recs
Re: Not all of us are like that

It is not a smear.  If Obama or McCain had received millions of dollars from a a Cayman Islands' partnership it would be questioned as well.  Do you doubt that?  

by Blue Neponset 2008-04-05 11:12AM | 0 recs
Re: Not all of us are like that

I dont understand your hostility. And beyond the tax records of the Clintons, I am not sure what 'proof' you need. Just because it raises flags about your candidate does not necessarily make it 'smear'.

In my opinion, it is alarming evidence (not smear)that the Clinton's charitable donations, which they of course used to decrease taxable income, were given to their own Foundation. That Foundation has a lot of power, politically and socially, and I think its crap. That is evidence - not smear. If you think its ok - then we can disagree.

The Cayman Islands represent a place that YOUR CANDIDATE has criticized for the lack of transparency...why would the Clintons have financial interests there? That is not smear - it is fact and it needs to be addressed. If you think that it is ok for a pres. candidate to have holdings with off-shore accounts while at the same time criticizing the practice as something of the 'rich' - fine we can disagree.

Finally - need to bring up Dubai? HRC has railed on Dubai on several fronts...but they are partnered with the Shiek. If you think that is not hypocritical - fine we can disagree - but it is a fact...not smear.

Again with the Ken Starr?
Ask Strickland, Rendell, Clinton - all of them made transparancy a MAJOR part of their campaigns (hell, Wolfson showed up to a Lazio gathering wearing an Uncle Sam suit...which I actually think is hillarious).

This fake indignation is what is crazy...
The pre-release statment by the campaign, as well as the timing on the 'Friday Dump' make it quite clear that the Clintons knew this would come up - and I am sure they are prepared to deal with it.

by Newcomer 2008-04-05 11:38AM | 0 recs
Re: Not all of us are like that

I dont care if the Clintons are rich.

Its funny though - HRC used to stump about 'speeches' not putting food on the table...hmmmm..

But really- I dont care if they are rich...but you should at least admit that there were not multi gazillionaires in the 90s.

by Newcomer 2008-04-05 01:00PM | 0 recs

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