Yucaipa and Big Dog
by Blue Neponset, Sat Apr 05, 2008 at 05:47:08 AM EDT
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