WNYC's Bob Hennelly is an award-winning investigative journalist. While at WNYC he has reported on a wide gamut of major public policy questions ranging from immigration and homeland security to power outages and utility mergers.
The Mayor's Money: Bloomberg Pressed on Offshore Investments
Saturday, April 24, 2010
New York, NY –
This week, right after President Barack Obama gave his address on the need for re-regulating Wall Street, Mayor Michael Bloomberg used an event at Times Square to challenge the president. But instead, he found himself uncharacteristically challenged by reporters about his charitable foundation's use of controversial off-shore tax havens. WNYC's Bob Hennelly was there and files this reporter's notebook.
It was a festive atmosphere in Times Square as thousands milled about what felt like a county fair to mark the 40th anniversary of Earth Day. Bloomberg had just been given an award for being America's greenest mayor before he convened a special press briefing to address what he saw as the shortcomings in Obama's plan to reform Wall Street.
"Before I take questions, let me start out by saying how glad we are that President Obama came to New York City to make his case for financial reform," the mayor said.
Bloomberg predicted that if the reforms limited the size of U.S. banks, the finance sector would flee off-shore to seek out less strict regulations -- taking their business, jobs, and tax revenue with them.
"My concern is for the police officers and firefighters teachers and sanitation workers and anyone else who lives in our neighborhoods, shops on our main streets, and keeps our city strong," Bloomberg said. "They get paid by the taxes the financial industry generates."
He called for an open exchange for the sale of derivatives and said he agreed with the president that increased market transparency is critical.
"For me, transparency is not just something I support, I have lived it. I spent part of my first career at Salomon Brothers and all of my second career as an entrepreneur finding ways to build transparency of information and markets," the mayor said.
But when it was time for reporters' questions, the topic turned to the transparency of the mayor's charitable foundation, which invests hundreds of millions of dollars in legal but controversial off-shore tax havens, like the Cayman Islands. Sara Kugler of The Associated Press asked Bloomberg if that contradicts his call to keep the financial sector within the United States to employ people and pay taxes.
"Doesn't it kind of go against this message you’re arguing here for you to allow your investments to be made in off shore --"
"--I don’t have anything to say about my investments," the mayor said.
"You signed those tax forms, so you had to…," Kugler continued.
"I did not sign those tax forms," Bloomnberg said.
"Well, that’s your signature on it," Kugler pressed.
"If they're tax forms that I signed, I signed," the mayor said. "But I don’t have any control over where my investments go. And incidentally, as far as I know the investments that my money managers make are perfectly legal. There’re fully disclosed and they’re appropriate to maximize the assets which I’m giving away to charities."
Bloomberg's assets are managed in a kind of blind trust under the terms of an agreement with the city's Conflict of Interest Board. But reporters continue to press the mayor about why some of his assets are invested overseas instead of locally. The mayor stood firm.
"We live in a global world," he said.
The Bloomberg Family Foundation's 2008 tax return (see below) does read like an off-shore atlas. It all comes down to P.O. boxes and addresses in Bermuda, Cyprus, the Cayman Islands, Luxembourg, and Mauritius, which at least in theory generate returns to be invested in the mayor's multiple charitable causes. And as far as the mayor being out of the loop on details, the IRS filing offers some insight on that as well. Even though the charity reported it was worth $1.5 billion in 2008, the mayor, who is listed as its director, affirmed to the IRS he spent just 15 minutes a week devoted to being its director.Bloomberg Family Foundation 2008 tax return