SPRINGFIELD — Republican Bruce Rauner Tuesday dismissed questions about his financial ties to the secretive Cayman Islands as a Democratic-driven “red herring,” calling it a “distraction” by Gov. Pat Quinn from his failed tax policies. In Chicago, Quinn hit Rauner over outsourcing allegations with regard to the venture capitalist’s former firm.
Rauner responded publicly for the first time to word that his former private-equity company set up a dozen investment vehicles in the Caribbean tax haven between 2009 and 2011, including three partnerships in which has disclosed having a personal financial stake.
“This issue of the Cayman Islands, this is a red herring,” Rauner told reporters in Springfield, where he was urging quick action by a state appeals court by the end of the week to allow a term-limits initiative on the fall ballot.
“This is a distraction. This is being foamed up by Pat Quinn and his allies to create a distraction in the media for the voters. It is not a real important issue one way or another in this election,” Rauner said.
For his part, Quinn, while in Chicago, hit Rauner over allegations that he led up companies that pushed outsourcing. “We’re talking about someone who is an outsourcer of American jobs to foreign countries. His companies did that. He laid off lots of people from their job. That’s not the way to go. Then he started a company, his firm did, to teach other companies how to outsource our American jobs to foreign countries,” Quinn said. “This is not a person I think who has any understanding of how important it is to build right here in our own backyard of Illinois. Look at the record of outsourcing of Bruce Rauner.”
Rauner chalked up the outsourcing allegations as another distraction.
“So, this issue of outsourcing, this is going to come up a whole bunch of times, and again, another red herring. Another distraction,” Rauner said. “I have never closed a plant and moved those jobs overseas or that sort of thing. That’s not what my business was. Never done that.”
Also on Tuesday, Quinn running mate Paul Vallas attacked Rauner on his Cayman connections, deriding him as a “vulture capitalist” intent on trying to “avoid tax liability” for himself and his investors by registering the investment vehicles in the Caribbean nation. Vallas also called on Rauner to release the names of fellow investors in those Cayman funds.
Earlier this month, the Chicago Sun-Times reported that three investment partnerships Rauner listed last fall on a state financial disclosure form were domiciled in the Cayman Islands, along with one stock investment and another holding that he appears to have sold.
On Tuesday, the newspaper disclosed that 12 such investment funds were established in the Cayman Islands by Chicago-based GTCR between 2009 and 2011, when he still was chairman of the private-equity firm.
Rauner acknowledged those investments during his Springfield appearance but said they did not impact his tax rate. Rauner sidestepped Vallas’ point about disclosing the names of investors in those Caymans entities.
“My tax rate is the same tax rate as Pat Quinn. I pay my taxes, full taxes, follow the rule, follow the law. I have never set up a Caymans account for my own assets myself. My firm has set up some Caymans accounts — just like almost all investment firms that have overseas investments set up Caymans accounts,” Rauner said.
“Pat Quinn’s own pension has many Caymans accounts in it. The Illinois state pension system has, I don’t know the exact number, I would bet hundreds of Cayman accounts in the Illinois pensions. It’s common practice.
“It’s not sinister. It’s not evil,” Rauner continued. “And, those accounts do not impact Pat Quinn’s tax rate, did not impact my tax rate. It’s just standard practice in the investment world. This is a distraction because Pat Quinn is failing on taxes himself. The real issue is Pat Quinn wants to raise taxes on the families of Illinois. I am working to lower the taxes on Illinois.”
