Mitt Romney released his financial records on Monday. These are neat. You don’t get too many opportunities to see where people with $250m put their money. (BTW, I think that he probably has more. How much is in his foundation?)
I didn’t expect to write on this because I find the whole issue of blind trusts a little obscure and without a clear moral or ethical direction to it. Furthermore, I view it to be a real feature of capitalism that you don’t have to know all the details of things that you make money off of. However, I was shocked by some of the stuff I found in Romney’s financials that, surprise, surprise, do not jive with his public stances or statements.
Now, Romney has recently divested from a number of companies, but two jumped out at me:
- Total SA (formerly Totalfina and Totalfina Elf), which Romney recently sold stock resulting in capital gains of $15-50k.
- Lukoil, which Romney recently sold with a cap gains of $50-100k
The Oil for Food scandal was a live issue when I was on the Hill, and I read a lot of documents about it at the time. And, simply put, Total and Lukoil are the bad guys. They have been, repeatedly, vehicles for corruption in their countries and they are both tools of the French and Russian governments, respectively. But back to Iraq for a moment. From a Heritage document about the Oil for Food scandal:
Prior to the regime change in April 2003, French and Russian oil companies possessed oil contracts with the Saddam Hussein regime that covered roughly 40 percent of the country’s oil wealth. French oil giant Total Fina Elf had won contracts to develop the Majnoon and Nahr Umar oil fields in southern Iraq, which contain an estimated 26 billion barrels of oil (25 percent of Iraq’s oil reserves). Russian company Lukoil had won the contract to develop the West Qurna field, also in southern Iraq, which has an estimated 15 billion barrels of oil.
An April 2005 National Review article had this to say about Total, "which NRO readers may remember for its sweetheart deals with Saddam Hussein, also holds major concessions in Sudan." And the Scotsman had this to say about Lukoil:
"Iraqi attempts to use oil gifts to influence Russian policy-makers were on a lavish and almost indiscriminate scale," it says. He targeted a "new oligarch class" and also bribed Lukoil, the oil giant, with oil-for-food vouchers worth $10 million.
These companies are also invested in the Sudan and have been since the mid-80s. They are also deeply invested in Iran. Here are some sample quotes. First, Lukoil and Iran, from Forbes:
Iran and Russia said they plan to step up economic cooperation and are seeking energy deals involving Russian oil and gas giants Lukoil and Gazprom.
With the South Pars project, TotalFinaElf has become the foremost oil company in partnership with Iran
One Congressional Research Service report lists $1.3b in investments by Total in Iran.
Incidentally, another oil company, China Petroleum and Chemicals, (aka Sinopec) that Romney has not divested from is still active in Iran. From an April 2007 article:
Iran is close to a deal with Sinopec of China on developing the Yadavaran oil field, the Iranian oil minister, Kazem Vaziri-Hamaneh, said Monday.
Sinopec Group, the state-owned parent of Sinopec Corp., agreed in October 2004 to take the lead in developing the Iranian oil field and to buy 10 million metric tons of liquefied natural gas every year for 25 years in a deal worth as much as $100 billion.
So Romney is extracting income from a state-owned Chinese government oil company investing in Iran. Nice…
Why does this matter?
Well, first Romney is a big advocate of divesting from Iran. At least in the case of Sinopec, it hasn’t happened yet. Now, Romney will argue, somewhat correctly, that this was in a blind trust, and therefore he isn’t accountable for it. Of course, back in 1994, Romney attacked the credibility of this argument, calling it an "age-old ruse:"
You give a blind trust rules. You can say to a blind trust, don’t invest in properties which would be in conflict of interest or where the seller might think they’re going to get an advantage from me.
How about "Don’t invest in companies that are investing in state sponsors of terrorism?" At the very least, these investments raise questions about the rules that Romney used. What were the rules? And they raise timing questions. Did Romney invest in Total, Sinopec, and Lukoil prior to the blind trust?
It seems that similar questions could apply to his investments in companies that do embryonic stem-cell research, although the political hypocrisy there would have more to do with his actual positions, not his investments.
While he’s at it, why doesn’t he release his tax returns (and Clinton and McCain could do that too), along with the tax returns of his foundation. (which gave the $15k to Mass. Citizens for Life, right?)