The attorney general for the State of New York is investigating several financial firms – including Bain Capital – for allegedly creating schemes to avoid paying taxes, The New York Times reports.
Attorney General Eric Schneiderman has subpoenaed documents from roughly a dozen firms in the past few weeks, according to The Times. The goal is to “reveal whether they converted certain management fees collected from their investors into fund investments, which are taxed at a far lower rate than ordinary income," the paper reported.
The Times further reports that some executives at the firms said Schneiderman, a Democrat, could have a political motivation, embarrassing the industry to highlight Mitt Romney's history at Bain.
In January, Schneiderman was tapped by President Obama in his State of the Union speech to be part of a new task force investigating mortgage fraud.
While Romney continues to receive profits from Bain, his campaign said that he did not benefit from the strategy. “Investing fee income is a common, accepted and totally legal practice,” R. Bradford Malt, a lawyer for Romney and the manager of the family’s investments, told The Times. “However, Governor Romney’s retirement agreement did not give the blind trust or him the right to do this, and I can confirm that neither he nor the trust has ever done this, whether before or after he retired from Bain Capital.”