(NEW YORK) — New York Attorney General Eric Schneiderman is investigating some of the nation’s biggest private equity firms, including Bain Capital, founded by Republican nominee Mitt Romney, to determine whether they abused tax strategies in order to pay hundreds of millions of dollars less in taxes, The New York Times reports.
Schneiderman has subpoenaed documents from more than a dozen firms in recent weeks, which would reveal whether the they converted certain management fees received from their investors into fund investments, which are taxed at a significantly lower rate than ordinary income. The tax strategy was revealed last month when hundreds of pages of Bain’s internal financial documents were made available online. The records showed that the firm had converted at least $1 billion in fees that normally would have been taxed as ordinary income at 35 percent into investments producing capital gains, which are taxed at the lower rate of 15 percent, according to the Times.
The subpoenas were reportedly issued before the leak of the Bain documents and do not appear to be connected, the paper says.
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Susan Scutti, CNN
Ivaylo Vezenkov and Lauren del Valle, CNN
Julia Horowitz, CNN