Romney and Gingrich battle over money matters

Mitt Romney and Newt Gingrich’s fight for Florida and the states beyond reached boiling point as Romney’s tax returns showed annual income topping $20 million — and a now-closed Swiss bank account — as Gingrich insisted his consulting work for a mortgage giant that contributed to the housing crisis did not include lobbying.

After a night of mutual sniping in a debate, the two leading GOP presidential candidates tried to turn the arguments over their various business dealings to his own advantage. Romney’s release of two years’ worth of tax papers, showing him at an elite level even among the nation’s richest 1%, focussed on the two men’s money and how they earned it.

Romney’s income put him in the top 0.006% of Americans, according to Internal Revenue Service data from 2009, the most recent year available. His net worth has been estimated as high as $250m.

As the former Massachusetts governor relented to pressure and released more than 500 pages of tax documents, Gingrich kept up the heat, saying that Romney was “outrageously dishonest” for accusing him of influence peddling for government-backed mortgage giant Freddie Mac.

The former House speaker said Romney’s charges were ironic, given that it was revealed after Monday’s debate that Romney himself was an investor in both Freddie Mac and its sister entity, Fannie Mae.

“I don’t own any Fannie Mae and Freddie Mac stock. He does, so presumably he was getting richer,” Gingrich told Fox News.

The spectre of well-off Gingrich and wealthier Romney feuding over money matters pleased Rick Santorum, who lags in polls for next Tuesday’s Florida primary but hopes to benefit from the dust-up as the race moves on. He simply said: “The other two candidates have some severe flaws.”

Striking out in two directions, Romney planned to offer criticism before and after President Barack Obama’s State of the Union address, then focus on Florida’s housing woes in an event sure to again highlight Gingrich’s $25,000 monthly retainer from Freddie Mac.

Gingrich, starting a busy day of campaign rallies along Florida’s Gulf Coast, also took on Obama, criticising him on foreign policy, energy plans and other issues. “I’m not so much interested in trying to tear Obama down as I am interested in getting the country to see clearly who he is,” he said in St Petersburg.

Records released by Romney show that he closed a Swiss bank account in 2010, as he was entering the presidential race.

He also kept money in the Cayman Islands, another spot popular with investors sheltering their income from taxes. But Benjamin Ginsberg, the Romney campaign’s legal counsel, said Romney did not use any aggressive tax strategies to help reduce or defer his tax income.

“Gov Romney has paid 100% of what he owes,” Ginsberg said.

Romney paid about $3m on nearly $22m in income in 2010 and indicated his 2011 taxes would be about the same, $3.2m on nearly $21m in income.

During the debate, Romney predicted his tax information would generate chatter but not any surprises, saying what he paid was “entirely legal and fair”.

Romney had declined to disclose any tax releases until he came under mounting criticism from his rivals.

In 2010, he donated $3m to the Mormon Church and other charitable causes. His effective tax rate was about 14%, the records showed. For 2011, he will pay a tax rate of about 15.4%, a level far lower than standard rates for high-income earners, reflecting the lower rate for long-term capital gains.

The tax records may silence Gingrich and others who argued that Republican voters should know the details of Romney’s wealth before they select their presidential nominee.

But it also could open up new lines of attack.

After Gingrich’s overwhelming victory in South Carolina last Saturday, Romney can ill afford to lose Florida’s Jan 31 primary, and he showcased a new aggression from the opening moments of the debate.

He said Gingrich had “resigned in disgrace” from Congress after four years as speaker and then had spent the next 15 years “working as an influence peddler”.

In particular, he referred to the contract Gingrich’s consulting firm had with Freddie Mac, a government-backed mortgage giant that Romney said “did a lot of bad for a lot of people and you were working there”.

“I have never, ever gone and done any lobbying,” Gingrich retorted emphatically, adding that his firm had hired an expert to explain to employees “the bright line between what you can do as a citizen and what you do as a lobbyist.”

Ron Paul, who is bypassing Florida in favour of smaller, less expensive states, returned to Texas after Monday’s debate. Santorum will appeal to the Tea Party to help revive his candidacy, appearing at two tea Party events.

Meanwhile, the wife of a casino mogul who contributed $5m to an independent group supporting Gingrich is matching that contribution, a person with knowledge of the contribution said.

Miriam Adelson, the wife of Las Vegas billionaire Sheldon Adelson, was giving $5m to Winning Our Future, a super-Political Action Committee (PAC) supporting the former House speaker’s presidential bid. The Adelson associate was not free to discuss the matter publicly and disclosed the contribution only on condition of anonymity.

The Adelsons are close to Gingrich and have supported his political endeavours for years. They have both made the maximum contribution to his campaign.

Super-PACs can raise and spend unlimited amounts to support or oppose a candidate as long as they do not coordinate directly with a campaign. Super-PACs came about after a Supreme Court ruling in 2010 significantly eased campaign finance restrictions.

Sheldon Adelson made his contribution to the pro-Gingrich super-PAC after Gingrich was battered with attack ads from Restore Our Future, a super PAC backing Romney. Gingrich, who had been leading polls in Iowa in December, placed fourth in the state’s caucuses and fourth in the New Hampshire primary after the advertising binge.

Winning Our Future stirred controversy when it purchased and aired a documentary highly critical of Romney’s years at Bain Capital, a venture capital firm where he made his wealth. The film depicted the Romney and the firm as heartless corporate raiders who destroyed countless jobs by buying and reorganising companies. The film had many inaccuracies, and Gingrich called for it to be edited or taken down.

The associate said Miriam Adelson had asked the group to use her money on ads that support Gingrich and not on attack ads.