Mercer Effort to Avoid Taxes Appears in Paradise PapersThe conservative billionaire behind the alt-right apparently used Bermuda feeder funds to avoid taxes and protect wealth
|By Baynard Woods|
November 7, 2017
The Guardian has reported that conservative billionaire and Trump backer Robert Mercer “appears as a director of eight Bermuda companies in the Paradise Papers,” the trove of documents reviewed by the International Consortium of Investigative Journalists.
The documents, which have not been independently confirmed by The Real News, appear to show that these Bermuda companies were intended to “legally avoid a little-known U.S. tax of up to 39% on tens of millions of dollars in investment profits amassed by the Mercer family’s foundation,” while also protecting the Mercer hedge fund’s multi-million dollar retirement fund.
Mercer’s cash has largely funded the rise of the alt-right—giving money to the campaigns of Ted Cruz and Donald Trump; donating massive amounts to Citizens United; and funding Steve Bannon projects like Breitbart News and the Government Accountability Institute, which produced the the book “Clinton Cash,” and played a major role in the general election.
Last week, in a letter, Mercer stepped down from his leadership roles in Renaissance Technologies, his extremely profitable hedge fund, and sought to distance himself from the ugliest fringes of the far-right, such as Bannon protege Milo Yiannopoulos, whose Breitbart emails became public last month and showed the extent to which he sought collaboration from open and active racists in his reporting.
“He's afraid,” Wil Hylton, who wrote about Breitbart for the New York Times Magazine, said of Mercer’s decision to sell his shares of Breitbart to his daughters. “Something has finally triggered him, and I think we know what it is. It's the revelation Breitbart through Milo Yiannopoulos was actively courting the support and influence of white supremacists, that it was not just the passive tolerance of white supremacy on the site or the sort of coded dog-whistle language that's apparent on the site, but that behind the scenes, Milo Yiannopoulos was actively communicating with, coordinating with, colluding with, conspiring with, and allowing himself to be sort of ghost-written by white supremacists.”
The revelation that there has been, in Hylton’s words, “this willful infiltration of a major, right-wing news site by the most extreme, overt, unabashed white supremacists,” may have encouraged Mercer to step away from the site—and Renaissance, where he will still be involved in the technical side of things—in order to protect his hedge fund’s bottom line. But the new revelations of the Paradise Papers may prove equally problematic.
Renaissance has already been ruled in violation of tax code, owing nearly $7 billion in back taxes and penalties—and the company is supposed to meet with the IRS about the debt and fees later this week. But Dean Baker, co-director of the Center for Economic and Policy Research (CEPR), told the Real News that there is real concern that Trump’s interim IRS director will let that go. “There's a real concern that David Kautter will just give them a green light and say ‘Oh, forget about that.’ That's a lot of money to Mr. Mercer, and needless to say, I suspect a substantial portion of that will come back to the Republican party and other conservative organizations.”
In fact, Mercer has given hundreds of millions to Bannon-linked projects and his foundation, which cannot make direct political contributions, has given $62 million to conservative groups over the last decade. According to the Guardian, “the Mercer foundation has avoided liability for millions of dollars in U.S. tax by routing its investments through one of these Bermuda vehicles.”
Photo of Robert and Rebekah Mercer by Sean Zanni/Patrick McMullan via Getty Images