A top House Democrat, Rep. Suzan DelBene (D-WA), has just been exposed for investing up to $1 million of her wealth in the popular international tax haven of the Cayman Islands, Fox Business reported.
That is notable in light of the fact that DelBene, who is among the wealthiest members of Congress, is vice chair of the tax policy-governing House Ways and Means Committee that just publicly released former President Donald Trump’s personal tax returns, and is on record calling for tax law “loopholes” to be closed and for the wealthy to “pay their fair share.”
Wealth partially sheltered in offshore tax haven
The Cayman Islands in the Caribbean, which have no corporate tax rate, have long been utilized as a popular tax haven for wealthy investors to shelter their money from the obligations of U.S. tax laws for individuals and corporations.
Fox Business reported that, according to financial disclosure forms, Rep. DelBene in 2020 invested between $500,001 and $1 million in a Delaware-based hedge fund known as Alkeon Growth Partners, which is considered to be a “feeder fund” for a Cayman Islands-based “master fund” known as Alkeon Capital Management.
Money invested into the feeder funds is funneled to the master fund and then profits earned by the master fund are returned to the feeder funds and investors on a proportional basis.
The outlet noted that per a separate Cayman Islands-based investment firm, “The principal advantage of utilizing a master-feeder structure is that it allows U.S. taxable investors to invest in an offshore hedge fund in a tax efficient manner that does not compromise the tax position of other non-U.S. or U.S. tax-exempt investors” — in other words, to avoid paying U.S. taxes on their investments and returns.
This situation for Rep. DelBene, while seemingly legal, nonetheless appears grossly hypocritical in light of her own rhetoric about tax obligations for the wealthy and her status as a powerful House Democrat with substantial influence over the nation’s tax laws.
In her position as vice chair of the House Ways and Means Committee, the Washington state congresswoman was instrumental in that committee’s ethically dubious and now successful efforts to obtain and publicly release former President Trump’s personal and business-related tax returns and associated documents.
She even highlighted that with a tweet on Tuesday that said, “No one is above the law, not even the President. That’s why the House passed the Presidential Tax Filings & Audit Transparency Act to ensure the IRS enforces our tax laws fairly to everyone.”
Further, just prior to the midterm elections in November, DelBene tweeted that while her fellow Democrats were working hard to ensure that everyone “pay their fair share in taxes,” her Republican colleagues “have no plan to fight inflation & want to raise prices for middle-class families, while giving tax breaks to the wealthy.”
Meanwhile, Republicans have no plan to fight inflation & want to raise prices for middle-class families, while giving tax breaks to the wealthy. (3/3)
— Rep. Suzan DelBene (@RepDelBene) November 4, 2022
The real kicker, though, was a May 2021 tweet from DelBene, in which she wrote, “Asking the wealthy to pay their fair share means more enforcement in the tax system & ending loopholes that only benefit the rich. Today’s @WaysMeansCmte hearing focused on meaningful reforms that can increase fairness & accountability in our system.”
She is not to be taken seriously
For what it is worth, Business Insider in 2021 ranked Rep. DelBene, a former Microsoft executive before being elected to the House, at number 13 among the wealthiest members of Congress with an estimated net worth, as of 2020, of around $52 million.
Thus, it is hard to take seriously her rhetoric about closing loopholes and making the wealthy pay their undefined “fair share” in taxes — to say nothing of her part in the disturbing public disclosure of Trump’s private tax information — when she herself is exploiting tax law loopholes to park her wealth in offshore tax havens to avoid paying the full amount she would owe under the very same U.S. tax laws that she helps write and oversee.