Jackson Free Press

Yesterday was a very good day for the JFP staff, and especially our writers and designers.

In its Sunday edition, The New York Times is reporting that New York Attorney General Eric Schneiderman is investigating several private equity firms, including Bain Capital for possibly abusing a tax strategy "in order to slice hundreds of millions of dollars from their tax bills."

The attorney general, Eric T. Schneiderman, has in recent weeks subpoenaed more than a dozen firms seeking documents that would 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.

Among the firms to receive subpoenas are Kohlberg Kravis Roberts & Company, TPG Capital, Sun Capital Partners, Apollo Global Management, Silver Lake Partners and Bain Capital, which was founded by Mitt Romney, the Republican nominee for president. Representatives for the firms declined to comment on the inquiry.

Mr. Schneiderman’s investigation will intensify scrutiny of an industry already bruised by the campaign season, as President Obama and the Democrats have sought to depict Mr. Romney through his long career in private equity as a businessman who dismantled companies and laid off workers while amassing a personal fortune estimated at $250 million.

The subpoenas, by a Democrat, went out before a huge document leak recently that raised questions about Bain Capital's practices:

The tax strategy — which is viewed as perfectly legal by some tax experts, aggressive by others and potentially illegal by some — came to light last month when hundreds of pages of Bain’s internal financial documents were made available online. The financial statements show that at least $1 billion in accumulated fees that otherwise would have been taxed as ordinary income for Bain executives had been converted into investments producing capital gains, which are subject to a federal tax of 15 percent, versus a top rate of 35 percent for ordinary income. That means the Bain partners saved more than $200 million in federal income taxes and more than $20 million in Medicare taxes.

The subpoenas, which executives said were issued in July, predated the leak of the Bain documents by several weeks and do not appear to be connected with them. Mr. Schneiderman, who is also co-chairman of a mortgage fraud task force appointed by Mr. Obama, has made cracking down on large-scale tax evasion a priority of his first term.

As a retired partner, Mr. Romney continues to receive profits from Bain Capital and has had investments in some of the funds that documents show used the tax strategy.

Be sure to read the entire article for a succinct explanation about the fees/interest practices of many financial firms. This ends the piece:

The leaked documents show that Bain has in recent years waived management fees in at least eight private equity and other funds, including one formed as early as January 2002. The documents stated that Bain executives had the right to decide either annually or each quarter whether to waive some or all of their management fees; they also had …

So, what's going on with Columbus police? The Guardian has a report that police there have filed two different police reports for killing of Ball, who was African American. The Guardian reports:

*Since 26-year-old Ricky Ball was shot and killed by police in October, the black community in Columbus, Mississippi, has grappled with questions that don’t have clear answers.

Why did police shoot Ball that night? Why did a string of police officials resign in the months that followed? And why did police claim Ball stole a gun from a police officer’s home only after his death? Attempts to obtain police documents about the case have raised a new question: why did police release two different versions of events from the shooting?

Documents obtained by the Guardian show police altered a document labeled “uniform incident report” in Ball’s death. An initial version published by the Commercial Dispatch said an officer “tased” Ball before he fled. A new version of the incident report released to the Guardian does not include any mention of Taser use.

“One of these two reports is not true,” said Philip Broadhead, director of the criminal appeals clinic at the University of Mississippi law school. Broadhead said he’s never seen an incident report altered the way the document was in this case. “For police officers to offer up this type of information in the form of an incident report as sworn law officers … It’s a violation of their oath.”*

Also, an officer fired for the shooting filed a federal lawsuit over his firing yesterday. Read more here.