Gingrich Attacks Romney in Florida as Swiss Account Owner

By Jonathan D. Salant and John McCormick - Jan 27, 2012 5:46 AM GMT+0700

Newt Gingrich opened a new line of attack against Mitt Romney, focusing on his wealth and ties to Goldman Sachs Group Inc. (GS), a firm he says added to the housing crisis.

Gingrich’s remarks, ahead of the Jan. 31 Florida (BEESFL) primary, were designed to blunt criticism of his work for Freddie Mac, the government-backed mortgage-lending company that Republicans link to the financial meltdown.

“We’re not going to beat Barack Obama with someone who owns Swiss bank accounts, Cayman Island accounts,” Gingrich said during a stop today in Mount Dora, Florida. “I am running for president to represent you, not to represent the Washington establishment, not to represent Goldman Sachs.”

Gingrich portrayed himself as the victim of attack ads run by Romney and his allies, calling them a “desperate last stand of the old order.” The former U.S. House speaker suggested that the ads ware being paid for by companies that foreclosed on the homes of Floridians.

With both men planning to appear tonight at a debate in Jacksonville, Gingrich also said Romney is spreading lies about him.

“We aren’t that stupid and you aren’t that clever,” Gingrich said, referring to Romney, the former Massachusetts governor and business executive.

Romney Response

Andrea Saul, a Romney spokeswoman, said it’s “puzzling to see Speaker Gingrich and his supporters continue their attacks on free enterprise. Unlike President Obama and Speaker Gingrich, Mitt Romney spent his career in business and knows what it will take to turn around our nation’s bad economy.”

Meeting later with reporters, Gingrich again brought up New York-based Goldman Sachs, whose employees and their families have provided more contributions to Romney than any other single employer. The company’s employees gave $367,200 to Romney through Sept. 30, according to the Washington-based Center for Responsive Politics, which tracks campaign finance. That’s more than the $235,275 he received from the company’s employees during his failed 2008 White House bid.

Gingrich said Romney had personal holdings in “a part of Goldman Sachs that was explicitly foreclosing on Floridians.”

David Wells, a Goldman Sachs spokesman, declined to comment.

Basis of Attack

When asked for the basis of his attacks, Gingrich’s campaign provided a link to an online post by Think Progress, whose website says it seeks to advance “progressive ideas and policies.”

The post’s author focused on Romney’s August financial disclosure that reported investments, through a blind trust, of between $1 million and $5 million in the Goldman Sachs Strategic Income Fund. Romney’s wife, Ann, also in a blind trust, placed between $200,001 and $500,000 in the fund, according to the disclosure.

That fund, which began in June 2010, held mortgage-backed obligations that constituted about a quarter of its investments as of March 31 last year, according to an annual report. Those obligations included adjustable-rate securities issued by Countrywide Financial Corp. and Washington Mutual Inc., lenders that were later purchased by Bank of America Corp. and JPMorgan Chase & Co., respectively.

Gingrich Investment

While the Think Progress report mentions that Countrywide and Wamu are involved in thousands of foreclosures filed in Florida, it doesn’t say that any of those foreclosed properties were held in the securitizations owned by the fund.

Gingrich, in a disclosure filed in July, listed retirement account investments of between $15,001 and $50,000 in the Pimco Total Return Fund and the Blackrock Global Allocation Fund, both of which listed holdings of mortgage-backed securities in their latest annual filings.

Gingrich also pointed to connections between Romney’s supporters and Freddie Mac. Romney has criticized Gingrich for his earnings of $1.6 million from Freddie Mac as a consultant.

Former Representatives Vin Weber of Minnesota, a Romney campaign adviser, and Susan Molinari of New York, who has made an anti-Gingrich TV ad, both were registered to lobby for Freddie Mac, according to the Center for Responsive Politics.

Another Romney supporter, Representative Mary Bono Mack, a California Republican, disputed Gingrich’s statements that Freddie Mac hired him as a historian.

‘Very Disingenuous’

“It is very disingenuous to say that he’s not an influence peddler,” she said in a conference call arranged by the Romney campaign. “There’s no doubt that he is. You cannot leave the speakership and not have influence, not only with your former colleagues, but future colleagues and the country as well.”

Romney, who has assailed Gingrich more vigorously following the former speaker’s Jan. 21 South Carolina primary win, pivoted back to his standard message today and focused on Obama.

Speaking at Paramount Printing in Jacksonville, a paper factory in the process of closing a plant there, Romney, 64, criticized the president for his handling of the economy.

“This has been a groundhog-day presidency,” Romney said. “He keeps saying the same things and we keep waking up to the same things going on.”

Dole Letter

The Romney campaign today released a letter from former Senate Majority Leader Bob Dole of Kansas, who led the Senate when Gingrich led the House. Dole said he is backing Romney for president.

“If we want to avoid an Obama landslide in November, Republicans should nominate Governor Romney as our standard bearer,” Dole, who lost the 1996 presidential election to incumbent President Bill Clinton by 8 percentage points, wrote.

Dole called Gingrich, 68, a “one-man-band who rarely took advice. It was his way or the highway.” Dole said Gingrich had “a new idea every minute and most of them were off the wall.”

Two polls released yesterday showed Romney and Gingrich in a virtual tie in Florida, heightening the pressure on both as they prepare for their televised debate. The surveys by Hamden, Connecticut-based Quinnipiac University and CNN/Time/ORC each showed Romney with 36 percent support and Gingrich with 34 percent.

The race’s two other remaining candidates -- former Senator Rick Santorum of Pennsylvania and U.S. Representative Ron Paul of Texas -- trailed far behind in the polls.

Santorum said today that Romney and Gingrich have refused to debate on policies because both agree on “the big issues of the day” such as cap-and-trade, health care mandates and the Wall Street bailout.

‘Real Contrasts’

“We want to have the real contrasts with President Obama,” Santorum told reporters in Tallahassee, the state capital. “Those two don’t disagree and I do. And that’s what makes us a much stronger and more viable candidate in the general election.”

As Romney’s Jan. 24 release of tax returns has provided fodder for his opponents, he has been emphasizing that he “didn’t inherit” his wealth. He also discussed yesterday why his tax rate is lower than those of many Americans.

“One of the reasons why we have a lower tax rate on capital gains is because capital gains are also being taxed at the corporate level,” Romney said during a stop in Miami. “The tax rate is really closer to 45 or 50 percent” for such income.

Romney Disclosure

His disclosure earlier this week showed he made $21.6 million in 2010 and used preferential rates for investment income and charitable contributions to hold his overall tax rate to 13.9 percent.

In Congress, Romney’s returns reignited a debate on the tax treatment of so-called carried interest, which provides some investment executives with preferential tax rates.

Romney said in an interview yesterday with CNBC that he would seek to keep the provision in the tax code, if elected, because he doesn’t want to raise taxes on anyone.

“If it’s actually a capital investment, and it’s fairly priced at the time people invest in it, and then it rises in value as a capital gain, then you treat it as a capital gain,” he said. “If someone turns it into what looks like ordinary income or a bonus, why then, obviously, it’s not a capital gain.”

To contact the reporters on this story: Jonathan D. Salant in Mount Dora, Florida at jsalant@bloomberg.net; John McCormick in Hollywood, Florida at jmccormick16@bloomberg.net

To contact the editor responsible for this story: Jeanne Cummings at jcummings21@bloomberg.net