Previously: That’s a really good question (July 3, 2012)

“…you can only put thirty thousand dollars per year as a regular person into these accounts. How could he possibly have grown that account to one hundred and one million dollars?…”

Jennifer Granholm on Current TV:

http://current.com/bc/1719777665001?linkBaseURL=http%3A%2F%2Fcurrent.com%2Fshows%2Fthe-war-room%2Fvideos%2Fcall-for-transparency-romneys-astronomical-101-million-ira

Jennifer Granholm: Governor Romney’s IRA, his Individual Retirement Account, is reportedly worth as much as one hundred and one million dollars. This is just his retirement account. But you can only put thirty thousand dollars per year as a regular person into these accounts. How could he possibly have grown that account to one hundred and one million dollars?

Edward Kleinbard: Uh, uh, you know, again, this, this is a great mystery and, um, there are, uh, two possibilities. One is that from a little acorn a mighty oak grew very, very quickly, uh, extraordinarily so. Uh, but at [crosstalk] thirty thousand dollars a year for fifteen years.

Jennifer Granholm: How can that be? Wait, wait, wait, wait, don’t move away from that. How could this, what little acorn would have grown to a hundred and one million? And I want to get some of that acorn.

Edward Kleinbard: Exactly so. Me, too. Uh, you would have to have had, um, if you actually put thirty thousand dollars of cash, uh, away in a 401K plan for fifteen years, which was his tenure at Bain. You know, that by itself is four hundred and fifty thousand dollars. So you can imagine you need, you need a, uh, a return of like thirty percent a year to, to reach a hundred million dollars.      

Jennifer Granholm: Which is ridiculous.

Edward Kleinbard: Exactly. So, the other possibility, uh, and the one that I find quite troubling, and again, disclosure would clarify all of this, complete disclosure would clarify it, uh, is that, uh, he didn’t just put thirty thousand dollars of cash in the fund which then went out and invested in, you know, S and P five hundred public stocks. The money went to buy, uh, interests in Bain funds that he himself controlled and he sold them at prices that he set. And the question is, did he set those prices at an honest fair market value [crosstalk], or did he lowball the prices?

Jennifer Granholm: Okay, wait, now, I just want to be clear about this. So, what you’re saying is that somebody can, um, put something into their IRA where they set the value of it and if it comes in under that thirty thousand, is that what it is, if it comes in under that cap that it’s okay, or is it a special deal [crosstalk] with private equity?

Edward Kleinbard: No. No, it, it’s, uh, it’s not okay. Uh, the price at which you sell into your 401K or IRA plan has to be the market price for what you’re selling. And so, if in fact you systematically are selling, um, uh, speculative, uh, uh, positions in private equity firms, uh, private equity funds, investments that you’ve made, uh, and you’re systematically doing that for nominal prices, that’s in fact a very serious issue.

Jennifer Granholm: So.              

Edward Kleinbard: Because, he would not have offered me the opportunity to buy those same interests at the, at nominal prices. And so, that’s the question. [crosstalk] That’s the issue.

Jennifer Granholm: So, in other words, if I’m, I just want to read into it, ’cause I just want to say it as it is. So, he would have put into his IRA something that he put a value on which had the potential to grow enormously, so he maybe would have, again, this is all speculation on our part, he maybe would have undervalued it as it went in to the IRA, grew enormously, he wouldn’t have had to pay taxes on that because it is exempt from tax ’cause it’s an IRA. So that’s how possibly it could grow to some astronomical amount like a hundred and five million?                          

Edward Kleinbard: Right, because, if it, imagine, just as by way of an example, imagine that you, you valued, um, uh, positions that you sold to your IRA at ten cents on the dollar, ten percent of what they’re really worth. Well that means that you can put three hundred thousand dollars into your IRA, not thirty thousand dollars. Now, what’s very frustrating to me about all this, uh, you know, is that, uh, we, we can only, uh, talk in abstractions and generalities because, again, of the lack of disclosure. These are issues that, that, that would be clarified presumably to the governor’s, uh, benefit if he were to be [crosstalk], if were to be more candid with the American people.                

Jennifer Granholm: If he were to be open, open.

Edward Kleinbard: Exactly.

Jennifer Granholm: All right.

It’s the one percent’s world, the rest of us only get to subsist in it.

Michigan Governor Jennifer Granholm was the keynote speaker for Truman Days at the Saturday night dinner held at the Hyatt Regency Crown Center in Kansas City.

Our previous coverage of Truman Days:

Truman Days in Kansas City: Friday Night Hospitality Suites

Truman Days in Kansas City: Friday Night Hospitality Suites, part 2

Truman Days 2009, Day 2, Brunch

Truman Days in Kansas City: Missouri State Treasurer Clint Zweifel

Truman Days in Kansas City: Missouri Attorney General Chris Koster

Truman Days in Kansas City: photos from May 1st and 2nd

Truman Days in Kansas City: Congressman Emanuel Cleaver

[applause] Thank you all. Thank you senator [McCaskill]. Thank you for the invitation. Thank you for allowing me to come. It’s five minutes to nine. [laughter] All right, so, I’m not, I promise I’m not gonna go very long. But there’s just a few things that I want to tell you. Are you okay? Just wait, just a little bit. [cheers] [applause] I promise to not go long. [applause]

But, it’s so great to hear you. Thank you for that honor. I’ve never heard you speak before, and so you’ve said some really great stories that I want to poach. If that’s okay, mister congressman [Emanuel Cleaver]? And Jay, excuse me Governor Nixon [laughter], great to be in your state. Great to see all the things you have done. And great to see all the love that there is for you and for all of you, for all of your statewides [office holders]. The love that [garbled] [applause]

So, I have, I have never, I’ve never been to Kansas City before. [voice: “Welcome!”] So thank you. I’m so pleased to be here and as we were flying in I was noticing how green it was and the hills. This is a beautiful place. And [applause], and then, here all of you all. Isn’t this a beautiful place? And, you know, the feel of Democrats in the evening. And this [laughter], this is really a beautiful place. So here’s what we’re doin’, you know, as we, as we drove in I was noticing, ’cause I think Kansas City was probably, you know, built up at around the same time Detroit was. And so there’s a lot of brick buildings. And there’s a lot of, there’s a lot of emphasis, I think, reinvigorating some of the old buildings. You see lofts and sort of the brick blending with the steel and glass. There’s a great blend of old and new. There’s a real sense of, of invigoration. And I, I just, I, I felt like there is this sense of renewal just in watching what was happening…

…And so as we were driving in, Joanne Halls [sp] who’s with me was telling me that really what Kansas City is known for is barbecue. [whistle] [applause] Is that right? [applause] So, we didn’t finish all the meal here, but tonight afterward we’re gonna go and and have some barbecue. [voice: Yeah!”] So we got a tip about where to go. [laughter] So, I’m not gonna keep you too long ’cause I’m gonna have some barbecue, too.

So, I, I love the fact that you’re all talking about change. This was really a week of change, just this past week that we came through. In fact, one week ago tonight I was at our Jefferson Jackson Day dinner, which is our statewide dinner for Democrats, and I had invited, to come and speak, Deval Patrick, who is the governor of Massachusetts. [applause] And if you know, he’s just this phenomenal presence, and he, you know, we’re so proud that he is the, well, we’re not [garbled] more. But he’s an African American Democratic governor who is doing phenomenal things in Massachusetts. And when he came and he talked to us he was talking about the power of change. And so you all talked about the power of change tonight and what a difference elections make.

And but what he said is that there’s this real moment for change in his life. And it’s such a great personal story, just very quickly. What he said, you know, he was actually born in Chicago. And he was born to a very poor family. And he was saying that his family was on welfare and he lived in a multi-generational home. And, he actually shared a room with his mom and his grandmother. And they had one bunk bed in the room. So every third night, they would rotate, one of them had to be on the floor. And so he comes from this place of really knowing what people are feeling. Well, when he was growing up, before he got to high school, they moved to Boston. And his family somehow arranged it to get him to be placed in a boarding school where they have really high expectations of kids. Now he had come from, you know, schools where they weren’t performing very well and he felt like he was lacking in skills. But he went to this school and he, when he graduated from that school he did so well that he went to Harvard. And then he went on to Harvard Law School. And then he did a whole bunch of great things, and of course ended up being the governor of Massachusetts. And he says that he lives now on this leafy street and he has this great family and when his, one of his daughters was young, she had this privilege of being raised in a, you know, family of privilege. And so when she was asked, his daughter, to do a, she was five years old, she was asked to do a little speech about the four seasons. And she, when she went in front of the class she said the Four Seasons has a concierge and when you drive up [laughter] they let you out of your car. [laughter] And his whole point in saying that was one generation. One generation. And so the question for us all is, you know, change can be short term or change can be long term. But the power of transformation, especially with education…so the power of transformational leadership is sometimes planting trees under who’s shade you will never sit, right? And that’s what education is all about. So [applause]  because you’re never going to be governor for a generation, no matter how good you were and long it was as attorney general, there will be people who come behind us. So it’s important to move as quickly as possible.

And so you are rushing, what do you call it? Racing to invest and to make diverse sectors, emerging sectors come to Missouri. Well, this issue of change, just in this past week, was remarkable. So on Monday General Motors annou…and I, of course I have a perspective on this, General Motors announced that it was going to be furloughing umpteen number of plants while they decide whether they’re going to file for bankruptcy. On Tuesday of this week, I think it was Tuesday, Arlen Specter gave President Obama a filibuster proof majority in the senate. [applause] On Wednesday the president celebrated, if you will, his hundred days in office. And I think that was the same day that the swine flu reared it’s ugly…You’re not supposed to call it the swine flue. What’s it called? [voices] It’s H1N1. [voice: “H1N1 virus.”] H1N1 virus. Sounds like, you know, sounds like something that C3PO gave to R2D2 or something like that. [laughter] But, so that was Wednesday. Thursday Chrysler files for bankruptcy. And Friday David Souter announces that he is going to step down from the Supreme Court.

So this is Saturday, we’re in Missouri. I’m glad to be here with you at the end of the week of change. [applause] Just to show you how quick it all co
uld be. [applause] And so we also know, because we are in the show me state, that [applause], and, yeah, go for it show me state, but I, I, I think that because this is the first time in Kansas City, I’ve been to St. Louis before, but never Kansas City, but I just have this feeling. I want to tell you what people like me feel about Missouri. ‘Cause I feel like, despite the fact that our economy is more challenged than yours, there are a lot of parallels between Missouri and Michigan. And, and so I feel like the parallels include the fact that we are states, you know, in the middle of the country. States of common sense. States that really honor work and workers and a work ethic. States that have a history with farming to manufacturing. States that, do you have? I feel like, do you guys have Friday fish frys? [voice: “Oh yeah.”] I mean, I’m all about the Friday fish frys and the front porches and the, you know, yellow ribbons on the street as the buses that bring the great soldiers back, go to the [applause][cheers]… Right, you know what I’m saying? Go to the high school and the kids are holding up a sign. So they’re saluting the buses. I feel, is that? That, that’s what you do in Missouri. That’s what you do in Michigan. It’s probably what you do across the country.

But I feel like, I feel like there is connection between us. And there’s a connection, too, because I think that both of our states want to put the “P” back in GDP. That we ought to be manufacturing products [applause] in this country. And I say that because, not just because we’re seeing this global shift in manufacturing jobs to low wage countries, ’cause we are. But because I think it is a critical national need. To be able to manufacture, for example, the means of our national defense. In World War II when the president turned to develop the means for our defense through the bombers, etcetera, they came to our factories. To be able to convert, to make those instruments of defense. If you don’t have the ability to craft that then hoe weak do you become?

And it’s true, as well, with respect to the change that the president seeks to bring on energy. I mean you can’t be independent of foreign oil or fossil fuels if you don’t have the means to manufacture that, right? [voice: “Right.”] If you don’t have the ability to make a car that’s an electric vehicle, like Ford is doing here, right? [voice: “Right.”] If you don’t have the ability to do that then we aren’t gonna be safe as a nation. Or, at least we won’t be reliant on foreign oil or foreign batteries. so, bottom line, I think that we have, our two states, a lot in common.

I do think that we’ve got an ability, our states, to demonstrate how change can happen. And I’m very, very grateful for this sixty vote margin, sixty-one vote margin next year, right, because [applause], because sixty votes, sixty votes means, and I, I don’t, have you, have you ever gone into a, I, let me just say what, I’ve been into like, I’ve been to the bakery and right next to the cash register is a mason jar with a picture on it of, you know, Aunt Mary, and the mason jar has a hand written note saying, “Donations wanted for Aunt Mary’s mammogram.” Asking for quarters. Sixty votes has an impact on that. Or, did you hear about the family who’s child has leukemia and they were auctioning off items on e-bay to be able to pay for that child’s leukemia treatment? We are not a nation that begs. We ought not to be a nation that begs for quarters to pay for health care. [applause][cheers] Sixty votes means that. [applause] Maybe sixty-one votes that mean that. Sixty votes means that the auto worker who is, who used to bend steel to make the minivan at a Chrysler plant in St. Louis might now have the chance to bend steel to make a wind turbine. And that wind turbine might be produced in a factory that’s been retrofitted because the carpenters and the plumbers and the pipe fitters have been able to retrofit it. [applause] And that wind turbine might be installed on a Missouri farm by an operating engineer and might be connected to a smart grid by the I.B.E.W. [cheers][applause]. So, you know that sixty votes is gonna mean jobs for us in this country when the president, who is committed to adding this new sector of employment. It’s, sixty votes meant a stimulus bill.

And you are so right about this. And I can just speak from the perspective of a governor. And I know you feel this way. That if it had gone the other way in November we would not be seeing additional weeks added to those who are unemployed, who are on unemployment insurance. You would not see [applause] an additional amount to help those families. And you would not see the commitment to adding these new sectors. Now, as governor of Michigan I can just tell you that since the year 2000, because of this shift in manufacturing jobs, and Michigan’s got seven times more automotive jobs than all of the other states, so we have got far too much concentration in one sector. We love our autos, but we want to add new sectors. We have lost, between 2000 and the end of this year, we will have lost over seven hundred thousand jobs. Over seven hundred thousand jobs. And just to put that in perspective, in Hurricane Katrina Louisiana lost about two hundred and thirty thousand jobs. Obviously a hurricane is different than an economic hurricane. And one time versus a longer period, but nonetheless, it certainly has impact on families, as you know, right…?

Part 2 will follow as soon as the Show Me Progress corporate headquarters transcription gnomes return from their mandatory 20,000 word break.