NYC Mayor's '09 Tax Forms Show More Offshore Money

In 2009 Michael Bloomberg's philanthropic foundation invested over $75 million in offshore tax havens. Although not illegal, off-shoring reduces the amount of money the government has to function. Mayor Bloomberg says all his money is held in blind trusts, meaning he has no idea where his money is invested. This practice is designed to eliminate any conflicts of interest as he serves as Mayor.

The Associated Press reports:

The Bloomberg Family Foundation's 2009 tax forms were filed to the state Monday after two extensions.

Bloomberg's foundation, which gives away hundreds of millions of dollars, has maintained offshore investments for years — typically more than $100 million annually — but that only came to light earlier this year.

Bloomberg spokesman Stu Loeser declined to comment on the latest foreign investments.

When first confronted with questions about the investments last spring, Bloomberg defended the tactic but said he has no control over the money. His investments are maintained in a blind trust that prevents him from knowing his specific holdings to guard against conflicts of interest.

"As far as I know," he said last spring, "the investments that my money managers make are perfectly legal, they're fully disclosed and they're appropriate to maximize the assets which I'm giving away to charities."

The mayor signs his own tax forms, which clearly list the offshore investments.

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Beneficiaries Can Bank Proceeds, Bypass Life Insurer Accounts

According to Bloomberg.com, some beneficiaries could vastly benefit by banking their proceeds instead of using a life insurer account. As the article explains, many of consumers are confused by ads that convince beneficiaries they cannot make investment choices on their own.

Policyholders may assume when buying life insurance that beneficiaries will get the payouts in a single bank check. That may not be the case, Bloomberg Markets magazine reports in its September issue. Insurance companies such as Prudential Financial Inc. profit by holding onto the money in their own accounts and issuing checkbooks, essentially IOUs, for survivors to access their money.

“The language they use at the time is all couched in reassuring phrases -- let me give you the security of not having to make an investment choice,” said Lawrence Baxter, professor of the practice of law at Duke University School of Law in Durham, North Carolina. “It leverages off of that state of emotional distress.”

After a loved one passes away, survivors must file a claim and provide a death certificate, according to Bob Hunter, director of insurance for the Consumer Federation of America in Washington. The insurer will then contact the beneficiaries with options for payment, which usually include keeping the money in an account with the insurance company, Baxter said.

“It’s very easy for trusted companies to mislead naïve customers, and life insurance companies are trusted,” said Daniel Kahneman, a professor of psychology and public affairs at the Woodrow Wilson School of Public and International Affairs at Princeton University and a Nobel Prize winner. “The fact that they seem to be outside the regulatory reach is shocking.”

Continue reading at Bloomberg.com…

NYC Mayor Fights $400 Property Tax Rebates in Court

From Reuters:

New York City Mayor Michael Bloomberg said he was fighting the city council in court over whether he has the authority to withhold $400 property tax rebates that he says the city cannot afford.

"We are in court right now," the independent mayor told reporters on Thursday. If the court sides with the Democratic-led council, Bloomberg said the checks would be mailed to homeowners.

"We will always obey the law," he said. If the tax rebates are granted, the city will have to make other spending cuts, he said.

New York is under pressure to close a $1.3 billion deficit in 2009. The mayor's fight with the council is unusual and underscores the severity of the budget problems.

The battle may also test Bloomberg's financial expertise, the cornerstone of his campaign to win a third term.

"We will work with the city council to try to get the right balance" of measures, he said.