Sunday, September 23, 2018
Politics

Jeb Bush's income soared after he left office, 33 years of tax returns show

The Bush family mantra has been consistent for generations: First make a lot of money, then focus on public service.

Jeb Bush followed that path before running for governor of Florida in the 1990s, and 33 years of newly released tax returns show how he embraced that strategy with zeal before launching a presidential campaign this year.

His income jumped from $261,000 in 2006, his final year as governor, to more than $2.2 million in 2007. Then, from 2010 through 2013, tax returns released Tuesday show his annual income exploded from $3.2 million to nearly $7.4 million.

All told, the Republican has earned at least $29 million since leaving public office.

He got an extension until Oct. 15 to file his 2014 return, which presumably added millions more in income. But Bush also paid a higher tax rate — 40 percent in 2013 and nearly that amount in recent years — than most Americans.

"It's remarkable and yet unremarkable," said Joseph Thorndike, director of the nonpartisan Tax History Project. "Remarkable because he's paying as much as he is. Unremarkable because he's paying like most people pay. Most of his income is regular income. We will know down the road if there's anything more unusual or suspicious or intriguing but at least initially they look confident that they have a pretty good story going."

The vast majority of his earnings came from consulting and speaking fees, where Bush earned between $40,000 and $75,000 apiece for dozens of appearances before business and trade groups, colleges, and organizations ranging from the Salvation Army to a South Korean defense contractor.

Bush's income in 2013 included $5.8 million from a speaking and consulting business, Jeb Bush & Associates, he ran with his son, 31-year-old Jeb Bush Jr.

That included $2 million from British banking giant Barclays; more than $97,000 from a corporation called Old Rhodes Holdings, which Bush created in 2011 to make money in the disaster response business; more than $125,000 from Britton Hill Advisors, another Bush venture raising money for assorted energy projects including hydraulic fracking; and nearly $180,000 from De Soto Partners, another limited liability corporation founded by Bush.

Precisely how those firms earned the money is unclear.

The former real estate executive, whose net worth dropped from roughly $2 million to $1.3 million during his eight years in office, today is worth between $19 million and $22 million, according to the campaign.

"Thank god for term limits," he joked Tuesday with reporters gathered at a law firm near the White House, heavy binders filled with his tax returns from an unprecedented 33 years.

"Most of my adult life has been spent in the private sector, not in government," Bush, 62, said in a statement. "I've been graced with good fortune, by having the most wonderful parents in the world, the best business partners a man could ask for, and opportunities that are out of reach for too many Americans.

"But part of the reason they are out of reach is that we have a tax code that stifles growth and opportunity. In my case, I paid the government more than one in three dollars that I earned in my career."

In posting 1,150 pages of personal financial information online Tuesday afternoon at Jeb2016.com, Bush sought to cast himself as a model of transparency in contrast to Hillary Rodham Clinton.

The Democratic frontrunner has not said how many years of returns she intends to release, but a campaign aide noted that 30 years of her returns have been released previously through past disclosures from her and former President Bill Clinton.

Bush's release also served to contrast him to 2012 Republican nominee Mitt Romney, who, after weeks of criticism, reluctantly released two years of tax returns that showed he paid an effective tax rate of about 14 percent, opening him up to scrutiny and attacks.

Bush's effective tax rate from 1981 to 2013 was about 36 percent — much higher than Romney's because most of Bush's income was regular income rather than capital gains, which are taxed at a lower rate.

Still, Bush's private-sector experience is likely to draw fire from Republicans and Democrats alike. He has done business over the years with several business partners later implicated in criminal activity, and some of his interests have already drawn criticism from Republican rivals.

After leaving the governor's office in 2007, Bush joined the boards of several corporations, including Tenet Healthcare, which supported the Affordable Care Act. Though Bush often criticizes that law, he earned millions of dollars from Tenet. He added to that by selling Tenet stock in 2013, doubling a $441,000 investment just two years earlier.

Likewise, his ties to financial giants Lehman Brothers — which paid him more than $1 million a year in 2007 and 2008 before going bankrupt — and Barclays have drawn disapproval. Last week a super PAC backing Sen. Rand Paul of Kentucky launched an online ad in early primary states mocking Bush as "Bailout Bush" for his support for the Troubled Asset Relief Program, or TARP, that propped up the financial industry.

Much as Bush touts his private-sector experience, the records also underscore how, just like the Clintons, his last name helped him earn much of his wealth. Bush has earned nearly $10 million in speaking fees since leaving the governor's office, including nearly $2.4 million for 50 speeches in 2013.

"I learned a lot. I talked to a lot of people that have added a lot of value in my life," Bush said of his extensive speaking fees. "I made less than Chelsea Clinton," he joked in reference to a report that Bill and Hillary Clinton's daughter earned $65,000 for a speech. (The Clintons have reported $130 million in speech income since 2001.)

No other candidate or prospective presidential candidate this year has committed to releasing as many tax returns as Bush. He denied he was seeking to put pressure on rivals, but Bush's move could certainly have that effect. "They'll figure out what to do," he said.

Bob Dole released 30 years of returns in 1996. George W. Bush released nine years in 2000, George H.W. Bush released 14 years in 1988, and Bill Clinton released 12 years in 1992.

Bush's transparency has limits. He would not commit to releasing more details about some of his consulting clients or several limited liability corporations he had created but has since resigned from. Confidentiality agreements prohibit full disclosure, he said.

People pouring over his reports likely will be drawn to overseas investments.

The funds were part of Abbey Capital accounts managed by SunTrust, Bush's longtime bank, and were located in Malta and Bermuda. Bush said he paid full taxes on the investments, and even lost some money, about $22,000. His campaign said the "passive investment funds" represented less than 2 percent of his overall holdings.

Bush called attention to the high overall tax rate he has paid, calling it "a little daunting. … It's not something I'm bragging about. I didn't focus on sheltering that income." But he said it was reason to streamline a Byzantine tax code that is full of what he called "maddening deductions."

The Bush campaign also highlighted his philanthropy. Tax returns show he and his wife, Columba, gave $431,056 in charitable donations from 2007 through 2013, roughly 1.5 percent of their adjusted gross income.

On top of that, aides said he raised more than $1 million for the Florida Coalition Against Domestic Violence; nearly $7.5 million for the Cystic Fibrosis Foundation; $17 million for the Barbara Bush Foundation Celebration Of Reading; and $46 million for the education reform foundation he created, the Foundation For Excellence In Education.

Bush characterized the effort Tuesday as the next step in opening up his life to the public, noting how he already posted on a website more than 280,000 emails from his time as governor.

"In Florida people know me. In northwest Iowa they may not," he said. "This is part of an effort to be as real and genuine as I can be. I don't have a problem with sharing my life. … It's not a life that's been scripted to run for president. I'm an adult. I've lived a life with ups and downs. Through that you gain wisdom."

Times staff writer Jeff Harrington contributed to this report.

 
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