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Friday, June 22, 2018

Here’s a $10,000 bet: Mitt Romney will stall and stall before opening his tax returns. His strategy is to open the returns after he is officially nominated at the Republican National Convention in August.

Earlier in my career, I negotiated large, complex contracts. The first rule of every negotiator is to have a strategy. One effective strategy is to put off addressing the most difficult issues until the end of all other discussions. Then, after all of the deal participants have spent untold hours on other details, are tired, and can envision a successful outcome, it’s far easier to tackle the hardest issues. At this point, everyone wants to be done so badly that inevitably some compromise is reached.

Mitt Romney is now pursuing precisely this type of negotiating strategy with the Republican Party. Unfortunately, the Republican Party is either unable or unwilling to recognize what’s happening.

There seems to be little doubt that Romney is hiding something. Indeed, even a critical piece of his 2010 returns has still not been opened to public view. The only question is what Romney is hiding. Speculation has ranged from questionable practices related to his “magical IRA” with the seemingly impossible value between $21 million and $102 million, to the creation of a “blocker corporation” which would have lawfully enabled tax avoidance (effectively invalidating Romney’s claim that his foreign holding had no impact on his U.S. taxes), to the possibility that he paid no federal taxes in 2009 because of large capital losses (a legal but politically deadly possibility).

In effect, there are now two potential realities. The first is that Romney’s off-shore activities don’t reveal any outright illegality but show a host of questionable or politically unpalatable practices. My money’s on this one.

In this case, Romney’s strategy is to force Republicans, willingly or not, to line up and uniformly defend whatever his tax returns ultimately demonstrate. Indeed, once Romney is the nominee, the Republican Party potentially will face a Hobbesian choice: Either vigorously defend practices which would otherwise be indefensible (and characterize them as good and virtuous) or somehow remove Romney from the ticket, which would almost certainly hand the election to Obama. Once Romney is the official nominee, it would be a disaster for the Republicans if he were forced off the ticket. Romney is calculating that Republicans will join ranks and vigorously defend whatever indefensible behavior he is now hiding.