Less than two weeks before an investment firm controlled by Mitt Romney decided to invest in a China-based home appliance company, the company put out a detailed document to investors promoting itself as a low-wage, low-tax firm that would not be subject to taxes in the United States.
It used “inexpensive labor,” Global-Tech Appliances wrote in a prospectus meant to attract investors on April 8, 1998. Its location in China meant “an overall effective tax rate that may be less than that of US corporations.” It said its current operations would not be subject to “material US taxes because it should not be considered to have significant income effectively connected with a trade or business in the US.”
The company also noted its working conditions: peak production periods required six-day work weeks, and two 10-hour shifts per day in the case of the metal stamping department. The main manufacturing facility, located in Dongguan, China, included 14 buildings that served as dormitories accommodating up to 3,700 workers.
Nine days after the document was released – on April 17, 1998 — an affiliate of Bain Capital called Brookside Capital Partners Fund acquired about 6 percent of Global Tech, according to Securities and Exchange Commission documents that were first reported by Mother Jones magazine.
Romney was listed as the “sole shareholder, sole director, President and Chief Executive Officer of Brookside Inc. and thus is the controlling person of Brookside Inc.”
more at Chinese firm promoted its low-wage, low-tax liability to investors shortly before Mitt Romney made investment – Political Intelligence – A national political and campaign blog from The Boston Globe – Boston.com.