Inside Mitt Romney's Bain Files

Very rich people have very much money in very many places.

Currently, that’s the broadest possible takeaway from the 950 pages of confidential documents related to Mitt Romney’s finances obtained and published by Gawker. The files include “internal audits, financial statements, and private investor letters for 21” entities in which the candidate has invested over $10 million—many of them Bain Capital subsidiaries or investment vehicles based in Bermuda or the Cayman Islands.

So far, there's nothing on income taxes, nothing incriminating, and nothing that should send either campaign reeling—but there are a couple of strings worth pulling on.

Gawker’s John Cook, who obtained the documents, has published a few preliminary observations, and we’re still trawling for more. But for now, here are the most interesting insights from the files.

• The documents may re-spark the political powder keg of Romney’s retirement from Bain Capital. The candidate claims he retired in 1999 to run the Olympics, and spent the next three years negotiating his retirement package. Democrats have countered that SEC disclosures show that Romney kept his role at the firm up until 2002, which would tie him to politically damaging deals and layoffs.

According to the new documents, Romney received a multimillion dollar stake in Sankaty Credit Opportunities, a foreign-based Bain fund, as part of his retirement package. Since that fund only commenced operations in August 2002, Gawker’s Cook infers that since the “retirement package was negotiated in 1999,” Romney’s explanation doesn’t add up.

However, this could be less of a smoking gun than Cook assumes, since an entity created in 2002 might be included in a retirement package that was initiated in 1999, if it was still being negotiated three years later—as Romney has already claimed.

• Romney’s IRA, worth between $21 million and $102 million, received money pursuant to his retirement package as recently as 2011. Sankaty Credit Opportunities IV, another Bain fund created as late as July 2008, earned him between $50,000 and $100,000 in dividends, a gain attributed to his retirement package with Bain Capital, negotiated years earlier. (Fortune's Dan Primack reported in July that Romney's retirement package gave him "limited partnership interests in all Bain-related funds raised through 2009.")

• We’ve already reported on how Romney’s offshore investments delay his tax burden, letting him pay Uncle Sam later and on more favorable terms: a natural strategy for any international investor hoping to attract foreign capital. According to these latest documents, Romney’s Cayman funds have established scores of alternative investment vehicles (AIVs), holding companies designed to do just that. One Bain Capital fund diverted $1.5 billion into as many as eighteen of these AIVs.

• We already know that Romney money has gone toward decidedly un-Romney-like businesses—like gambling. Cook rifled through disclosures from one big Bain fund, Sankaty High Yield Partners II, to find that it lent money to casino companies, cigarette distributors, a “Hollywood talent-management company,” Manchester United, and the parent company of the National Enquirer.

Gawker’s look-through also fished up a couple of red herrings.

• Cook alleges that “Mitt Romney puts his money where Obama’s mouth is” because he has holdings in Bain-linked funds whose managers, in internal investment notes, supported the Obama stimulus. That’s far from damning, and a faulty conclusion. Most investment managers have bottom-line reason to support fiscal accommodation. And investing in a company doesn’t mean one must agree with every statement made by its independent managers, or even every one of their individual business strategies. Some funds in which Romney had a stake had reason to support Obama fiscal policy; some had reason to oppose it. Nothing hypocritical about that.

• Cook also takes Romney to task for “derivatives, short sales, and … other exotic financial instruments,” like swaps and “fund of funds” investments. Here again, the blogger protests too much. Given that Romney headed an investment firm, a diverse portfolio of financial instruments shouldn’t come as a real surprise. There’s nothing inherently shady in trading a derivative (which your mutual fund probably does), short-selling (which helps shares reach a competitive market price), or swaps (which are likely how your town finances its municipal bonds). Cook calls these financial realities “glorified gambling that helped bring down the global economic system in 2008.” But so far, we haven’t found anything in the documents to suggest a particularly risky, predatory, or financially self-destructive investment strategy on the part of Romney or his Bain affiliates.

With 950 pages to pick through, more insights may be soon to come. So far the files have turned up some telling tidbits and political fodder—but nothing damning.