Rauner spoke with reporters the same day a published report detailed how three of five of Rauner's Cayman Island holdings are tied to GTCR, a Chicago-based private equity firm Rauner helped found. The Chicago Sun-Times cited a comparison of investments Rauner listed on a state economic disclosure form with the online corporate registry maintained by the Cayman Islands government.
Rauner hasn't been accused of wrongdoing and his campaign said Rauner met legal tax obligations and disclosed the necessary information to the federal government. However, political experts said it's a matter of political optics. A central part of Gov. Pat Quinn's re-election bid has been scrutinizing how the multimillionaire Rauner made his money, and the Chicago Democrat's campaign has alleged Rauner "stashed" money to avoid paying taxes.
"I'd think someone who anticipates being in the public eye wouldn't be in the Cayman Islands because the question to be asked is, 'Why would you have invested there?'" Richard L. Kaplan, a University of Illinois law professor told the newspaper.
Rauner dismissed the notion Sunday, after speaking to Asian leaders in Chicago's Chinatown neighborhood.
"At no point have I tried to avoid taxes or done these things that they're trying to spin," he said, adding that his message has resonated with voters. "GTCR has its own structure for just a couple of investments. When they invest in overseas companies, they set up that particular structure. It doesn't impact our personal tax rate whatsoever."
Cayman, a British territory, is considered one of the world's largest financial centers and a haven for mutual funds and private equity. International companies and ultra-rich investors have long taken advantage of offshore financial centers there, drawn by regulations and legal systems making it easy to move capital internationally.
The GTCR holdings were set up among partners of the firm using equity stakes each had in the company and didn't involve Rauner's personal funds, according to his campaign spokesman Mike Schrimpf. He said Rauner's the main GTCR funds were incorporated in the U.S. The other investments were The Overlook Partners Fund LP, from which Rauner disclosed receive a capital gain of at least $5,000 in 2012, and HSBC Holdings PLC. Rauner's campaign said the investment belongs to Rauner's family foundation.
Rauner stepped down from GTCR in 2012, a year when he earned $53 million. He often cites his business acumen on the campaign trail and has poured millions of his own money into his first run for public office. But Quinn's campaign has tried to raise questions about Rauner's wealth, calling on him to release 2013 tax returns and more complete schedules of previous years Rauner has released voluntarily. Rauner has said he'll make 2013 returns public before the Nov. 4 contest.
"Republican billionaire Bruce Rauner doesn't just use exotic methods to dodge taxes — he even uses exotic, offshore locations," Quinn spokeswoman Brooke Anderson said in a Sunday statement. "Whether Mr. Rauner's tax dodge is legal is beside the point. It's wrong."
Schrimpf said channeling the GTCR money helped "fulfill fiduciary duties" to investors.
"Bruce has disclosed all this information to the federal government and is clearly in full compliance," Schrimpf said.