[2006 tax return: $15 million cash transfer, biggest of three]
A tipster pointed me to a set of public Freedom Forum documents that I overlooked the first time around. Now, I'm stumped. I've never seen Forms 926: Return by a U.S. Transferor of Property to a Foreign Corporation. I found them way back on pages 147-52 of the foundation's amended annual IRS return for 2006. It was signed May 1, 2008, by Nicole Mandeville, senior vice president and treasurer. The original return includes the identical forms.
The documents show the foundation transferred a combined $25.4 million in cash to three offshore investment funds on the Cayman Islands. Most of the cash, $23 million, was transferred on the last day of the year: Dec. 31, 2006. I've Googled the funds, but couldn't find any useful information.I would ask Freedom Forum to explain, but its administrators still haven't responded to my last set of spending questions. Perhaps one of Gannett Blog's whip-smart readers can explain these outfits, and what services they perform:
Goldman Sachs Hedge Fund Opportunities Ltd.
Address: P.O. Box 510 GT Regatta Office Park, 2nd Floor, West Bay, Georgetown, Grand Cayman CY
Transferred: $15 million cash
Date: Dec. 31, 2006
Goldman Sachs West Street Partners II, SPC
Georgetown Grand Cayman CY
$8 million cash
Dec. 31, 2006
THL Equity Fund VI GS Access Offshore LP
(Address not provided)
$2.4 million cash
(Date not provided)
How to get a non-profit's return
I've used the well-regarded GuideStar service, which I first learned about at IRE. I bought a one-month subscription for $100, which Gannett Blog Sponsors generously underwrote.
The Money Trail: Tracing a $650 million fortune
Gannett Chairman and CEO Al Neuharth started Freedom Forum in 1991 with $650 million in capital that shareholders forked over under duress soon after his retirement. Employees spent more than 50 years building that fortune when it was held in the original Gannett Foundation. The company's now-depleted charitable arm was dedicated to helping newspaper carriers and other needy people in communities where Gannett does business. In an occasional series, I'm reporting on what the Neuharth family has been doing with all that money.Please post your replies in the comments section, below. To e-mail confidentially, write gannettblog[at]gmail[dot-com]; see Tipsters Anonymous Policy in the green sidebar, upper right.
These look like hedge funds. The vast majority of hedge funds are headquartered in the Caymans for tax and cover-your-ass reasons (Cayman Islands courts like bankers where those pesky American courts have been known to rule for an investor or two).
ReplyDeleteThe most likely explainer here: Freedom Forum invested its money in hedge funds for (what used to be) superior returns; most of those funds are headquartered in the Caymans; and that's that. There could be more here but I doubt it.
Funny, I've been half-wondering if some of the $2 billion-plus pension money reported in 2007 is being kept there. Gannett sure seems stingy -- and maybe downright sneaky -- about rolling over pension and 401(k) cash since December.
ReplyDeleteI asked corporate if any public or independent agent audits the pension account, but I received no reply. Does anyone reading this know?
Gannett doesn't control the 401K money and can't lay its hands on it; you do. If there's any slowdown there, it's in the hands of the financial firm hired by Gannett to do this work -- or more likely, because people aren't sure how to apply for this money. I've found Hewitt, the company Gannett uses for this work, to be very responsive, and I rolled my 401K into an IRA online.
ReplyDeleteAs far as the retirement money goes...I got the paperwork within two weeks, filled it out, sent it back and am now waiting for a check (that I can also roll over to my IRA). There are a crapload of people getting retirement payouts these days, thanks to the layoffs, and that's bound to slow things down.
One thing that I hope my laid-off-in-December friends noticed: If you waited until January to apply for the retirement fund payout, you're going to get the yearly inflation adjustment as far as I can tell. If you did it in December, no joy.
With so many people being exposed to retirement fund and 401K choices thanks to job loss, it is vitally important that you understand your options. And above all, don't just take the cash unless you absolutely have to! There are brutal financial penalties for doing that and you lose the ability to keep you money working for you over (in some cases) decades. Roll it over unless you're just financially stuck.
You are right to look into these activities, but we may not know the full story until the 1099 forms are filed next year, reflecting on what happened in 2008. It looks to me as if someone in the FF took a gamble with $25 million and sought out a hedge fund that offered a higher return than could be obtained on the stock market. It probably worked really well in 2007, but I suspect it became a real all-time disaster in 2008 when probably all of the money was lost. Funny how Pritchard suddenly found himself retired, isn't it. Anyway, the largest investment was in a GS fund that was involved in mortgage securities. I have not yet determined if it was investing in mortgage securities directly, or derivatives of mortgage securities. I suspect, but do not know, that it was the derivatives because for complicated tax reasons, that is why the Camyan Island home address. If derivatives, then investors really got soaked since they amplify the gains or the losses. We see what happened to the mortgage market, so you know what happened to anyone who held investments in amplified mortgage securities.
ReplyDeleteIs the THL investment Thomas H. Lee Partners in Boston, a big private equity firm?
ReplyDeleteAfter my departure, I got my pension payout around 6-7 weeks after I sent the paperwork in (in fact, it was dated Dec 26th).
ReplyDeleteI received my 401K rollover paperwork/check in less than two weeks.
Very responsive & no problems.
11:34, several aspects of your post make me think you don't know a lot about the pension and 401(k) funds, or how they are held and operate. But I won't bother with that.
ReplyDeleteGannett may not have authority to decide investment of our money in the 401(k), but it is Gannett, not Hewitt, controlling its release for rollover, absolutely. Gannett has at least some conversions coming through the Mellon Bank. So, Mellon is a back Gannett is scratchin' ...
I can't tell from your post if you were a December layoff or previous, but volume of layoffs is no excuse: That was their choice. They shouldn't have started the layoffs until they had the capacity to roll over retirement funds in a timely manner. I'm getting nothing but song-and-dance and finger-pointing in efforts to roll over both directly into my IRA. Following my own money, and still not having it released, has become a f*cking job in itself.
12:43, what you are talking about with 401Ks is illegal. Period. There is absolutely no advantage to Gannett controlling the release of the money, either, since it is in no way Gannett's money and isn't on their books. And *you* control the *sale* of stock in your 401K, so Gannett can't try to force-time that, either.
ReplyDeleteIt costs Gannett nothing for 401K money to be distributed and it does not affect Gannett's finances, except in cases where the balances aren't entirely vested.
Pensions are quite another matter, though. Gannett has considerably more control there.
Quit spewing incorrect propoganda.