Obama's Trade Nominee Has $500K Stashed in Caymans

Michael Froman, President Obama's nominee for U.S. trade representative, has nearly $500,000 stashed away in a Cayman Islands fund, documents given to the Senate Finance Committee reveal.

In addition, The New York Times reports that Froman's holdings include millions of dollars he received to divest himself from some Wall Street investments that relied on a loophole known as "carried interest" Obama has been trying to close since 2009.

While the White House denies Froman benefited from the loophole, the Times reported that Finance Committee Republicans plan to accuse Obama of being a hypocrite for making the tax loophole elimination a central part of his re-election while pushing Froman as trade representative.

“When he was first elected, the president said tax avoidance through international tax havens forced ordinary Americans to 'pick up the slack,'” said Finance Committee member Charles Grassley of Iowa. “He railed against fat cats who avoid taxes offshore.”

But the White House insisted that Froman "has paid every penny of his taxes and reported all of the income, gains and losses from the investment on his tax returns."

Froman, who has served as the president's negotiator at major economic gatherings, reportedly has $490,845 in a Citigroup-managed fund that's based in the Grand Cayman’s Ugland House, which has become an international symbol for tax avoidance. Froman told the Finance Committee on May 17 that if confirmed, he would sell off the Cayman assets within 90 days.

Grassley, according to the Times, noted that Obama once called the Ugland House "the biggest tax scam in the world."

Finance Committee Chairman Max Baucus also has questioned Froman's investing activities, saying that while they don't break the law, they do "highlight the need for tax reform."