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‘Tax the Rich’? North Carolina Dem Stashes More Than $1 Mil in Cayman Islands Fund

Kathy Manning has big money in offshore tax haven through husband's trust

Rep. Kathy Manning (D., N.C.) / manning.house.gov
• June 4, 2022 4:59 am

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As Democrats call on the rich to "pay their fair share" in taxes, North Carolina congresswoman Kathy Manning (D.) has more than $1 million stashed in a Cayman Islands-based fund.

One of the wealthiest members of Congress, Manning and her husband hold more than $1 million in Seven Bridges Multi-Strategy Fund Ltd., her financial disclosure shows. The private fund is located in the Cayman Islands, a notorious tax haven for America's elite, according to SEC filings. Manning in 2020 earned up to $100,000 from the fund, which feeds into another investment fund that holds roughly $350 million from 144 investors. An investor must put up at least $1 million to join.

The revelation may pose intraparty problems for Manning as her Democratic colleagues in Congress ramp up their rhetoric against the same tax havens that Manning and her husband have used. In March 2021, Texas Democratic congressman Lloyd Doggett introduced the Stop Tax Haven Abuse Act, which he said would "shut down the complex shell games that allow corporations and the super-rich to hide their profits in island tax havens, forcing working families and small businesses to make up the difference."

Manning did not return a request for comment. Her stake in the Cayman Islands fund is held through her husband's charitable trust, a tactic that is often used to defer paying capital gains taxes. Ethics experts told the Washington Free Beacon that Manning's disclosure of the offshore holding shows the Democrat has a financial interest in the asset.

"If the member reports an investment on their financial disclosure, that is because there is an interest or relationship there that serves to benefit the member," Foundation for Accountability and Civic Trust executive director Kendra Arnold told the Free Beacon. "So we know that—no matter the type of investment—if the member is reporting it, it's because they're required to because there's an interest or relationship that could influence them. There is no distinction between a member and their spouse's investments in regards to a conflict of interest."

Manning's husband, Randall Kaplan, served as CEO of real estate marketing firm Elm Street Technology and has contributed nearly $17,000 to Manning's campaigns. The Cayman Islands-based fund in which the couple invests is managed by investment advisory firm Seven Bridges Advisors. Manning has received $16,000 in campaign contributions from Seven Bridges founder, partner, and CEO Laurence Cohen, campaign finance disclosures show.

Manning joined Congress following a successful campaign in 2020, which came two years after she failed to unseat Rep. Ted Budd (R., N.C.) in a race that saw her spend $250,000 of her own money. According to Business Insider, she is worth more than $27 million, making her one of Congress's 20 richest members. She will face Republican business owner and Army veteran Christian Castelli in November.