MINNEAPOLIS (WCCO) — There’s an eye-catching new political campaign ad from Republican U.S. Senate candidate Karin Housley.
It accuses Democratic U.S. Senator Tina Smith of personally profiting from ethically shady business investments.
How true is it?
The ad is an homage to a popular Corona beer television commercial featuring a couple sitting on beach chairs on an ocean. Featuring the sounds of ocean waves, and the clinking of champagne glasses as if toasting.
But that’s where the similarity ends. Housley’s ad goes on the attack. Against the serene ocean backdrop, words appear on the screen: Tina Smith “profited from the opioid crisis.”
Smith: “Supported the largest tax hike in state history.”
And she “Hid her money in a Bermuda tax shelter.”
It’s a visually compelling ad, and there’s a lot to unpack.
But it makes some false and deceptive claims.
Let’s start with what is true: Did Smith support the largest tax hike in Minnesota history?
The answer is: Yes.
In 2011, when the state faced a $6 billion deficit, Smith supported Democratic Governor Mark Dayton’s $2 billion tax hike on the wealthiest Minnesotans.
We can quibble over whether it was the largest, but it was huge. Along with budget cuts and an improving economy, the tax hike helped erase Minnesota’s deficit.
Did Smith profit from the opioid crisis?
The evidence says no.
The Housley campaign says financial disclosure forms show “she and her husband own between $250,000 and $500,000 in stock for Abbott Laboratories, which was one of the leading marketers of the powerful opioid Oxycontin. Through its agreement with Purdue Pharma, and its use of aggressive and misleading sales tactics, Abbott Laboratories became a major contributor to the opioid epidemic ravaging our communities.”
That’s a misreading of Smith’s stock ownership. Smith and her husband owned stock in Minnesota-based St Jude Medical.
St. Jude Medical was purchased by Abbott Laboratories in 2016, and Abbott converted all of the St. Jude stock to Abbott.
It is true that Abbott was one of the early marketers of OxyContin, a potent and sometimes dangerous opioid.
But Abbott ended its opioid connections in 2002, 14 years before it purchased St. Jude Medical.
The ad falsely makes the claim that Smith “Hid her money in a Bermuda tax shelter.”
According to the Housley campaign, it was an investment “between $500,000 and $1 million in a hedge fund called the Pine Grove Offshore Fund, a notorious tax haven located in Bermuda.
According the U.S. Public Interest Research Group, Minnesota ranks sixth in annual income tax revenues lost to tax havens, losing almost $2 billion annually.
In fact, it is Smith’s husband, Archie, not Smith herself, who owns the Pine Grove hedge fund investment included in an IRA.
According to the federal government, “Traditional IRA contributions are tax-deductible on both state and federal tax returns for the year you make the contribution; withdrawals in retirement are taxed at ordinary income tax rates.”
According to financial records, these are the 10 investment funds in Archie’s IRA, including the Pine Grove Offshore Fund.
- SWGXX – Schwab Government Money Fund
- CGNT-Cogentix Medical, Inc.
- CUTR – Cutera, Inc.
- DXCM-DexCom, Inc.
- IIN – IntriCon Corporation
- OXFD – Oxford Immunotec Global PLC
- PJC – Piper Jaffray Companies
- TCMD – Tactile Systems Technology, Inc.
- USB – U.S. Bancorp
- Pine Grove Offshore Fund Exempted Company Class A
It is true the Pine Grove Fund is invested in Bermuda, but Smith’s husband is required to pay income taxes on the fund when he withdraws the money.
That’s Reality Check.
Here are some of the sources we used for this Reality Check: