Manning has $1 million in Cayman Islands-based fund

A Democratic North Carolina congresswoman deemed to be one of the richest members of Congress has over $1 million socked away in a Cayman Islands-based fund, a notorious tax haven for wealthy Americans.

The Washington Free Beacon reported on June 4 that Kathy Manning and her husband hold more than $1 million in Seven Bridges Multi-Strategy Fund Ltd. according to her financial disclosure. SEC filings show that in 2020, Manning earned up to $100,000 from the fund, which feeds into another investment fund that holds approximately $350 million from 144 investors. An investor must put up at least $1 million to join.

While Democrats, since the days of President Barack Obama, have held to the mantra that the wealthy should “pay their fair share,” offshore accounts operate to shield the wealthiest Americans — including many prominent Democrats like Manning — from tax liability.

This common hedge-fund process operates by having a U.S. “feeder” fund that funnels money into a “master” fund in the Caymans. While legal and common, earnings are not subject to American taxes, like capital-gains tax, as the Cayman Islands are considered to be “tax neutral.”

In 2017, it was reported that around 85% of the world’s hedge funds were domiciled in the Cayman Islands.

Randall Kaplan, Manning’s husband, had served as CEO of Elm Street Technology, a real estate marketing firm, and contributed close to $17,000 to Manning’s campaigns, according to the Federal Election Commission.

Manning’s interest in the Cayman Islands fund is held through Kaplan’s charitable trust, a strategy that is used to defer paying capital gains taxes. She received $16,000 in contributions to her campaign from Laurence Cohen — Seven Bridges founder, partner, and CEO.

The Stop Tax Haven Abuse Act was introduced in March 2021 by Congressman Lloyd Doggett, D-TX, and Sen. Sheldon Whitehouse, D-RI. It would close offshore tax “loopholes” so that corporations and the rich couldn’t shelter profits in tax haven jurisdictions. But the bill hasn’t made much traction since.

Business Insider lists the congresswoman as being worth more than $27 million and among the top 20 richest members of Congress.

Manning is seeking re-election in the 6th Congressional District, which includes Guilford, Rockingham, and parts of Caswell and Forsyth counties. She will face off against Republican Christian Castelli in November’s general election. Castelli won the May Republican primary for North Carolina’s 6th U.S. Congressional District with 36% of the vote.

Carolina Journal reached out to Castelli, a business owner and Army veteran, who declined to comment. Manning did not return a call for comment.

Manning was among four candidates from North Carolina seeking U.S. House seats that recently received letters from the Federal Election Commission warning them to correct errors with their campaign finance reports or face possible consequences.

The FEC said that Manning had collected too much money from certain donors. A May 22 letter to Manning’s campaign, indicated a person donated the full amount under her legal name and again under a nickname. The campaign also received a $4,000 donation from the campaign of California Democratic U.S. Rep. Pete Aguilar. Campaigns are only allowed to give $2,000 to each other.

In a letter dated March 13 that referenced Manning’s Year-End Report, the commission requested corrected information for totals listed on the summary and detailed summary pages.

In 2018, Manning lost to Rep. Ted Budd, R-N.C. in the 13^th District but joined Congress after winning the 6^th District in 2020 against Republican Joseph Haywood.