Romney's Tax Fiasco Is Deja Vu for Massachusetts Voters

Questions about tax returns nearly sank the GOP contender's 2002 Massachusetts gubernatorial run. How did he let it happen again?


Over the weekend, Mitt Romney caved and agreed to release his tax returns on Tuesday, but only after a week of withering attacks gave a surging Newt Gingrich the extra lift he needed to whip him in South Carolina.

Romney told Fox News it was a mistake and a distraction not to release his taxes. Indeed, his many responses -- stammering about his 15 percent tax rate, waffling over how many years' tax returns he might release, and warning about giving President Obama ammunition in a general election -- mystified national observers.

"This is somebody who sketched out his presidential campaign for six years and is worth $250 million dollars," said Larry Sabato, a University of Virginia political scientist. "He blundered badly."

Yet to Bay State watchers, it was like watching the same car wreck twice. In the 2002 governor's race, Romney's political career was nearly snuffed out when his ballot status was challenged over his tax returns. Back then, his campaign team -- many members of which are still working for Romney -- wasn't ready. But his second stumble on the issue never should have happened.

"Everyone should have known how consequential this was, especially since they were almost denied the ballot," said Todd Domke, an unaligned Massachusetts GOP strategist. "Mitt Romney seemed so inept, it raised questions about his electability."

When Romney jumped into the 2002 governor's race, he broke a tradition of Massachusetts candidates releasing their tax returns. It had worked when he ran for Senate against Edward Kennedy in 1994 -- Kennedy refused to release his, too -- but this time the media challenged him. Romney lived in the Boston suburb of Belmont, but in June 2002, The Boston Globe reported that Romney paid property taxes on a $3.8 million Utah home, which the state considered his primary residence, for three years starting in 1999, the year he left to run the Salt Lake City Olympics. As a resident, he got a $54,000 tax break. Campaign aides insisted it was a mistake, but Utah officials said they hadn't goofed in 12 years, although they soon conceded incorrectly designating the home a primary residence.

As in 2012, Romney further complicated matters by seeming to wing it.

Romney initially told reporters he had filed taxes as a resident of both states. A day later, he retreated and said he amended his 1999 and 2000 returns and sought an extension on the third year to file as a full-time Bay State resident. According to law, candidates were required to live in Massachusetts for seven years prior to Election Day. Democrats seized an opportunity to get rid of a well-financed foe and asked the state ballot commission to disqualify Romney.

Romney went on offense. He fought Democrats' efforts make his tax returns public. He raised questions about a Democratic rival's residency. He ran ads blaming the Democrats. But it was embarrassing: the CEO, unused to questioning, was examined under oath by Democratic lawyers. At one point, he explained the residency gaffe by saying he didn't read his tax return before signing it. Nonetheless, Romney emerged victorious at the polls -- the ballot commission credited him with living in the state since 1971, and Romney went on to become governor.

Whether Romney can pull off a repeat rebound is anybody's guess.

By releasing the returns now instead of April, Romney may be blown up by landmines buried deep in his taxes and released before the campaign is ready, Domke said. Expect Romney to be on offense all week as a distraction. "They'll be very aggressive in attacking Gingrich and try and get away from talking taxes," Domke said.

Still, the embarrassing loss means all bets are off for Romney.

"When you do that badly and screw up that badly in South Carolina, nothing is that certain any more," Sabato said. "The only reason he's still the favorite is he's the only one left who has the elements to win."

Image: Jim Bourg / Reuters