So, Is Romney Saving Money in the Caymans or Not?

Mitt Romney offered this convoluted answer in an interview with the GOP-aligned National Review about why he hasn't cut his offshore accounts as he draws flak for having them:

Well, first of all, all of my investments are managed in a blind trust. By virtue of that, the decisions made by the trustee are the decisions that determine where the investments are. Secondly, the so-called offshore account in the Cayman Islands, for instance, is an account established by a U.S. firm to allow foreign investors to invest in U.S. enterprises and not be subject to taxes outside of their own jurisdiction. So in many instances, the investments in something of that nature are brought back into the United States. The world of finance is not as simple as some would have you believe. Sometimes a foreign entity is formed to allow foreign investors to invest in the United States, which may well be the case with the entities that Democrats are describing as foreign accounts.

Michael Graetz, a tax specialist who teaches law at Yale and Columbia, noted that Romney makes no effort to suggest he's not benefiting financially from the secretive accounts. Romney's adviser Kevin Madden wrote in a letter that was read on "Fox News Sunday" that Romney "hasn't paid a penny less in taxes by virtue of where these funds are domiciled."

But Graetz questioned whether that's the case.

"Sherlock Holmes has taught us all to look for the dog that doesn't bark," he said. "So the dog that's not barking is whether these arrangements are saving his taxes. He doesn't deny it."

That foreigners also use the Caymans to save money, he added, "seems largely irrelevant."

Then there's the issue of the so-called blind trust. Graetz said as part of not knowing where his money is parked, Romney still has the option of guiding his trustee to avoid conspicuous locales.

"He can say, 'I'm not going to tell you where to put it. But I'm going to tell you where not to put it,' " Graetz said.

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