Word: rosee
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...further point of contention was HMC’s use of complex “structured finance agreements,” which created and linked so many investment entities that tax reporting became nearly impossible to conduct without attending planning discussions among the managers and HMC lawyers, Rose said...
According to Rose, HMC frequently under-reported its income from outside money management firms by “netting” it, or cancelling it out, with management fees paid out by the University. This practice, which reduces HMC tax obligations, is questionable because much of the income that Harvard receives from the firms actually derives from management fees that the firms collect from other investors—activities unrelated to the University’s tax-exempt purpose...
...Rose said that when he raised concerns to HMC lawyers about netting, they said they had “no tax authority,” or legal precedent, to be engaging in the practice—but continued nonetheless...
...particularly infuriating incident, Rose said that after he repeatedly inquired about a seemingly purposeless investment vehicle, a lawyer informed him that the company was actually set up to help a former employee defer his income to a Cayman Islands entity—thereby avoiding substantial tax payments. He also mentions another instance in his disclosure in which HMC officials adamantly opposed the reporting of a foreign entity—likely because the form used would have been attached to the publicly visible IRS Form 990, exposing Harvard to questioning about its use of offshore accounts...
Eventually, Rose said that the culture of silence and the “creativity” that managers encouraged among employees to circumvent tax payments became so disruptive that he could no longer properly conduct his work. The culture of HMC, Rose said, was such that managers consciously avoided providing him with necessary reporting information. He recalls one incident in particular in which a lawyer told him he was “rocking the boat” after he raised a legitimate tax issue...