The candidate made more in a year than most Americans earn in a lifetime and used a shell company to manage money and cut down on risk. It wasn't disclosed until investigative reporters dug up the paper trail.
In 2012, the candidate was Mitt Romney and the company was Bermuda-based Sankaty High Yield Asset Investors Ltd. This time around, it's Hillary Clinton and Delaware-based WJC, LLC.
Since late 2008, Clinton's spouse, former President Bill Clinton, has used the limited liability company as a pass-through for his speech and consulting income, an increasingly commonplace practice since LLCs can shield business owners' personal assets from some lawsuits and potentially offer some tax benefits.
WJC, LLC's existence, first reported by the Associated Press on Tuesday, wasn't noted on the financial disclosure forms that Hillary Clinton filed while at the State Department, nor on the disclosures she filed with the Federal Election Commission earlier this month after getting into the 2016 presidential race. That's because, Clinton aides say, it had no assets, since all the money that went into the LLC flowed straight to Bill.
Hillary Clinton's name isn't on the legal filings associated with the company, and aides to both Clintons haven't responded to repeated questions from Bloomberg about whether her speech fees also went through the LLC. Hillary Clinton, who is required to list any positions she holds outside the government, didn't include any LLCs of her own.
The Romney shell company was particularly eyebrow-raising because it was based in Bermuda and could potentially have been used to skirt U.S. tax laws. A web video posted during the 2012 campaign by President Barack Obama's campaign accused the Republican presidential contender of “keeping his money in offshore tax havens.”
"Here's the question," the Obama video asked. "Is not technically breaking the law a high enough standard for someone who wants to be president of the United States?"
Though not exactly a parallel case, the Clinton LLC and the questions that have surfaced because of it recall some of the challenges that Romney faced during the last cycle and that Clinton is already running up against: immense wealth, and a reliance on legal and tax protections that are outside the experience of most voters.
Bill Clinton's spokesman, Angel Urena, offered only a brief explanation of why the former president had turned to the LLC structure: "President Clinton set up a commonly used mechanism to manage his personal business affairs." In fact, LLCs are so common that previous Clinton disclosures showed Bill Clinton had two others: WJC International Investments GP, LLC and WJC International Investments LP, LLC.
According to the U.S. Small Business Administration, the LLC structure gives its members the same kinds of protections that shareholders of a corporation get: little to no liability if debt is incurred or if the LLC is sued. If the LLC incurs debt or is sued, the personal assets of its members are generally exempt.
“You want to avoid that exposure by conducting your business through a legal entity,” said William Siegel, a lawyer at Greenberg Traurig LLP in Miami who focuses on partnerships and LLCs. “That’s not like high-end or exotic planning. That’s just kind of nuts and bolts.”
LLCs typically have lighter requirements than other, more complicated business structures and fewer rules about sharing profits among multiple owners.
An LLC could also have tax advantages depending on how it is structured, compared with someone who directly accepts checks as a sole proprietor.
Payments directly from a company to a consultant, like Bill Clinton, would be considered self-employment income, subject to payroll taxes of 15.3 percent on the first $118,500 and 3.8 percent on everything above $250,000 (if you're married).
The owner of an LLC could treat some or all of that income as profit distributions from a business and the rules are "unclear," according to the Treasury Department.
Owners of LLCs can, in some cases, avoid some employment taxes by being treated like S corporations.
Using S corporations in a structure that pays income taxes and avoids employment taxes is a strategy that former presidential candidates John Edwards and Newt Gingrich used on businesses they owned.
It's a common technique—and one that the IRS has challenged in some cases. The Obama administration and Democrats in Congress have proposed curbing business owners' ability to avoid payroll taxes this way.
"Small business owners' avoidance of employment taxes presents a serious enforcement challenge for the IRS," the administration wrote this year in defense of its budget proposal, which would raise $75 billion for the government over the next decade.
Urena said all income received through the LLC "has been reported and is accounted for." The Clintons haven't said whether employment taxes were paid on all of that income.
"Anyone trying to paint this as anything more than that is playing politics," Urena added.