London offers world stage and war chest for Republican 2016 hopefuls

Potential candidates can gain foreign experience and donations in the British capital but expatriate supporters want action on Obama’s onerous tax demands Republican donors in the UK are lobbying the presidential hopefuls visiting London in search of foreign policy credentials and wealthy corporate allies to abandon President Barack Obama’s aggressive pursuit of overseas residents for US taxes.

British-based Americans, who ploughed millions of dollars into Republican coffers during the last presidential election, are among contributors whose backing is up for grabs after Mitt Romney, the 2012 nominee, announced that he would not run for the White House again.

As potential candidates such as Chris Christie, Scott Walker, Bobby Jindal and Marco Rubio pass through the British capital, they are checking off talks at Downing Street, policy speeches in Westminster and even photo opportunities at Arsenal Football Club.

But behind the scenes, contributors who gave thousands of dollars to Romney from London – and may give again to the right Republican candidate for 2016 – are pleading with them to overhaul a law implemented by Obama that was aimed at tackling offshore tax evaders.

“We have an issue with expatriate Americans, and how we are treated under the tax code,” said Tom Grant, who co-chaired a $75,000-a-plate private dinner with Romney in London in July 2012, and has given tens of thousands to Republicans. “People are concerned.”

“All of us Americans that come in touch with [the potential candidates] are looking for ways to talk to them about it,” said Colleen Graffy, a former senior State Department official who co-chaired a separate $2,500-per-head event with Romney in London and gave thousands to his election effort.

Christie, the governor of New Jersey, met George Osborne, the UK chancellor, on Tuesday after talks with David Cameron on Monday evening. The meetings were the pinnacle of a three-day trip that has also taken in a visit to a US life science firm’s Cambridge laboratories and an Arsenal football match.

Christie’s tour followed swings through the British capital by Jindal, the governor of Louisiana, and Rubio, the junior senator for Florida. Walker, the governor of Wisconsin, is scheduled to head to England for his own official visit next week. All four men have signalled that they are likely contenders for the Republican presidential nomination next year.

Republicans in the UK said they were seeking a candidate to tackle the Foreign Account Tax Compliance Act (Fatca), which came into force last year and expanded America’s unusual tax policy for citizens overseas. American expatriates must continue completing US tax returns and pay top-ups to the US Treasury if their local tax rate is lower than they would pay at home.

The new law, which was primarily intended to catch people sheltering large sums offshore, requires foreign banks to report the financial information of any Americans on their books, prompting outcry from some expatriates. Institutions failing to comply face financial penalties on their US business. Opponents claim that the law was behind a 220% increase in the number of Americans renouncing their citizenship in 2013.

Graffy said the law was punishing ordinary overseas professionals who were key to “explaining America, American culture and American values”. She said: “Americans are even having difficulty opening bank accounts, because they cause too much regulation. They’re being told by financial institutions ‘We no longer want your business.’”

Boris Johnson, the London mayor, described the rules as “outrageous” after he faced a US capital gains tax bill for the sale of his London house because he was born in New York. Unlike the UK, American authorities levy the tax on sales of primary homes. Johnson was reported last month to have settled his US tax bill before an official visit.

Senator Rand Paul of Kentucky, another likely Republican presidential contender, has proposed legislation to repeal Fatca, calling it a “violation of Americans’ constitutional protections”. The Republican party last year made repeal part of its official platform.

Graffy said that Jindal in particular “sounded very sympathetic and very concerned” when she and other Americans complained about the tax system following a speech at parliament. “Most US politicians are unaware of it,” said Graffy. “We are really trying to get it on the agenda.” Representatives of Jindal did not return a request for comment.

The governors’ visits are officially trade missions to encourage investment into their states. Yet Christie has said he sees himself as a national advocate as well. “One of the main objectives of this trip is to focus on the opportunities that exist between the UK and New Jersey and our country as a whole,” he told reporters on a conference call before his visit.

And for a would-be commander in chief, being photographed at 10 Downing Street is a handy shortcut to an appearance of authority on foreign affairs – a portfolio that is typically out of reach to those sitting in statehouses while rivals in the US Senate are able to embark on fact-finding missions overseas for their committees.

“There are a lot of people looking at 2016, and the fact that if you’re a governor, you need to be able to think outside of your own state, and build relationships,” said a source familiar with the thinking behind Walker’s visit, who was not authorised to speak about it publicly. “And the UK, particularly on the Republican side, is seen as the key partner.”

A British diplomat formerly involved in US political visits said candidates did see them as genuinely educational. “They are an important way of reinforcing their view on these things before they have to start talking about them on the campaign trail,” said the diplomat.

“It burnishes your credentials to have had conversations with America’s key international partners about the big issues of the day,” said the diplomat. “And if you are a governor of a state then your exposure to those sort of issues, such as Greece or Syria, is limited.”

Leaders using state funds to pay for their trips face restrictions on political activity. However, people with experience of such visits said they were often used to carefully lay the early groundwork for overseas fundraising networks. “Friend-making will hopefully later lead on to the money making,” said Graffy.

Romney took in an estimated $2m at a pair of London fundraisers at the Mandarin Oriental hotel, adding to hundreds of thousands of dollars already raised from expatriates by his campaign and the Republican National Committee. Senior executives from financial giants such as Goldman Sachs, Credit Suisse and JP Morgan were among the dozens of guests, who were asked to bring their US passports to prove they were entitled to donate.

The 2012 events followed a $2,300-a-plate fundraising lunch held by his predecessor as Republican presidential nominee, Senator John McCain, at London’s Spencer House, in April 2008. London-based conservatives said they expected the 2016 nominee to follow suit.

“There is a big American community in London who are very engaged professionally and politically,” said Grant, who is also a Cambridge University law lecturer and former chairman of the UK branch of Republicans Overseas. “London appears to have become a place where you go to meet Americans who might want to contribute to your campaign. That seems to have become an expectation.”