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Thursday, July 12, 2012

The Bain of Romney

Romney recently denied he was working for Bain during the times when the Washington Post claims that Bain was going to town on outsourcing and off-shoring. They've tried to maintain he left Bain in 1999. I had researched this before and the article I'd read back then at the time claimed he left for his run for Governor. It was vague about what year that was.  When Romney accused the Washington Post, Obama and the Boston Globe of lying I went back to the Wikipedia article, but it's been edited again, so the stuff that was there last time is gone. The revised article on his bio now refers to an announcement that Romney made in 2001 that he'd not be going back to active service with Bain after he finished with the Olympics;
"Mitt Romney won't return to the business world after the 2002 Winter Games but instead will pursue public service, possibly elected office."
Trouble is, this announcement is from 2001, not 1999. That article also included the following comment:

"No one would run a 3 1/2-year campaign for any office in Utah. I'm surely not, and I imagine Mitt is not either"
Okay, he announces in 2001 that he's not going back to private work at Bain Capital. I suppose we are supposed to take him at his word, though he's still CEO of Bain Capital for at least another 4 years.

Trouble is, even if he was on leave of absence, his SEC filings show him as sole owner and CEO the whole time. From 1999-2001 he's clearly CEO in those filings.

The Boston Globe cites the 2000 SEC filing which shows;
"Bain Capital, Inc., a Delaware corporation ("Bain Capital"), is the sole                       
managing partner of the BCIP entities.  Mr. W. Mitt Romney is the sole
shareholder, sole director, Chief Executive Officer and President of Bain
Capital and thus is the controlling person of Bain Capital.  The executive
officers of Bain Capital are set forth on Schedule B hereto."

And (2001):, there were some minor changes:
Mr. W. Mitt Romney, in his capacity as sole shareholder, sole director, Chief Executive Officer and President of Bain Investors VI, Bain Capital, Brookside Investors Inc. and Sankaty Investors II and in his capacity share voting and dispositive power with respect to the shares held by CLEC members. The filing of this statement by Mr. W. Mitt Romney shall not be construed as an admission that he is, for the purpose of Section 13(d) of the Exchange Act, the beneficial owner of such shares based on their pro-rata share of membership interests in CLEC."
So it's obvious that in 2000/2001 he was still running the company, even if he was also involved with the Olympics, and after the olympics were over, in his Massachusetts financial disclosure, the Boston Globe reports further:
"Also, a Massachusetts financial disclosure form Romney filed in 2003 states that he still owned 100 percent of Bain Capital in 2002. And Romney’s state financial disclosure forms indicate he earned at least $100,000 as a Bain “executive” in 2001 and 2002, separate from investment earnings."
From 2002-2004 his record gets murky.
The Wiki article says "He transferred his ownership to other partners and negotiated an agreement that allowed him to receive a passive profit share as a retired partner in some Bain Capital entities, including buyout and investment funds." Supposedly that is similar to a blind trust, except there is nothing blind about it and the Wiki article doesn't say when the transfer occured. Normally a "passive profit share" would indicate no active involvement in business decisions. The article admits that his money wasn't in a blind trust until 2003, so it is that period between 2001 and 2003 where the arguments run right now. Politico claims that:
"Romney did not finalize a severance agreement with Bain until 2002, a 10-year deal with undisclosed terms that was retroactive to 1999. It expired in 2009."[

Trouble is that if Romney stated that he was leaving Bain for private work in 2001, but didn't actually do so until 2002, and shows on the records the whole time as CEO of the company, that really doesn't pass a smell test.
Mitt Romney has repeatedly sought to distance himself from some business dealing...
"Bain Capital and the campaign for the presumptive GOP nominee have suggested the SEC filings that show Romney as the man in charge during those additional three years have little meaning, and are the result of legal technicalities. The campaign declined to comment on the record. It pointed to a footnote in Romney’s most recent financial disclosure form, filed June 1 as a presidential candidate."
Naturally. Fact Checker maintains;
If the Obama campaign were correct, Romney would be guilty of a federal felony by certifying on federal financial disclosure forms that he left active management of Bain Capital in February 1999….
So, it's going to take a little fact checking by real fact checkers to get to the heart of this subject.  Fact is Romney was technically in charge (CEO), owner of Bain Capital, was apprised of many of its decisions, and doesn't announce that he's not going to continue with business until his work at the Olympics is over.  Was he involved in day to day operations? What CEO is? Was he involved in high level decisions? Maybe he can avoid prosecution but he can't pass the smell test.
My own feeling is that even if Romney wasn't involved in day to day operations, he's still responsible for what his company decided to do while he was still technically at the helm, and he's responsible for what Bain does as the owner of that company as well.
The examiner writes:
"Whether Romney lied on the SEC filings and other documents, or whether he is lying now, he lied nevertheless. Either he resigned in 1999 and lied to the SEC, or he didn’t resign then and therefore he is lying about the outsourcing now. Both statements can not be true. Obama and the Washington Post trust the official filings Romney signed at the time, not the statements the campaign is making now."

Also whether Romney left in 1999 or not, his big investment in outsourcing was in 1998.

Examiner -- New Evidence shows outsourcing despite Romney denials
Boston Globe Article

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