Tuesday, July 17, 2012

Logical questions in the Mitt Romney/Bain Capital uproar???

The first question is whether it is even a valid charge by the Obama campaign that there is anything wrong with what happened.  It’s a he said, they said, sort of predicament centering around the fact that Romney said he left Bain Capital in 1999, having absolutely no responsibility in decisions made thereafter, and a top Obama staffer saying he was still listed as Bain’s CEO, President, Chairman of the Board, and the firm’s sole stockholder as late as 2002.

Romney has been accused of being in charge of Bain at the time thousands of jobs were eliminated and outsourced at companies controlled by the firm.  He said he had nothing to do with it so the next question is, if you are its CEO and the only stockholder, doesn’t that mean you are the one who’s supposed to be watching the store?  There are legal questions also re. alleged false reports submitted to the SEC, but they seem to have been ruled out by legal experts.

Peter Cohan of Forbes magazine agrees with me in principle.  My earlier comment is based on an investor looking at the SEC reports showing Mitt Romney in charge at Bain Capital and making a decision to invest based on that.  Cohan comments “…if he is as good as he claims, Romney would never invest in a company whose CEO – in title only — collected an executive salary but spent almost every waking hour doing a completely different job.”  Misleading, at least?

John King on CNN interviewed 4 sources at Bain who say no to whether or not Romney had any hands-on role after 1999.  Three are Democrats.  David Gergen, also on CNN, claims that the Obama campaign has not made its case that Romney was doing any managing at Bain after 1999.  Gergen does have both a personal and financial relationship with top partners there. 

But the Obama staff continues to hang its hat on the context of the SEC filings, whether or not their intentions are specific or implied.

Insiders say that Obama wants to keep the Bain Capital matter live to get at another investment issue, but is hampered if the 1999 leaving date becomes official.  It seems that Bain Capital was involved with a company named Stericycle, a medical waste company that, among other things, disposed of aborted fetuses.  This was 9 months after Romney supposedly left, and could be an interesting shocker for the religious right heading into November.

The Boston Globe was first to release the Bain Capital story and quoted a former SEC commissioner, Roberta S. Karmel, who said SEC filings are a crucial window on the operations of business.  In addition she remarked, “Let me put it this way, it’s a pretty serious problem to file false documents with the SEC. You can be prosecuted for that.”  The next question is what direction will the Obama team follow?  Specific SEC statements or inferred misunderstanding?

In a Huff Post article, speaking to Rachel Maddow, Christopher Rowland, one of the Globe reporters on the story, said the discrepancy was important because Romney has used his supposed departure date to bat away criticism about Bain's dealings after 1999.  "This has been his main talking point when confronted with things like bankruptcies and layoffs," he said.  If you look at the paperwork alone, it shows that he was the man in charge.” 

Again in Huff Post, they report Romney testimony that he sat on the board of LifeLike Co., a doll maker that Bain had invested in.  Then Talking Points Memo comes up with information not yet reported; “instances where Romney made declarations to the SEC that he was still involved in running Bain after February 1999.”  There are 2 SEC filings from 2000 and 2001 where Romney lists “Managing Director of Bain Capital, Inc.” as his “principal occupation.”

There’s more.  In a 2002 Boston Globe story, it was reported that Bain employee Marc Wolpow said, "I reported directly to Mitt Romney ... You can’t be CEO of Bain Capital and say, 'I really don’t know what my guys were doing.'"  When running for Massachusetts governor in 2002 he listed himself as “Executive” of Bain Capital, conflicting with a statement in 2001 also to the state as “Former Executive.”  It is clear why there is mistrust in his current denials.

Mitt Romney
But it’s Joe Klein of Time magazine that, perhaps, puts it all into perspective.  While pushing the envelope on Bain Capital, the Obama campaign is just biding its time to expose the fact that Romney has made zillions of dollars in the past, but has paid very little tax (14% is considered the high water mark).  Bain just keeps the stew boiling until Romney relinquishes 12 years of tax returns like Obama has, and most presidential candidates in the past.

Currently Romney has released 2010 and will honor us with 2011 when filed.  But he says that’s it, and will release no more of his returns.  You have to wonder what his taxes for 2001 and 2002 would reveal re. Bain Capital.  And here’s the clincher, George Romney, his father, ran for president in 1968 voluntarily releasing 12 years of tax returns.  In this case, not “like father, like son.”

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