The Watcher Cat

The Watcher Cat

Thursday, July 12, 2012

Mittens Agonistes

So the Boston Globe has a story today about Mitt Romney's tenure at Bain Capital which presents something of a poser for the former Governor of Massachusetts. Let me explain.

A core component of Romney's argument that he and not President Obama is better able to lead the United States on a path to prosperity is his experience in the private sector, and especially his leadership of Bain Capital. Romney has claimed that in his tenure at Bain, he helped create 100,000 jobs, a figure which doesn't really bear scrutiny, but heightens the centrality of his Bain experience in his resume.

In recent weeks, the President has taken to pointing out Bain's role in outsourcing jobs from the United States. Romney has sought to deflect this charge--and the possibly even more toxic Bain investment in Stericycle (a medical waste management company "that has been attacked by anti-abortion groups for disposing aborted fetuses collected from family planning clinics."--by insisting he left Bain in 1999, to run the 2002 Winter Olympics in Utah and was not active in the management of Bain thereafter.

As the Globe reports, however:
public Securities and Exchange Commission documents filed later by Bain Capital state he remained the firm’s “sole stockholder, chairman of the board, chief executive officer, and president.”

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.

. . . .

A former SEC commissioner told the Globe that the SEC documents listing Romney as Bain’s chief executive between 1999 and 2002 cannot be dismissed so easily.

“You can’t say statements filed with the SEC are meaningless. This is a fact in an SEC filing,” said Roberta S. Karmel, now a professor at Brooklyn Law School.

“It doesn’t make a whole lot of sense to say he was technically in charge on paper but he had nothing to do with Bain’s operations,” Karmel continued. “Was he getting paid? He’s the sole stockholder. Are you telling me he owned the company but had no say in its investments?”

The Globe found nine SEC filings submitted by four different business entities after February 1999 that describe Romney as Bain Capital’s boss; some show him with managerial control over five Bain Capital entities that were formed in January 2002, according to records in Delaware, where they were incorporated.

A Romney campaign official, who requested anonymity to discuss the SEC filings, acknowledged that they “do not square with common sense.” But SEC regulations are complicated and quirky, the official argued, and Romney’s signature on some documents after his exit does not indicate active involvement in the firm.

Mother Jones has placed the Stericycle 13 D form from 1999 online, and it reflects "W.M. Romney" as "the sole shareholder, Chairman, Chief Executive Officer, and President of Bain," and the various entities through which it was working on the Stericycle deal. (P. 26). The Schedule 4 for Stericycle, also filed in 1999, likewise describes Romney "as an individual who holds "voting and dispositive power" with respect to the stock owned by Bain."

Likewise, Talking Points Memo has unearthed not one but two subsequent SEC filings (from July 2000 and February 2001) "in which Romney lists his 'principal occupation' as 'Managing Director of Bain Capital, Inc."

Now Romney's defenders, including Glenn Kessler, as the Washington Post's "Fact Checker" claim that these filings and the Globe-Mo Jo-TPM reportage do not change the picture, and that Obama's claims that Romney is responsible for Bain's acts in these years is, as he had previously dubbed it, unfair and false in essence.

Kessler argues "[t]he story seems to hinge on a quote from a former Securities and Exchange Commission member, which would have more credibility if the Globe had disclosed she was a regular contributor to Democrats." He relies on his previous analysis that Romney's role was legal and technical, and that he was not disingenuous, as "[t]he part about lying to the SEC is absurd, since the SEC doesn’t require an owner to be the operational decision-maker (Romney delegated such responsibilities, as is his right)."

But Romney didn't file as just an owner. Again and again, he is described as CEO, MD and 100% shareholder, having "voting and dispositive" power over shareholder votes, as well as having received a salary (admittedly small by Romney standards--$100,000). These terms in conjunction do not sound like a ruler fainenat, but like the Boss. Period. These statements shift the burden over to Romney to explain statements which would be at a minimum misleading if what he says now is true--and which could have misled investors looking to Romney to exercise his leadership, when, by his account today, he was a mere cipher. Ultimately, I find myself with Andrew Sullivan on this one:
The relevant question is why Romney was listed as CEO and sole owner and chairman for three years after he says he stopped having anything to do with Bain. I don't believe he was SuperMan, running the Olympics and a political campaign while involved in Bain's day-to-day operations. But either you own the company or you don't. And saying one thing to the SEC and another thing to us needs to be reconciled. Even if the shift was abrupt with Romney's departure for the Olympics, it's stunning to see it took Bain three years to correct the record. Legally, Romney is responsible for everything that happened while he was sole owner of the company. Which is what he told the SEC.

Meanwhile, on the the issue that caused all this digging, David Corn has more; "[a]ccording to government documents reviewed by Mother Jones, Romney, when he was in charge of Bain, invested heavily in a Chinese manufacturing company that depended on US outsourcing for its profits—and that explicitly stated that such outsourcing was crucial to its success." MoJo attaches the SEC filing, and the press release. So even if Romney didn't personally orchestrate the later outsourcing done during his legal tenure as CEO, etc, it was very much in his style, and on his watch. Which means, as far as I'm concerned, point goes to Obama.


Vinnie Bartilucci said...

Mitt is more and more being unmasked as the Gordon Gecko type venture capitalist that we only assumed (hoped) only existed in the films. Any moment now I expect someone to run up to him, claw at his face and clothes, and reveal that he has a "Z" shaped dueling scar and a hook for a hand.

Anglocat said...

And here I was thinking he was the Last Auton...