Very well done, compact summary of the Bain issues.
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TPM2012
Why The Timing Of Mitt Romney’s Bain Exit Matters
Benjy Sarlin
July 14, 2012, 9:01 AM
Mitt Romney is locked in a pitched fight over whether he left Bain Capital in 1999, when he took a job running the Olympics, or stayed involved in the firm over the next several years. The battle has swelled to a dizzying multi-front conflict encompassing both presidential campaigns, a horde of fact-checkers and reporters and Bain Capital itself.
Why the war over a seemingly simple line on Romney’s resume? The answer is actually critical: A heap of attack ads are based on deals Bain made during that gray period, 1999-2002, when Romney was in Salt Lake City.
Countless Obama campaign ads take Romney’s tenure at Bain — which Romney touts as one of his most valuable qualifications for office — and turn it on its head by accusing Romney of profiting off companies that outsourced, laid off workers, cut benefits or made Bain money as they went bankrupt. Media fact checkers have consistently slammed the ads, objecting to the fact that the Bain investments in question happened after 1999, when Romney says he left the company, thereby absolving him of blame.
“All of these attacks are things that happened after Mitt Romney left as the managing director of Bain — he left to run the Olympics, some of the best Olympics in history, in 2002,” Virginia Gov. Bob McDonnell said on Friday. “He left to do that in 1999. To the degree that there is any truth to these sorts of outsourcing allegations, they happened after 1999 when he was not the managing director.”
That Romney left Bain in 1999 has long been the default assumption for sites like FactCheck.org and the Washington Post Fact Check blogger Glenn Kessler.
Both candidates regularly cite those outlets’ reporting to referee disputes, and Romney made heavy use of their coverage in his two latest ads, which accuse the Obama campaign of “misleading, unfair, and untrue” attacks, a phrase borrowed from Kessler.
The Obama campaign is currently trying to relay the stakes to their supporters, who are now confronted with a blizzard of SEC filings and competing partisan claims.
So let’s review a few of the attacks in question that the Obama camp is trying to boost by raising questions about Romney’s involvement at Bain.
• Outsourcing: The Washington Post kicked off a resurgence of Bain-related attacks with a story in June outlining how Bain invested in a number of companies considered “pioneers” of outsourcing. Romney demanded a correction, and his campaign noted that two of the companies in question, ChipPAC and SMTC, were acquired only after Romney’s tenure at Bain had ended. FactCheck.org called ads based on the article an “overreach” in part for the same reason, and claimed a third company, Modus, fell under the same standard since it only offshored jobs after Romney left. Romney’s own signature appears on SEC filings related to ChipPAC in 2001.
• KB Toys: Democrats, and before them Romney’s Republican primary rivals, tried to portray Bain Capital as a company that specialized in laying off workers in order to increase investors’ bottom line. One of their favorite examples was KB Toys. Bain borrowed money to buy the chain in 2000 and then took out a $120 million dividend from its stock, making a huge profit. KB Toys, however, fared less well: It declared bankruptcy in 2004, and closed 600 stores amid complaints from creditors that Bain had weakened the company by extracting cash.
Even Kessler, who has cast an ultra-wary eye on most Bain attacks, acknowledged that “the Bain Capital deal with KB Toys certainly looks a bit fishy.” But Romney has consistently denied any responsibility because the deal took place during his Olympics work.
• GS Technologies: Bain took over a Kansas City steel mill in 1993 and subsequently clashed with labor over funding for pensions, leading to a 1997 strike. It went bankrupt in 2001, during Romney’s leave of absence, leaving 750 workers out of a job. But Bain made $12 million in net profit. Its displaced workers have been fodder for attack ads from both Republicans and Democrats. Romney has defended himself in part by pointing out the actual layoffs occurred after 1999.
• Romney’s Secrets: Beyond specific case studies, the Obama campaign is also trying to use the questions surrounding Romney’s role at Bain to highlight his failure to release more information about his personal finances. The Obama campaign has accused Romney of being the most secretive candidate “since Richard Nixon,” noting he has not released more than a year of tax returns or a list of his campaign bundlers. Romney has asked voters to take him at his word that SEC filings listing him at the top of the Bain hierarchy were formalities and did not tie him to the company’s decision-making.
The Obama campaign says he needs to release minutes of company meetings regarding the various deals in question to prove he really was hands-off, and release more tax returns to clear up his financial relationship with Bain during that period, and to shed light on a variety of affiliated companies in Bermuda and the Cayman Islands.
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