Placing bets on which Romney Lie is the Felony Lie

We’ve pretty much seen Mitt Romney take positions on all sides of issues.  We know he lies and repeats lies of others.  You can get away with a lot in the world of high finance these days.  This is especially true for the ways that Romney has conducted business.  He thrives in a world of little to no transparency where lawyers can work their way around just about anything.  Will this be the case for Willard now that David Corn and reporters at the Boston Globe have uncovered contradictory federal filings?  One has to be a lie.  Lying on either the SEC or the FEC form is a felony.  Which agency has the correct information?

Bostonboomer has been doing a lot of heavy lifting on telling us all about Mitt Shady. I had no idea about his dealings, his tenure as governor of her state, or his business as a corporate raider. ( I hesitate to call what Bain does equity capitalism because I have friends in venture capitalism and equity capital firms that create value.  Bain is anathema to them even. ) I had no idea he was such a complete sleaze.  I sent BB this David Corn article at MoJo last night. You can see from the threads last night and this morning that she jumped right on it. The Boston Globe article even goes further with evidence of Mitt Shady having commited felony lying.

In the words of Joe Biden, “this is a big fucking deal”.

There is some really good analysis on this out there today in the MSM including interviews with former SEC and FEC commissioners who believe that one of the filings must represent felony lying.  The deal is that filings made by Bain to the SEC and Romney to the FEC contradict each other on when Romney left Bain Capital.  This date is important for several reasons to the political campaign. It is part of an Obama campaign tactic to hang outsourcing and job loss on Romney.  The Romney defense was that he wasn’t there at the time so it wasn’t him.  Well, that’s what the FEC filings say.  However, that’s not what the SEC filings say.

Which one is the truth and which is the felony lie? This is from Peter Cohen writing for Forbes Magazine.

Why does this matter? It depends on whether the SEC and state filings are accurate. If those filings are correct, then Romney is in a weak position to claim that he had nothing to do with decisions to fire employees working for Bain Capital-controlled companies after 2002.

To wit, consider Bain Capital’s 1993 $24 million investment in GST Steel, a Kansas City, Missouri steel company. During his 2002 campaign for governor, Romney’s opponent pointed out that Bain Capital had profited to the tune of $50 million – after laying off 750 workers at GST.

And Romney replied that he was no longer at Bain Capital when the layoffs happened. But the SEC filings indicate that Romney was Bain Capital’s CEO in February 2001 when GST declared bankruptcy. And Romney made the same “not there then” claim when the Obama campaign raised this example in May 2012.

If the SEC filings are accurate, that means Romney was again in a grey area when he made the claims about GST. After all, if he was CEO and sole owner of Bain Capital in 2002, he would have had a responsibility to his investors to make key decisions about its investments — like whether GST should file for bankruptcy and fire its staff.

On July 11, Bain Capital issued a statement: “Mitt Romney retired from Bain Capital in February 1999. He has had no involvement in the management or investment activities of Bain Capital, or with any of its portfolio companies, since that time.”

To paraphrase Clinton, it depends upon what the meaning of the word retired is.

This is actually a big deal if the SEC filing is wrong because it leaves Romney open to huge lawsuits by buyers of 5 funds supposedly managed by Romney in 2002.  Any prospectus beyond the initial red herring has to have the truth or the SEC will come after you with the wrath of Khan. In the words of John Aravosis: “Romney told the SEC that he remained the firm’s “sole stockholder, chairman of the board, chief executive officer, and president” up until 2002.”

But Romney said in a more recent financial disclosure form that he left Bain in 1999 – so the two federal forms contradict each other, at least one is a lie:

Mitt Romney Public Financial Disclosure Report, Aug. 11, 2011: Mr. Romney retired from Bain Capital on February 11, 1999 to head the Salt Lake Organizing Committee. Since February 11, 1999, Mr. Romney has not had any active role with any Bain Capital entity and has not been involved in the operations of any Bain Capital entity in any way.

In other words, Romney lied to the federal government either way. Either to the SEC, or in his more recent financial dislocure (sic) forms.  And either one appears to be a felony.

Interestingly, Politico now has up a post echoing what I already wrote, and reaching the same conclusion about a felony.

The Boston Globe article is damning.

Romney has said he left Bain in 1999 to lead the winter Olympics in Salt Lake City, ending his role in the company. But 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.

The timing of Romney’s departure from Bain is a key point of contention because he has said his resignation in February 1999 meant he was not responsible for Bain Capital companies that went bankrupt or laid off workers after that date.

Contradictions concerning the length of Romney’s tenure at Bain Capital add to the uncertainty and questions about his finances. Bain is the primary source of Romney’s wealth, which is estimated to be more than $25o million. But how his wealth has been invested, especially in a variety of Bain partnerships and other investment vehicles, remains difficult to decipher because of a lack of transparency.

The Obama campaign and other Democrats have raised questions about his unwillingness to release tax returns filed before 2010; his offshore assets, which include investment entities based in Bermuda and the Cayman Islands and a recently closed bank account in Switzerland; and a set of “blind trusts” that meet the Massachusetts standards for public officials but not the more rigorous bar set by the federal government.

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.

The Corn article at Mojo contains information on Sankaty–also something Boomer’s followed–which is another thread in the Mitty Shady’s dealings.

Sankaty is a story in itself. It was recently the focus of an Associated Press investigation that reported that Sankaty “is among several Romney holdings that have not been fully disclosed” and that there is a “mystery surrounding” Sankaty. Reporting on this Romney entity, Vanity Fairnoted that “investments in tax havens such as Bermuda raise many questions, because they are in ‘jurisdictions where there is virtually no tax and virtually no compliance,’ as one Miami-based offshore lawyer put it.” With Sankaty, Romney was using a mysterious Bermuda-based entity to invest in a Chinese firm that thrived on US outsourcing.

In early 1999, Romney’s investment in Global-Tech expanded again. An SEC report filed on March 25, 1999, stated that Brookside and Sankaty at this stage owned 9.11 percent of the firm’s stock. Romney was still listed as the sole shareholder and president of both Brookside and Sankaty.

By this point, according to the open-to-question account offered by Bain and the Romney campaign, Romney no longer had any involvement in Bain deals. But the series of SEC filings show active Brookside and Sankaty trading in Global-Tech Appliances while Romney fully controlled these firms. The two Romney companies repeatedly changed their ownership stake in this Chinese firm, which was not shy about its dependence on outsourcing. In its 2001 annual report, Global-Tech noted that US outsourcing was essential to its prospects: “Household appliance companies are focusing on their primary strengths of marketing and distribution, while increasingly outsourcing product development and manufacturing…Our ability and commitment to develop new and innovative, high quality products at a low cost has allowed us to benefit from the increased outsourcing of product development and manufacturing by our customers.”

In August 2000, Brookside and Sankaty sold their interest in Global-Tech, according to the SEC documents. With these filings disclosing minimum details about Romney’s investment in Global-Tech, there is no telling how much money he made—or lost—on the deal.

Democrats and the Obama Campaign are wasting no time issuing talking points about this.  The Romney campaign is firing back that The Boston Globe article is wrong and the Obama Campaign cannot hold Romney responsible for all that outsourcing because he was out rescuing the Olympics.  My question to you is if you were 100% owner in a company would you truly, completely ignore it for about 3 – 4 years?  Here’s Harry Reid firing off his salvo.  Needless to say, the rhetoric is getting pretty fierce out there.

Senate Majority Leader Harry Reid (D-NV) said Thursday that new revelations about Mitt Romney’s tenure at Bain Capital mean he’d have trouble gaining Senate approval for pretty much any job.

“He not only couldn’t be confirmed as a cabinet secretary, he couldn’t be confirmed as dog catcher,” Reid told reporters at a Capitol press briefing, in response to a question from TPM. “Because a dog catcher, you’re at least going to want to look at his income tax returns.”

The bottom line remains, however.  These two filings contradict each other.  They can’t both be true. Both agencies will have to investigate.  Also, riddle me this. Who is in charge of the executive branch right now and probably won’t impede or stop these investigations?  Who would probably like to speed them up?

So, my next question is will we have a last minute rescue and nomination of Jeb Bush, Chris Christie, or perhaps, Michelle Bachmann or Ron Paul?  This puts Ron Paul in a very interesting position because his people have been wrangling up enough delegates to try to stage a floor fight anyway.

Even The Business Insider is tut tutting Mitt Shady.

As “Chairman, CEO, and President” of Bain, he damn well would have remained responsible for these decisions. In which case, saying he had “left” and implying that he had no involvement or responsibility whatsoever is highly misleading.

The CEO of a car company may not have input into the decision of what specific cars the company makes or where it makes them (though he or she obviously could if s/he wanted), but this CEO is unequivocally responsible for these decisions.

Similarly, if Romney was CEO of Bain at the time it made the Stericycle decision, as well as the company layoffs and other unpleasant facts that Candidate Romney would like to disown, he certainly was responsible for these decisions.

So, enough with walking a fine line rhetorically.

Here are the questions that the Romney campaign needs to answer:

  • Was Mitt Romney “chairman, CEO, and President” of Bain from 1999-2002 (even if he had physically “left” and was spending 100% of his time running the Olympics)? If the answer is “yes,” then Romney is responsible for what Bain did during that period–full stop.

OR

  • Were the filings submitted to the SEC inaccurate?

The answer to those two questions cannot be “both.”  It’s one or the other.

And if the answer is that Mitt Romney was chairman, CEO, and president of Bain for the years in which he has long tried to disavow any responsibility for what the firm did, the American public has every right to feel misled.

I know what I’ll be doing this week.


34 Comments on “Placing bets on which Romney Lie is the Felony Lie”

  1. ANonOMouse says:

    That was great summary! You, BB and the other posters here are doing great work keeping us informed. Thanks

    • dakinikat says:

      Thanks! BB’s watching her nephews today. We thought it was important to put up a thread to the most important information that had a lot of links instead of having folks go through all those comments.

      • RalphB says:

        We all may need to purchase a set of chest waders to get through the flood of mud that will be unleashed in this fight.

      • I’m with you Dak…seems like a possibility to me.

      • bostonboomer says:

        I can’t wait to see what Rachel and Larry O’Donnell will have to say tonight!

      • ANonOMouse says:

        I’m thinking Big Ed is probably going to pile-on to this too.

        Text A to 622-639
        If you believe Mitt Romney is a BIG OLD Upper-Crust, Privleged, snobby Fraud

        Text B to 622-639
        If you believe Mitt Romney is Mother Teresa

      • Beata says:

        For those of us who don’t get MSNBC, is there a way to watch Ed and Rachel live tonight over the Interwebs?

      • bostonboomer says:

        Beata,

        They put all the shows on line afterwards. Sometimes they are broken up into topics, but if you go the the shows’ websites, you find them. Maybe we should live blog tonight?

        LOL, Mouse! That’s a good one!

      • Beata says:

        A live blog would be great, BB. If not for the posts at Sky Dancing, I would feel very out of the loop on this.

  2. Edward Shaw says:

    Thanks for the information, Kat. This IS a big effing deal.

  3. mablue2 says:

    Actually we need to resurrect some of the ads the Newtster ran again Mittonic 3000. This guy is just such a compulsive liar.

    On a different note, BB alrady linked to Michael Tomasky’s article I would have written. I could not believe how people missed to whole point of Romney’s tough talk ton the NAACP: The whole charade was for the Rush Limbaugh and Sean Hannity of this world.

  4. dakinikat says:

    Talking Points Memo ‏@TPM

    Romney campaign demands Obama apology, Boston Globe retraction over SEC filings: http://tpm.ly/LcL47G

    roflmao … yeah like I’ll wait for that one

  5. RalphB says:

    From a post about Rmoney and blind trust by Todd Purdom in Vanity Fair. Obama’s finances are gonna be hard to attack.

    An Age-Old Ruse

    As a freshman senator, Barack Obama—whose wealth comes almost entirely from his book royalties—set up a blind trust but later that same year sold all of his stocks and closed the trust because he decided that even such an arrangement could not protect him from the appearance of a conflict. Most of his wealth is now invested in U.S. Treasury bonds and diversified funds—about the most transparent option available. What’s good for the country is good for Obama, and vice versa, to coin a phrase.

  6. Pat Johnson says:

    How is it that Pete Rose can be banned from the Hall of Fame for betting against his own team and Mittens can get away with “betting” against the US dollar by investing his money in Europe?

    What is the difference when one man can be sanctioned for doing the same thing on one level but the other gets to run for POTUS without a bat of an eye?

    Not exonerating Pete Rose by any means, just making an observation that each bet against the same people they “served” in one capacity or another.

    Just asking.

    • bostonboomer says:

      The rich are used to getting a different standard of justice than the rest of us. To people like Mitt, Pete Rose is just another serf. It’s a little different running for president than running a private equity firm, Romney is just beginning to realize that.

  7. bostonboomer says:

    Thanks so much for writing this up, Dak. You made it crystal clear. There is something verrrry hinky going on and Romney had better figure out some kind of explanation ASAP.

    I’m loving this!

    • Feeling a little disconnected with all this, with all the “stuff” going on with my dad, I am having trouble keeping up. I looked online and still haven’t seen a lot of msm picking up. Am I wrong?

      • bostonboomer says:

        Are you kidding? This story is everywhere! Politico, ABC, and everyone. The Boston Globe just turned down Romney’s request for a retraction. They say their story is “entirely accurate.” I can’t figure out how to copy links on this computer I’m on, but Dak is going to post it soon.

        • Oh good, because I just took screen shots of the big 4 news outlets…abc, cbs, msnbc, cnn and fox. There isn’t much in the way of headlines on it…save for fox.

      • bostonboomer says:

        JJ, when you have a chance go read Joseph Cannon’s post on this.

  8. dakinikat says:

    The Boston Globe will not issue a retraction or an apology

    http://www.politico.com/blogs/media/2012/07/boston-globe-will-not-issue-correction-128799.html

    Dear Ms. Gitcho:

    We received your request late this afternoon for a correction regarding this morning’s Globe story. Having carefully reviewed that request, we see no basis for publishing a correction. The Globe story was entirely accurate.

    The Globe story was based on government documents filed by Bain Capital itself. Those described Governor Romney as remaining at the helm of Bain Capital as its “sole stockholder, chairman of the board, chief executive officer, and president” until 2002. The story also cited state financial disclosure forms filed by Romney that showed he earned income as a Bain “executive” in 2001 and 2002, separate from investment earnings.

    The Globe story accurately described the contents of those documents.

    The Globe story also gave a full account of the Romney campaign’s position that, notwithstanding several years of regulatory filings, Mitt Romney “retired from Bain Capital in 1999 … (and) has had no involvement in the management or investment activities of Bain Capital, or with any of its portfolio companies, since that time.” In your correction request, you reiterate points that are fully detailed in the Globe story.

    Sincerely,

    Martin Baron
    Editor, The Boston Globe

  9. RalphB says:

    I keep waiting on Mark Halperin to post something about how this whole kerfuffle is good for John McCain.