Watch LIVE

Dems & Media Imply Romney May Have Committed a Felony -- But What's the Full Story?


The "outsourcer" vs. the "liar."

Talking points are becoming more personal, campaign rhetoric is heating up, and political operatives are pulling out the big guns. But what do you expect when we're only a few months away from Election Day?

Of course things are going to get ugly!

The Obama campaign, for example, has accused former Massachusetts Gov. Mitt Romney of being an “outsourcer-in-chief” and the Romney campaign has responded by calling the president a “liar.”

But let’s focus on this whole “outsourcer-in-chief” thing because (as we had great fun watching the other night) the president’s supporters are hell-bent on making this a major campaign issue.

Now, it’s important to note that the "outsourcer" accusation has already been debunked by and The Washington Post.

Romney stepped down from managing Bain in 1999 to do the Salt Lake City Olympics. From there, he went on to become Governor of Massachusetts. The outsourcing that the Obama campaign blames Romney for occurred after he had finished managing the company.

If he wasn’t managing Bain, he wasn’t outsourcing. So this shouldn’t be a talking point, right? Well, remember when we said the president's supporters are hell-bent on making this an issue? Yeah, we meant that.

The Boston Globe, a paper that has mostly ignored Massachusetts senatorial candidate Elizabeth Warren's laugh-out-loud “fauxcohantas” problem, has uncovered documents that, they say, suggest Romney may have actively managed Bain after '99.

“Government documents filed by Mitt Romney and Bain Capital say Romney remained chief executive and chairman of the firm three years beyond the date he said he ceded control, even creating five new investment partnerships during that time,” Callum Borchers and Christopher Rowland report for the Boston Globe.

“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 report adds, implying that that Romney could have made managerial decisions during Bain's outsourcing period.

If the Globe can prove this, then the Obama campaign can really go after Romney for “betting against America”! But do the SEC documents prove he was actively managing the company?

“You can’t say statements filed with the SEC are meaningless. This is a fact in an SEC filing,” former SEC commissioner Roberta S. Karmel told the Globe reporters.

“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,” she added. “Was he getting paid? He’s the sole stockholder. Are you telling me he owned the company but had no say in its investments?”

Okay, so let's pretend the Globe and other news outlets are correct when they say Romney was involved in Bain's day-to-day functions after February 1999. What then? Well, as points out, he’d be guilty of a federal felony for having certified otherwise on federal financial disclosure forms.

“If someone invested with Bain Capital because they believed Mitt Romney was a great fund manager, and it turns out he wasn’t really doing anything, that could be considered a misrepresentation to the investor,’’ Karmel said.

Obama deputy campaign manager Stephanie Cutter was more blunt in her assessment.

Either Romney was "misrepresenting his position" at Bain to the SEC, "which is a felony," or he was "misrepresenting his position at Bain to the American people," she said during a conference call Thursday morning.

"If that’s the case, if he was lying to the American people, that’s a real character and trust issue," she added.

Not so fast. As it turns out, documents recently obtained by Fortune show that, if anything, the Globe article is simply a poorly researched hit piece.

First, "offering documents for a Bain Capital Fund circulating in June 2000, as well as a fund in 2001," do no list Romney as being among the “key investment professionals," the Washington Post's Fact Checker [again!] notes.

Simply put, the “contemporaneous Bain documents show that Romney was indeed telling the truth about no longer having operational input at Bain -- which, one should note, is different from no longer having legal or financial ties to the firm,” Fortune adds.

Second, Romney never said he cleaned out his desk, shook the Bain dust from his feet, and never, ever looked back. He said he no longer called the shots after he stepped down in '99. The only thing the Globe's recently-uncovered documents prove is that he still had ties to a company he helped build.

Third, there's this statement and explanation from Bain Capital itself:

Mitt Romney left Bain Capital in February 1999 to run the Olympics and has had absolutely no involvement with the management or investment activities of the firm or with any of its portfolio companies since the day of his departure.

Due to the sudden nature of Mr. Romney's departure, he remained the sole stockholder for a time while formal ownership was being documented and transferred to the group of partners who took over management of the firm in 1999.

Accordingly, Mr. Romney was reported in various capacities on SEC filings during this period.

Fourth, there's this rebuttal from [via POLITICO]:

We see little new in the Globe piece. So far nobody has shown that Romney was actually managing Bain (even part-time) during his time at the Olympics, or that he was anything but a passive, absentee owner during that time, as both Romney and Bain have long said.

... in our considered judgment, nothing in the Globe story directly contradicts Romney's statements -- which he has certified as true under pain of federal prosecution -- that he "has not had any active role" with Bain or "been involved in the operations' of Bain since then."

Lastly, and here's the kicker, the two Globe reporters fail to mention that the former SEC commissioner they cite as an authority on the subject also happens to be a regular contributor to Democrats.

Seems like a pretty important detail, doesn't it?

Final thought: Did these reporters really think no one would challenge their article? Considering that we live in an age of instant communication and high-tech research tools, figuring out whether someone (let alone a man running for president) has committed a felony by lying to the SEC isn't going to be that difficult. Indeed, as of this writing, the Globe's entire report has been thoroughly debunked and their narrative has been shot to pieces.

This story has been updated.

Most recent
All Articles