To accept some of the claims, one would have to believe that Romney, with the advice of his lawyers, lied on government documents and committed a criminal offense. —Glenn Kessler, The Washington Post
The Boston Globe made waves Thursday after publishing a story about Mitt Romney's departure from Bain Capital — a story that prompted criticism of Romney from President Barack Obama's campaign and push-back from fact-checkers and other media outlets.
According to the Boston Globe story, government documents filed with the Securities and Exchange Commission show that Romney remained chief executive and chairman of the firm three years beyond the date he ceded control, and that a Massachusetts disclosure form stated that he still owned 100 percent of Bain Capital in 2002.
The timing of his departure is critical, the article said, because Romney claims to have left in 1999 to run the 2002 Winter Games, and that he can therefore not be held responsible for Bain Capital companies that went bankrupt or laid off workers after that date.
"Either Mitt Romney, through his own words and his own signature, 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 to avoid responsibility for some of the consequences of his investments," Stephanie Cutter, deputy Obama campaign manager, told reporters on a conference call.
Additional reporting from The Huffington Post cited a 2002 testimony where Romney said he sat on the board of LifeLike Co., a doll maker that Bain invested in, as well as sitting on the boards of Staples Corporation and Marriott International.
Current TV also looked at the issue, with former Michigan Gov. Jennifer Granholm saying that, "Current TV has learned that Mitt Romney was the 100 percent stakeholder in 11 Bain Capital entities later than 1999. Romney signed, in 2003, a Massachusetts State Ethics Commission document stating he held several 'executive' positions at Bain Capital and its affiliates."
"Romney has said he had no authority or responsibility for managing Bain since 1999, but that has been proven false," Obama spokesman Ben LaBolt said after the Globe story was published. "Regardless of whether he was on the management committee for this particular deal, he remained president, CEO and Chairman of the Board and he was legally responsible for every investment and decisions made by Bain."
There is less new in the Globe article than the attention it has drawn suggests, Greg Marx wrote at Columbia Journalism Review. The existence of the filings discussed in the article had already been reported and hashed out by multiple sources.
Washington Post's Glenn Kessler wrote that checking claims about Romney's leaving date at Bain "really feels like Groundhog Day again," and that just because someone is listed as an owner of shares does not mean that person has a managerial role.
"To accept some of the claims, one would have to believe that Romney, with the advice of his lawyers, lied on government documents and committed a criminal offense," the fact-check said. "Moreover, you would have to assume he willingly gave up his share to a few years of retirement earnings — potentially worth millions of dollars — so he could say his retirement started in 1999."
FactCheck.org said none of the SEC filings show that Romney was anything but a passive, absentee owner.
CNN's John King looked at the Globe story as well, finding four sources with firsthand knowledge of Bain's operations at the time, all of whom said Romney is telling the truth about his departure date. Three of the four are Democrats, King reported, and two are active Obama supporters.
"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," Bain Managing Director Steve Pagliuca said. "Accordingly, Mr. Romney was reported in various capacities on SEC filings during this period."
Fortune examined offering documents for Bain Capital's seventh private equity fund in June 2000, finding that Romney was not listed among the 18 managers of the private equity fund. He is also not listed on an affiliated co-investment fund or the Bain Capital Venture Fund's "key investment professionals" or as part of its day-to-day operations or investment committee.
Romney did not formally give up his title and firm ownership until 2002, and continued to fulfill legal obligations such as signing certain documents in the interim. Actual investment and managerial decisions were made by others, Fortune reported.
CNN also reported that in a 2002 challenge to Romney's eligibility to run for governor in Massachusetts, the State Ballot Law Commission reported the following:
"The Respondent remained actively employed at Bain Capital until January 1, 1999, at which time he left to take the position of President and Chief Executive Officer of the Salt Lake Organizing Committee for the 2002 Winter Olympic Games."
In their book, "The Real Romney," Boston Globe reporters Michael Kranish and Scott Helman wrote that Romney's departure from Bain in 1999 was not a smooth one.
"The partners squabbled over how the firm would operate without him," the book said. "A power struggle ensued. Several partners made plans to leave. Suddenly a company that relied on loyalty, long-term relationships and Romney's personal courtship of investors seemed to be at risk.
"Romney grew worried that the company he had worked so hard to build would be destroyed," the book continued. "The anxiety escalated until finally, one Sunday afternoon, Romney and one of his fellow Mormons at Bain, Bob Gay, knelt on the floor together and prayed for its survival. 'We were facing a crucial event that threatened the very existence of our partnership,' Gay said later. In the end, the crisis abated. Romney left the firm, retaining a financial interest in it, and Bain Capital continued to thrive."
Kevin Roose at New York Magazine said that Romney was "running" Bain in a nominal and legal sense, but "it's entirely plausible that Romney's involvement after 1999 was limited to signing documents, getting a few brief updates from his lieutenants, and then going back to worrying about bobsleds or ski jumps or whatever."41 comments on this story
In a legal and political sense, Roose suggested, Romney can be held responsible for anything the firm did while Romney was working in Salt Lake City.
After Obama's deputy campaign manager said Romney was either a liar or a felon, Romney's campaign manager Matt Rhoades said the Obama campaign had hit a new low.
"President Obama ought to apologize for the out-of-control behavior of his staff, which demeans the office he holds," Rhoades said. "Campaigns are supposed to be hard fought, but statements like those made by Stephanie Cutter belittle the process and the candidate on whose behalf she works."
During an interview with MSNBC's Ed Schultz, Obama's campaign press secretary said they won't apologize.