Can you explain Romney and Bain Capital?

Gold Member Joined: Jul 07 2008 Posts: 1508

I also want to know more about this?

Senior Member Joined: Jul 14 2011 Posts: 192

From my understanding he was still listed as CEO past 99' on paper but was not actually running that company at that point. He left in a hurry to get the olympics in order which has been backed by multiple sources involved in the company at the time. It was after he left that the outsourcing of jobs began. Obama's campaign accused him of being a "felon" because if he was not the CEO then it is a felony to be misleading. SIDE NOTE: Obama's stimulus plan has outsourced 29 billion dollars...so yea

It is so irrelevant to the actual issues this election is supposed to be about that it's really no indication of anything if someone doesn't know about this Bain thing. All it means is that he doesn't get involved in negative campaigning.

Active Poster Joined: Feb 07 2011 Posts: 65

It's an issue because it means that he gave conflicting reports under threat of perjury. When one signs a financial disclosure form, one is signing it as if under oath and the signer is representing that all facts and statements within said disclosure form are true (to lie on said forms is a felony).

Romney signed one federal disclosure form saying that he had was not involved with Bain Capital in any way after he left for Utah to help with the Olympics in 1999. However, he was still listed as the CEO of Bain Capital until 2002 and drawing a yearly salary of at least $100,000. Therefore, there is now a question as to what exactly his role was in the 1999-2002 year period and whether the conflict is felony (regardless of whether he actually gets charged, which I highly doubt--although as a technicality it probably is).

Thus the "retroactive retirement" becomes important. Per his spokesman "He took a leave of absence and in fact he ended up not going back at all, and retired retroactively to 1999 as a result." The current problem with the retroactive retirement is that he testified that he did in fact have continual stake in the company and activity (including board meetings and the like) through at least 2001 in hearings to justify his residency claims when running for governor of Massachusetts--hence the conflicting statements under oath.

In reality its probably at best a lack of careful management and legal oversight that probably helped him when running for Mass gov (hence previous statements) and now hurting him in his run for the presidency (because of the now conflicting statements and documentation) and at worst intentional manipulation of experience, residency, leadership and income (there's also some ownership of businesses in that period that could hurt him with certain constituencies). It's become big news and hurtful either way because he's made his business experience the crux of his platform and to admit that at best it was poor oversight and management (or that he left management of a company to pursue other interests and left them without real executive leadership for 3 years until he got around to resigning) that created this whole issue doesn't bolster his argument to be the chief executive.

This is my field of expertise and the kind of situation that gives me nightmares (but keeps folks like me employed).

Active Poster Joined: Feb 07 2011 Posts: 65

No problem eatingbagels--I get how this can be very confusing.

Your question of how can he say he had nothing to do with the company while being listed as its CEO and sole owner...is exactly the question being asked. Romney's position seems to be that he stepped down from his duties and was CEO in name only...on legal documents, but it was a 3 year transition process, he was not actually running the company (at least from what I've gathered in things I've read), thus there is no contradiction. However, for a lot of people that doesn't pass the smell test and him and his lawyer making statements under oath to the contrary don't really help.

From what I understand the forms he signed stating he was the CEO were SEC forms (the SEC requires certain filings and forms to be submitted by companies on a periodic basis). The statements you make on these filings/forms are required to be accurate and --and any lying and/or misrepresentations on those forms are a felony.

Retroactive retirement means that you tell your job you're going on leave, but then never return. For example let's say you went on a sabbatical for a year because you wanted to spend it in Israel and your office was fine with that. You have every intention of going back when the year is up. Then when your year is up, you decide you're not going to return to your job and you decide to "retire" instead, retroactive retirement would be if they made your effective date of departure not the date you decide not to come back--but the date you left, even though you got paid the entire time you were on sabbatical.

As for him being required to release his tax returns..legally he's not, but it is kind of tradition to do so. If you don't the inference has always been you have something to hide. Showing tax returns has generally shown the American public where you stand (alliances due to corporate ownership, etc), that you have nothing to hide and everything's on the up and up. It has become suspicious because his father, George Romney (who also ran for president) believed in transparency and released over a decade of tax returns to demonstrate his honesty in business, taxes, etc. I personally think he is not willing to show his tax returns because they are probably some things that will not play well politically. Someone who makes the kind of money he does can manipulate the tax structure, gains, income, etc to pay very little or even no taxes--can you imagine the ads Obama could run if someone worth the kind of money he is shows a year (or years) of him paying less taxes than the average American or none at all. He also might have investments in companies (through Bain) that will not play well to the public.

btw..I'm a corporate and securities lawyer. Hopefully the above is somewhat helpful

It depends on how good he is at damage control. Some pretty negative things were revealed about Obama in 2008 but he was able to spin them away and win the election anyhow.

Active Poster Joined: Feb 07 2011 Posts: 65

He could get past it if he can a find a reasonable way to explain the discrepancy and releases his taxes. Right now he's letting the story become a bigger issue than it really needs to be and even Republicans are demanding he release his tax returns. If he releases them early enough, takes the hit in the interim and then comes back swinging it won't hurt him in the long run. Unfortunately the way he's handling it now ...is making this all snowball and seem more nefarious. How bad it hurts him depends on how he and his team responds.