Account of Romney's Bain departure has evolved
Conflicting evidence on his role after 1999
Only a week before the election for Massachusetts governor in 2002, Democratic candidate Shannon O’Brien launched a television ad in which a laid-off steelworker accused Mitt Romney, O’Brien’s Republican opponent, of firing laborers at a Kansas City steel mill, leaving them without health insurance and destroying their families.
Eight years earlier, Senator Edward M. Kennedy deployed a similar attack — with devastating effectiveness — in a campaign against Romney, the wealthy founder of private equity firm Bain Capital.
But this time, Romney had a strong rebuttal, one that would become a bedrock of his political career for the next decade: He said he was not responsible for the struggles of the worker and his colleagues because he had left Bain Capital in February 1999, two years before the Bain-owned steel mill went bankrupt.
It was a response echoed again and again in televised interviews Friday, as Romney did not budge from his position. “I had no role whatsoever in the management of Bain Capital after February of 1999,’’ he told CBS.
The 2002 gubernatorial campaign, which Romney won, marked a major pivot in the narrative about his tenure at Bain Capital. From that time on, Romney, now the presumptive GOP nominee for president, began to describe Feb. 11, 1999 — the day he was named chief executive of the Salt Lake City Olympics organizing committee — as the date on which he abdicated all control over Bain Capital and its business operations.
But until his run for governor — and even before that campaign was underway in earnest, when he needed to prove sustained connections to Massachusetts in order to ward off a ballot challenge — Romney had characterized his departure from Bain Capital more as a “leave of absence” in which he would be a “part-timer,” and not as an absolute separation from the thriving business he built and solely owned.
It was not until 2002 that Romney finalized a severance agreement with Bain, a 10-year deal with undisclosed terms that was retroactive to 1999.
Romney’s own words, along with other documentary evidence, appear to challenge his campaign’s assertion in a recent financial disclosure that Romney had “retired” from Bain in 1999 and “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.”
Financial disclosure forms Romney filed in Massachusetts indicate he earned at least $100,000 as a Bain “executive” in 2001 and 2002, separate from investment earnings.
In addition, Bloomberg news service reported Friday, Romney is named as one of two managing members of Bain Capital Investors LLC in annual reports filed in Massachusetts as late as 2002, “adding a new corporate entity to a growing number of Bain-related investments and funds that list the Republican presidential candidate as controlling the company three years after he said he left it.”
On the day after Romney took over the Winter Olympics, the Boston Herald reported that “Romney said he will stay on as a part-timer with Bain, providing input on investment and key personnel decisions.”
On July 19, 1999, a news release about the resignation of two Bain Capital managing directors describes Romney as CEO and “currently on a part-time leave of absence to head the Salt Lake City Olympic Committee.”
Romney is quoted in the release from Regan Communications of Boston as saying, “While we will miss them, we wish them well and look forward to working with them as they build their firm,” language that suggests he was still involved in Bain personnel matters.
A Harvard Business School bulletin from October 1999 reported that “Romney is currently on leave as CEO of Bain Capital” and not that he had “retired” from Bain. In a November 2000 interview with the Globe, Romney’s wife, Ann, said he had been forced to lessen, but not end entirely, his involvement with Bain Capital.
It was not until August 2001 that Romney announced he would not return to full-time management of Bain Capital at the conclusion of the Olympics.
Until then, Romney planned to pick up where he left off, just as he had after two previous leaves of absence — one from 1991 to 1992 to save Bain and Company from near-bankruptcy and another from late 1993 to 1994 to run for US Senate.
“When I left my employer in Massachusetts in February of 1999 to accept the Olympic assignment,” Romney testified before the state Ballot Law Commission on June 17, 2002, “I left on the basis of a leave of absence, indicating that I, by virtue of that title, would return at the end of the Olympics to my employment at Bain Capital, but subsequently decided not to do so and entered into a departure agreement with my former partners.”
Romney also testified that “there were a number of social trips and business trips that brought [him] back to Massachusetts, board meetings” while he was running the Olympics. He added that he remained on the boards of several companies, including the Lifelike Co., in which Bain Capital held a stake until 2001.
Romney’s lawyer at the hearing said that Romney’s work in the private sector continued unbroken while he ran the Olympics.
“He succeeded in that three-year period in restoring confidence in the Olympic Games, closing that disastrous deficit and staging one of the most successful Olympic Games ever to occur on US soil,” said Peter L. Ebb from Ropes & Gray.
“Now while all that was going on, very much in the public eye, what happened to his private and public ties to the Commonwealth of Massachusetts? And the answer is they continued unabated just as they had.”
The Romney campaign declined to comment on the record about whether the business trips and board meetings were related to Bain Capital obligations.
During this campaign, Romney’s team has not wavered from its position that he had no involvement with Bain Capital after Feb. 11, 1999. The firm has backed him, despite submitting Securities and Exchange Commission filings that name Romney as “sole stockholder, chairman of the board, chief executive officer, and president” long after that date.
“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 Capital said in a statement Thursday. “Accordingly, Mr. Romney was reported in various capacities on SEC filings during this period.”
Other news outlets have reported material that supports the claims of Romney and Bain Capital.
Last week, FactCheck.org re-published part of an Associated Press story from April 1999, two months after Romney took the Olympic job, which reported he had little time for anything else. Even celebrations of his wife’s 50th birthday and the couple’s 30th wedding anniversary reportedly had to be canceled. The AP also quoted a Romney friend, Bob White, as saying “Right now, he’s doing two, maybe three fulltime jobs,” running the Olympics.
As an elite competitor might log endless time in weight and film rooms, Romney put in 112-hour weeks at the beginning of his tenure as chief executive of the Games, the AP reported.
Fortune magazine reported Thursday that it had obtained confidential offering documents Bain Capital gave to prospective investors in 2000, ahead of the launch of its seventh private equity fund.
The prospectus lists “certain investment professionals responsible for the day-to-day affairs of the Brookside and Sankaty funds, which are affiliated funds of Fund VII.”
Fortune noted that Romney was not among the 18 managers identified in the documents.
Callum Borchers can be reached at firstname.lastname@example.org. Brian MacQuarrie can be reached at email@example.com.