When the Boston Globe reported yesterday that Mitt Romney continued to be listed as Bain Capital’s president, CEO, chairman and sole shareholder on SEC documents long after he claims to have left the company, Bain responded with this explanation:
“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,”
The problem with this: Romney himself provided a different – and more sensible – explanation when he appeared before the Massachusetts State Ballot Law Commission in 2002:
“When I left my employer in Massachusetts in February of 1999 to accept the Olympic assignment, 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, I use that in the colloquial sense, not legal sense, but my former partners,”
What Romney said a decade ago makes a lot more sense than what he and Bain are saying now.
When Romney agreed in early 1999 to run the Salt Lake Organizing Committee, there was no reason for him to think he’d jump right back into politics when the games were over – and every reason for him to assume he’d return to his private equity work. In fact, by 1999 he’d already taken two similar leaves of absence, one to run Bain and Company in 1991 and 1992 and another when he campaigned for the U.S. Senate from November 1993 to November 1994. After each of those leaves, he came right back to Bain Capital.
Romney now argues that February 1999 should be considered his exit date from Bain, and that he ceased to have any input into the company’s activities after that point. But it’s important to remember the circumstances under which he first made that claim.
We tend now to think of Romney’s political rise as a seamless transition in 2002 from Olympic glory to the Massachusetts governorship. But his opening to run for office that year didn’t come about until very late in his Olympic tenure. Romney was clearly interested in a political future when he took the Salt Lake gig, but there were no opportunities on the horizon in Massachusetts. Both Senate seats were safely held by Democrats, while a Republican, Paul Cellucci, had just been elected to a full term, and there was reason to believe that he would run again in 2002. And even when Cellucci left in early 2001 to become ambassador to Canada, it still didn’t help Romney, since it was assumed the party would close ranks behind his successor, Jane Swift.
It was only in late 2001, when Swift’s governorship began to implode, that running in 2002 became a serious option for Romney. And it was only in 2002 that Romney actually struck a severance agreement with Bain. Before Swift's demise, Romney's only other possible post-Olympic political opportunity had involved Utah’s governorship, which was possibly going to open up in 2004. In the summer of ’01, Romney took some tentative steps to put his name in the mix for that race, but it was still several years away and there were real questions about how viable he'd be if he ran.
In other words, it makes all the sense in the world that he would have held on to his leadership titles at Bain and planned to return after the games. For most of the time he was in Utah, politics was not a realistic option for Romney’s immediate post-Olympic career. And because of this, it makes all the sense in the world that Romney would have remained apprised of Bain’s activities while in Utah and maintained some level of engagement, even if he wasn’t directly involved in the company’s day-to-day activities. That’s pretty much what Romney told the ballot commission in June ’02, when he termed his ’99 departure a leave of absence and explained that during his Salt Lake years he’d come back to the state for “a number of social trips and business trips that brought me back to Massachusetts, board meetings, Thanksgiving and so forth.”
Romney didn’t start pushing the idea that he’d severed all ties with Bain in ’99 until late in the ’02 campaign, when Democrats played up Bain’s closure of a Kansas City steel plant, a move that cost 700 workers their jobs. Confronted with this potentially damaging attack, Romney pleaded ignorance, insisting he couldn’t have had anything to do with the closure because it came two years after he’d left. That’s the story he’s stuck with ever since – and especially this year, as national Democrats have taken up the GST story.
The point here isn’t that Romney was running Bain Capital and making all of its key decisions from 1999 to 2002. But the story he tells now absolves him of all responsibility for anything and everything Bain did in those years. This would be reasonable if Romney had forged a clear and total break with the company in 1999, but he didn’t. His statement to the ballot law commission 10 years ago was supported by just about all of his actions between 1999 and 2002: Until the final few months of his Olympic tenure, Romney’s break from Bain was supposed to temporary.