Can Mitt Explain Why He Was King of Bain in 2001?

At a news conference on Aug. 23, 2001, when Mitt Romney announced he was leaving Bain Capital (“retroactively,” according to former RNC chairman Ed Gillespie), a reporter for the Provo (Utah) Daily Herald apparently surprised Mitt with a story that hit the sports papers on the same day saying that Bain Capital was joining a group of investors looking to purchase the flailing Boston Red Sox.

One easily-overlooked sentence in the Aug. 23, 2001 edition of the Provo (Utah) Daily Herald seems to be the iceberg that could sink Romney’s claim that he had nothing to do with the venture capital firm since he took the Winter Olympics CEO job in Feb. 1999.

Romney spoke of his lack of support for Bain’s plan in the Daily Herald story.

“I have no willingness to participate at this time,” Romney said.

If Romney was not involved in the Bain decision-making process, if he was not involved in the day to day operations of Bain since Feb. 1999, then why would his “willingness to participate” make a difference?

Which, apparently, it did.

According to a story titled “Bidders facing serious hurdles,” by Scott Van Voorhis in the Boston Herald, 11/15/2001…

“And Bain Capital, after weighing a link-up with Werner/Otten, has decided not to take the plunge, sources say. ‘Bain has bailed out on them,’ said one.”

If Romney was not making the decisions at Bain in 2001, why did Bain drop its bid for the BoSox shortly after Romney stated his lack of interest?

If it made sense for Bain to join the group, why would they back out just because Romney wasn’t interested? If Bain saw the deal as a money-maker, would they not go ahead without Romney if Romney were no longer pulling the strings?

So, one day Bain Capital is high on the idea of being part of the group purchasing the Red Sox. Romney says “no dice” and they lose interest?

Romney did seem to be taken by surprise by the Provo (Utah) Daily Herald’s August 23, 2001 announcement that Bain was part of the bid to purchase the Red Sox, which indicates they acted without his knowledge or consent.

But for Bain to drop out of the plan so quickly after the “fuhgeddaboudit” from Romney? And we are to believe he exercised no “influence or control” over Bain since February 1999 when he left to run the Winter Olympics?

This is just one more log on the fire that is burning hole into Romney’s official story about how and when he left Bain.

An article in the Aug. 26, 2001 Providence (R.I.) Journal indicates Romney was still the King of Bain in the summer of 2001.

“ROMNEY TO VENTURE BACK INTO POLITICS: W. Mitt Romney, the Republican businessman who failed to unseat U.S. Sen. Edward M. Kennedy, D-Mass., in 1994, is quitting Bain Capital, the Boston-based investment firm he owns, to get back into politics. Romney, 54, said he wants to run for office in either Massachusetts or Utah, where he is helping to organize next year’s Salt Lake City Winter Olympics. Romney is giving up 100-percent control of Bain Capital to 26 managing directors. The company he started with $35 million in 1984 has grown into a $13-billion venture and buyout firm that has invested in a broad mix of businesses, such as Domino’s Pizza, Staples and the Sports Authority.”

Globe reporter Frank Phillips wrote this for the Oct. 1, 2002 edition:

“The state AFL-CIO labor council, which is backing Democrat Shannon O’Brien in the race, plans a march and rally Thursday in front of Romney’s former venture capital firm, Bain Capital, where union leaders hope to focus public attention on his corporate record and the impact of Bain’s decisions on workers. Romney headed the firm until he resigned in 2001.”

A story by John Ellis in the May 20, 1999 Boston Globe furthers the case against Mitt Romney having stepped down as CEO of Bain Capital in Feb. 1999.

In a story called “It’s Time to Talk Business with the Red Sox,” Ellis writes:

“Imagine that representatives of the Boston Red Sox or the New England Patriots went to Mitt Romney, chief executive officer of Bain Capital, and said: “Mitt, we need you to invest millions of dollars in our enterprise so that we can improve the product we offer.” What do you suppose Romney’s response would be?”

How could Romney be the “chief executive officer of Bain Capital in May 2009 when he says he departed the company in February? Ellis was a writer at a Boston newspaper. Did he not get the memo?

Add this to the pile… a story in the August 23, 2001 Boston Business Journal, which says:

“W. Mitt Romney is quitting Boston-based Bain Capital, the $13 billion investment firm he started with $35 million in 1984. The son of a former governor and himself a presidential candidate is going into politics in either Massachusetts or Utah after he completes work helping organize next year’s Salt Lake City Winter Olympics.

“Romney, 54, is giving up his 100 percent control of Bain Capital to 26 managing directors. The firm has made 170 venture and buyout investments in companies like pizza delivery chain Domino’s Pizza Inc., brokerage Datek Online Holdings Corp. and retailers Staples Inc. and the Sports Authority Inc.”

Not “has quit”.

Not “formalized his 1999 departure.”

Not “made it official and departed.”

“Is quitting.”

“Is giving up his 100 percent control of Bain Capital.”

Right there. Black and white.

All of which takes us back to the Aug. 23, 2001 edition of the Provo Daily Herald.

“PROVO — SLOC president Mitt Romney has joined a group trying to buy the Boston Red Sox, perhaps unwittingly.

“Citing unnamed sources, the Boston Globe reported Thursday that the investment firm Bain Capital, which Romney founded, has joined a group headed by television producer Tom Werner bidding to purchase the storied baseball club.

“Romney, 54, announced this week that he had stepped down as CEO of Bain Capital and had surrendered his controlling stock in the company. However, he remains one of 27 partners and investors in the company, one of the nation’s largest private equity firms with more than $12 billion under management.”

The Daily Herald story would appear to confirm reports in the Boston Globe and elsewhere that 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.

Romney has said he left Bain in 1999 to lead the winter Olympics in Salt Lake City, ending his role in the company. But public Securities and Exchange Commission documents filed later by Bain Capital state he remained the firm’s “sole stockholder, chairman of the board, chief executive officer, and president.”

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.

What do you believe? Do you buy Romney’s version of events?

And if you do, might you be interested in a lovely old bridge we have for sale connecting Brooklyn to Manhattan? Contact us at editor@theliberalgrouch.com for excellent financing terms.