Former Bain Capital Executive Says Romney "Legally" Remained with Bain Beyond 1999

Monday, July 16, 2012

In recent weeks the Obama campaign has centered its attacks on Mitt Romney's history with the private equity firm, Bain Capital. Romney has said that he left the company for good in 1999, two years before a Kansas steel mill under the firm's control filed for bankruptcy, leaving hundreds of workers unemployed. The story of GST Steel has been a major component of the President's criticism of Romney's economic credibility.

In 1999, Romney took his leave from Bain Capital to run the 2002 Salt Lake City Winter Olympics. However, the Boston Globe reports a number of interactions between Romney and Bain that indicate that he remained involved with the firm in a significant way. He earned money from the firm as an "executive," separate from investment earnings, and a number of news sources described his departure as a part-time leave of absence instead of a permanent exit. 

Edward Conard, former managing director at Bain Capital and author of "Unintended Consequences: Why Everything You've Been Told about the Economy is Wrong," contends that the questions are nothing more than a distraction from the real issues. "I do think that this is a tactic to divert from what's important in the election, because I think the underlying story here is not nearly as interesting as everybody wants to make it out to be." 

"In February of 1999, Mitt came to us and said he had an offer to run the Olympics," Conard says. "He felt that it was important for him to make the contribution and that he was going to leave the firm to go do it, and he left the firm to go do it. We were left to then figure out how to run the firm successfully without him." 

Romney's departure, Conard says, came at a time of major restructuring at the private equity firm, and it took a while for the company's executives to "untangle that."

Even though Romney's name remained on the firm's books as one of the managers as late as 2002, Conard contends that that does not mean that Romney was involved with any decisions made at that time, including the decision to scuttle GST Steel. "I would tell you that the partners of Bain Capital were making investment decisions without Mitt's input, and I don't think that anybody felt that they needed to call Mitt up and ask his permission," Conard says. 

"Whatever decisions have to be made in the normal course of business would've been made. I don't think somebody would've stopped and said, 'Oh geez, Mitt's head is still on the masthead, maybe we ought to call [him up.]" 


Edward Conard

Produced by:

Robert Balint and Javier Guzman

Comments [7]

Ajay Jain from Dallas Texas

Here are the top 10 comments about Bain from Romney’s Republican rivals:

1. “The idea that you’ve got private equity companies that come in and take companies apart so they can make profits and have people lose their jobs, that’s not what the Republican Party’s about.” — Rick Perry [New York Times, 1/12/12]

2. “The Bain model is to go in at a very low price, borrow an immense amount of money, pay Bain an immense amount of money and leave. I’ll let you decide if that’s really good capitalism. I think that’s exploitation.” — Newt Gingrich [New York Times, 1/17/12]

3. “Instead of trying to work with them to try to find a way to keep the jobs and to get them back on their feet, it’s all about how much money can we make, how quick can we make it, and then get out of town and find the next carcass to feed upon” — Rick Perry [National Journal, 1/10/12]

4. “We find it pretty hard to justify rich people figuring out clever legal ways to loot a company, leaving behind 1,700 families without a job.” — Newt Gingrich [Globe and Mail, 1/9/12]

5. “Now, I have no doubt Mitt Romney was worried about pink slips — whether he was going to have enough of them to hand out because his company, Bain Capital, of all the jobs that they killed” — Rick Perry [New York Times, 1/9/12]

6) “He claims he created 100,000 jobs. The Washington Post, two days ago, reported in their fact check column that he gets three Pinocchios. Now, a Pinocchio is what you get from The Post if you’re not telling the truth.” — Newt Gingrich [1/13/12, NBC News]

7. “There is something inherently wrong when getting rich off failure and sticking it to someone else is how you do your business, and I happen to think that’s indefensible” — Rick Perry [National Journal, 1/10/12]

8. “If Governor Romney would like to give back all the money he’s earned from bankrupting companies and laying off employees over his years, then I would be glad to then listen to him” — Newt Gingrich [Mediaite, 12/14/11]

9. “If you’re a victim of Bain Capital’s downsizing, it’s the ultimate insult for Mitt Romney to come to South Carolina and tell you he feels your pain, because he caused it.” — Rick Perry [New York Times, 1/8/12]

10. “They’re vultures that sitting out there on the tree limb waiting for the company to get sick and then they swoop in, they eat the carcass. They leave with that and they leave the skeleton” — Rick Perry [National Journal, 1/10/12]

Just last night, Newt Gingrich defended his attacks, saying “I think there are things you can legitimately look at in Bain Capital. I think there are things you can legitimately look at in anybody’s record, including Mitt Romney’s record.”

Aug. 03 2012 04:10 AM
MrJM from Chicagoland

Shorter Edward Conard: "Rules are for little people."

-- MrJM

Jul. 17 2012 09:07 PM
Rick from USA

“There is nothing wrong with being successful and making money. That’s the American dream. But there is something inherently wrong when getting rich off failure and sticking it to someone else is how you do your business. I happen to think that that is indefensible,” Rick Perry said.

Jul. 17 2012 12:36 PM

Get a load of the headline: "Former Bain Capital Executive Says Romney 'Legally' Remained with Bain Beyond 1999." So that's technically true; and it also misses the main point of what everyone with real knowledge of Bain Capital agrees on; that Mitt Romney was not involved with the kinds of managerial decisions about which the Obama Campaign is complaining.

The Obama Campaign isn't really interested in anything about Bain Capital, except insofar as the firm may have had made decisions which were good investment and operational decisions, which may have resulted in outsourced jobs. And the Obama Campaign isn't even interested in the larger economic issues -- the most efficient use of capital, the return to shareholders, and the other entities for whom Bain managed investment funds -- that might make the subject of Bain Capital an interesting one.

No the Obama Campaign is interested in the quick-hit cheap shot. And The Takeaway has obliged.

Honestly no matter what one's politics are; if the interview guest had been allowed to summarize his own main point, wouldn't it have been "Former Bain Capital Executive Confirms Romney not Involved in so-called Outsourcing"?

Jul. 16 2012 03:09 PM
Chas Holman from USA

If this is how the Governor handles a simple personal domestic issue, please keep him the heck away from our foreign policy.

Jul. 16 2012 11:37 AM
seth from NY, NY

I'm saddened that the press continues to let the Obama campaign go with this line of attack against Romney. The truth is that whether Romney was at Bain or not the day the outsourcing took place is irrelevant. Whether he was on the masthead or not. Whether he was spending more time on the Olympics or not. It's all irrelevant because "protecting American jobs" was never in his job description. He was focused on making Bain a success along with the companies in which Bain invested. If Romney, Bain and it's investments chose to engage in any degree of outsourcing, they were doing it because business conditions dictated. Obama (and Romeny for that matter) should stop targeting individuals as "outsourcers" but instead target the policies that have made outsourcing such a logical decision for so many businesses.
The minute Obama or Romney brings up the word outsourcing, I would prefer if the press asked them what they planned to regarding the host of policies that have contributed to a business environment that favors outsourcing and imports over domestic job creation.

Jul. 16 2012 09:53 AM

Didn't the President just issue an Executive Privilege decree covering-up documents relating to serious violent international crime while his Attorney General is held in Contempt of Congress?
The President stated he could not grant work visas to hundreds of thousands of undocumented people on his own authority last year yet he went ahead and did it this year.
What about the legality of those recent Presidential actions in the last month rather than obsessing on a private company's management from 12 years ago?
Are NASA jobs being outsourced to Russia and what Obama economic policies are forcing outsourcing of jobs like the Keystone pipeline?

Is the President's credibility on a downward spiral and is the media's credibility spiraling with him?

Jul. 16 2012 08:26 AM

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