When did Mitt Romney really leave Bain Capital -- in February 1999, as he and the company claim, or in 2002, when his separation agreement took effect?
It certainly appears to me that Romney removed himself from day-to-day operations of the business when he moved to Salt Lake City, but retained ultimate authority, as well as his financial stake as owner. In other words, he was where the buck stopped. And, in my view, the other Bain executives took advantage of his absence from daily operations to enter into deals that the notoriously risk-averse and reputation-guarding Romney would not have approved.
It's a matter of judgment whether, or to what degree, voters should hold Romney responsible for those deals and decisions, that he was ultimately responsible for (and profited from) but for which he was not actively involved in the vetting or decision-making. Obviously a strong case could be made that this is exactly what Presidents do. But on the other hand, Presidents don't take time off to run another business.
However, Romney remaining in actual control of Bain Capital during those years does make his deal-making for the Salt Lake games look awfully dubious.
Romney’s business career ended in 1999, when
he accepted the post of CEO of the Salt Lake Organizing Committee (SLOC)
for the struggling 2002 Winter Olympics. But he utilized the same
strategy of drawing on his network of wealthy contacts that he used at
Bain Capital — and is using to build his campaign.
And
while in Salt Lake, he still had powerful levers at his disposal.
Although he claimed to have severed his ties to Bain Capital, SEC
documents show that Romney retained 100 percent operational ownership of
the company and its subsidiaries through 2001 (his campaign insists
this was just a paper formality) and maintained his financial stake in
Bain’s portfolio of companies.
Romney
has insisted that he had no thoughts of politics when taking on the
Winter Olympics in 1999, but there have been reports to the contrary —
including a comment by David D’Allesandro, CEO of John Hancock, in the Boston Globe’s
recent seven-part profile, saying that Romney appealed for Hancock’s
Olympic sponsorship by saying that his own political career depended on a
financially successful Winter Games. D’Allesandro, an ally of Romney’s
in Boston, initially threatened to withdraw his company’s sponsorship
after the International Olympic Committee (IOC) bribery scandal, but,
after Romney joined the SLOC, re-signed. It was not the only such
instance.
The Olympics were emerging from an
international bribery scandal. To launch his political career, Romney
needed to financially rescue them. To do that, he needed corporate
sponsorships. And he got many of those sponsorships by working his
business connections, and his skill at finding ways to make deals
worthwhile to the person across the table.
The
details of those deals were never disclosed: Romney exempted them from
his “total transparency” pledge regarding the SLOC’s finances and
business arrangements.
One story told by Romney himself suggests his methods. In Turnaround,
his 2004 book about his Olympics experience, Romney tells of the deal
he offered to his friend Thomas Stemberg, founder and then-CEO of
Staples, for that company’s sponsorship: his Olympics staff “would get
to work lobbying SLOC board members and other corporate contacts to
switch their office-supply contracts to Staples.”
Romney
was on the Staples board at the time, and holding a financial stake in
the company, as he was offering to use his SLOC leverage and staff to
drum up business for the company, an apparent conflict of interest.
But
before Stemberg accepted, SLOC’s outside-sales firm landed Office Depot
for the sponsorship. Romney wanted it to go to Staples. As he writes in
Turnaround, he arranged for Stemberg to offer a million dollars more
than Office Depot had — and then had his SLOC staff offer Office Depot a
million dollars to back out of the sponsorship deal. Office Depot
declined, and kept the sponsorship.
In
other cases, generosity to the Winter Olympics was followed closely by
lucrative deals from Bain Capital, which do not prove a quid pro quo but
do raise questions.
Utah
billionaire Jon M. Huntsman ponied up a cool million dollars to the
Olympics — and in July 2001, Bain Capital invested roughly a
quarter-billion dollars in Huntsman’s international-holdings company.
Huntsman is now a national finance co-chair for Romney’s presidential
campaign.
Gateway, too, signed on as
a sponsor; in September 2001, it made an agreement for unpaid
consulting services from Bain Capital, in exchange for certain
underwriting opportunities.
Others
of the final tally of 53 corporate sponsors were already under Romney
and Bain Capital’s influence. Marriott is led by close family friends —
now campaign finance co-chairs; plus, Romney was sitting on the
company’s board at the time. Sealy, which Bain Capital owned, became a
sponsor. So did Monster.com, where one of Romney’s sons worked as a
consultant. The vice-chair of General Motors was on Marriott’s board of
directors with Romney, as were the directors of Blue Cross/Blue Shield
and Sears; all became sponsors. Many other sponsors had extensive
business dealings with Bain Capital companies, or had top-ranking
executives with past connections to Bain Capital companies. And most of
them have come through for Romney again, by donating to his campaign.
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