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A Project of The Annenberg Public Policy Center

Bain: Still ‘No Evidence’

The Obama campaign says a new Associated Press story backs up its claims that Mitt Romney “did not leave [Bain Capital] when he says he did,” and that he’s responsible for “American jobs that were outsourced” by Bain-controlled companies after February 1999. We don’t think so.

Some impressive reporting by the AP and others recently has shown that Romney retained ownership and corporate titles at Bain for a time after he took a hurried leave of absence on Feb. 11, 1999, to manage the 2002 Winter Olympics. That has been shown by any number of routine corporate disclosures with the Securities and Exchange Commission, and Romney even signed some of them.

But we’ve seen no evidence so far to show that Romney was actually running Bain, even part-time and from a distance of nearly 2,100 miles, as the Obama campaign wishes voters to believe. And we’ve seen no evidence to contradict what Romney has certified repeatedly to be true (under pain of federal prosecution): that he “has not had any active role” with Bain or “been involved in the operations” since that time.

Obama’s Selective Citation

The Obama campaign continues to press the point to support its claim in TV ads that Romney personally “shipped jobs to China and Mexico” and that “Romney’s never stood up to China; all he’s ever done is send them our jobs.” We disagreed in an article we posted on June 29, stating that “we found no evidence to support the claim that Romney — while he was still running Bain Capital — shipped American jobs overseas.” And we still see no such evidence.

The latest press release from the Obama campaign, issued July 25 by Ben LaBolt, the national press secretary, is a study in selective citation. Like earlier campaign arguments, it ignores findings that support Romney’s version of events and focuses only on those that the Obama campaign sees (incorrectly, we think) as contradicting Romney.

The release quotes the AP story as saying, for example, that Romney “continued to attend meetings with his partners” while running the Olympics. That’s true, but ignores what the AP said about those meetings (emphasis added by FactCheck.org):

The Associated Press, July 25: Those familiar with Romney’s discussions with his Bain partners said the contacts included several meetings in Boston, the company’s home base, but were limited to matters that did not affect the firm’s investments or other management decisions.

Several associates now say that Romney made repeated trips between Salt Lake and Boston, where he met at times with his former partners, mostly to discuss his severance from the firm.

The AP also quoted “a legal expert familiar with Romney’s discussions” as saying that Romney “took care to avoid the day-to-day role of a corporate manager.

We could not find the text of the Obama news release on the campaign’s website, so we’ve reprinted LaBolt’s statement in full here. Just click the link below.

LaBolt, July 25: Governor Romney has stated flatly that he left Bain Capital in 1999, but an Associated Press report today makes clear he did not leave when he says he did. Not only did he remain CEO, President, and Chairman of the Board, but he continued to attend meetings with his partners. Additionally, he personally signed off on financial documents, including one for DDI, a company that went bankrupt and laid off workers after Bain loaded it up with debt. Mitt Romney’s explanations about his continued involvement at Bain have shifted all over the place. But what hasn’t changed is his unwillingness to take any responsibility for the American jobs that were outsourced and lost under his leadership, both before and after 1999.

New Globe Reporting

The AP’s reporting follows an earlier story by the Boston Globe that made a similar finding. It said Romney decided he would not be returning to Bain and began negotiating his severance soon after he left for Salt Lake City.

The Globe caused a stir with a front-page story on July 12 that focused on SEC disclosure filings that it said indicate Romney “remained at the helm” of Bain after February 1999. But after further reporting, the Globe published a July 20 story that painted a somewhat different picture. It said that Romney “was still technically in charge” — but had decided soon after taking leave that he probably wouldn’t return.

The Globe said this was clear at a meeting that took place “shortly” after Feb. 11, 1999:

Boston Globe, July 20: Romney and his partners had decided that, in his absence, five managing directors would oversee the company. And in Palm Beach it became clearer that Romney was unlikely to return — but would retain his title as chief executive officer and sole shareholder.

The Globe‘s sources said Romney retained his CEO title and ownership of Bain Capital as leverage, to negotiate a lucrative 10-year buyout from the firm that wasn’t made final until 2002. Meanwhile, the newspaper reported that Romney took no part in launching new equity funds that were at the core of Bain’s business.

Globe: Before he left, tasks were doled out to other partners, including work on an investment committee and a compensation committee. He was not a partner in the new private equity funds launched in 2000 and 2001, meaning he had no role in assessing new investments, his partners said — a departure from his having previously had the final say on every deal.

We find this added detail consistent with Romney’s account — that he wasn’t an active manager. Nothing in the latest AP and Globe stories mentions a role in the firms that the Obama campaign blames for “outsourcing” U.S. jobs overseas.

For example, Modus Media announced in June 2000 that it would close its plant in Fremont, Calif., and open a plant in Mexico, as reported in a news brief cited by the Obama campaign. But that announcement came more than a year after Romney had left Bain for the Olympic organizing committee. Similarly, SMTC Corp. closed its Denver plant in June 2001 and moved some of its operations to Mexico, according to a report filed with the Securities and Exchange Commission. Again, Romney was not actively involved in Bain at that time. Furthermore, Romney was not on the board of either company.

For more details on these and other companies, see our June 29 article, “Obama’s ‘Outsourcer’ Overreach.”

In its latest release, the Obama campaign also complains that Romney isn’t taking responsibility for outsourcing U.S. jobs before 1999. It says: “But what hasn’t changed is [Romney’s] unwillingness to take any responsibility for the American jobs that were outsourced and lost under his leadership, both before and after 1999.”

We dealt with that claim in our June 29 article. One firm cited by the Obama campaign, Corporate Software Inc., acquired by Bain in 1993, was actually adding jobs both in the U.S. and abroad. Another firm, Holson Burnes, a maker of picture frames, acquired in 1986, had over 35 suppliers overseas but also had 650 U.S. employees by the time it was sold to its current owner in 1995. And we could find no evidence that work previously done in the U.S. was later transferred overseas. The closest we could come is the closing of a plant in South Carolina in 1992. But that plant made custom photo albums, mainly for professional photographers, a product line that the company simply discontinued in order to concentrate on mass-market photo frames sold through big-box retailers — a different kind of job entirely.

Massaging the Message

So we see no reason to change our original assessment from June 29: “The president’s campaign fails to back up its claims that Romney ‘shipped jobs’ overseas.” We’ve previously reviewed our reasons — and additional evidence — in items posted on July 2 and July 12. For all the bluster that has followed, including the latest Obama release, that remains true, in our judgment.

Lately, however, we’ve noticed the Obama campaign and its allies have been a bit more careful in the wording of their ads. One widely viewed Obama ad features Romney singing “America the Beautiful” (a bit off key) while graphics appear on screen stating that “[i]n business, Mitt Romney’s firms shipped jobs to Mexico. And China.” So, the campaign has gone from saying that “he” shipped jobs overseas, to saying his “firms” did it.

That’s technically accurate, in the sense that Romney was still “technically in charge,” to quote the Globe’s story. So we put the more recent ads in the category of “accurate but misleading” because they fail to note that there’s no evidence Romney himself made the decisions being criticized.

We take note that the Washington Post‘s Fact Checker, Glenn Kessler, recently wrote that he “may withhold the awarding of Pinocchios” regarding claims made about Bain when the question of truthfulness turns on when Romney left the firm. Kessler restated his finding that “he effectively stopped managing Bain when he left for his Olympics job,” adding that “we cannot definitely prove that Romney did not play a role in Bain deals in 1999.”

We can’t prove that negative either, but our view remains that the burden of proof rests with the candidate making an accusation. We reject any notion that a mere accusation — whether made by the president’s campaign or any other — requires the person being accused to prove innocence.

One other thing we’ve noticed is that Obama’s supporters have in some cases tried to move the goal posts. In a July 25 post, for example, the Washington Post‘s Greg Sargent, a liberal blogger, argues that even if it cannot be shown that Romney had any “direct managerial role,” it is “nonetheless fair to hold Romney partly responsible for” them, because he still held the title of CEO and “retained some kind of relationship with the company.”

That’s a matter of opinion, as Sargent notes. Is Romney to some degree responsible for decisions made by others in his absence? We’ll leave questions like that to pundits, and voters. But based on the facts, there’s still nothing to show that Romney made the decisions the Obama campaign claimed he did.

— Brooks Jackson, Eugene Kiely and Rob Farley

Update, July 26: In fairness, we should have noted that Greg Sargent had earlier concluded that the original Obama ads were false.

Greg Sargent, July 13: [I]t has not been established that Romney was directly involved in offshoring. As a result … the original ads Obama ran accusing Romney himself of offshoring are false.

Sargent went on in that piece to call the more recent Obama ads “somewhat misleading” because they “imply direct Romney involvement in shipping jobs abroad without quite saying it.” We agree with that.

To be clear, our dispute is not with Sargent or others who concede that Romney wasn’t running Bain but who argue that he bears some responsibility anyway. That’s opinion with which anyone is free to agree or disagree. What we object to is the Obama campaign’s continued insistence that Romney continued to run Bain from afar after taking leave, for which we still see no evidence, and Obama ads that either state or imply that he acted personally to send jobs offshore.