Eisenhower never liked Nixon much – in 1952 he really didn’t want Tricky Dick on the ticket. But Eisenhower was a subtle and affable moderate and even then there was the crude conservative base of the Republican Party to consider, and Nixon had been an excellent hatchet man. It was Nixon’s investigation in 1948 – as a member of the House Un-American Activities Committee – that broke the Alger Hiss case. Whittaker Chambers had said that Hiss, a former State Department official, had been a Soviet spy – and no one believed him. But Nixon did. And then Nixon pulled a rabbit out of the hat – Chambers had saved microfilm reproductions of incriminating documents by hiding them in a pumpkin, and the rest is history. Don’t mess with Dick Nixon. He has a pumpkin and he’s not afraid to use it. Nixon also got along well with his fellow anti-communist, that odd Wisconsin senator, Joseph McCarthy – a man Eisenhower came to loathe. But Nixon could carry California for Eisenhower, even if he was a nasty little man. Nixon would have to do.
Eisenhower did have one chance to drop Nixon that year – a scandal involving a fund established by Nixon’s backers to reimburse him for his political expenses. Yes, that was illegal, and with his place on the Republican ticket now in doubt, Nixon flew out here to Los Angeles and delivered a half-hour television address – that famous Checkers Speech – from a studio here in Hollywood at the old Avalon Theater on Vine Street. Later the Avalon would be home to the Lawrence Welk Show, and now it’s a beyond hip techno-thump trance-music club with DJ’s from Paris and all that. But back then, on September 23, 1952, Nixon defended himself there. He urged a national television audience to contact the Republican National Committee, to have those guys think about this. He was not a crook, and he had returned all the money and gifts. And then he laid it on thick. Regardless of what anyone said, he intended to keep just one gift, the little black-and-white cocker spaniel his children had named Checkers. Yes, it was a cute dog, and by the way, his wife didn’t wear a mink coat, just “a plain cloth coat.”
It was maudlin, it was pathetically defensive, and it worked like a charm. Eisenhower was stuck with Nixon, and the rest of us were too, for decades. He had saved his ass.
The whole controversy is forgotten now. No one remembers what the fuss was all about, or that there was a fuss at all – but politics is like that. Things can hinge on the stupidest of minor details, like Mitt Romney’s claim that he left Bain Capital in 1999 and thus he really can’t be held responsible for any of the stuff Bain Capital did after that. And now the Boston Globe has dropped the hammer:
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.
Kevin Drum states the obvious:
If I had to guess, I’d say that when Romney took the Winter Olympics job he hadn’t made up his mind to leave Bain. So basically he took a leave, keeping his ownership and his titles so that he could return later. As for his intentions during his Olympics tenure, who knows? Maybe he planned to keep his finger in the Bain pie but ended up not having the time. Maybe he planned to stay semi-involved. It’s impossible to say.
But Drum argues that really doesn’t matter:
SEC documents show that he was CEO and owner of the firm between 1999 and 2002. In a political context, there’s just no way to weasel your way around that – and Romney is going to look increasingly weaselly if he tries. Your average Joe sees a multi-gazillionaire trying to claim that he was only technically CEO and isn’t responsible for what happened during his technical CEO-ship. That’s like a Mafia don taking the Fifth. It’s not going to fly, especially from a guy who’s constantly yammering away about personal responsibility and accountability.
So Romney has a problem, and he’d better figure out a better way of dealing with it than releasing increasingly tortured explanations of the definition of “CEO.” Voters want a president who takes responsibility, not one who tries to blame other people when something goes wrong.
Maybe it’s time for another Checkers Speech, even if the Avalon is currently booked, and Romney has a problematic relationship with dogs – he ties them to the car roof for long trips.
Drum also points to David Corn’s latest piece – all about Bain’s investment in a Chinese manufacturing company that “depended on US outsourcing for its profits -and that explicitly stated that such outsourcing was crucial to its success.”
This happened in 1998, when Romney was unequivocally in charge. This stuff is piling up, and it doesn’t look very salt-of-the-earth to those independent blue-collar voters Romney is so anxious to court. He’d better figure out an answer.
Steve M at No More Mister Nice blog disagrees:
The problem is, Romney has a rebuttal that will probably sound plausible to Joe and Jane Heartland – yes, he was still the Big Kahuna on paper, but he’d taken a leave of absence to (nobly) run the Olympics, and, well, you know those gosh-darn government documents! So confusing! Am I right?
Apologies for the buzzkill, but I think, for once in his life, something Romney is saying is going to be regarded as relatable by the average American.
But there’s Andrew Sullivan:
Maybe this is a technical snafu caused by elaborate federal and state legal technicalities. But who gets paid $100,000 a year for two years for work as an executive in a company he has already quit? …
But here’s why this is lose-lose for Romney. It’s another day when the focus is on his vast wealth, rather than on Obama’s economic record; and even the best case in defense of Romney must argue that he got paid at least $100,000 a year for doing nothing. A lot of Americans may wonder how that can happen, how the rules they live by simply don’t apply to people with Romney’s massive wealth.
And Adam Peck reports on the four companies that folded or downsized in the three year period after Romney claimed to have left Bain Capital, starting with GS Industries and 750 jobs lost:
In a series of ads earlier this year, the Obama campaign hit Romney over Bain Capital’s purchase of GS Industries, a steel company that closed its Kansas City plant and eliminated 750 jobs in February 2001. The Romney campaign responded by claiming that Romney had left Bain Capital well before 2001, and was therefore not tied to the collapse of the GS. Bain Capital and its executives, including Mitt Romney, earned at least $12 million on the initial investment.
Then KB Toys and about 3,500 jobs lost:
During the primary season, Newt Gingrich’s 30 minute documentary on Romney and Bain Capital spent a significant amount of time focused on KB Toys, a retail chain bought by Bain in 2000. At the time, the Romney campaign, with an assist from fact-checking groups like PolitiFact, pointed to the calendar. As these new filings show, Romney was still very much at Bain Capital when they purchased KB Toys, and profited mightily when the company took out crippling loans to pay Bain Capital an $83 million dividend.
Then there’s Dade International and 1,700 jobs lost:
Months after Romney claims to have left the company, Bain Capital received a $242 million bounty for its stake in the medical supply company. Romney profited substantially from the deal. In 2002, Dade International filed for bankruptcy, costing more than 1,700 people their jobs. At the time, Romney was the 100 percent owner of Bain Capital, the new documents show.
There’s also DDi Corporation and 275 jobs lost:
In 1996, the circuit board manufacturer was bought by a group of investors, with Bain Capital in the lead, for more than $40 million. By December 1999, DDi closed a Colorado plant and fired 275 workers. Bain Capital, with Romney still listed as Chairman and CEO, then proceeded to take DDi public, raising $170 million during the company’s IPO in 2000. Over the next few months, Bain began selling off its stock, raising almost $100 million, more than doubling its investment. The stock plummeted shortly thereafter.
That’s about six thousand jobs lost. But it wasn’t his fault. He had left, in spite of what the SEC filings said. And the New York Times’ Michael Shear covers the current state of play:
On Thursday – even as Mr. Romney started broadcasting a television commercial accusing the president of approving dishonest attacks – Mr. Obama’s campaign seized on a new report in The Boston Globe about Securities and Exchange Commission documents showing that Mr. Romney was listed as the chief executive, president and owner of Bain Capital during that period.
The president’s team moved with a fury, holding a 45-minute conference call with reporters to denounce what they called Mr. Romney’s “Bain lie.” Stephanie Cutter, a deputy campaign manager for Mr. Obama, said it seemed possible that Mr. Romney had committed a felony.
“Either Mitt Romney, through his own words and his own signature, was misrepresenting his position at Bain to the S.E.C., which is a felony,” Ms. Cutter said, “or he was misrepresenting his position at Bain to the American people.”
Those are strong words, which generated a strong response:
Matt Rhoades, the campaign manager for Mr. Romney, issued a blistering statement calling on Mr. Obama to apologize for Ms. Cutter’s remarks.
“President Obama’s campaign hit a new low today when one of its senior advisers made a reckless and unsubstantiated charge to reporters about Mitt Romney that was so over the top that it calls into question the integrity of their entire campaign,” Mr. Rhoades said in a statement.
He called Ms. Cutter part of an “out of control” staff working on Mr. Obama’s behalf.
The White House did respond to that. No one is apologizing for anything, and it went downhill from there:
A statement from Charlyn Lusk, a spokeswoman for Bain Capital, reiterated Mr. Romney’s position that he “has had absolutely no involvement with the management or investment activities of the firm or with any of its portfolio companies since the day of his departure” in 1999.
Ms. Lusk said that “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.”
“Accordingly,” she added, “Mr. Romney was reported in various capacities on S.E.C. filings during this period.”
They needed time to revise the paperwork, which they did – except that it took them three years. But Shear notes that documents obtained by Fortune magazine later that day helped a bit – the magazine said on its website that it had obtained “offering documents” for funds that Bain Capital circulated in 2000 and 2001. Those listed the managers of the funds. Romney’s name was not on any of them, so THERE!
And Fortune got specific:
Then there is Bain Capital Venture Fund – the firm’s first dedicated venture capital effort – whose private placement memorandum is dated January 2001. Romney also isn’t listed among its “key investment professionals” or as part of its day-to-day operations or investment committee.
Shear points out the problem here:
There has so far been no contemporaneous evidence of Mr. Romney’s active participation in management decisions during the period in question. No one has come forward to produce notes of meetings that Mr. Romney attended. There is no indication of conference calls or partnership meetings that he attended.
Asked about the lack of such evidence, Robert F. Bauer, the chief counsel for Mr. Obama’s campaign, hinted that something like that might yet emerge.
“I would stay very much tuned on that,” he said, adding that Mr. Romney could ask Bain Capital to release notes of meetings during that period.
Shear states the core problem with all this:
If more reports establish that Mr. Romney has been less than truthful about his time at Bain, the political damage to his presidential bid could be lasting. The issue plays into a larger storyline that the president’s team is trying to create: that Mr. Romney is hiding things about his past and his wealth from the voters.
But Mr. Romney’s new television ad suggests a possible danger for Mr. Obama as well if voters conclude that the president has crossed an ethical line.
Obama has crossed an ethical line if he says Romney is lying, lying to hide things – unless it’s all true. Boston Globe editor Martin Baron did send an email to Mitt Romney’s communications director:
We received your request late this afternoon for a correction regarding this morning’s Globe story. Having carefully reviewed that request, we see no basis for publishing a correction. The Globe story was entirely accurate.
The Globe story was based on government documents filed by Bain Capital itself. Those described Governor Romney as remaining at the helm of Bain Capital as its “sole stockholder, chairman of the board, chief executive officer, and president” until 2002. The story also cited state financial disclosure forms filed by Romney that showed he earned income as a Bain “executive” in 2001 and 2002, separate from investment earnings.
The Globe story accurately described the contents of those documents…
There’s no help there, and Alec MacGillis in the New Republic suggests that things are changing:
Just a few weeks ago, there was a growing sense amid the East Coast’s Very Serious People that there was nothing more to be said about Bain, that any further attempts to attack Romney over his role there were somehow played-out and, even worse, undignified – that the Obama team was engaging in tacky populism by trying to keep the subject alive.
But Chicago stuck to its guns. It was a decision that was anything but a sure thing – after all, there had been many times in recent years when the Obama team shrank from the more populist, harder-edged course, swayed by the murmurings of caution from the Tim Geithners in its ranks. In this instance, though, another instinct won out, a Middle American gut sense that the Bain attacks might yet have more resonance in Dayton and Danville than they had in D.C.
In hindsight, it seems like a no-brainer – polling shows the Bain attacks having a clear impact in the swing states where they’ve been focused, and Romney’s now in serious hot water about the latest revelations (despite mystifying attempts by some fact-checkers to undercut the solid reporting of their own colleagues.) But it might easily not have turned out this way, had Chicago accepted the Beltway declaration that the fork had been stuck. A sign, perhaps, of the wisdom of the campaign’s having set up shop on the shores of Lake Michigan, far from the 100-degree echo chamber on the Potomac.
Romney is in trouble, but Joan Walsh argues he has only himself to blame:
The real problem is that Romney made his qualifications as a business leader his main calling card as a presidential candidate – and immediately began backpedaling away from his career. First he described himself as a “job creator,” but when his own GOP rivals began digging up stories about Bain’s role in destroying jobs, he stopped making that claim, while accusing his rivals of demonizing capitalism. Then, when the Obama campaign, and later the Washington Post, began pointing to Bain’s investments in firms that sent jobs overseas, and even firms that specialized in helping other firms send jobs overseas, he insisted he was being blamed for investments and/or decisions made after he left Bain – setting off this search for proof of when he actually left the firm. Before the Boston Globe, both David Corn at Mother Jones and Talking Points Memo also found documents listing Romney as still involved at Bain later than he claimed. …
It turns out that Romney’s GOP rivals also peddled stories during the primary about the discrepancy in Romney’s stories about when he left Bain – but the Romney campaign apparently managed to shut reporters down by insisting that Romney’s rapid departure to helm the Olympics accounted for the apparent confusion.
Walsh recommends Ben Smith’s reporting on that – this has been going on a long time, even if discussion of it was suppressed. Romney said he left Bain in 1999 and the press took him at his word, until the Boston Globe decided not to, and Walsh adds this:
Of course, Romney might not be in any of this pain had he chosen to tell a simple story about his career in private equity. He was fabulously successful. He had a “sterling career” (in Bill Clinton’s regrettable words) – making money for his clients, and yes, sometimes that involved layoffs and outsourcing and offshoring, because that’s the way private equity works.
He won’t tell that simple story. Maybe he’s ashamed. Walsh cites Bloomberg View’s Josh Barro, quite upset at Romney’s lack of “pride” in his private equity career – “Romney founded one of America’s leading private equity firms. What private equity does is take underperforming firms and make them more profitable, sometimes by closing facilities and sending operations overseas. If he can’t defend Bain’s 1999-2002 record on the merits, he can’t defend its record from 1984 to 1999 either.”
Walsh suggests that in itself is the problem:
Instead Romney got involved in silly debates over how many, if any, jobs he created, the difference between outsourcing and offshoring, and now, finally, the precise date at which he had any responsibility for Bain’s business decisions. Ben Smith calls it a “trap,” which implies it was set by someone else. But Romney really set it for himself.
Now Romney needs a way out. Did he leave Bain Capital in 1999 or 2002, or 2003, or when, or ever? Maybe he does need to make a Checkers Speech of some sort. Things can hinge on the stupidest of minor details, and he says he likes dogs – no, really, he does.
But no one will believe him now. Nixon screwed the pooch, so to speak.