Posted by AzBlueMeanie:
The Boston Globe today reports on the role of Willard "Mittens" Romney at Bain Capitol from 1999-2002. Busted! Romney kept reins on Bain, bargained hard on severance during absence:
Romney has said in financial disclosure statements that he “was not involved in the operations of any Bain Capital entity in any way” after Feb. 11, 1999. But he was still legally the CEO, with numerous duties and obligations that were his alone, until early 2002.
Interviews with a half-dozen of Romney’s former partners and associates, as well as public records, show that he was not merely an absentee owner during this period. He signed dozens of company documents, including filings with regulators on a vast array of Bain’s investment entities. And he drove the complex negotiations over his own large severance package, a deal that was critical to the firm’s future without him, according to his former associates.
Indeed, by remaining CEO and sole shareholder, Romney held on to his leverage in the talks that resulted in his generous 10-year retirement package, according to former associates.
“The elephant in the room was not whether Mitt was involved in investment decisions but Mitt’s retention of control of the firm and therefore his ability to extract a huge economic benefit by delaying his giving up of that control,” said one former associate, who, like some other Romney associates, spoke only on condition of anonymity because they were not authorized to speak for the company.
Romney had expected to remain at Bain Capital for years. He initially rejected the idea of running the Olympics, recounting in his memoir, “Turnaround,” that “after fifteen years of effort, Bain Capital had become extraordinarily lucrative. How could I walk away from the golden goose, especially now that it was laying even more golden eggs?” To do so, Romney wrote, meant “I would walk away from my leadership at Bain Capital at the height of its profitability.”
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. He initially kept his corner office at the firm’s Copley Square headquarters, which was eventually turned into a conference room. His secretary moved into Bain’s human resources department.
But Romney still had a lot of money on the table; much of his personal wealth was tied up in Bain. And he was still technically in charge.
James Cox, a professor of corporate and securities law at Duke University, said Bain’s continued reference to Romney as CEO and sole shareholder indicated that Romney was still the final authority. Moreover, Cox said, Romney would likely have been updated regularly about Bain Capital’s profits while he was negotiating his severance package. As a result, Cox said, Romney’s statement that he had no involvement with “any Bain Capital entity” appears “inconsistent” with his actions.
“If he is 100 percent owner, I just find it incredible that what I would call ‘big decisions’ — acquisitions, restructuring, changes in business policy — that they would not have passed on to him on an informational basis, not asking for formal approval but just keeping him in the loop,” Cox said.
* * *
Romney’s exit dragged on, officials of the firm said, because it was a complex ordeal to extract Romney from dozens of partnerships and business entities of the firm, along with the negotiations over his compensation. The full tally of Romney’s 10-year compensation deal is not known because he has refused to release tax returns for the relevant period, which ended in 2009. In addition, his financial disclosures are sporadic and incomplete, and his assets are in a blind trust. Romney has released his 2010 tax returns and has said the only other release will be for 2011.
* * *
While Romney continued negotiating the terms of the severance deal, he referred to himself as CEO. In July 1999, five months after he had left for Utah, he provided a quote for a press release issued by Rehnert and Wolpow, who had left Bain to start their own firm, Audax. He was referred to as “Bain Capital CEO W. Mitt Romney, currently on a part-time leave of absence.”
In that release, Romney said of the departing partners, “While we will miss them, we wish them well and look forward to working with them as they build their firm.”
Those did not sound like the words of someone who had severed his ties to Bain Capital. To the contrary, it implied that Romney was still a part of Bain and its future. Two and a half years after leaving to run the Olympics, Romney finally signed his severance agreement in August 2001. Still, Romney’s name continued to appear as CEO and owner on dozens of Bain fund documents filed with the Securities and Exchange Commission until January 2002. No one would succeed Romney as CEO of Bain Capital. To this day, Bain is run by a management committee.
Romney's hot tub time machine cannot retroactively retire reality.
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