Thursday, July 12, 2012

Apples and oranges

In the face of growing interest in the question whether Mitt Romney continued to stay involved in Bain entities during the period (1999-2002) when Romney claims to have relinquished control of Bain, those in the fact-checking world (FactCheck.org and Fact Checker) who took a position supporting Romney, are still trying desperately to defend their original conclusions. They are missing the point.

The latest FactCheck rebuttal repeatedly mischaracterizes the issue as whether Mitt Romney was "actively managing" Bain during the period in question. Evidence supports the conclusion that Romney was heavily involved in the Olympics during those years. Nobody doubts that Romney substantially reduced the amount of time he spent on Bain activities. Obviously, if Romney was working full time on the Olympics, he had less time to spend on Bain. The relevant question, however, is whether Romney was still involved in managing Bain at all. That is relevant because Romney is not claiming merely that he substantially reduced his role at Bain. He is the one who is claiming that he was not involved in Bain at all.

From the financial disclosure forms cited in the previous FactCheck article, which were signed by Mitt Romney in 2011 when he declared his intention to run for president:
Since February 11, 1999, Mr. Romney has not had any active role with any Bain Capital entity and has not been involved in the operations of any Bain Capital entity in any way.
Note that Romney is not talking about reducing his role in the "active management" of Bain. What he certified on these federal disclosure forms is that he has not had ANY active role with ANY Bain entity, and has not been involved in their operations in ANY way since February 1999. If the companies' subsequent SEC filings are correct, however, and we should assume they are (because they are supposed to be), Mitt Romney actually stayed on as owner, officer and director of various Bain entities for three more years. Therefore it is hard to imagine that he did not have ANY role or involvement in operations.

That brings up the second blind spot of these Romney defenders. They claim that just because Romney held a title, like  managing director, "doesn’t necessarily mean that he’s responsible for decisions like layoffs or outsourcing." And it's true that a person's title does not tell you what actual duties they personally performed. What a title can tell you, however, is what LEGAL responsibilities a person may have had. Certain titles carry with them specific legal responsibilities. A title like "director" includes the responsibility for electing officers, for example, and for ratifying their actions. Likewise, officers of a corporation have specific legal responsibilities defined in a corporation's by-laws or by operation of common law or statutory law that do not depend on what they actually did on the job. Those responsibilities encompass essentially all of the operations of a company. (Today's Fact Checker article does not even deal with the problem of Romney's role as a corporate officer, asserting that "[j]ust because you are listed as an owner of shares does not mean you have a managerial role." As pointed out in my previous post, ownership does not necessarily carry legal liability with it. Holding the positions of officer and director is quite something else.)

This is not about titles, and it's not about the amount of time that Romney did or did not spend managing Bain during 1999-2002. It is about legal responsibilities. If Romney was performing those responsibilities, then he was actively involved in managing Bain. But even if Romney were not performing any of those responsibilities, he was still legally responsible for the actions of whomever did perform them, based on what Bain reported to the SEC. Eventually Romney is going to have to acknowledge either that he did not have the responsibilities that were listed on his companies' SEC filings, and therefore the filings were incorrect; OR alternatively that he did either himself perform or delegate those responsibilities, and therefore continued to be legally responsible for all of the operations of Bain during the period that has been called into question. Either way, you have to wonder why a person running for the most responsible position in the world, a person who wants to sit at the desk where Harry Truman placed a sign saying "The Buck Stops Here," why somebody seeking that office would be so intent on ducking responsibility for any of the actions of companies that represented his life's main work.

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