A Bad Day for Mitt Romney

Today's Bain Capital story is serious stuff, one that opens him to a powerful attack by the Obama administration that his remarks appear to merit a criminal investigation.
Romney and Bain claim that he was not involved with Bain, but Bain and its portfolio companies in their required filings under the Securities Exchange Act continuously certified to the Securities and Exchange Commission say precisely the opposite--asserting without qualification that he was a controlling person, fully in charge of Bain, under the Federal securities law. Under normal circumstances, the question of the truth of this representation would result in an investigation by the SEC into possible criminal, as well as civil, violations of the law.
Lying to the SEC is a serious crime, but of course the high probability is that any investigation will discover that he didn't lie to the SEC.  What we know of his background suggests a businessman who would have been careful to know the rules, and whose character does not lead him to take reckless risks of this sort.  It's far more likely that his recent remarks, which carry no legal penalty and which are the remarks of a politician in an election campaign, will be the location of any truth-stretching.  That is also consistent with the charge -- opinions differ, even here, over how accurate the charge might be -- that his statements in election campaigns are aimed at what he thinks voters want to hear rather than the whole truth of the matter.

(Though from my perspective, the Obama administration's remarks are more damning than the probability that Romney stretched the truth for political advantage.  What is meant by 'under normal circumstances,' here?  Is the suggestion that the SEC will not investigate the claim?  Are we to believe that the Obama administration will not do what it claims to be its duty, and if so, why not?  Out of a sense of fair play?  Do the Marquess of Queensberry rules apply to criminal investigations as long as the offender is a member of the political class, or just during elections?  This is a serious matter, enforcing the law, especially when the rich and powerful are the ones who merit investigation.  If Romney's remarks call into question the honesty of his SEC filings, as they do, then the investigation ought to occur.)

Tonight there is a rumor floating that Romney might choose Dr. Rice as his Vice President.  I certainly hope that Allahpundit is correct in his guess that this is just a wild hare to distract from the Bain story.  My impression of her from my time in DC was entirely negative, and I don't find her competent for succession to the Presidency nor the power it entails.  I recall Cassandra saying that her husband had the opposite impression, though; but Dr. Rice has likewise come under sharp criticism from most of the people she worked with in the Bush administration, including Dick Cheney, Donald Rumsfeld, and John Bolton -- none of whom are perfect (well, Bolton is close), but all of whom seem to have a common impression of her as not terribly competent, helpful, or principled.  That aligns with my experience as well, so I tend to believe it is probably the case.

It's also true that the selection of a pro-choice VP would undermine any confidence pro-lifers might have that Romney's conversion on the issue of abortion is genuine.  I would think a candidate who knows he is on thin ice with such a large and important part of his base would take some care to choose a running mate who was at least not opposed to them.


Eric Blair said...

I see you fell for the ruse.

Texan99 said...

Romney took an abrupt leave of absence from Bain in 1999 to rescue the 2002 Salt Lake City Olympics, a job that occupied him for 80-100 hours a week until he brought it to a stunning success out of an initial shambles. In the meantime, he retained his titles as chairman, president, and CEO of Bain for two more years and was properly listed that way on securities filings. Why all this fuss over whether his leave of absence was a complete enough break to insulate him from attacks on Bain's financial strategies while he was working on the Olympics? By all accounts, his sudden departure to take on a public-spirited project was so disruptive it nearly broke up the firm. He thought he might be returning, so he kept some ties, but was out of the decision-making loop (though still entitled to profits). If Democrats want to attack him for not severing his ties with evil thoroughly enough, fine. The attacks on Bain are ridiculous anyway.

Here's a Fact Check report: http://factcheck.org/2012/07/factcheck-to-obama-camp-your-complaint-is-all-wet/

Grim said...

I read all that, Tex. But the Business Insider is right: you can't be CEO and Chairman of the Board and so on and disclaim responsibility. It doesn't matter whether you were there paying attention to it all or not; formally, the buck stops with you.

The danger here doesn't relate to whether he severed his ties far enough; it's about public perception of whether his word can be relied upon. The danger has always been that a plain reading of Romney's public comments is that they are always structured for maximal political advantage, vice taking care to tell the truth.

So, in 2012 when he thinks the electorate would prefer him not to be part of Bain Capital, his federal disclosure form says that he "retired" from the firm in 1999 (with a small, meaningless exception of having kept all those titles). But in 2002, when he needed to establish residency in Massachusetts, he testified that he traveled back "regularly" for "business trips."

Now, if you're like me, you read this in the context of all those other occasions we saw in the primary where we put up statements in the form of "in 1994, when he was running for X, he said Y; in 2012, when running for Z, he said Q."

But even if you're not, it's pretty clear that there is some difference between "retirement" and "CEO," or between "no time for it" and "regular business meetings." I'm inclined to read this as noncriminal truth-stretching, but I'm not going to pretend that it isn't a pretty obvious bit of stretching, at least.

Eric Blair said...

Don't say "Business Insider"; say instead "Henry Blodget".

As an analogy, you are basically listening to Joseph Goebbels lecture you on how bad the Jews are.

Texan99 said...

It's a poor idea, I agree, to say "I was CEO at that time, but don't associate me in any way with what the firm's active officers were doing, because I was on leave spending every waking moment rescuing the Olympic Committee." It would be a lot better to say, "I had and have confidence in the people who were active in making Bain's operational decisions during that period, when I was on leave, and as you know I've never tried to distance myself from Bain's reputation, because it's a firm I'm proud of."

Then he should address off-shoring directly, because that's a garbage attack, too. How people can buy cheap Chinese stuff at the local discount store and then carp at any corporation for getting scut work done cheap overseas, I will never understand. The whole point of international trade is for each country to concentrate on what it can do best and cheapest. Does anyone really think each country would be magically more prosperous if it closed its borders? Well, yes, I guess a lot of people do think that, to judge from union rhetoric.

None of which has even a tiny bit to do with the new and ridiculous claim that Romney committed a felony by signing his 1999-2001 SEC filings, which were 100% correct: He continued to hold those corporate titles for the period specified.

And to think that all this hooraw is over a time when Romney was doing more generous, skilled, and totally effective hard work on the public's behalf that President Obama has ever dreamed of doing in his entire life. I can only hope that a few of the people whose attention is caught by this story are led to find out something about Romney's Olympic Committee service and results, because it's exactly what we should be looking for in an executive. I only wish he were a conservative; he's be perfect.

Grim said...


I don't know the name, but having looked up his biography, I'm not sure if it's entirely fair to liken him to Goebbels. However, I do note that he seems to be a part of the elite that Anne Applebaum is trying to tie to Romney, rather than the one that she wants to tie to Obama. He's a global finance banking guy with a degree from Yale, who is regularly published in all the right economic journals. That's the elite that is supposed to be (and is, if we look at donations) backing Romney over Obama.

Grim said...


I agree with some of what you say here. I think Romney could have been honest, even if it were more difficult. I doubt people are really even listening to the Bain stuff, because who cares? It was more than ten years ago, and we've got lots of problems right now. (For that reason, I doubt most people care about the Salt Lake City Olympics either, although it does point to one of Romney's good qualities -- apparent executive competence.)

I also wish he were a conservative. I wouldn't say that would make him perfect in my book, but it would make him pleasing. However, to be the kind of conservative I would find pleasing, he would need to be the kind of man who spoke the truth even if it was hard.

Texan99 said...

I disagree. Both of the possible statements I attributed to him were strictly true, but the one he avoided would have required engaging directly on the issue of why the popular attitude toward corporate profit-making strategies is ignorant and misguided. His campaign, I'm sure, would prefer to spend less time on that issue and more on others, so they tried to change the subject, especially since he hadn't been personally involved in the decisions the Obama campaign (and the press) were obsessing over

If Romney were a more thorough-going conservative, he would have shed the diffidence he feels when attacked for his wealth and success, and he'd be more comfortable addressing these issues without falling into the envy/pity trap.

Grim said...

Right, but the actual statement he made was not "I was CEO at the time, but don't attribute to me..." but rather, "I was retired, so don't..."

I think your preferred statement was the best one by far; it would have been both honest and forthright. The first proposed statement would have been honest but not forthright. The last one was neither one.

Maybe this doesn't matter. There are some good qualities in Romney, including executive ability and -- as we observed in the case of the missing daughter -- he does seem to take care of the people who work under him.

Still, it's the kind of thing that bothers me. What I look for in a leader is honor. Even more than knowing I agree with him, I want to know that he keeps his word no matter what the consequences to himself. I can understand if you broke your word because of unforseen consequences to others: it might even be an act of selfishness to prefer your word to preventing others from a sufficiently serious harm. When the consequences are personal, though, a man ought to speak the truth and keep his word.

I'm not sure if we can get through another four years without a real conservative leader, but I am pretty sure I don't want to commit to eight more. At least in 2016, if Romney loses, we get a fresh draw from both parties. Otherwise, we're committed to him until 2020. There won't be a President who really shares our values for at least nine years, best case scenario.

Texan99 said...

i still think it's splitting hairs. As I was saying over at Cassandra's place, if he had decided to return to Bain after he finished his brilliant Olympics service, he might have called the hiatus a "leave of absence." Since he in fact decided to terminate all connection to Bain after two years in 2001, he took to saying that he had retired from Bain starting in 1999, an equally valid shorthand description in context. Neither his technical description in SEC filings nor his informal one on the campaign stump was inaccurate.

Romney strikes me as an extremely unlikely target for extreme dissatisfaction in a leader's honor and honesty. If you're too fastidious to support him, even at the cost of making a second term for Obama, you may have reached that point where you're unlikely ever to bring yourself to vote a a flesh-and-blood candidate. I'd be surprised if we'd seen one sporting more personal rectitude than Romney in a very long time. I see practically no reason to suppose that suffering through another four years of Obama is likely to give us better choices in 2016, and that would be a horribly costly bet, anyway.

Grim said...

Romney strikes me as an extremely unlikely target for extreme dissatisfaction in a leader's honor and honesty.

I find that remarkable, since that seems to be a huge problem with him. You were here for the primary, so you know that I find it difficult to read him in any way that is not incredibly dishonest, even about what are allegedly his basic principles. To have changed position on issues like abortion, gun rights, and gay marriage would be remarkable if it were any one of them; but it's all of them. And to have changed position on these hot button issues more than once is still more remarkable.

Until, of course, we remember that his changes of position on these issues align with his electoral prospects. Just as, here, his description of his role at Bain depends on whether he wants to establish residency or play down what he now seems to feel is a vulnerability.

Throughout the primary, Romney supporters -- of whom neither you nor I were one -- held that his strange changes of language and position couldn't be positively demonstrated to be falsehoods; if we adopted the most charitable reading, and refused to attribute anything misleading without absolute proof, we could construct scenarios in which we didn't have to think that we were voting for a scoundrel.

Only in the last day have I heard defenders like Krauthammer assume the position that Romney is simply a pure, straight-laced, above-board straight arrow about whom no such charge could possibly be entertained. You may have come to that position yourself, although I don't believe you always held it; but you surely understand why I continue to regard the man's word with extreme suspicion.

Grim said...

Furthermore, if he is elected, it will frequently be our duty to oppose him from the right -- in order to get the most out of him that we can, and to make up as much as possible for surrendering the Presidency to non-conservatives for a minimum of nearly a decade.

It would be wise to retain the habits of mind necessary for such opposition, and not to position yourself so that non-conservative advocates of him taking some 'moderate' position in future years can simply quote your own words back to you about his excellent character and unimpeachable rectitude.

In other words, if you're going to ride this horse, at least don't trust it.

Eric Blair said...


Eric Blair said...

And this: http://pjmedia.com/instapundit/146593/

Grim said...

If that's how you feel, you've got a right to make that choice. But I'll say the same to you as I said to Tex: If you're going to ride this horse, at least don't trust it. I wouldn't trust a promise that he makes, a pledge he grants or anyone at all that he appoints if you don't know them from another context. That's got to be true especially for Supreme Court appointments, if one of the reasons you're backing him is the hope for a more conservative court. You can't give him his head on that question at all.

If you're a conservative you'll have to be ready to fight him on all of that for as long as he's in power, because otherwise he's going to slide right out from under you.

Texan99 said...

I remember you took that position vehemently. However, while I suspect Romney is subject to mood-swings about policy issues, I don't believe they are attributable to dishonesty but to lack of rigor in his worldview. He's a middle-of-the-road type who likes to think that moderate positions will win the day. And he may turn out often to be right, if he doesn't flirt with too many brain-dead feel-good Robin Hood schemes.

In any case, although I think highly of his personal rectitude, it won't buy him any points with me when he adopts bad policy. My point is not that he's an ideal candidate who should be indulged no matter what he proposes. It's that, if he's going to be attacked, it's absurd for the attack to take the form of dissatisfaction with his personal rectitude in matters like SEC disclosure and compliance with technical law. If he's not good enough in that particular sense, we won't get anyone who is -- certainly not Mr. Obama and almost certainly not whoever else may run in 2016.

Grim said...

Well, I agree with you there: I said in the original post that I doubted he was the kind of person who would violate SEC law. There are consequences to that sort of thing, and he's a very clever man.

There appear to be no consequences to swearing fealty to voters' most deeply felt ideals in order to get elected, and then... ah, well. No one cares but me.

Just, if you win, remember the warning.

Texan99 said...

Of course everyone cares. You're confusing failure to persuade us with indifference on our part.

Grim said...

I mean to say that no one cares about Romney's violation of his word. If you don't care about it because you aren't persuaded of it, or if you don't care about it because it pales in comparison with beating Obama, it is nevertheless the case that you don't care about the issue that troubles me.

That's your right, either way. I don't dispute it. You can be persuaded of whatever you'd like. If I were going to support a man for the Presidency, I'd want to be persuaded to believe good things about him too. I can't blame you for wanting the same.

Texan99 said...

Of course I care that you are troubled, I just believe you are mistaken and suffering needlessly. I care enormously that you, and voters like you, will make the wrong choice in November on a faulty basis, so if I possibly can, I'll talk you out of it.

Would you say you "don't care" about my concern that Obama will be re-elected and do huge damage to the country? Or is it just that you honestly believe the alternative would be more damaging?

Grim said...

No, it's not that I don't care. But it is a dilemma.

If Romney is elected, it is possible that conservatives will be able to pressure him enough to force at least some accommodation on various issues of importance. That's good! But they will do so at the cost of losing even the hope of a conservative President for a decade or more: they'll have to support Romney in 2016, and can try again in 2020.

You are aware of the scale of the problems in front of us as a nation. They are time-sensitive, because they chiefly arise from the retirement of the Baby Boomers: the fiscal crisis is mostly about Medicare, Medicaid, and government pensions and other benefits. A principled conservative can't be elected, now, before 2016 and can't take office before 2017. That strikes me as already alarmingly late.

I don't know how much damage a lame-duck Obama facing a hostile Congress can do. Especially if the Democrats lose the Senate, he will be largely toothless for the first half of his second term; and in the second half, even more of a lame duck.

So it looks like it might be almost a wash. Obama would be a little worse, but he's also out in four years for sure. We'd see new candidates from both parties. Romney would be a little better, but would cost us half a decade at least -- and the clock is ticking, and the solution set that might really fix the problem isn't moderate or compromising. It's radical.

Now if Romney were to pick a VP who was a rock-ribbed conservative on these issues, well, we could hope that his VP would be a persuasive force in office (or otherwise positioned to assume at least some of the mantle of executive authority). That might be persuasive. At least it would give me something to hope for.

Otherwise, I don't see how I can vote for either of these men. I've told you what I think of Romney's reversals on every principled moral issue that these elections are about; but Obama is no better. Every moral issue he ran on he betrayed: Gitmo, drone strikes, indefinite detention, etc. I happen to agree with the principles underlying the positions he's now taken, but if I were one of his 2008 believers, I'd be furious and offended at his betrayal of his word.

I think there cannot but be damage to the Republic from electing such men to positions of power. But this time, as it seems to me, we have no choice about that.