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Thursday, July 12, 2012

What happened at Bain in 1999?

by digby

I have been wondering obsessively why Romney is so keen on saying that he left Bain in 99 instead of 02. I mean it's not as if he's running from his career there in general. So why is so adamant that he not be associated with it during that period? The easiest answer is that he stupidly said it without really thinking through the implications of holding the title and being compensated while allegedly being uninvolved and now he's stuck with it because of his FEC filing.

On the other hand, there are some things beyond the usual off-shoring and layoffs that he might not want it known that he profited from. Henry Blodget writes:

[T]he reason this issue is important is that Romney wants to disavow responsibility for anything Bain or Bain companies did after early 1999.
And one of the things that Bain did after early 1999, as Dan Primack of Fortune points out, is invest in a company called Stericycle whose services included the disposal of aborted fetuses.

For obvious reasons, an investment in a company that performed this service might hurt Romney's standing with the right-to-life voters in the Republican party, even though Romney was pro-choice at the time the investment was made...

As "Chairman, CEO, and President" of Bain, he damn well would have remained responsible for these decisions. In which case, saying he had "left" and implying that he had no involvement or responsibility whatsoever is highly misleading.
The CEO of a car company may not have input into the decision of what specific cars the company makes or where it makes them (though he or she obviously could if s/he wanted), but this CEO is unequivocally responsible for these decisions.
Similarly, if Romney was CEO of Bain at the time it made the Stericycle decision, as well as the company layoffs and other unpleasant facts that Candidate Romney would like to disown, he certainly was responsible for these decisions.

You have to wonder how the true believers would feel about that little deal. Once being pro-choice is one thing. Profiting from abortion may just be a bridge too far for people who have compared that company to Nazis.

Update: I missed this original comprehensive piece last week from Mother Jones breaking the story of the disposal business:

The SEC filing lists assorted Bain-related entities that were part of the deal, including Bain Capital (BCI), Bain Capital Partners VI (BCP VI), Sankaty High Yield Asset Investors (a Bermuda-based Bain affiliate), and Brookside Capital Investors (a Bain offshoot). And it notes that Romney was the "sole shareholder, Chairman, Chief Executive Officer and President of BCI, BCP VI Inc., Brookside Inc. and Sankaty Ltd."

The document also states that Romney "may be deemed to share voting and dispositive power with respect to" 2,116,588 shares of common stock in Stericycle "in his capacity as sole shareholder" of the Bain entities that invested in the company. That was about 11 percent of the outstanding shares of common stock. (The whole $75 million investment won Bain, Romney, and their partners 22.64 percent of the firm's stock—the largest bloc among the firm's owners.) The original copy of the filing was signed by Romney.

Another SEC document filed November 30, 1999, by Stericycle also names Romney as an individual who holds "voting and dispositive power" with respect to the stock owned by Bain. If Romney had fully retired from the private equity firm he founded, why would he be the only Bain executive named as the person in control of this large amount of Stericycle stock?

Good question.

Update II:

You should check out this StopStericycle site. One of their major campaigns is to out the executives of the company and warn away investors:
If you are a trader of stocks or a holder of mutual funds, please check your portfolio for the company Stericycle (SRCL). If you find that you are partaking in the blood money of Stericycle, pull out now. Your investment in Stericycle helps to financially support Stericycle’s daily collaboration with the abortion industry.

Additionally, please check your portfolio for the companies listed on our top shareholders, mutual fund investors and other investors lists. These companies are profiting from Stericycle’s blood money, and if you invest in them, you are as well. We encourage you to remove your investment until these corporations stop supporting Stericycle.

Correspondingly, it is important to also contact the corporate officers and fund managers of these companies via phone, postal mail or e-mail and inform them that you have ceased supporting their company until they discontinue their investment in Stericycle. You may click on the names of each company on our profiteers lists to obtain their respective contact information.

Update III: I should make it clear that I have no idea if Romney was aware of the abortion tie (doubtful) or even if the company was doing it in 1999. But I'm guessing that either way he doesn't want to be associated with it. For obvious reasons.