Thursday, July 12, 2012

Why Harry Reid Busted Mitt Romney

There he goes again. When Harry Reid gets badass, the Beltway press corps have to pay attention. So of course, he's making them pay attention to this.

“[Mitt Romney] not only couldn’t be confirmed as a cabinet secretary, he couldn’t be confirmed as dog catcher,” Reid told reporters at a Capitol press briefing, in response to a question from TPM. “Because a dog catcher, you’re at least going to want to look at his income tax returns.”

“The long report that we have in the Boston Globe today indicates that, as one of his own employees said, it doesn’t make sense,” Reid continued. “He said he left Bain to go to the Winter Olympics in Salt Lake City and stopped any association with Bain. But his SEC filings indicated that he was Chief Executive Officer, sole stockholder, and ran the corporation for at least 3 more years. And that’s why people who say there’s been advertisements where businesses were closed, people laid off - and he says oh I wasn’t there, I left in 1999. As his own operative said, it doesn’t make sense. And it doesn’t.”

Reid said the issue is important because Bain was accused of being involved with outsourcing jobs in those ensuing years, and Romney’s campaign has argued that he had left by then.

Senator Reid was talking about this explosive Boston Globe story debunking Mitt Romney's claim that he wasn't in charge of Bain Capital when his company began massive layoffs early last decade. While Romney claimed he left Bain in 1999, the documents Bain Capital filed with the SEC listed Romney as 100% owner and CEO, and that Romney earned a $100,000 annual salary in 2001 and 2002 on top of his Bain investment earnings.

So why does this matter? Here's why.

Need more details? Read this from Kevin Drum.

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 reponsible 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 reponsibility 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.

And while we're on the subject, check out David [Corn's] latest piece on 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.

And speaking of David Corn's explosive Mother Jones article, it reveals even more lurid details on what Mitt Romney was doing at Bain Capital... And another outfit that's just starting to make headlines.

On April 17, 1998, Brookside Capital Partners Fund, a Bain Capital affiliate, filed a report with the Securities and Exchange Commission noting that it had acquired 6.13 percent of Hong Kong-based Global-Tech Appliances, which manufactured household appliances in a production facility in the industrial city of Dongguan, China. That August, according to another SEC filing,Brookside upped its interest in Global-Tech to 10.3 percent. Both SEC filings identified Romney as the person in control of this investment: "Mr. W. Mitt Romney is the sole shareholder, sole director, President and Chief Executive Officer of Brookside Inc. and thus is the controlling person of Brookside Inc." Each of these documents was signed by Domenic Ferrante, a managing director of Brookside and Bain. [...]

At the time Romney was acquiring shares in Global-Tech, the firm publicly acknowledged that its strategy was to profit from prominent US companies outsourcing production abroad. On September 4, 1998, Global-Tech issued a press release announcing it was postponing completion of a $30 million expansion of its Dongguan facility because Sunbeam, a prominent American consumer products company and a major client of Global-Tech, was cutting back on outsourcing as part of an overall consolidation. But John C.K. Sham, Global-Tech's president and CEO, said, "Although it appears that customers such as Sunbeam are not outsourcing their manufacturing as quickly as we had anticipated, we still believe that the long-term trend toward outsourcing will continue." Global-Tech, which in mid-1998 announced fiscal year sales of $118.3 million (an increase of 89 percent over the previous year), also manufactured household appliances for Hamilton Beach, Mr. Coffee, Proctor-Silex, Revlon, and Vidal Sassoon, and its chief exec was hoping for more outsourcing from these and other American firms.

And in case that isn't damning enough...

Brookside downsized its Global-Tech holdings later in 1998. An SEC filing submitted on December 21, 1998, reported that the Bain affiliate now controlled only 4.63 percent of the company's shares. But Brookside was sharing its stake in Global-Tech with Sankaty High Yield Asset Investors LTD—a Bermuda-based corporation of which Romney was the "the sole shareholder, a director, and President." That is, Romney had split his Global-Tech holdings between two of his various business entities. (The SEC filing doesn't indicate why he did that.)

Sankaty is a story in itself. It was recently the focus of an Associated Press investigation that reported that Sankaty "is among several Romney holdings that have not been fully disclosed" and that there is a "mystery surrounding" Sankaty. Reporting on this Romney entity, Vanity Fair noted that "investments in tax havens such as Bermuda raise many questions, because they are in 'jurisdictions where there is virtually no tax and virtually no compliance,' as one Miami-based offshore lawyer put it." With Sankaty, Romney was using a mysterious Bermuda-based entity to invest in a Chinese firm that thrived on US outsourcing.

Wow. This is even worse than I had originally thought. I just knew that Mitt Romney was/is a vulture capitalist who profited from destroying American jobs. Now we know he's caused even more damage to our economy by outsourcing formerly American jobs to China AND by hiding his money in offshore Bermuda based investments!

But really, should we be surprised? This truly is the Mitt Romney way. He makes money while American workers suffer.Desert Beacon warned us back in May. His voodoo economics, as well as his embrace of just plain voodoo emanating from Donald Trump's ass, should have been enough of a warning for us.

And this is why Harry Reid said what he said this morning. Mitt Romney can't be trusted to speak the truth on his own financial records. Mitt Romney can't be trusted to protect American jobs. Mitt Romney can't be trusted to stick to the same position on anything. Is there anything Mitt Romney can be trusted on?

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