Now it's Personal: Romney Goes Toe-to-Toe With Obama Over Bain Attacks

Friday, 13 Jul 2012 07:33 PM
By Paul Scicchitano

The first hint of the personal attacks that will inevitably feature in the presidential campaign came Friday when President Barack Obama and Mitt Romney lashed out at each other Romney’s history with his private equity company Bain Capital.

Obama called on Romney to come clean on the exact date he left the company, while Romney fired back calling on the president to apologize after one of his aides suggested Romney might have broken the law.

Romney immediately went on the offensive, granting five-minute interviews to CBS, NBC, ABC, Fox News and CNN.

"He sure as heck ought to say that he's sorry for the kinds of attacks that are coming from his team," Romney told ABC.

On CBS, he said of Obama, "This is reckless and absurd on his part, and it's something that's beneath his dignity. I hope he recognizes that even fellow Democrats have said that."

On CNN he said the Obama campaign's tactics were "disgusting and demeaning," adding "Is this the level that the Obama campaign is willing to stoop to? Is this up to the standards expected of the presidency of the United States?"

And on Fox News he said, "This is showing a pattern. You just had bad news on the economic front with now 41 straight months with unemployment above 8 percent. And what does the president do? He says he is going to raise taxes on people, he's trying to gut welfare reform as we know it, and he launches attacks of this nature. It's beneath the dignity of his office,"

Before Friday, the two candidates have let their campaigns battle it out on the issue, but now both have personally jumped into the fray. The Obama campaign has pointed to documents it says proves Romney was in fact in control of Bain during a three-year period after 1999 when jobs were sent abroad. Romney said gave up his role in the company in 1999.

But Obama was in no mood to quit. “Ultimately, I think, Mr. Romney is going to have to answer those questions because if he aspires to being president, one of the things you learn is you're ultimately responsible for the conduct of your operations," the president said in an interview with WJLA-TV in Virginia as he campaigned across the battleground state.

"Now, my understanding is that Mr. Romney attested to the SEC multiple times that he was the chairman, CEO and president of Bain Capital. And I think most Americans figure if you're the chairman, CEO and president of a company that you are responsible for what the company does," Obama said.

On Thursday Romney campaign manager Matt Rhoades attacked the president’s campaign for suggesting Romney could have committed a felony by misrepresenting his position at Bain Capital to the Securities and Exchange Commission.

“President Obama’s campaign hit a new low today when one of its senior advisers made a reckless and unsubstantiated charge to reporters about Mitt Romney that was so over the top that it calls into question the integrity of their entire campaign,” snapped Rhoades.

Stephanie Cutter, Obama’s deputy campaign manager hurled the accusation earlier in the day in response to a Boston Globe article, which purported to show that Romney was in charge of Bain — at least on paper — longer than he had claimed.

"Either Mitt Romney, through his own words and his own signature, was misrepresenting his position at Bain to the SEC, which is a felony," said Cutter, "or he is misrepresenting his position at Bain to the American people to avoid responsibility for some of the consequences of his investments."

Rhoades said that was hitting below the belt. “President Obama ought to apologize for the out-of-control behavior of his staff, which demeans the office he holds,” he charged.

“Campaigns are supposed to be hard fought, but statements like those made by Stephanie Cutter belittle the process and the candidate on whose behalf she works.”

The Romney campaign also rolled out a hard-hitting television ad that accused the president of launching "misleading, unfair, and untrue" attacks about the Republican's role in outsourcing U.S. jobs.

"When a president doesn't tell the truth, how can we trust him to lead?" the narrator says in the Romney ad titled "No Evidence."

Obama has accused Romney of being an "outsourcing pioneer" who invested in companies that shipped jobs to China, India, and elsewhere overseas. But Romney, who has made his business experience the central part of his candidacy, claims he had no role in outsourcing U.S. jobs because much of that activity didn't happen until after 1999, when he says he had given up operational control at Bain.

Romney’s former colleagues, who helped him organize the 2002 Winter Olympics, also were quoted in news accounts as being skeptical that Romney could have found the time to work at Bain Capital during his time at the Olympics.

Both candidates dug in on their positions, dispatching aides to level deeply personal criticisms aimed at casting each opponent as little more than a typical politician. Each candidate is seeking to sully his rival's integrity in hopes of gaining ground in closely contested campaign four months before Election Day.

But the strategy carries risks: It could alienate voters — especially critical independents — who may be turned off by negative campaigning and want to see the candidates focus on the economy and job growth.

At issue is when Romney left Bain, and whether he was at the helm when it sent jobs overseas.

The documents, filed with the U.S. Securities and Exchange Commission, place Romney in charge of Bain from 1999 to 2001, a period in which the company outsourced jobs and ran companies that fell into bankruptcy.

Romney has tried to distance himself from this period in Bain's history, saying on financial disclosure forms that he had no active role in Bain as of February 1999.

But at least three times since then, Bain listed Romney as the company's "controlling person," as well as its "sole shareholder, sole director, chief executive officer, and president." And one of those documents — as late as February 2001 — lists Romney's "principal occupation" as Bain's managing director.

The Obama campaign called the SEC documents detailing Romney's role post-1999 a "big Bain lie." Cutter said the presumptive GOP nominee may have even engaged in illegal activity.

After weeks of Bain attacks by Obama, Romney rolled out his new ad alleging dishonesty — a signal that the Democratic criticism may be hurting him.

The ad sought to establish dishonesty as a pattern for Obama, and uses his 2008 Democratic primary rival, Hillary Rodham Clinton, to do it. It included a clip of Clinton — now serving Obama as secretary of state — saying, "Shame on you, Barack Obama" and calling on her then-challenger to stop running dishonest ads.

The campaign also issued a statement from Bain saying that "due to the sudden nature of Mr. Romney's departure, he remained the sole stockholder for a time while formal ownership was being documented and transferred to the group of partners who took over management of the firm in 1999. Accordingly, Mr. Romney was reported in various capacities on SEC filings during this period."

The SEC documents raise questions about Romney's role at Bain in 1999, 2000, and early 2001. If he turned his full attention to the Olympics in early 1999, as his campaign says, it's hard to square with the Bain SEC filing, two years later, listing his "principal occupation" as the company's managing director and his titles as CEO and president.

James Cox, a securities law professor at Duke University, said the SEC's Schedule 13D forms have always been under legal scrutiny by SEC officials and company executives. He said law firms hired to file such reports — known as "beneficial ownership reports" because they deem who can sell securities — "pay great attention to these forms. I don't find that these parts of the documents are casually reported."

"It's hard for me to believe you could be listed as 'management anything' without it taking up a bulk of your time," said Cox, who had not reviewed Bain's statement on Thursday.

During the years in question — 1999 to 2011 — Bain oversaw investments that either sent jobs abroad or filed for bankruptcy. For example, in late 1999, Bain-controlled Steam International set up overseas call centers, and a subsidiary moved jobs from California to Mexico. In 2000, the Ampad company declared bankruptcy. The following year, so did steel-maker GS Industries — just as Bain made $58.4 million from its investment.

The Obama campaign has used workers laid off from Ampad in attacks on Romney's business record.

Romney helped found Bain Capital in 1984. The private equity firm invested in various companies, often restructuring their management and operations. Some became success stories that hired new workers and enriched Bain's investors. Others struggled or went out of business. Romney made millions of dollars and cites Bain as chief proof that he understands private enterprise and job-creation.

Romney eventually negotiated a retirement agreement with Bain Capital in 2002. The agreement was made retroactive to February 1999.

The Boston Globe reported Thursday that a Massachusetts financial disclosure form Romney filed in 2003 stated he still owned 100 percent of Bain Capital in 2002, the year he was elected to his single term in Massachusetts.