This post has been updated (see bottom of second page).
In the great politico-media debate over Mitt Romney, Bain Capital, and outsourcing, writers here at CJR have generally come out in support of the factchecking sites that criticized the Obama campaign’s ads—but have also called for more reporting, both to resolve the question of when Romney gave up control of Bain and to inform larger debates that are beyond the ken of the factcheckers.
Today, The Boston Globe’s Beth Healy and Michael Kranish have a bit of reporting that everyone who’s followed this tussle should read. The Globe piece asserts up high that Romney “was not merely an absentee owner” after he took a leave of absence to run the Salt Lake City Olympics in February 1999, and it cites an interview with a Duke professor who doesn’t really believe Romney’s claims of being entirely out of the loop after that point. But the story also makes clear that Romney wasn’t running the show after leaving for Utah, and that his departure precipitated a major transition at Bain—with investors keenly aware that Romney was no longer managing the firm’s money. That’s basically consistent with what we already knew.
So why, then, did Romney remain Bain’s titular head for another three years? The article, which opens with a scene recounting a previously unreported meeting of Bain’s top management in early 1999, offers this explanation:
He signed dozens of company documents, including filings with regulators on a vast array of Bain’s investment entities. And he drove the complex negotiations over his own large severance package, a deal that was critical to the firm’s future without him, according to his former associates.
Indeed, by remaining CEO and sole shareholder, Romney held on to his leverage in the talks that resulted in his generous 10-year retirement package, according to former associates.
“The elephant in the room was not whether Mitt was involved in investment decisions but Mitt’s retention of control of the firm and therefore his ability to extract a huge economic benefit by delaying his giving up of that control,” said one former associate, who, like some other Romney associates, spoke only on condition of anonymity because they were not authorized to speak for the company.
Readers will make of this what they will. (Here are a pair of early responses.) But what matters from a journalistic perspective is that after all the ink and pixels spilled on this topic over the last couple weeks, Healy and Kranish have brought forth new information that—assuming it holds up—gives us a fuller understanding of what happened as Romney and Bain parted ways.
Meanwhile, there’s a line that goes by almost in passing in the Globe piece that suggests an opportunity for further reporting. Paraphrasing the worries of an unnamed Bain partner, Healy and Kranish describe Romney as someone “who excelled at bringing in investors, not at finding the companies to invest in and overhaul.” Bringing in investors is clearly an important business skill. But as Yoni Appelbaum notes on Twitter, the narrative Romney and his supporters offer about his private-sector experience emphasizes his managerial know-how, not his talents as a rainmaker. Any reporters care to pick up this thread?
On the subject of new reporting about Romney, Bain, and outsourcing, Mother Jones’s David Corn and Nick Baumann have a story out today detailing Romney’s substantial investments, through a Bain-related entity known as Brookside Capital Investors Inc., in two companies that produced components overseas for US-based tech businesses. The story recalls a July 11 Corn post that reported a Brookside investment in a third similar company.
In both cases, the Romney campaign replied that Brookside is a hedge fund that makes passive investments, not a private equity operation that gets involved in the management of companies it invests in. If that’s true, it means that Brookside’s investments don’t support the precise claims the Obama campaign made about Romney’s involvement in shipping jobs overseas, which is where this all started. On the other hand, MoJo’s pieces offer plenty of reason, if any was needed, to believe that whatever his current rhetoric, Mitt Romney doesn’t really have a deep-seated objection to offshoring.