Bain Matters

romney detourIn response to corporate governance scandals of the early 2000s, a 10-point plan issued by then-President George W. Bush called on CEOs to “personally vouch for the veracity, timeliness, and fairness of their company’s public disclosures, including their financial statements.” The Business Roundtable said in a statement its “the responsibility of management to run the company on a day-to-day basis, and senior management needs to have a deep understanding of the company’s business and risks.”

Recent comments questioning the relevance of Securities and Exchange Commission (SEC) documents suggest a number of fact-checkers suffer memory loss about America’s political and business climate during that post-Enron era of scandals which included names like Tyco, and Global Crossing, and harsh criticisms of the SEC. Throughout our economy, the pattern repeated: CEO power run amok, “legal” tax evasion schemes, corporate governance failures, millions extracted for CEO and senior executive 1 percenter in bonuses as their companies went bankrupt, while 99 percenter employees lost everything — healthcare, pensions, 401(k)s. Those “job-creators” whined about the ills of over-regulation while board members and corporate officers feared personal consequences of increased accountability and transparency for actions they were required to sign off on.

Tyco’s intricate web of “legal” tax evasion unraveled in 2002, revealing extensive efforts to avoid tax obligations, estimated around $600 million, including its 1997 incorporation in Bermuda and subsidiaries in tax-friendly Barbados and the Cayman Islands. Extracting millions, former CEO Dennis Kozlowski used Tyco as his personal ATM; in the aftermath 7,200 jobs were lost. Global Crossing simultaneously laid off 2,000 employees and forgave an $8 million loan to then-CEO Thomas Casey; when the company finally crashed in January 2002, $15 million in payouts went to top executives while 9,000 employees were laid off with worthless 401(k) plans and lost medical benefits, some left bankrupt.

This is the backdrop for Mitt Romney’s ever-changing story about his relationship with Bain. Working in the private sector around that time, it’s hard to forget the ferocity of public anger driving demands for changes to the corporate governance structures that determine everything from the flow of power and responsibility to strategic decisions, cash flow, resource allocation, compensation, pension systems and retirement plans. CEOs, corporate boards and officers expected, feared and tried to avoid scrutiny. Making it harder to believe Romney and Ban would be so careless with legal documentation filed with the government in this period.

The Boston Globe reported Bain listed Romney as an executive for three years and he drew a salary even after he claimed to have given up an active role there. A new document from December of 2002 reported by The Huffington Post lists Romney as one of two managing members of Bain Capital Investors, LLC, “authorized to execute, acknowledge, deliver and record any recordable instrument purporting to affect an interest in real property, whether to be recorded with a Registry of Deeds or with a District Office of the Land Court.”

karen finneyRomney is asking Americans to believe that while he signed documents affirming he was president, CEO and sole shareholder of a company, he had no involvement in it, and Bain and its investors were comfortable with that arrangement.

While most Americans don’t know much about the SEC, they do understand signing their name on a tax form, loan agreement or other legal document makes them legally responsible for its accuracy.

Karen Finney
The Hill

Posted: Monday, 16 July 2012

About Karen FInney

Comments

  1. Karen ;

    As Hollywood007 points out ,YOU ARE STUPID ! see , it’s a _private_ company there fore the rich assholes who run it , are BETTER than you , I or the working class schmucks THEY STOLE WAGES AND PROMISED BENEFITS FROM .

    You foolish Liberals never get it no matter how clearly the 1 % puts it : THEY DON’T CARE , YOU ARE NOT IMPORTANT and in fact are barely Human .

    -Nate

    • Hwood007 says:

      Look, you apparently wrote about a topic of which you know
      little.  Bain is a LLC, that means a
      limited partnership of a select group of people.  It has no public money and did not loose any
      taxpayer money such as the current PotUS did. 
      The money it has comes from the members. 
      The more you put in the investment, the more you receive in profits.

       

      All the companies you gave as references are/were public
      companies over which the SEC had/have the
      job to oversee.  I even owned Enron and
      it was a total loss. Bain does not require that much oversight, the members all
      know what they are doing, unlike the average investor such as myself. If a
      partner resigns from management, he/she still receives any profits due as they
      come to the LLC.  It make take years to
      wind down the investments a partner has made, these types of companies are
      unlike coke or Johnson and Johnson, which you can sell on any day the market is
      open.  LLC are different, they have to be
      sold in house to other members and that may take time.  So Romney was going to be a partner until he
      sold out.  It matter little whose name is
      where and on what papers as long as the correct papers are filed and taxes for
      the LLC are paid when due.  I once owned
      a public partnership and was not happy with the rules of such things and sold
      my interest on the open market, which does not exist for Bain.

       

      Only a person with a wide knowledge of the markets could
      attack or defend Bain and with all due respect, it is easy to determine neither of you are
      that person.  All the liberals in my family are really nice people, there are those elsewhere who are not.

       

       

    • Hwood007 says:

      PS are and look are not the same. 

  2. Hwood007 says:

    Do you not see the difference between a private company (one without any public investment) and a public company like Johnson& Johnson or the others you listed.  The first one, like Bain, is run and owned by a select few, perhaps a few as 10, doing what ever they want without reporting to me or you. The SEC does not CARE if they cheat each other nor do you.  They have none of your money or mind. The latter is a public company, where I have money invested, perhaps even you, and reports to owners, thousands of us.

    I wonder if you have any money invested in US companies, I do, 27 of them, but I could not invest in Bain if I wanted to do so as it is private!  I suggest you pick a different topic.  You are riding a dead horse here and look stupid.

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