Updated | 1:36 p.m. A former partner at Bain Capital, who worked at the firm when Republican presidential candidate Mitt Romney was in charge, acknowledged on Sunday that Romney was “legally” the chief executive officer and sole owner of Bain Capital until 2002, not 1999 as Romney has previously stated, and said that Romney was engaged in a “complicated set of negotiations” over his exit pay for at least two years after he says he left the firm.
“Mitt’s names were on the documents as the chief executive and sole owner of the company,” Ed Conard, who served as a partner at Bain Capital from 1993 to 2007, said in an exclusive interview with Up w/ Chris Hayes. Asked again if Romney was chief executive officer of Bain Capital from 1999 to 2002, Conard said, “Legally, on documents, I suppose, yes.”
Despite Romney's statements that he left in 1999, Conard's new remarks suggest that, in fact, Romney's continued ownership of the firm enabled him to negotiate a better exit deal. "We had to negotiate with Mitt because he was an owner of the firm," Conard said.
The legal transfer of ownership dragged on for three years after Romney’s informal departure to run the Olympics in Salt Lake City, Conard said, because Romney was aggressively negotiating his retirement package and compensation with executives and lawyers at the company.
“He’d created a lot of franchise value, and we were going to pay him for that,” Conard said, adding: “We had a very complicated set of negotiations that took us about two years for us to unwind. During that time a management committee ran the firm, and we could hardly get Mitt to come back to negotiate the terms of his departure because he was working so hard on the Olympics.”
Asked if Romney was driving a hard bargain during the negotiations, Conard said, “In part, yes, of course.” Romney legally remained the CEO and sole owner of Bain Capital until 2002, Conard added, because he was intensively negotiating his exit deal with the partners at the firm. Conard summed up Romney’s position this way: “'I created an incredibly valuable firm that’s making all you guys rich. You owe me.' That’s the negotiation.”
Romney has previously stated on financial disclosure documents that he “retired” from Bain Capital in February 1999. But Securities and Exchange Commission filings as well as a raft of other documents unearthed in the last two weeks by Talking Points Memo, Mother Jones, the Boston Globe and others list Romney as the “chief executive officer, president and managing director” of Bain Capital until 2002. Romney himself testified that he attended board meetings of companies Bain Capital had invested in after February 1999, according to the Huffington Post.
The discrepancies are important because Bain Capital laid off hundreds of American workers and closed down several companies, such as GST Steel in Kansas City in 2001, during the period in question, all while recouping large profits for its partners and investors, according to reports by The Wall Street Journal, Bloomberg and others. Romney has sought to distance himself from those deals by saying he was no longer in charge of the company at the time.
“They said, 'Oh, gosh, Governor Romney at Bain Capital closed down a steel factory,’’” Romney said of an Obama campaign ad about the GST Steel closing in an interview with the website HotAir.com in May. “But their problem, of course, is that the steel factory closed two years after I left Bain Capital, was no longer there. So that's hardly something that's on my watch.”
Asked whether Romney, as the legal president of the company between 1999 and 2002, could have ordered executives at Bain Capital at the time to put a stop to factory closures such as GST Steel, Conard said yes: “You’d have to presume that he was aware of it, yes. I don’t think he would have been aware of it.”
Asked if the factory closures and lay-offs that occurred between 1999 and 2002 were characteristic of Bain Capital’s record before 1999, Conard said, “I believe that’s true, yes. I think that Bain Capital does what Bain Capital does, which is try to make companies stronger and grow them faster.”
Conard also said that he did not believe Romney was “ashamed” of any part of Bain Capital’s record. “You say ashamed, I see great pride,” Conard said of Romney's position on Bain Capital's entire record. He added that he believed Romney would embrace Bain Capital’s record rather than try to distance himself from it once the campaign intensifies in the fall. “When the debate really starts, in August, September and October, we’ll see. I think he’ll own it.”
Conard contended that, despite Romney’s legal status as CEO and sole owner of Bain Capital on federal regulatory documents filed with the SEC, a “management committee” oversaw the company’s day-to-day operations after Romney left in 1999. According to former Securities and Exchange Commission officials, however, representing Romney as the CEO of the company when he was no longer in charge would have been misleading to both federal regulators and investors.
“If the information is not correct then investors are potentially being materially misled,” Edward Siedle, a securities lawyer formerly with the SEC’s Division of Investment Management, said in a telephone interview Saturday. “The filings are supposed to require material disclosure. I mean, these aren’t pointless forms.”
Siedle added that both investors and federal regulators rely on timely and accurate filings for up-to-date information about a financial company’s operations, and that the officers listed on the filings should be considered responsible for the company’s actions. “All those designations indicate that he had significant responsibility at the firm,” Siedle said of Romney. “There’s a reason he was listed as president and CEO all those years.”
Sal Gentile (@salgentile) is segment & digital producer for Up w/ Chris Hayes.