M2RB: Beastie Boyz
D. pulled me over said, "Hide your gold,
The girl is crafty like ice is cold!"
The girl is crafty - she knows all the moves
I started playing records - she knew all the grooves
He thought she was a thief - and D. was right
But I just figured she'd spend the night
When I woke up late in the afternoon
The girl is crafty like ice is cold!"
The girl is crafty - she knows all the moves
I started playing records - she knew all the grooves
He thought she was a thief - and D. was right
But I just figured she'd spend the night
When I woke up late in the afternoon
She had taken all the things from inside his room
I found myself naked in the middle of the floor
She had taken the bed and the chest of drawers
The mirror, the TV, the guitar cord
My remote control and my old skateboard
She robbed us blind - she took all we owned
And the boys blamed me for bringing her home
"Romney and Bain claim that he was not involved with Bain, but Bain
and its portfolio companies in their required filings under the
Securities Exchange Act continuously certified to the Securities and
Exchange Commission say precisely the opposite — asserting without
qualification that he was a controlling person, fully in charge of Bain,
under the Federal securities law. Under normal circumstances, the
question of the truth of this representation would result in an
investigation by the SEC into possible criminal, as well as civil,
violations of the law."
— Robert Bauer, Obama campaign counsel, 13 July 2012
There is a journalistic convention that appears to place great
weight on “SEC documents.” But these are public filings by companies,
which usually means there are not great secrets hidden in them. The Fact
Checker, in an earlier life covering Wall Street, spent many hours
looking for jewels in SEC filings.
As we wrote yesterday,
we are standing with our assessment that Mitt Romney left the helm of
Bain Capital in 1999, when he left to run the Salt Lake City Olympics.
The date is important because some questionable investments by Bain took
place between 1999 and 2002, when he ran for governor. But a Boston Globe article
on Thursday raised new questions about that timeline, citing SEC
filings, and the Obama campaign jumped to take advantage of it.
Despite the furor, we did not see much new in the Globe article. We had examined many SEC documents
related to Romney and Bain in January, and concluded that much of the
language saying Romney was “sole stockholder, chairman of the board,
chief executive officer, and president” was boilerplate that did not
reveal whether he was actually managing Bain at the time. (For instance,
there is no standard definition of a “chief executive,” securities law
experts say, and there is no requirement for anyone to have any
responsibilities even if they have that title.)
The one thing
new we saw in the Globe story was the assertion that “Romney’s state
financial disclosure forms indicate he earned at least $100,000 as a
Bain ‘executive’ in 2001 and 2002, separate from investment
earnings.” But then we realized we had already reviewed those documents
in January. The 2001 form describes him as a “former executive” (see page 1 of form A-5) — the campaign says this was retirement pay — but the 2002 form says “executive.” So either you believe he suddenly rejoined the firm, after leaving it, or someone made a typo.
Romney’s
sudden departure from Bain had left the partnership in flux, in fact
almost breaking up the firm, and a final resolution was not reached
until he ended his Olympic sojourn and decided to run for governor. At
that point, he signed retirement papers that set his departure date as
February 1999, the month he left for the Olympics.
Fortune magazine on Thursday reported that it had obtained the offering documents
for Bain Capital funds circulating in 2000 and 2001. None of the
documents show that Romney was listed as being among the “key investment
professionals” who would manage the money. As Fortune put it, “the
contemporaneous Bain documents show that Romney was indeed telling the
truth about no longer having operational input at Bain — which, one
should note, is different from no longer having legal or financial ties
to the firm.”
Let’s also not forget that Massachusetts Democrats
tried to keep Romney off the ballot in the 2002 governor’s race on the
grounds that he had been living and working in Utah, even paying taxes
there, and thus had failed to meet the requirement to have lived seven
consecutive years in Massachusetts. The effort failed, but not after Democrats waged an expensive, months’ long battle to prove he worked so much on the Olympics that he was in effect a citizen of Utah. (More on this below.)
Still, the Obama campaign has raised a very serious charge of potential criminal behavior. Does it have much credibility?
The Facts
One of the SEC documents in question
that has received attention in recent days is a Form 13D that was
posted by Talking Points Memo. A Form13D is filed when an investor or
investment group announces that it has acquired more than five percent
of the company.
In this case, Bain had
merged a juice producer it had bought in 1998 — Fresh Samantha — with a
rival called Odwalla. In return, a Bain investment fund received
3,612,122 shares in the new company. When Odwalla was sold to Coca-Cola
in 2001, the Bain investment group made $55 million, more than four
times its initial investment.
Romney is not mentioned in the filing Odwalla made at the time of the sale;
instead, two Bain executives who sat on the board are listed. Romney is
listed in the documents involving the investment fund that made the
filing, Bain Capital Fund VI, L.P., which was formed prior to his
departure for the Olympics.
We consulted with securities law
experts, with many years of experience with these forms.
One expert
examined this document at our request. He suspected that someone had
simply duplicated a filing that had been made many times before, though
he acknowledged, “it looks inartful in retrospect.” He pointed out that
the titles are basically meaningless, that someone can be listed as a
chief executive and actually have no responsibilities whatsoever.
The
SEC can bring civil charges for discrepancies in filing 13D documents,
but as far as we can tell none has ever been brought for someone listing
a misleading title. The more common 13D investigation involves a
situation in which investors secretly act in collusion to acquire more
than five percent of the stock, but fail to disclose that — or if
investors do not make a timely disclosure that their holdings have
fallen below five percent.
Moreover, there is a five-year statue
of limitations, though the clock could start from when the SEC becomes
aware of the matter. But 12 years have passed since the filing in
question. Bringing in a federal prosecutor to examine criminal charges
is even a bigger stretch.
Romney often did not sign the SEC
documents. In the Odwalla case, for instance, the filing was signed by
someone named Mark E. Nunnelly, a Bain managing director.
However, we have identified at least six filings that Romney did sign during this period: a April 13,, 1999 13D filing by Pirod Holdings regarding an investment in Rohn Industries; a Jan. 3, 2000 13D filing by VMM Merger Corp. regarding an investment in VDI MultiMedia; a Feb. 14, 2000 13G filing by Bain Capital Fund IV regarding Wesley Jessen Visioncare; a Feb. 13, 2001 13G filing by Bain Capital Fund VI regarding Integrated Circuit Systems; a Feb. 14, 2001 13G filing by Bain Capital Fund VI regarding ChipPAC; and a November 12, 1999 13G filing (first reported by Mother Jones) by Bain Capital Fund VI regarding Stericycle.
These few filings may just represent the winding down of affairs. Or
some might think there is something more nerfarious going on. But,
remember, when Romney decided to run for governor in 2002, he received a
retirement package that was dated Feb., 1999. (In effect, as of that
date, he became an investor in Bain, not a partner.) If he had been
working hard on these transactions, it would be strange for him to not
demand payment for his services.
We readily admit that there is
grey area about Romney’s involvement with Bain in the 1999-2002 period,
because his future post-Olympics role had not been settled and the
future of Bain Capital was in flux. Some have seized on the SEC
documents as evidence, but we think there are two stronger pieces of
evidence that trump these random filings.
Indeed, if someone
wanted to make a criminal case, why quibble with ancient SEC documents?
In 2011, Romney, as a presidential candidate, filed a public financial disclosure form, under pain of perjury, that stated:
“Mr. Romney retired from Bain Capital on February 11, 1999 to head the Salt Lake Organizing Committee. Since February 11, 1999, Mr. Romney has not had any active role with any Bain Capital entity and has not been involved in the operations of any Bain Capital entity in any way.”
You can see Romney’s signature, on the first page, in
which he states: “I certify that statements I have made on this form
and all attached schedules are true, complete and correct to the best of
my knowledge.” If Romney lied on this form, that would be a felony.
That
filing would seem to trump these SEC documents. Moreover, there is
another document — the 2002 Massachusetts Ballot Law Commission report
that certified that Romney could run for governor. The findings in this
report were the result of weeks of testimony and investigation. We have
embedded the report below.
The report included these findings of fact, adopted unanimously by the Commission, made up of representatives of both parties:
“The Respondent was employed in Massachusetts from 1975 until 1999.”
“On February 11, 1999, the Respondent went to Utah to take the position of Chief Executive Officer (CEO) for the Salt Lake Organizing Committee of the 2002 Winter Olympic Games, a non-profit organization burdened by scandal and fiscal crisis.”
“On or about February 11, 1999, the Respondent became an employee of the Salt Lake Organizing Committee for a fixed term of three years. While so employed, the Respondent worked, on average, over 12 hours per day, 6 days per week.”
The report also stated: “The Respondent
remained actively employed at Bain Capital until January 1, 1999, at
which time he left to take the position of President and Chief Executive
Officer of the Salt Lake Organizing Committee for the 2002 Winter
Olympic Games.”
The report showed that Romney remained on the
board of three companies, two of which had Bain connections — Staples
and LifeLike Co. The report said he returned to Massachusetts “to attend
meetings at Staples,” but does not mention that he attended any
meetings at Bain, even as it provides a long list of social events that
brought him back to Massachusetts. One would think that if Romney was
trying to prove continued links to Massachusetts, he would have
emphasized he kept doing work for Bain.
In other words, an
official state investigation concluded that Romney no longer worked at
Bain as of early 1999, and also was working “12 hours a day, six days a
week” on the Olympics from 1999 to 2002. That also would seem to trump
the SEC filings.
Bauer, in an email, provided this statement:
“Every 1934 Act filing is subject to the requirement that it be truthful, and are subject to potential civil and criminal charges. For example, Form 13D is intended to alert investors that a person or persons has a 5% position and what their intentions may be. Whether or not Mitt Romney will still active in Bain would be without doubt a material fact that an investor would want to know. No securities lawyer would say otherwise. Civil charges can be solely for the purpose of setting the record straight, while criminal referral by the SEC to the Department of Justice is typically for cases where someone knowingly and intentionally filed a false 13D. Whether a case is civil or criminal depends on the facts developed through investigation.”
The Pinocchio Test
The Obama campaign is blowing smoke here.We realize that
Bauer gets to the word “criminal” by mentioning “investigation,” but
that distinction might be lost on most listeners.
Meanwhile, the
weight of evidence suggests that Romney did in fact end active
management of Bain in 1999. He stated that in a federal disclosure form
he signed, under threat of criminal penalties. He said he was a “former
employee” in a state disclosure form. A state commission concluded 10
years ago that he did, indeed, leave Bain in 1999. Investors in Bain
funds were told he was not part of the management team.
The SEC
documents, especially the ones Romney signed, do raise some
questions. One can certainly argue that because Romney did not fully
extricate himself from Bain till after his Olympic sojourn ended, he
should bear some responsibility for what happened in that period. But
that is an entirely different matter than suggesting that he is a
potential criminal. It is more of a PR problem, which the Obama campaign
is trying to exploit to build a larger case that Romney is secretive.
We were tempted to award this claim Four Pinocchios, but the documents with his signature leave some room for inquiry.
Still,
if the Obama campaign wants to put its money where its mouth is, it
should immediately lodge a complaint about Romney’s financial disclosure
form, filed just last year, rather than try to mislead people about
potential violations in relatively unimportant SEC documents.
Three Pinocchios
Obama Campaign Jumps The Shark! - Mitt Romney A Felon!!!
She's Crafty - Beastie Boyz
Well this girl came up to me - she says she's new in town
But the crew been said they seen her around
I thought they were right but I didn't wanna know
The girlie was Def and she wanted to go
I think her name is Lucy but they all call Loose
I think I thought I seen her on eighth and forty-deuce
The next think she said, "My place or yours?
Let's kick some bass behind closed doors!"
We got into the cab - the cab driver said
He recognized my girlie from the back of her head
He said a little something about tip to base
So I made him stop the cab to get out of the place
I shouldn't have looked back man I'll always regret it
Something's going on and I'll probably never get it
She was crying like a baby - stupid dumb
It's just too bad that girl's a bum
She's crafty - she's gets around
She's crafty - she's always down
She's crafty - she's got a gripe
She's crafty - and she's just my type
She's crafty
I spent my last dollar to by a Sabrett
When I seen this girl I could never forget
Now I like nothing better than a pretty girl smile
And I haven't seen a smile that pretty in a while
The girl came up to me she said she loved the show
Asked her to come home and she couldn't say, "No!"
We got the crib - there's Adam and D.
We didn't say a word - they just stared at me
I said, "I don't know her just met her tonight."
And Adrock started hiding everything in sight
D. pulled me over said, "Hide your gold,
The girl is crafty like ice is cold!"
The girl is crafty - she knows all the moves
I started playing records - she knew all the grooves
He thought she was a thief - and D. was right
But I just figured she'd spend the night
When I woke up late in the afternoon
She had taken all the things from inside his room
I found myself naked in the middle of the floor
She had taken the bed and the chest of drawers
The mirror, the TV, the guitar cord
My remote control and my old skateboard
She robbed us blind - she took all we owned
And the boys blamed me for bringing her home
[repeat chorus]
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