M2RB: The Beach Boys
Wipin' out wipe out
Wipin' out wipe out
Hey, watch out!
Here we go, here go
Wah wah wah
Wipin' out wipe out
"...All these attacks [by Team Obama] may be hurting the president’s brand a
little bit....our supporters
went a little bit too far with the felony business.”
- Governor Ed Rendell and Former Chairman of the Democratic National Committee
Why does it matter when Mitt Romney left Bain Capital?
Millions
of dollars of attack ads by the Obama campaign are hanging in the
balance. If Romney left Bain in February 1999, when he departed to run
the Olympics, then a number of business deals that went sour (such as KB Toys)
can’t be counted as part of Romney’s tenure. If he actually left in
2002, as the Obama campaign alleges, then those deals are fair game.
But now the Boston Globe has raised the issue again.
The story seems to hinge on a quote from a former Securities and
Exchange Commission member, which would have more credibility if the
Globe had disclosed she was a regular contributor to Democrats. (Interestingly, “The Real Romney,”
a book on the former Massachusetts governor, by Boston Globe reporters,
states clearly that he left Bain when he went to run the Olympics and
details the turmoil that ensued when he suddenly quit, nearly breaking
up the partnership)
We’re considering whether to once again take a
deeper look at this, though it really feels like Groundhog Day again.
There appears to be some confusion about how partnerships are structured
and managed, or what SEC documents mean. (Just because you are listed
as an owner of shares does not mean you have a managerial role.)
To
accept some of the claims, one would have to believe that Romney, with
the advice of his lawyers, lied on government documents and committed a
criminal offense. Moreover, you would have to assume he willingly gave
up his share to a few years of retirement earnings — potentially worth
millions of dollars — so he could say his retirement started in 1999.
UPDATE: Fortune obtained the offering documents
for a Bain Capital Fund circulating in June 2000, as well as a fund in
2001. None of the documents show that Romney was listed as being among
the “key investment professionals.” 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.”
For interested readers, below is a summary of what we, FactCheck.org and Fortune magazine have previously concluded.
A 2002 statement he filed with the Massachusetts State Ethics Commission
on his financial interests lists ownership of various Bain entities,
some of which appear to intersect with the funds that invested in KB
Toys. The document says that Romney is “a passive, limited partner
[with] no management capacity” in many of these funds.
In the
Massachusetts document, Romney is also listed as 100 percent owner of
“Bain Capital Inc.” But there is less than meets the eye here. Bain
Capital Inc. was the management firm, which was paid a management fee to
run the funds and actually made virtually no profit, since it existed
to pay salaries and expenses. After Romney formally left Bain in 2001, a
new entity called “Bain Capital LLC” took over the management function.
By
virtually all accounts, Romney was focused on the Olympics in the
1999-2002 period. Yet because Romney had not legally separated from
Bain, his name is littered across Securities and Exchange Commission
filings concerning Bain Capital deals during this period. The crazy
quilt of private-equity structures, in some ways, makes his ownership
appear even more ominous, as the filings list hundreds of thousands of
shares controlled by Romney.
Even so, it is a real stretch to
claim that Romney — himself — “closed” these stores. No evidence has
emerged that he was involved in the KB Toys transaction. Indeed, when
creditors sued over the dividend payment, they named six Bain-controlled
entities and three Bain executives who had served on the board of KB
Holdings.
Given that the plaintiffs’ lawyers will try to list as
many defendants as possible to try to force a settlement, one can be
certain Romney would have been named if there had been any hint of his
involvement. But he was not named, despite the SEC filings suggesting
his control of the shares.
In other words, creditors apparently had determined Romney was only a passive investor.
If the Obama campaign were correct, Romney would be
guilty of a federal felony by certifying on federal financial disclosure
forms that he left active management of Bain Capital in February 1999….
And
after reviewing evidence cited by the Obama campaign, we reaffirm our
conclusion that Romney left the helm of Bain Capital when he took a
leave of absence in 1999 to run the Salt Lake City Organizing Committee
for the 2002 Winter Olympics – as he has said repeatedly — and never
returned to active management.
The Obama campaign’s recent ads thus
mislead when they point to investments made by Bain, as well as
management decisions made by companies in which Bain invested, after
that time.
What does the Obama campaign have in rebuttal? Very little, and none of it convincing in our judgment.
Much
of the Obama campaign’s letter is devoted to quoting portions of
documents filed with the Securities and Exchange Commission. In summary,
the letter states there are “at least 63 filings with that agency after
March 1, 1999 that list various Bain entities and describe them as
‘wholly owned by W. Mitt Romney.’” That’s true, but not relevant.
We
have never disputed that Romney remained the owner of Bain while he was
running the Olympics committee. The issue always has been, who was
running Bain?
Nothing in the SEC documents contradicts what Romney has
certified as true.
On that point, the Obama campaign cites
snippets of a few news clippings to make a case that Romney was still a
part-time manager of Bain after he left to run the Olympics. But a close
reading shows these news accounts don’t contradict Romney either.
Remember, Romney did not leave Bain Capital as part of a
long-term, planned succession process. Instead, his departure was fairly
sudden — borne of a desire to help salvage an Olympic Games that was
$1.4 billion in the hole and tarred by a massive bribery scandal. The
very first reports of Romney being considered for the Salt Lake City job
were on Feb. 2, 1999. Just nine days later, he officially took over.
Not
surprisingly, Bain Capital hadn’t worked out all the details of
Romney’s departure. It eventually would discard the CEO position in
favor of a horizontal management committee made up of numerous partners,
and provide Romney with a golden parachute that included limited
partnership interests in all Bain-related funds raised through 2009
(including the option for Romney to invest additional monies). But none
of that was in place when Romney took the Salt Lake City job.
Moreover,
unwinding a private equity firm’s ownership structure is extremely
complicated. The “firm” itself is largely a legal construct of
convenience, since it doesn’t pay salaries, make investments or do much
of anything else. Instead, what matters are the individual funds.
In
the case of Bain Capital’s funds, it’s reasonable to assume that Romney
was considered a “key man,” meaning that each fund’s limited partners
could have voted to end the fund’s investment period — or take over fund
management themselves — if a super-majority felt it prudent. But that
didn’t happen, and Bain saw no reason to expend massive administrative
effort to amend existing funds. Instead, it asked Romney to sign
documents when necessary, and made the managerial/ownership changes on
new funds going forward….
The part about lying to the SEC is
absurd, since the SEC doesn’t require an owner to be the operational
decision-maker (Romney delegated such responsibilities, as is his
right).
UPDATE:
As lawyer and blogger John Hinderaker notes, those claiming that Romney committed any crimes or perpetrated fraud in 1999 is simply ignorant of the law.
…the fact that Romney was a “controlling person” for purposes of securities laws has nothing to do with whether he was running the company; nor is his status as a shareholder or director -- Romney owned the company until a buyout was completed in 2002 -- relevant. And whatever titles may have been recited in the filings shed no light on whether he made the investment decisions that the Obama administration now wants to criticize.
Sadly, while The Times keeps spinning Obama's narrative for him, they are allowing the truth to go unreported.
Related Reading:
3 Pinocchios: Do Bain SEC Documents Suggest Mitt Romney Is A Criminal?
Wipe Out - Beach Boys
Heheheheheheee Wipe oooout!
Wipin' out wipe out
Wipin' out wipe out
Wah wah wah
Wipin' out wipe out
Wipin' out wipe out
Wah wah wah
Wipin' out wipe out
Wipin' out wipe out
Wah wah wah
Wipin' out wipe out
Wipin' out wipe out
Hey watch out
Here we go here go
Wah wah wah
Wipin' out wipe out
For three years straight we toured the nation
When we get through we needed a vacation
We wanted to party and get a little rest
So we packed our things and headed out west
We got our surfboards took the beach-ball out
Jumped in a limousine ready to "Wipeout"
Now we're ready to go
Here we go here we go
One one two one two one two hit it D
Here we go
We got to California I said headed for the beach
There were girls galore all within our reach
There was sand and sun and lots of fun
But when we get there the fun really begun
So we cut on the box and started to shout
It was the Beach Boys rockin' huh huh the "Wipeout"
Oo oo
Ooo ooo
Oo
Oo
Oo oo
Wa-ah-ah-ah wawawa-ooh-oo
Wa-ah-ah-ah wawawa-ooh-oo
That's it, that that that's it dit dit dit dit dit
Hit it D
The sun went down and the night began
We was rapping for the people cold chillin' boppin'
We was partying hard making lots of noise
When around the corner came the real Beach Boys
So we all jumped up and started to shout
"Let's all sing the song called the 'Wipeout'"
Wipin' out wipe out
Wipin' out wipe out
Wah wah wah
Wipin' out wipe out
Wipin' out wipe out
Wah wah wah
Wipin' out wipe out
Wipin' out wipe out
Wah wah wah
Wipin' out wipe out
Wipin' out wipe out
Hey watch out
Wah wah wah
Wipin' out wipe out
Stay go stay go stay go
Bring it out now
Wipin' out wipe out
Wipin' out wipe out
Wah wah wah
Wipin' out wipe out
Wipin' out wipe out
Wah wah wah
Wipin' out wipe out
Wipin' out wipe out
Wah wah wah
Wipin' out wipe out
Wipin' out wipe out
Hey watch out
Wah wah wah
Wipin' out wipe out
Wipin' out wipe out
Wah wah wah
Wipin' out wipe out
Wipin' out wipe out
Wah wah wah
Wipin' out wipe out
Wipin' out wipe out
Wah wah wah
Wipin' out wipe out
Wipin' out wipe out
Hey watch out
Here we go here go
Wah wah wah
Wipin' out wipe out
For three years straight we toured the nation
When we get through we needed a vacation
We wanted to party and get a little rest
So we packed our things and headed out west
We got our surfboards took the beach-ball out
Jumped in a limousine ready to "Wipeout"
Now we're ready to go
Here we go here we go
One one two one two one two hit it D
Here we go
We got to California I said headed for the beach
There were girls galore all within our reach
There was sand and sun and lots of fun
But when we get there the fun really begun
So we cut on the box and started to shout
It was the Beach Boys rockin' huh huh the "Wipeout"
Oo oo
Ooo ooo
Oo
Oo
Oo oo
Wa-ah-ah-ah wawawa-ooh-oo
Wa-ah-ah-ah wawawa-ooh-oo
That's it, that that that's it dit dit dit dit dit
Hit it D
The sun went down and the night began
We was rapping for the people cold chillin' boppin'
We was partying hard making lots of noise
When around the corner came the real Beach Boys
So we all jumped up and started to shout
"Let's all sing the song called the 'Wipeout'"
Wipin' out wipe out
Wipin' out wipe out
Wah wah wah
Wipin' out wipe out
Wipin' out wipe out
Wah wah wah
Wipin' out wipe out
Wipin' out wipe out
Wah wah wah
Wipin' out wipe out
Wipin' out wipe out
Hey watch out
Wah wah wah
Wipin' out wipe out
Stay go stay go stay go
Bring it out now
Wipin' out wipe out
Wipin' out wipe out
Wah wah wah
Wipin' out wipe out
Wipin' out wipe out
Wah wah wah
Wipin' out wipe out
Wipin' out wipe out
Wah wah wah
Wipin' out wipe out
Wipin' out wipe out
Hey watch out
Wah wah wah
Wipin' out wipe out
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