POLITICS
07/12/2012 09:24 pm ET | Updated Jul 12, 2012

Mitt Romney Tax Returns Are True Target Of Obama Campaign Attacks

WASHINGTON -- Top officials for President Barack Obama's campaign made a flurry of accusations against Mitt Romney on Thursday regarding his career at private equity firm Bain Capital a decade ago.

Romney, they said, may have lied to federal regulators about when he stopped working for Bain. But, even if he did tell the truth, they argued, he remained legally responsible for decisions made at the firm after he reportedly left. The attacks took some effort to untangle. But the end game of the strategy is clear: it allows the Obama campaign to renew calls that the Republican presidential nominee release his tax returns.

"This could all be cleared up if they didn't have anything to hide, like releasing their tax returns, or by releasing Mitt Romney's tax returns, rather," said Stephanie Cutter, Obama's deputy campaign manager.

The Obama campaign has recently made the push for Romney to release more than one year of personal income tax returns a central part of its message. Romney's father, George, the former governor of Michigan, released 12 years of returns when he ran for president in 1968. Obama himself has released 12 years of returns.

But Sen. John McCain (R-Ariz.), released only two years of returns in 2008, which Romney will match when he releases his 2011 returns in October after receiving a six-month extension.

The multiple accusations and questions by the Obama campaign Thursday were simply part of the overall goal: focus on the tax returns to help drive the narrative that Romney is a "corporate raider" who can't be trusted.

Romney might have lied to federal regulators by saying he left private equity in 1999 to run the 2002 Olympics, the Obama advisers said. But even if Romney didn't lie or mislead, they argued, he's still on the hook, legally, for the decisions Bain made during that period that the campaign claims sent some U.S. jobs overseas.

"He was responsible for everything, legally responsible, for everything that happened during that period: every decision, every investment," said Obama campaign spokesman Ben LaBolt.

The focus on Romney's legal responsibility for Bain decisions during 1999 to 2002 is the Obama campaign's out.

The Obama campaign is running TV commercials that accuse Romney of outsourcing jobs overseas during his time at Bain, and the president himself has called Romney an "outsourcing pioneer." But multiple fact checkers have said the Obama campaign's claims are false, and that any jobs at Bain-owned companies that went overseas –- or at least the examples offered by the Obama campaign –- occurred after Romney left Bain in 1999.

By focusing on the 1999 to 2002 period, the campaign can pivot to argue that Romney is legally responsible for decisions at that time -- even if it is a quite different claim than saying Romney personally managed and oversaw business decisions to take jobs away from Americans and give them to foreign workers in order to maximize profits.

There is plenty of evidence that Romney spent most of his time from February 1999 to February 2002 overseeing the preparations for the 2002 Winter Olympics in Salt Lake City.

Regarding Romney's legal liability, the Washington Post found that when creditors sued Bain Capital for dividend payments during the 1999 to 2002 time period, they did not name Romney in their suit.

Evidence definitively proving that Romney was involved in Bain's operations during this time has yet to emerge, though Obama campaign attorney Bob Bauer hinted to reporters that it might surface soon.

"I would stay very much tuned on that," Bauer said.

The Obama campaign has pointed to federal disclosure forms filed by Romney with the Securities and Exchange Commission for that 1999 to 2002 period which list him as the "sole shareholder, sole director, Chief Executive Officer and President" at Bain.

Other federal disclosure forms, filed by Bain Capital in 2000, list Romney along with 12 other people as managing directors of Bain Capital. Romney, along with the dozen other individuals, are listed as having their "principal occupation" at Bain.

Bauer, a former White House counsel for Obama, said that the 2000 and 2001 SEC filings listing Romney as Bain's "sole shareholder" contradict the assertion in Romney's August 2011 filings that he "retired" from Bain in 1999 and did not have "any active role with any Bain Capital entity and has not been involved in the operations of any Bain Capital entity in any way."

"If in fact he now claims that he was in fact not active with the company, he was not the controlling person, as it is described here, that means these statements [in the 2000 and 2001 SEC filings] are false," Bauer said.

Bauer indicated that there could be legal consequences "for the controlling person of this sort of potential misrepresentation."

"And frankly on this record it appears by his own words absolutely it's a representation because he's now saying none of this matters, none of this was true," Bauer said. "[It's] very, very serious, and in the normal course would subject somebody in this position to every manner of investigation, with all the consequences you can imagine that would follow."

Cutter raised the possibility that the GOP's presidential nominee might be guilty of a felony crime.

"Either Mitt Romney, through his own words and his own signature, was misrepresenting his position at Bain to the SEC, which is a felony," Cutter said, "or he was misrepresenting his position at Bain to the American people to avoid responsibility for some of the consequences of his investments."

Romney's campaign manager, Matt Rhoades, issued a strongly worded statement in response.

“President Obama’s campaign hit a new low today when one of its senior advisers made a reckless and unsubstantiated charge to reporters about Mitt Romney that was so over the top that it calls into question the integrity of their entire campaign," Rhoades said in a statement emailed to reporters.

"President Obama ought to apologize for the out-of-control behavior of his staff, which demeans the office he holds. Campaigns are supposed to be hard-fought, but statements like those made by Stephanie Cutter belittle the process and the candidate on whose behalf she works.”

The Obama campaign did not back down from the felony talk after news outlets first reported Cutter's comments.

"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," Bauer, the campaign attorney, said in an e-mailed statement. "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."

The Huffington Post reported Thursday evening that in 2002, Romney told the Massachusetts State Ballot Law Commission that during his time running the Olympics, he sat on the board of LifeLike Corporation, a company that Bain invested in in 1996, and owned part of through 2001. While that would not have constituted involvement in day-to-day decision making at Bain, it would seem to contradict Romney's claim not to have been involved in any "Bain entity" during that time.

But Bain Capital spokesman Charlyn Lusk backed up Romney's story.

"Mitt Romney left Bain Capital in February 1999 to run the Olympics and has had absolutely no involvement with the management or investment activities of the firm or with any of its portfolio companies since the day of his departure," Lusk said in a statement e-mailed to reporters. "Due to the sudden nature of Mr. Romney's departure, he remained the sole stockholder for a time while formal ownership was being documented and transferred to the group of partners who took over management of the firm in 1999. Accordingly, Mr. Romney was reported in various capacities on SEC filings during this period."

The Washington Post's Glenn Kessler noted that "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," Kessler wrote.

If Bauer's claim to have other information showing Romney was involved in daily management of Bain decisions proves true, that would change the conversation. But for now, it is a tit-for-tat. The Republican National Committee fired back this week that millions of taxpayer funds in the 2009 stimulus paid for wind farms built with turbines that were manufactured overseas, and the Romney campaign followed up with an ad calling Obama a liar -- for calling Romney an outsourcer.

And as the two campaigns bickered over an issue that is politically significant -- largely because even accusations of outsourcing push the buttons blue-collar voters in Rust Belt swing states -- nearly 13 million Americans remained out of work, with many more having left the labor force, and the national debt closed in on $16 trillion.

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