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William S. Lerach

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Romney's Lies and Bain's Capital

Posted: 07/27/2012 1:47 pm

As Bain Capital has said, as Gov. Romney has said and as has been confirmed by independent fact checkers multiple times, Gov. Romney left Bain Capital in February 1999 to run the Olympics and had no input on investments or management of companies after that point. -- Andrea Saul, the Romney campaign


So was Gov. Romney lying to the government when he signed filings with the Securities and Exchange committee identifying himself as the Chairman, Chief Executive Officer and sole shareholder of Bain during all of 1999, 2000 and 2001 -- intensifying the controversy over Romney's true status during those years with respect to the operations of Bain?

Or is he lying to the American people to avoid having to accept even more responsibility than is already rightly his for Bain's dubious business practices? That seems more likely.

While Gov. Romney flits around London's Olympics this week, the controversy continues at home over whether and when he supposedly "left" Bain to begin work on the Salt Lake City Winter Olympics in 2002. Romney says he did actually retire then and had no involvement in the management of Bain after that time. Thus he claims he cannot be held responsible for Bain's controversial business conduct during 1999-2001 -- the plant closings, firings and sending jobs overseas -- that so many find disturbing.

When critics pointed out the inconsistency between Romney's claimed non-involvement and the legal filings he signed as the Chairman/CEO of Bain, Romney claimed he was being accused of committing a crime by lying to the SEC. That's not true. He was being accused of telling the truth to the SEC and lying to the American people to avoid having to accept even more responsibility than is already rightly his for Bain's dubious business practices.

A corporation's bylaws (its rules of operation) establish who runs its operations by setting forth the duties of its corporate officers. Bain was incorporated in Delaware. Delaware corporate bylaws normally provide that "the Chief Executive Officer shall have general supervision and direction of the business affairs of the corporation [and] shall be responsible for corporate policy and strategy." So -- a couple questions for Romney:

  1. How do Bain's corporate bylaws describe the powers and duties of its CEO?
  2. If Romney was not the CEO of Bain during 1999-2001, who was? On what date did the Bain Board appoint that other person CEO?
  3. If during 1999-2001 someone other than Romney was Bain's CEO, why were the SEC filings not correct when filed or later corrected?

Here's an educated guess: Romney knew he was not coming back to Bain when he left for the Utah Olympics, but he was nevertheless the CEO and owned 100 percent of the company. He had a huge personal economic interest to protect. He keeps the title and the power of the CEO position so that when he finally negotiates his formal exit and his payout package, he controls the process. It was about lining his pockets, which is what has made him one of the wealthiest major party presidential candidates in the history of American politics.

At least he did not commit a felony by lying to the SEC; he was Chairman and CEO of Bain as the SEC filings he signed stated. But that means he is not telling the truth now in claiming he had no involvement in Bain's business during 1999-2001, because Bain's corporate bylaws charged him as its CEO with direction and supervision of that corporation's business, policies and strategy. The layoffs, bankruptcies, off-shorings and other reprehensible things that Bain is becoming famous for absolutely happened on his watch. When is he going to defend them?

William S. Lerach was for three decades one of the nation's leading class action attorneys specializing in corporate securities misbehavior. He lives in San Diego.

 
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07:04 PM on 08/02/2012
OK rehash of what we already knew, but it misses something critical--Bain did off shoring and out-sourcing *before* 1999! Even during the time he admits he was fully involved. He also o-s, o-s'd work as head of the Olympics!
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gevan
big dubya
02:05 AM on 07/31/2012
How much did Mitt remitt to the IRS in comparison to his tithe to the LDS? Just wondering whether God or Country ranks first for our prospective chief executive.
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notmoderate
There's always money in the banana stand
12:56 PM on 07/30/2012
Why do we even have an SEC if it has no teeth? This is the only acceptable model for the CFPB in the eyes of the GOP. These masters of the universe actually believe they're entitled to break the rules. I was at a wedding in the Hamptons this weekend and driving in the Long Island expressway was an interesting experience. EVERYone things they have the right of way and every lane is the left lane. Great wedding, though.
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12:13 AM on 07/30/2012
All the Liberal Bain crap has been debunked by every fact source on the planet, get over it quit lying about a profitable company.

Liberal business model, over pay and provide benefits not affordable. Make a product that is now so expensive it's unsellable. How long does this business last?

Is it not the goal of a business to make money or am I missing something. So a CEO should not take in all expects of a business plan and make money. Not only for investors but the employees.

If they can't be viable as is, Changes need to be made to the culture, make up of the company. People are employed and payed regularly. The company doesn't owe the individuals anymore any less. Individuals are dispensable, one leaves a new person comes in takes over does as good or a better job.

What some employees don't get is there is competition for product and services provided by any company.

Obama outsourced jobs to several foreign countries by sending tax dollars to those countries to build products which could and should have been made in the US. No uproar from the left on that issue. 29 Billion Of tax dollars sent out of the country.

In five or ten years the unions will put GM back as a bailout company. Wait until tarp runs out.
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Gestas
Mountain Man
10:22 PM on 07/29/2012
Mitt Romney..The God Father of Organized Greed.
08:08 PM on 07/29/2012
All I can say is, if Romney has nothing to hide, then why is he hiding ...

Where are his tax returns for the years after he allegedly left Bain? Why was his name still listed as the owner, sole stockholder, CEO and President of Bain 3 years after he "retroactively retired" from Bain? Why are his signatures on Bain documents after 1999, indicating that he was still part of the decision-making process?

If what happened at Bain is just the way business works, as some have suggested, then why won't Romney own up to it?

Maybe we should have paid more attention to Gingrich and Santorum when they were trying to warn us about Romney!
06:25 PM on 07/29/2012
Come off it. Mitt was Bain's carny barker. That's the extent of the quarter-billionaire's business skill set.

Just like Obamneycare was his only policy accomplishment.

Come to think of it, Willard makes Sarah look almost Presidential...
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oceanspat
I am Against Assualt Weapons in Our Neighborhoods-
05:43 PM on 07/29/2012
Ok William , Nice Touch, FF this post. I think millions of American's have stories to tell about a Bain Experience and I am sure you'll find someone that will post home that company was failing and needed to be Bain a sized--
Every company can be considered a take over target and sold off one piece at a time untill the cash ia all gone and stock is worthless. Then its loans are never repaid.
I always wondered how the Boards of all these companies let these Vultures in and why,, its Bribery and corruption, I watched it take down a company I spent 17 years at- I heard all the semi valid excuses why this need to happen. In the end the new look to the company had not changed still havVP's and new CEO , in the end no cash left and tons of DEBT- Tidewater - except with them is was 2 Equity stake partners , that bought in and installed a CEO that steered them to sell everything profitable in the company. Get rid of the 20 plus year employees to stop the pension plans,, now today they are scrambling for those 20 year employees,, me better off on the internaional market- as they say- you made your bed now sleep in it- they say Greed is good, well its because of there greed I get twice the day rate - so there is a silver lining to Bain style greed- op
03:40 PM on 07/29/2012
Learn more about the author of this story: http://en.wikipedia.org/wiki/William_Lerach. Here's an excerpt: In 2007, Lerach pled guilty to one count of obstruction of justice and began a two year prison sentence. He was disbarred in 2009. Lerach was a major Democratic donor for many years. His case and sentencing were presided over by US District Court Judge John F. Walter, nominated to the bench by President George W. Bush in 2002.
07:59 PM on 07/29/2012
And this information about the author therefore discredits the FACTS he's presented about Romney and Bain because ... ???
09:04 PM on 07/29/2012
The acts that he was charged with were not illegal when he committed them. Only when the Bush administration made them illegal was he railroaded into prison. HE WAS CONVICTED because of political forces that wanted him to not sue companies like haliburton/brown and root for profiteering in our current and past war on terror and Iraqi freedom. Mr. Lerach would have maybe been the lead Attorney for the B. Maddoff disaster!

Mr. Lerach found funds for the victims of Enron's debacle and other pensioners and investors with American technology and investment banks. In the 90s Mr. Lerach was one of the first legal minds that blew the whistle on the greed of our Banks, investment houses and all financial companies that the Republican party de-regulated! He told, then Speake, r Newt Gingrich that the de-regulation of those industries will be a financial disaster in the near future. HE WAS RIGHT!!!

Look at our economy now! Look at banks that the American taxpayer bailed out and they're getting larger and ever more powerful! We bailed them out and they won't or refuse to stimulate our economy. So, anyone can look up Wikipedia. The best way to judge Mr Lerach's motives is to read law journals and law reviews and the American public will see he works for our best interests!

Pardon W S Lerach! I want to start a committing or be part of one! (written by a true Republican not a overly religious, right wing zealot).
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Hannibal55
Misrey luvs company but company doesn't reciprocat
03:09 PM on 07/29/2012
Obama made 3 critical mistakes in regard to dealing with the Republicans that could cost him the election!

1.Inviting the Republicans to the table! Trying to be bipartisan was just dumb.

2.Squandering the goodwill that Americans felt toward the new president and their anxiety about an economy hemorrhaging jobs with a lackluster stimulus that included repugo sponsored tax cuts; a full third of the stimulus went to the wealthy as tax cuts!

3.Allowing a popular idea — that no American should have to choose between a home and medical care to be recast as a government takeover of health care!

In all fairness, hind sight is 20/20 and useless to the Democrats in the short term due to time constraints and the fact that the majority of Democrats bore the brunt of the Bush depression and are in no way able to match the BBC (Billionaire Boys Club) in campaign financing!

If one thing can be learned from hindsight it is that modern day republicans (teabags and neocons) are similar to rattle-snakes, you don't trust them, you don't pet them and you never get in bed with them!

Just saying!
04:15 AM on 07/30/2012
Although I agree with you, I do think that the President had to make the effort to be bipartisan. However, after the first few months, he should have realized that it was useless, and the only way to go was to out-play the Republicans at their own game.

Reminds me of an old parable of the wolf who agreed to carry the snake across the river. When they got to the other side, the snake bit the wolf. The dying wolf asked the snake why, and the snake replied "What did you expect? I'm a snake."
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jesocr
12:27 PM on 07/29/2012
I think the writer is correct Romney is trying to have it both ways. I think that Romney is splitting hairs and I don't think it matters. It's not like Bain changed their "successful" business model after Romney left no matter when that was. And if Bains activities are so egregious why doesn't he disinvest himself from them instead of pocketing the money? I don't think he has a personal problem with their actions just a political one.
11:32 AM on 07/29/2012
Romney is trying to own ALL the bases simultaneously and occupy whichever at his covenience at any given time, depending on how the wind blows...
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AMACHA
Getting it Straight
09:35 AM on 07/29/2012
"Paris Hilton for President! She's Richer!"
08:36 AM on 07/29/2012
" The layoffs, bankruptcies, off-shorings and other reprehensible things that Bain is becoming famous for absolutely happened on his watch. When is he going to defend them?"

So I ask...
When is it acceptable for a company to have layoffs?
When is it acceptable for a company to declare bankruptcy?
When is it acceptable for a company to to send jobs overseas?
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BeyondKen
i am a red pickup truck
11:08 AM on 07/29/2012
The American people are asking the same. Trouble is, Romney won't answer. And that is the problem.
11:19 AM on 07/29/2012
You don't have to ask Romney...it's business 101, really...it is ok to layoff when the future of a company is in jeopardy and the leaders believe that short term cuts will ultimately lead to long term growth.  If people are not layed off when they probably should be and the company dies as a result, think of all the jobs that are now lost.   Same basic answer for the other two questions...
Companies send jobs overseas in order to compete with other companies so we Americans can shop cheaply at Walmart....pretty simple concept but easy to miss if you allow yourself to get caught up in the   inflammatory rhetoric spewed by politicians and focus your blame on fricken Romney.  
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Allene Stucki
12:14 PM on 07/29/2012
Never, if you're a liberal afflicted with total ignorance about how the world actually functions.
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FredNH
free thinker
05:29 PM on 07/29/2012
Actually we are afflicted with compassion, not hate and fear.
06:27 PM on 07/29/2012
So stripping assets from a firm is OK if you have an R after your name?

OTOH, if you set your house on fire to collect the insurance (essentially the same as what Bain Capital did), you go to jail?
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Equinator
Shovels manure daily
08:15 AM on 07/29/2012
If you own 100% of a company, get 100% of the profits, are listed in SEC filings as the president and CEO, how in the world can you not accept the responsibility for the actions of the company?

If Romney truly believes that the the actions of Bain were immoral or in someway wrong, is it not his responsibility to at least try to make it right? After all he got 100% of the profits which were substantial.

The only conclusion is that Romney is either lying or forsaking his personal responsibility or both. I personally believe that Romney is lying and that he is willing to profit from the misery and destruction of other people's lives.

Not the kind of man I want as president of the United States.