Mojo - July 2012

What We Know About Romney and Bain, Explained

| Fri Jul. 13, 2012 3:00 PM EDT

The battle over Mitt Romney's role at Bain and whether he was actually running the company after he claims to have left continues. Here's what we know about the GOP presidential candidate's involvement with the private equity firm:

Romney claims he left Bain in 1999. 

  • In his 2011 federal financial disclosure documents, Romney asserted that he left Bain in 1999 to run the Olympics and "had not been involved in the operations of any Bain Capital Entity in any way" since then.
  • Bain released a statement to Politico saying that Romney's story is true:

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. 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."

Official documents and other sources contradict Romney and Bain's account. 

Among them:

  • Six SEC filings announcing Bain's acquisition of other companies (collected here by the Washington Post's Glenn Kessler) that are signed by Mitt Romney.
  • Those SEC filings, among them those first highlighted by my Mother Jones colleague David Corn and Talking Points Memo's Josh Marshall, list Romney's "principal occupation" as "managing director of Bain, Inc," as well as "chairman" and "chief executive officer."
  • As David reported on July 2, a press release issued on Bain's behalf in 1999 describes Romney as the CEO of Bain and says he's on a "a part-time leave of absence to head the Salt Lake City Olympic Committee."
  • Sworn testimony uncovered by Huffington Post's Ryan Grim and Jason Cherkis in which Romney states that "[T]here were a number of social trips and business trips that brought me back to Massachusetts, board meetings, Thanksgiving and so forth," after 1999 and before 2003. Cherkis and Grim report that during this time, Romney continued to sit on the boards of Staples and LifeLike, a doll-making company—firms that Bain had invested in. 
  • As Grim and Cherkis reported, Romney's lawyer said in 2002 that Romney's "private and public ties to the Commonwealth of Massachusetts" continued "unabated" during his time running the Olympics.
  • Romney told the Globe in 1999 that he would "stay on as a part-timer with Bain, providing input on investment and key personnel decisions." As Slate's Dave Weigel points out, this article was cited in an email the Romney campaign sent out to rebut claims that Romney remained involved with Bain after 1999.
  • News reports from during Romney's 2002 run for governor refer to his affiliation with Bain during the 1999-2002 period as a "leave of absence," not a full departure. As Politicker reported Friday, Romney retained a "very active role" with Bain during a previous leave of absence, when he ran for Senate in 1994. 

So where does that leave us?

  • Bain and Romney's claim that he had "absolutely no involvement with the management or investment activities of the firm or any of its portfolio companies" is deeply implausible, given the SEC filings and Romney's role on the boards of LifeLike and Staples. Lifelike, in particular, was a Bain portfolio company by any definition, and Romney was on its board—perhaps a passive management role, but indisputably a management role. As Brad DeLong writes, "It would be very unusual for somebody to have the titles of not just 'CEO' but 'President,' 'Chairman of the Board' and be 'sole stockholder' and to have no responsibilities whatsoever." As a factual matter, Romney's claim of zero involvement is contradicted by what we currently know. 
  • That said, none of the documents uncovered so far disprove Romney's claim that he had no direct, day-to-day managerial role at Bain after February 1999. The Romney campaign seems to believe that inoculates the candidate from responsibility for Bain's investment decisions during that time, despite the fact that Romney continued as CEO, president, and chairman of the board and benefited financially from Bain's investments.
  • But even if Romney wasn't involved in Bain after 1999 (a claim contradicted by the documentary evidence), he's still not off the hook for outsourcing. As my Mother Jones colleague David Corn has reported, there's at least one example of Bain investing in outsourcing prior to the date Romney says he left.

Although the Obama campaign's initial claims about Romney's personally deciding to invest in outsourcing post-1999 were misleading, the Obama camp has shifted from accusing Romney of being directly responsible for deals that moved jobs overseas to accusing Romney of profiting from such deals, which is beyond dispute.

As Talking Points Memo's Brian Beutler wrote on Thursday, "For Romney to be truly off the hook politically for the stuff Bain was doing, he'd have to claim not lack of control, but lack of knowledge." It's hard to believe that Romney didn't know what was going on at a company where he was the president, CEO, chairman of the board, and owner.

UPDATE: In an interview with local DC ABC affiliate WJLA, President Barack Obama says Romney should have to answer questions about his tenure at Bain:

Ultimately Mr. Romney, I think, is going to have to answer those questions, because if he aspires to being president one of the things you learn is, you are ultimately responsible for the conduct of your operations, but again that's probably a question that he's going to have to answer and I think that's a legitimate part of the campaign.

Now, my understanding is that Mr. Romney attested to the SEC, multiple times, that he was the chairman, CEO and president of Bain Capital and I think most Americans figure if you are the chairman, CEO and president of a company that you are responsible for what that company does.

 

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Ira Rennert's Helicopter Terrorizes The Hamptons (Video)

| Fri Jul. 13, 2012 2:18 PM EDT

When things heat up in the Empire State, many of our nation's rulers join the Summer Colony, what Hamptonites call the influx of plutocrats and assorted helpers who seasonally fill the island's beach chalets. Escaping nearby Manhattan's heat and noise for a few months each year is one of the 1 percent's most cherished membership perks, but it may be going the way of groundskeeping graveyard shifts at The Creeks.* A growing class of Hamptonian super-rich now insist on commuting to their tranquil getaways by helicopter, thereby disrupting the peace of anyone beneath their flight paths. Hamptons' resident Frank Dalene, a founding member of the Quiet Skies Coalition, says billionaire industrialist Ira Rennert is the worst offender. Here's a video he recorded of Rennert's Sikorsky S-92 and other noisy choppers buzzing the roof of his home:

For more on Hamptons helicopter feud, read my story from the July/August issue.

*According to the book "Philistines at the Hedgerow," the previous owners of The Creeks, Albert and Adele Herter, employed gardeners who worked at night so as not to disturb the Herters during the day.

This Week in Dark Money

| Fri Jul. 13, 2012 5:00 AM EDT

A quick look at the week that was in the world of political dark money...

the money shot

 

QUOTE of the week

"We openly acknowledge the irony of being a super PAC trying to address money in politics."
—Jonathan Soros, son of billionaire philanthropist George Soros, explaining his new anti-super-PAC super-PAC, Friends of Democracy. His super-PAC joins several others formed to protest the amount of money in American politics. (The Open Society Foundations, chaired by George Soros, have supported Mother Jones' campaign-finance reporting.)

 

VIDEO of the week

The Center for Public Integrity's Michael Beckel hits the streets of DC to ask citizens what they think of super-PACs. Most were not fans (one man suggested they be "blown up"):

 

STAT of the week

$200,000: The amount that LPAC, a new, first-of-its-kind lesbian and women's-rights super-PAC, reports that it raised on its first day. The group hopes to raise a modest $1 million. It's headed by Chicago Cubs co-owner Laura Ricketts, a major bundler for President Obama. Her dad, Joe Ricketts, is also a Cubs co-owner and has his own super-PAC, the anti-Obama Ending Spending Fund.

 

attack ad of the week

A conservative dark-money group called American Commitment is using some of the $7 million it's raised to attack Democrats in Ohio, Florida, Wisconsin, North Dakota, New Mexico, and Nevada. (Last month, the group spent $1 million on ads opposing EPA regulations.) American Commitment was started by Phil Kerpen, who has also worked for the Koch brothers-connected Americans for Prosperity and Club for Growth. In Ohio, the group has spent $1.2 million on ads attacking Sen. Sherrod Brown. This one accuses Brown of being "the deciding vote" in favor of Obamacare:

 

more mother jones dark money coverage

Karl Rove & Company's New "Sucker-Punch" Ad Strategy: How outside-spending groups sidestep federal election law to obscure their ad spending.
Shadowy Group Pushing for Tax Chaos in Michigan: The Michigan Alliance for Prosperity is trying to fundamentally alter the state's political calculus.
Dems: Dark Money Groups Use "Secret Money to Subvert the Democratic Process": A new complaint targets political nonprofits that attack Democrats and hide their donors.
Mother Jones reporter Andy Kroll discusses 501(c)(4) groups on The War Room with Jennifer Granholm

 

more must-reads

• Casino magnate and megadonor Sheldon Adelson gives another $1 million to a super-PAC. Sunlight Foundation
• Ross Perot's son gives $100,000 to the pro-Romney super-PAC Restore Our Future. iWatch News
• Jamelle Bouie questions whether out-of-control fundraising will really have much of an impact on the presidential race. American Prospect

Why Fast Food Loves Mitt Romney

| Fri Jul. 13, 2012 5:00 AM EDT

Mitt Romney has a complicated relationship with fast food. He likes pizza, but insists on scraping off the cheese before he ever takes a bite. He likes fried chicken, but only when the skin has been removed. He likes Big Macs, but only after removing the middle bun. He likes Coca-Cola because, he explained in his 2004 book Turnaround, it reminds him of polar bears, but he rarely drinks it because he can't have caffeine. On the trail, Romney has name-dropped Carl's Jr. and spoken of the wonders of WaWa but subsists mainly on granola he carries around in one-gallon Ziploc bags.

Fast food's love for Mitt Romney, on the other hand, is uncomplicated. All told, he's received $561,582 in contributions from the food and beverage industry, more than any other candidate in the country. (In late May, Romney held a fundraiser at the Louisville mansion of Papa John's founder John Schnatter.) And it's not just Mitt—other Republicans get fast-food love, too. Earlier in May, Waffle House, the 24-hour Southern breakfast chain, gave $100,000 to Karl Rove's super-PAC, American Crossroads, on top of the $80,450 it had already given to Republican causes this year, still well short of the $305,000 it gave exclusively to Republicans between 1997 and 2002. (The company's CEO, Joe Rogers Jr., was once on the finance team of Romney's political action committee, Commonwealth PAC.) McDonald's has directed 57 percent of its political spending to Republican candidates, in keeping with its historical trend. A few steps up the scale, OSI Restaurant Partners, whose chains include Outback Steakhouse, has favored Republicans over Democrats by a rate of 24 to 1. Nationally, the food and beverage industry has given to Republicans at a 70 percent clip. (David Graham has a more exhaustive look at this here.)

They might not get the attention of groups like Wall Street and Big Oil, but as Waffle House's Crossroads gift made clear, chain restaurants are a core part of the GOP coalition. There's Herman Cain, formerly of Godfather's Pizza and the National Restaurant Association, and Tom Monaghan, founder of Domino's and the wannabe theocratic town of Ave Maria, Florida. Chick-fil-a, which closes on Sundays to observe the Sabbath, gave $2 million to anti-gay groups in 2009. Wendy's founder David Thomas was a Republican donor and frequent speaker at conservative conferences. When Rep. Darrell Issa (R-Calif.) needed a witness to talk about the Affordable Care Act's adverse effect on businesses, he summoned Jamie Richardson, vice president of White Castle.

So why is Big Big Mac so conservative? There are a couple of obvious demographic reasons—some of the above companies (and plenty of others) were founded by Southern Christian white dudes, who have a high statistical likelihood of voting Republican anyway. But in his classic book Fast Food Nation, Eric Schlosser flags a policy angle. As Schlosser explains, McDonald's founder Ray Kroc was largely apolitical—with the notable exception of 1972, when he directed $250,000 toward Richard Nixon's reelection effort through a variety of state and federal organizations. Kroc had a good reason: His company was lobbying Congress to pass the "McDonald's Bill," which would have allowed the company to pay teenagers 20 cents below minimum wage.

Fast-food companies aren't lobbying for a reduction in the minimum wage these days—at least not openly (since it's not tracked to inflation, the minimum wage decreases in real value every year anyway). But they have a vested interested in a number of policies that would bring them into conflict with the Democratic party. Among some chain restaurants' preferred policies: the lowest possible wages for workers and few (if any) benefits; tort reform to discourage lawsuits (McDonald's, you'll recall, was the defendant in the famous hot coffee case); anti-union legislation; no new nutritional and food safety standards; and a crackdown on consumer-friendly statutes like the Patients Bill of Rights (fiercely opposed by the National Restaurant Association). Andrew Puzder, CEO of CKE Restaurants Inc., which includes Hardee's and Romney's favorite Carl's Jr., offered a broader critique of the Obama administration's policies in an op-ed for the conservative outlet Human Events last summer.

In that context, Fast Food's fundraising for Mitt Romney isn't much of a mystery at all. And unlike the grub, he'll take as much of it as he can.

Nearly 6 Million Americans Can't Vote Due to Felon Disenfranchisement Laws

| Fri Jul. 13, 2012 4:30 AM EDT

In an updated study released Thursday, the Sentencing Project reports that close to 6 million Americans are now unable to vote thanks to felon disenfranchisement laws. "Approximately 2.5 percent of the total US voting age population—1 of every 40 adults—is disenfranchised due to a current or previous felony conviction," notes the report, authored by Christopher Uggen and Sarah Shannon of the University of Minnesota and Jeff Manza of New York University.

The numbers have risen dramatically over the decades, due both to the rise of mass incarceration in the United States and to the spread of restrictive state voting laws. As we reported last week, nearly all states bar imprisoned felons from voting, 29 states bar them even after they have served their time, and a handful—including several battleground states—effectively bar them for life. The number of affected Americans has ballooned from 1.2 million people in 1976 to 3.3 million in 1996. As of 2010, the figure stands at 5.9 million.

Rates of disenfranchisement vary dramatically by state due to broad variations in voting prohibitions. In six states—Alabama, Florida, Kentucky, Mississippi, Tennessee, and Virginia—more than 7 percent of the adult population is disenfranchised.

In what amounts to a modern-day version of Jim Crow-era statutes, felon disenfranchisement takes a substantial bite out of the black vote. According to the report, nearly 8 percent of voting-age black Americans (1 in 13) is disenfranchised, compared with roughly 2 percent of their non-black counterparts. In three states—Florida, Kentucky, and Virginia, at least 1 in 5 black Americans will be out of luck come Election Day. In the cases of Florida and Virginia, the numbers are sizeable enough to change the outcome in November. As Desmond Meade of the nonprofit Florida Rights Restoration Coalition put it to us last week: If these people were able to vote, "Florida would no longer be a swing state."

Corn on MSNBC: Did Romney Profit From Outsourcing to China?

Thu Jul. 12, 2012 11:24 PM EDT

David Corn appeared on MSNBC's The Last Word to explain his latest major scoop reporting on Mitt Romney's time at Bain Capital. Corn discovered that Romney invested millions in a Chinese firm that profited from US job outsourcing. From the article:

This previously unreported deal runs counter to Romney's tough talk on the campaign trail regarding China. "We will not let China continue to steal jobs from the United States of America," Romney declared in February. But with this investment, Romney sought to make money off a foreign company that banked on American firms outsourcing manufacturing overseas.

Read more about the mystery of Mitt Romney's exit from Bain and how he invested in a medical-waste firm that disposed of aborted fetuses.

David Corn is Mother Jones' Washington bureau chief. For more of his stories, click here. He's also on Twitter.

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Mississippi's Anti-Abortion Gov. Might Have Doomed State's New Clinic Rule

| Thu Jul. 12, 2012 4:04 PM EDT

On Wednesday, US District Court Judge Dan Jordan granted an extension of an injunction that has allowed Mississippi's only abortion clinic to stay open despite a new law targeting the clinic that was supposed to go into effect on July 1.

As we've reported previously, Mississippi's new regulation requires that all doctors working at the Jackson Women's Health Organization, the only clinic in the state, have admitting privileges at a local hospital. That is difficult for a number of reasons, but especially because only doctors who live in the state are granted admitting privileges, and just one of the doctors at the JWHO lives in Mississippi. So if the new rule did go into effect, the clinic would likely have to shut down.

What's most interesting in this case is that the state's anti-abortion activists—including the governor and lieutenant governor—seem to be the main reason the judge is willing to block the law from going into effect. That's because both Gov. Phil Bryant and Lt. Gov. Tate Reeves have made a habit of saying publicly that their real goal is to outlaw abortion entirely. So has State Rep. Bubba Carpenter (R), who recently boasted that lawmakers had "stopped abortion in the state of Mississippi."

Bryan, Carpenter, and Reeves' honesty about the true purpose of the law may be what helps the clinic win its court case, according to the Jackson Free Press (via Jezebel):

The state attorneys defending the new law said the Mississippi governor and lieutenant governor's statements desiring to eliminate abortion in the state shouldn't matter because they did not author or vote on the controversial legislation, HB 1390.
Jordan seemed to think the statements were relevant "considering they came from the governor who signed the bill and the presiding officer over the Senate.” The judge also made it clear that Bryant and Reeves' pronouncements made this case unique.
In his July 1 order, Jordan questioned the motive of the bill's backers—pointing out that they seem more focused on eliminating access to abortion, a constitutional right, than in protecting the health of women.

Oops.

The judge's decision on Wednesday was just another temporary extension; the parties will be back in court in the next few weeks to determine the long-term fate of the law.

The New Federal War On Pot Dispensaries

| Thu Jul. 12, 2012 2:38 PM EDT

Cannabis station, a medical marijuana dispensary, is located at the site of a former gas station in Denver, Colorado.

Remember when the feds pledged to end raids on medical marijuana dispensaries that complied with state laws?

Psych! Like a trippy screen saver undergoing a phase change, the Justice Department has morphed its marijuana stance back into what it looked like during the Bush era, going on the offensive against dozens of medical pot operations. This week federal agents moved to evict Harborside Health Center, the nation's most respected (and by all accounts, most legally compliant) dispensary.

The Justice Department has certainly done a lot of weed-whacking in recent years, but mostly just around the fringes of California's $1.3 billion medical pot industry. Staying true to its word, it has targeted dispensaries that violated state law by, for instance, opening up too close to schools and parks. And it has used an obscure provision of the tax code to stipulate that dispensaries cannot deduct routine expenses such as rent and wages. It claims Harborside owes the IRS back taxes totalling $2.5 million.

But this week the department appeared to cross the line, breaking its 2009 pledge to leave state-compliant dispensaries alone. On Tuesday it filed papers to seize the properties in Oakland and San Jose where Harborside does business, alleging that it is "operating in violation of federal law." 

In a statement, US Attorney Melinda Haag said she was now moving to target "marijuana superstores."

"The larger the operation, the greater the likelihood that there will be violations of the state's medical marijuana laws," she said. 

Of course, size doesn't necessarily equate to disregard for the law. And either way, going after dispensaries that might break the law is a much different standard than targeting actual lawbreakers. But there you have it—even as the public becomes ever more tolerant of pot, the feds are becoming less so.

Romney Gets Booed, Limbaugh Race-Baits

| Thu Jul. 12, 2012 2:05 PM EDT

Mitt Romney never had a chance of winning over the NAACP, according to Rush Limbaugh. That's not because Romney's a Republican, or because his policy positions aren't shared by the organization, but because Mitt Romney is white. 

"Obama's the Preezy," Limbaugh told his listeners Wednesday, (get it? Cuz that's how black people talk). "He's confident they'll boo Romney, simply 'cause Romney's white. He's confident of that." I'm sure Limbaugh will have an impressive rationalization for why Vice President Joe Biden was so well received by the NAACP convention Thursday. This is, put simply, the dumbest thing Limbaugh has said since the time the 61-year old radio host revealed he didn't know how birth control works.

Romney has now said he "expected" to get booed, and House Minority Leader Nancy Pelosi accused Romney of wanting to get booed in order to make himself look politically brave. Like Limbaugh's ridiculous comment, Romney and Pelosi's statements are unfair to the NAACP. There has only been one black president of the United States in history, and Mitt Romney is not the first white presidential candidate to address the NAACP. When Ross Perot (!) adressed the convention in 1992, press accounts don't describe any boos despite Perot referring to the audience as "you people." Then-Arkansas Governor Bill Clinton was well received. Former Republican Senator Bob Dole (R-Kan.) declined to speak, saying he wanted to talk to audiences he "could relate to."  Both Al Gore and George W. Bush addressed the convention in 2000, and neither were booed.  

There are only two instances in the past thirty years or so in which a "white guy" of comparable status to Romney getting booed at an NAACP convention. Following his appearance in 2000, George W. Bush snubbed the NAACP for years as president, but when he finally did speak in 2006, he was booed when he brought up charter schools and the war in Iraq. Prior to that, you have to go back about twenty years of white guys not getting booed to 1983, when then-Vice President George H.W. Bush was booed because of his defense of the Reagan administration's civil rights record. Even then, ABC News describes him as being "well received" when he returned as a presidential candidate in 1988.

To reiterate: Bush was booed over Reagan's civil rights record, the second President Bush was booed over his education policy, and Romney was booed for promising to repeal Obamacare. There's an obvious explanation here for how you get booed at an NAACP convention, and it's not being a white guy: It's saying something NAACP members really don't like. So there's little reason for Obama (in Limbaugh's fevered imagination), Pelosi, or Romney to have assumed from the outset that Romney would be booed. Not just white guys, but previous Republican candidates have managed to make their pitch to the NAACP without eliciting such an explicitly negative reaction—in fact, that's the norm.

This is not actually about whether or not being white means you get booed at an NAACP convention, though. It's about a right-wing narrative of white racial resentment, wherein black people are reduced to nothing more than a tangle of seething racial hatred, spending eternity plotting new and fiendish ways to make white people suffer. Or as Limbaugh put it yesterday, "[black people] thought a whole bunch of getting even with 'em out there was gonna be happening." This is projection: By assuring white people that black people hate them and want to take their stuff, any anger or fear Limbaugh's audience feels towards black people collectively, and Obama in particular, is justified. This is racial tribalism at its most explicit and crude.

WATCH: The God-Awful Particle [Fiore Cartoon]

| Thu Jul. 12, 2012 12:14 PM EDT

Mark Fiore is a Pulitzer Prize-winning editorial cartoonist and animator whose work has appeared in the Washington Post, the Los Angeles Times, the San Francisco Examiner, and dozens of other publications. He is an active member of the American Association of Editorial Cartoonists, and has a website featuring his work.