"The highest ranking executive in a company whose main responsibilities include developing and implementing high-level strategies, making major corporate decisions, managing the overall operations and resources of a company, and acting as the main point of communication between the board of directors and the corporate operations. The CEO will often have a position on the board, and in some cases is even the chair."
To claim repeatedly over a period of more than two years that someone was the CEO -- and thus the "controlling" person -- if that were not true represents what many securities regulators would call a "material" deception.
Though Bain did file some documents without reference to Romney, as Kessler notes, that does not and should not absolve the firm or Romney from responsibility for filing others with what they now say is false information.
A Different Tone
While devising endless excuses for Romney and his Harvard Business School buddies, these same "independent fact-checkers" heap scorn on the African-American president and his campaign for daring to raise these impertinent questions about the much-admired Romney.
Annenberg's FactCheck.org mocked a six-page letter from Obama's campaign with the flippant response, "your complaint is all wet." In giving Obama "three Pinocchios" for pointing out the discrepancies in Romney's Bain story, Kessler said he spared Obama a fourth Pinocchio (a total "whopper") with the grudging admission that "there is grey area" regarding Romney's last few years at Bain Capital.
In a larger sense, however, this issue of exactly when Romney left Bain is a ruse, a diversionary line of defense that Romney has been building since he ran for Massachusetts governor in 2002. The reason for this ever-expanding moat is that it lets Romney deny responsibility for Bain-related plant closings and off-shoring of jobs that occurred from 1999 to 2002.
But the key question is not when Romney left but who set in motion the strategies that led to the plant closings and the job off-shoring. It was Romney who pulled the trigger on investments in companies whose business model involved facilitating these actions for other companies.
For instance, as Washington Post investigative reporter Tom Hamburger explained in a front-page story on June 21, Romney's venture capital firm "owned companies that were pioneers in the practice of shipping work from the United States to overseas call centers and factories making computer components."
In other words, Bain Capital wasn't just investing in companies that shipped jobs overseas themselves, Bain owned companies that were trail-blazing the practice of outsourcing American jobs to low-wage companies like China and India. The story said:
"A Washington Post examination of securities filings shows the extent of Bain's investment in firms that specialized in helping other companies move or expand operations overseas. ...
"Bain played several roles in helping these outsourcing companies, such as investing venture capital so they could grow and providing management and strategic business advice as they navigated this rapidly developing field."
A Lucrative Foray
As Hamburger reported...
"Bain's foray into outsourcing began in 1993 when the private equity firm took a stake in Corporate Software Inc., or CSI, after helping to finance a $93 million buyout of the firm. CSI, which catered to technology companies like Microsoft, provided a range of services including outsourcing of customer support. Initially, CSI employed U.S. workers to provide these services but by the mid-1990s was setting up call centers outside the country.
"Two years after Bain invested in the firm, CSI merged with another enterprise to form a new company called Stream International Inc. Stream immediately became active in the growing field of overseas calls centers. Bain was initially a minority shareholder in Stream and was active in running the company, providing 'general executive and management services,' according to SEC filings. ...
"The corporate merger that created Stream also gave birth to another, related business known as Modus Media Inc., which specialized in helping companies outsource their manufacturing. ... Modus Media grew rapidly. In December 1997, it announced it had contracted with Microsoft to produce software and training products at a center in Australia. Modus Media said it was already serving Microsoft from Asian locations in Singapore, South Korea, Japan and Taiwan and in Europe and the United States."
All those events occurred while Romney acknowledges that he was the hands-on CEO at Bain Capital. Hamburger also describes continuation and expansion of these outsourcing activities after February 1999. But those activities were simply an extension of what Romney had started.
To pretend that there was some bright line between the "good" Bain Capital before February 1999 and the "bad" Bain Capital afterwards is downright silly. It is even sillier for "independent fact-checkers" to suggest that Romney had no responsibility for what his own company did.