And what kind of "fact-checkers" would engage in such a hair-splitting defense of a politician anyway? What's clear is that Romney shared in the responsibility for investing in companies that specialized in helping other companies cut their costs by shifting jobs to places where workers earned less, often a lot less.
Free-market economists can defend this business strategy -- and presumably Romney saw the value in these tactics when he pulled the trigger on the investments -- but isn't it absurd to argue that Romney bears no responsibility for the consequences of these investments, even if he did relinquish day-to-day control of Bain in February 1999?
Romney and his Bain Capital team were famous for carefully examining each company that was a candidate for investment and a couple of these firms promoted themselves as specialists in outsourcing, as Washington Post investigative reporter Tom Hamburger explained in a front-page story on June 21.
After studying SEC filings, Hamburger reported that Romney's Bain Capital "owned companies that were pioneers in the practice of shipping work from the United States to overseas call centers and factories making computer components."
Trailblazers in Outsourcing
In other words, Romney's venture capital firm wasn't just investing in companies that shipped jobs overseas themselves, Bain owned companies that were trailblazing 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. While Bain was not the largest player in the outsourcing field, the private equity firm was involved early on, at a time when the departure of jobs from the United States was beginning to accelerate and new companies were emerging as handmaidens to this outflow of employment.
"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. ...
"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.
"Two years later, Modus Media told the SEC it was performing outsource packaging and hardware assembly for IBM, Sun Microsystems, Hewlett-Packard Co. and Dell Computer Corp. The filing disclosed that Modus had operations on four continents, including Asian facilities in Singapore, Taiwan, China and South Korea, and European facilities in Ireland and France, and a center in Australia. ...
"According to a news release issued by Modus Media in 1997, its expansion of outsourcing services took place in close consultation with Bain. Terry Leahy, Modus's chairman and chief executive, was quoted in the release as saying he would be 'working closely with Bain on strategic expansion.' At the time, three Bain directors sat on the corporate board of Modus.
"The global expansion that began while Romney was at Bain continued after he left [for the Olympics in 1999]. In 2000, the firm announced it was opening a new facility in Guadalajara, Mexico, and expanding in China, Malaysia, Taiwan and South Korea.- Advertisement -
"In addition to taking an interest in companies that specialized in outsourcing services, Bain also invested in firms that moved or expanded their own operations outside of the United States. One of those was a California bicycle manufacturer called GT Bicycle Inc. that Bain bought in 1993.
"The growing company relied on Asian labor, according to SEC filings. Two years later, with the company continuing to expand, Bain helped take it public. In 1998, when Bain owned 22 percent of GT's stock and had three members on the board, the bicycle maker was sold to Schwinn, which had also moved much of its manufacturing offshore as part of a wider trend in the bicycle industry of turning to Chinese labor."