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Bain Story Recycled From Primaries

The Obama campaign managed to get the Boston Globe to pick up the story nobody else was buying: that Mitt Romney lied about leaving Bain Capital in 1999, based on documents filed with the SEC. As WaPo’s fact-checker Glenn Kessler notes, these claims had already been picked over and rejected by numerous outlets:

But now the Boston Globe has raised the issue again. The story seems to hinge on a quote from a former Securities and Exchange Commission member, which would have more credibility if the Globe had disclosed she was a regular contributor to Democrats. (Interestingly, “The Real Romney,” a book on the former Massachusetts governor, by Boston Globe reporters, states clearly that he left Bain when he went to run the Olympics and details the turmoil that ensued when he suddenly quit, nearly breaking up the partnership.)

We’re considering whether to once again take a deeper look at this, though it really feels like Groundhog Day again. 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.)

To accept some of the claims, one would have to believe that Romney, with the advice of his lawyers, lied on government documents and committed a criminal offense. Moreover, you would have to assume he willingly gave up his share to a few years of retirement earnings — potentially worth millions of dollars — so he could say his retirement started in 1999.

The SEC documents in the Globe piece don’t appear to be new. Here’s WaPo’s Kessler from last January, throwing cold water on a document that the Globe seems to treat as a smoking gun:

In the [2002] Massachusetts [SEC] document, Romney is also listed as 100 percent owner of “Bain Capital Inc.” But there is less than meets the eye here. Bain Capital Inc. was the management firm, which was paid a management fee to run the funds and actually made virtually no profit, since it existed to pay salaries and expenses. After Romney formally left Bain in 2001, a new entity called “Bain Capital LLC” took over the management function.

By virtually all accounts, Romney was focused on the Olympics in the 1999-2002 period. Yet because Romney had not legally separated from Bain, his name is littered across Securities and Exchange Commission filings concerning Bain Capital deals during this period. The crazy quilt of private-equity structures, in some ways, makes his ownership appear even more ominous, as the filings list hundreds of thousands of shares controlled by Romney.

Even so, it is a real stretch to claim that Romney — himself — “closed” these stores. No evidence has emerged that he was involved in the KB Toys transaction. Indeed, when creditors sued over the dividend payment, they named six Bain-controlled entities and three Bain executives who had served on the board of KB Holdings.

The Globe is responsible for its own reporting, but clearly this was a story the Obama campaign has been trying to resurrect. The campaign has been blasting out the Globe article — and strongly-worded comments accusing Romney of either lying or being a criminal — for most of the day. The story is being dutifully picked up by news outlets, but most political reporters can probably see what’s going on here. The Obama campaign is playing dirty pool, planting flimsy stories that had already been settled months ago. Now the media will wade through the SEC documents again, and the Romney campaign will have to answer the same questions it answered last January. Even if this is thoroughly debunked, it hurts the Romney campaign simply because it’s in the news.