David Gergen
is a senior political analyst for CNN and has been an adviser to four
presidents. A graduate of Harvard Law School, he is a professor of
public service and director of the Center for Public Leadership at
Harvard University's Kennedy School of Government. Follow him on Twitter.
(CNN) -- There may be a number of good reasons to vote against Mitt Romney, but based upon what we know so far, his honesty about his tenure at Bain Capital does not seem to be one of them.
Let me acknowledge
upfront what I have said several times on CNN: I have a past
relationship with the top partners at Bain that is both personal and
financial. I have worked with them in support of nonprofit organizations
such as City Year. I have given a couple of paid speeches for Bain
dinners, as I have for many other groups. I was on the board of a
for-profit child care company, Bright Horizons, that was purchased by
Bain Capital. It was a transaction with financial benefits for all board
members and shareholders, including me.
So, yes, I have a bias.
But let me also add how that bias plays out: I have come to admire and
like the leaders of Bain Capital because I have learned firsthand that
in a private equity industry, where there are obviously some predatory
companies, Bain stands out for the respect in which it is generally held
and for the generous philanthropy of some of its partners. Nothing I
have seen so far has shaken that view.
David Gergen
With that on the table, let's turn to the controversy and offer answers to some basic questions:
Gillespie: Romney retroactively retired
Are President Barack Obama and his team right to demand close scrutiny of Romney's leadership at Bain?
Absolutely. Central to Romney's candidacy is his claim that he will be
better at creating jobs and growth than Obama because of his experience
at Bain. Just as Republicans have relentlessly questioned Obama's record
(often to the point of sheer demagoguery), it is absolutely fair to
question Romney's.
And given that critics
have argued that Bain helped outsource jobs through its investments in
the years immediately after Romney's departure to head the Olympics, it
would be a significant revelation if it turned out that in fact he had
still played a meaningful role in the company.
Has Romney handled the scrutiny well? No,
he hasn't. He and his team should have prepared a thorough, written
record of his time at Bain and made it publicly available long before
this stage of the campaign -- a record that would have explained in
advance his accomplishments and failures while at Bain, the manner of
his departure and the conflicts that have arisen over what he has said
and filings Bain has made with the Securities and Exchange Commission.
Had he been proactive in laying it all out, it is unlikely he would be
facing the barrage of today.
(In another life, I made a
similar argument to Bill and Hillary Clinton -- people I enormously
respect -- over Whitewater and that went nowhere; naturally enough,
politicians are not inclined to put out documents that may be
discomforting, even if they also help clear the air.)
Should Romney disclose his tax returns and other information relating to off-shore accounts?
Yes, he should. Like many others who have been financially successful
and as a result have complicated financial histories, Romney has shown a
deep reluctance to disclose anything more than the bare minimum and has
only released his tax return for one year. But he is asking voters to
entrust him with the most powerful and important office in the world. In
return, voters have a right to know who he is and how he got here. Put
it out, take whatever hits are coming, and move on. If he has been as
honest as all his friends believe, he will ultimately be a stronger
candidate and can refocus on what matters: the country.
Has Romney basically lied about when he actually departed Bain?
Has he tried to mislead the public or investors? Here we come to the
heart of the recent controversy. I may be wrong but based on what we
know so far, I would conclude that we do not have persuasive evidence to
show that he has.
Romney has argued for
years that after he was called in to rescue the Salt Lake City Olympics
in February 1999, he turned his full attentions there and no longer
exercised active management at Bain. The story is a complicated one
because Bain was a complex partnership and because the company filed
various SEC papers after February 1999 still listing Romney in various
key roles, including CEO and chairman. But if one takes time to look
behind the SEC filings, what emerges is much more supportive of Romney's
statements.
When the story first broke Thursday in The Boston Globe
suggesting that Romney and Bain had fudged, CNN asked if I would do
some reporting. I reached two of the top people whom I know in the
company and, on background, they told me the same story that Bain
sources told CNN's John King:
When the call came from the Olympics that February, Romney met with his
partners and said he and wife, Ann, had concluded that they had to do
this and as difficult as it would be for the partnership, he had to
leave in a matter of several days.
That set off
consternation within Bain because the company had exploded in size and
Romney was not only CEO (or managing partner) but was also deeply tied
into a variety of investments and partnerships. The partners had to turn
quickly to reorganizing their teams and the way they ran their
business. That was their priority.
Had they known that one
day Romney would be running for president, they might have acted with
equal haste on cleaning up the many filings and paperwork that bore
Romney's name but at the time, they didn't think that was an urgent
task. So, as the company slowly unwound its records, some papers from
Bain continued to list Romney even though he had left the partnership.
A sloppy mistake? Yes.
An attempt to mislead? The evidence so far doesn't show that. Also of
note: At the time, it seemed that he might return from the Olympics to
active management, but in any event, he did not. Secondly, I do not know
of (nor is there any controversy suggesting) his involvement in other
companies during that time.
As the New York Times reports Monday,
there was an expectation at first that Romney might return to active
management of Bain so he did not sever his ownership ties right away --
an additional reason why his name was not struck from documents for a
while. The Times account goes on to say there is no evidence that during
this interim he was actively engaged in managing the firm.
Both partners with whom I
spoke firmly and unequivocally said that after he physically left in
February 1999, Romney no longer made decisions for Bain regarding
investments, hiring, firing or any other management issues. Subsequent
to that February, the firm in 2000 offered another round of financing
and, according to Bain, the investors well understood that Romney was no
longer actively managing the company.
Could these Bain partners now be lying? Possibly. On a rare
occasion in the past, when I was wearing a reporter's hat, a friend has
lied to me for self-protection. But based on relationships over several
years, I trust his or her account. Even so, knowing my bias, you may
well ask: Is there any corroborating evidence? As it turns out, there
is.
FactCheck.org, a
respected website that nails candidates for inaccuracies, earlier
investigated the whole issue of Romney's departure and reached a
conclusion that he was telling the truth. Last week, little noticed by
Romney's critics, FactCheck went back, reviewed the evidence again, and
based on what we know so far, reaffirmed its earlier conclusion.
FactCheck's recent article was co-written by a man who was once a top
investigative journalist for CNN. (The piece last week also recalled an
Associated Press report on the Olympics that said in his early tenure at
the Olympics, Romney was working 112-hour weeks to save the Salt Lake
City games. Does this sound like a man who was also managing a private
equity firm on the East Coast?)
Last week, in another article that critics tend to ignore, Fortune reported
that it had obtained confidential documents that Bain gave to
prospective investors in advance of that seventh round offering in 2000.
The prospectus is the way a company such as Bain informs possible
investors who will manage their money. The prospectus listed 18 managers
at Bain who would have responsibility. Romney's name was not among
them.
It remains possible, of
course, that new evidence will emerge that could sharply contradict both
Romney and Bain. If so, that will be a whole new ball game. Both he and
the company would be grievously damaged.
But judgments today can
only be fairly made on the evidence at hand and the reputations of the
people who are coming forward. From my perspective -- yes, with a bias
-- the weight comes down on the side that as he has said all along,
Romney ended his active management at Bain when he left for the
Olympics. Again, there are many other reasons why one might oppose his
candidacy, but this does not strike me as a fair one.
As long as fairness is
the standard, it would be reassuring if some of the harshest critics of
Romney and Bain would acknowledge their own biases. And for goodness
sake, will the Obama campaign please withdraw its heavy suggestion that Mitt Romney could well have committed a felony? That was an injustice to both Romney and the president.
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