The Dole Blog

News media so frequently writes stories of a glimpse-of-time moment that I have resisted the urge to write about Mitt Romney, not wishing to detail his day-to-day exploits without some larger explanation of what it means and where it comes from.  Let’s try to step back and look at the big picture.  Romney is the presumptive nominee for the Republican presidential primary this year, and is all but guaranteed the full backing of the party infrastructure, an infrastructure that raised $106 million for him in June.  That would be neither here nor there, but it’s part of a larger story, about politics in general, party politics, and Romney in particular.

In August, 2011, Romney made the unusual statement that “‘corporations are people, my friend.'”  I need hardly point out that corporations are not people because a person can only be one entity, while a corporation either consists of, or has the ability to consist of, more than one individual, and can function even after a person ceases to exist.  So, while Bain Capital has been made out to be Mitt Romney, and Mitt Romney is Bain Capital, keep in mind that other people existed within the Bain Capital Corporation, and that Bain Capital is just part of a larger system which the folly of people have allowed to exist.

Romney happens to lead a privileged life.  We cannot fault him for that; none of us have any control over where we came from, or the opportunities our circumstances have provided us.  It is what we do with those opportunities, and that privilege, that is important.  He has also invested his capital well, although undoubtedly unethically and in a manner that is to his advantage and often to the disadvantage of others.  Romney’s father, George Romney, was governor of Michigan and was a Republican who maintained “the progressive outlook on race of the moderate northern Republican—he walked out of the 1964 GOP convention over the rejection of a civil-rights plank and marched in Detroit in support of Martin Luther King Jr.’s marches hundreds of miles to the South.”; Mitt went to prestigious boarding schools and later acquired a joint MBA/JD from Harvard.

Romney then proceeded to co-found Bain Capital. What is Bain Capital?

The private equity firm, co-founded and run by Mitt Romney, held a majority stake in more than 40 United States-based companies from its inception in 1984 to early 1999, when Mr. Romney left Bain to lead the Salt Lake City Olympics. Of those companies, at least seven eventually filed for bankruptcy while Bain remained involved, or shortly afterward, according to a review by The New York Times. In some instances, hundreds of employees lost their jobs. In most of those cases, however, records and interviews suggest that Bain and its executives still found a way to make money.

This New York Times article describes that Bain controlled the Michigan-based company Cambridge Industries – an automotive plastics supplier whose losses had been building for three consecutive years, finally filed for bankruptcy in May 2000 under a mountain of debt that had ballooned to more than $300 million – “continued to religiously collect its $950,000-a-year ‘advisory fee’ in quarterly installments, even to the very end, according to court documents.”

Bain first acquired a stake in the manufacturer of plastic automotive parts in 1995. Bain employees personally invested $2.2 million, according to bankruptcy records, alongside $15.7 million from outside investors.

Bain immediately collected $2.25 million from Cambridge as a transaction fee for investing in the company. Cambridge then acquired several companies in rapid succession, and each time, Bain earned 0.75 percent of the purchase price as a transaction fee. The rest of Bain’s $10 million in fees came through advisory fees and payments for a debt refinancing completed by Cambridge in 1997.

By then, interest payments from the company’s expansion were outstripping operating income. As part of the refinancing, aimed at lowering interest payments, Cambridge repaid $17 million it owed to a debt fund run by Bain. This involved paying it a $2 million prepayment penalty.

Cambridge was finally forced into bankruptcy in 2000, when Bain declined to provide the company with an infusion of capital needed to fulfill a major new order, according to former company officials. During bankruptcy proceedings, lawyers for some of Cambridge’s creditors leveled scathing criticism at Bain, zeroing in on the fees extracted while they said Cambridge was insolvent, as well as the prepayment to Bain’s debt fund.

True, as Romney says, “‘sometimes investments don’t work and you’re not successful'” but “an examination of what happened when companies Bain controlled wound up in bankruptcy highlights just how different Bain and other private equity firms are from typical denizens of the real economy, from mom-and-pop stores to bootstrapping entrepreneurial ventures.”  And yes, there is a difference between ‘equity firms’ and the ‘real economy’: check out Liar’s Poker, or The Big Short (both by Michael Lewis), or articles by Matt Taibbi, or just wake up and smell the unemployment.

Romney was willing to ask employees to push the limits at Bain.  “This unsettling account [of Romney suggesting to an employee that they fib in order to find out competitors’ information] suggests the young Romney—at that point only two years out of Harvard Business School—was willing to push into gray areas when it came to business. More than three dec­ades later, as he tried to nail down the Republican nomination for president of the United States, Romney’s gray areas were again an issue when he repeatedly resisted calls to release more details of his net worth, his tax returns, and the large investments and assets held by him and his wife, Ann. Finally the other Republican candidates forced him to do so, but only highly selective disclosures were forthcoming.”

Back to Romney’s Bain: “Bain structured deals so that it was difficult for the firm and its executives to ever really lose, even if practically everyone else involved with the company that Bain owned did, including its employees, creditors and even, at times, investors in Bain’s funds;” unsurprisingly, Bain Capital and the equity industry (it is an industry, right?), unequivocally deny this.  “To a large extent, however, this [guaranteed win for equity] is simply the way private equity works, offering its practitioners myriad ways to extract income and limit their risk…. In four of the seven Bain-owned companies that went bankrupt, Bain investors also profited, amassing more than $400 million in gains before the companies ran aground, The Times found.  All four, however, later became mired in debt incurred, at least in part, to repay Bain investors or to carry out a Bain-led acquisition strategy.”  Even when Bain lost it could claim with some accuracy that it was winning, if making a fortune while other people lose their jobs is winning; on the few occasions, like with Cambridge Industries, when Bain’s investors lost, “lucrative fees helped insulate Bain and its executives, records and interviews showed.”

In the main, Bain was successful, both for the individuals who ran Bain and for the companies whose money they handled.  As is natural, sometimes companies failed; sometimes through the fault of Bain, and sometimes not.

In at least three of the seven bankruptcies [of companies managed by Bain Capital], however, companies appear to have been made more vulnerable by debt taken on to return money to Bain and its investors in the form of dividends or share redemptions.

That was arguably the case with GS Industries, a troubled Midwest steel manufacturer that Bain acquired in 1993, investing $8.3 million. The private equity firm took steps to modernize the steelmaker. A year later, the company issued $125 million in debt, some of which was used to pay a $33.9 million dividend to Bain, securities filings show.

The private equity firm plowed an additional $16.2 million into the steelmaker, but when the industry experienced a downturn in the late 1990s, the company could not manage its heavy debt. It filed for bankruptcy in 2001, but Bain’s investors still earned at least $9 million.

There’s nothing that Bain could have done about, and little it could have done to foresee, the fact that the steel market would take a strong downturn.  The problem is not that companies which Bain Capital manages the money for collapse on occasion (if it happened consistently it would be a definite problem), but that Bain Capital and other equity firms game the system and walk away with huge profits from collapsed companies.

As a further instance, detailed by the same New York Times article,

after Bain acquired Ampad, a paper products company, in 1992, the company grew through a series of acquisitions. Sales jumped, but its debt climbed to nearly $400 million, and it found itself squeezed by “big box” office retailers. It filed for bankruptcy in 2000. Bain and its investors walked away with a profit of more than $100 million on their $5 million investment, on top of at least $17 million in fees for Bain itself, according to securities filings and investor prospectuses.

A similar phenomenon unfolded with DDi, a Bain-owned circuit board maker that expanded aggressively in the late 1990s. Sales soared, but so did its debt. The bursting of the tech bubble forced it to scale back. It filed for bankruptcy in 2003. The gains for Bain’s investors easily exceeded $100 million. Bain also collected more than $10 million in fees.

Both companies collapsed, and both failed in part because the debt created by subservience to Bain made the company unable to function in the market.

So how do private equity companies work, and how did Bain work in particular while Romney was listed as manager and CEO?  “First, the firms charge their investors a percentage of the fund as a management fee, meant to cover its overhead. During Mr. Romney’s tenure, this was initially 2.5 percent and then dropped to 2 percent. Private equity firms also collect transaction or deal fees, ostensibly for advisory work, from companies they buy. These fees are generally collected for major transactions, like the purchase of another company, a public stock offering or even the initial acquisition of the company. A third fee stream comes from annual monitoring or advisory fees that portfolio companies typically pay to their owners, the buyout firms.”

How much does this amount to?  It’s not what you and I consider a normal amount of money, unless we are hedge-fund managers, bankers with a large clientele, or peruse government documents for fun and like high numbers.

These fees can be substantial. In the case of Dade International, a medical supply company in which Bain acquired a stake in 1994, Bain and other investment firms piled up nearly $90 million in fees over seven years. The company filed for bankruptcy in 2003 but not before it had borrowed heavily to pay $420 million to Bain and other investors several years earlier.

In 1998 alone, Mr. Romney’s final full year at Bain, The Times was able to identify roughly $90 million in fees collected by the firm across its various funds, a figure that is probably low because most companies in Bain’s portfolio did not have to file financial disclosures.

These fees covered Bain’s expenses — like rent, salaries and lawyers — and the bulk of the remaining money was awarded to Bain employees as annual bonuses.

That’s right, don’t forget the annual bonuses. I warned you that, unless you happen to be upper-upper middle class, or a poor little rich man, the numbers are fairly high.  “Bonuses were relatively small some years, like from 1989 to 1991, when the savings and loan crisis and other events slowed business. In that period, Bain managing directors made roughly $300,000 to $400,000 a year, mainly from their salaries, excluding gains from investments, according to an executive familiar with Bain’s compensation. By the mid-1990s, as Bain grew, managing directors’ annual incomes, again excluding investment returns, had swollen to $3 million to $5 million, mainly thanks to bonuses derived from fees.”  And that’s not where Romney, or anyone else in Bain Capital, or the equity business, made most of their money: “that came from their share of Bain’s ‘carried interest,’ the firm’s cut of its funds’ investment profits, as well as the returns from personal investments in Bain deals.”

Give Bain some credit, if they are being honest about personal investment of their employees.  “Bain prides itself on the personal money its employees put into deals, saying its co-investment rate is among the highest in the industry. The percentage during Mr. Romney’s tenure sometimes ran to nearly 30 percent but was usually less, according to records and interviews.  ‘We are collectively the single largest investor in every portfolio company and every fund,’ the company’s statement said. ‘When our portfolio companies grow and perform, investors and Bain Capital do well. In rare instances when a business fails, Bain Capital employees share in the negative economic consequences of those losses.'”

A couple of examples of the losses:

Bain Capital “bought Anthony Crane, a crane rental company, which then acquired a slew of smaller competitors, financed by debt. But a building slowdown hit the company hard, and it filed for bankruptcy in 2004, wiping out $25.6 million from Bain’s investors, along with $9.5 million from Bain employees. The firm, however, collected $12 million in fees over the life of the deal.  Bain officials maintained they still lost money on Crane because it also cost them $5.1 million in carried interest that they otherwise would have garnered from gains in the rest of the fund.”

Also, “when Bain bought a troubled chain of maternity stores called Mothercare in 1991, its investors put $1.24 million into the deal. Bain repositioned the company and upgraded its merchandise, but the stores still struggled. Bain offloaded the chain in 1993 at a total loss, and the new owners put it into bankruptcy. Bain still collected $1.5 million in fees while it owned the company, bankruptcy records show.”

Regarding Cambridge Industries,  the automotive plastic manufacturer mentioned earlier “‘we have been unable to identify what, if any, “reasonably equivalent value” the Company received in exchanges for these exorbitant fees,’ Michael Stamer, a lawyer for the unsecured creditors committee, wrote to Bain’s lawyers. ‘It appears, instead, these fees were nothing more than a device used by Bain to provide a return on its equity.'”

But wait … all of what Bain did, and does, that I have detailed above is about how Bain Capital games the American financial system and plays a game it has no way to lose.  The modern economy, though, isn’t only about financing one or multiple American companies, and ignoring the international aspect.  Bain Capital is very much an international player, one that looks to its own interests first and how to make the most money quickest.  Let’s turn away from the 1990’s Romney and look at now.  As Huffington Post reported, at the end of June, “after the Washington Post published a story last week detailing how Bain Capital investments may have helped send American jobs overseas, the Mitt Romney campaign tried to draw the very legitimate distinction between ‘offshoring’ and “outsourcing’ in the modern American economy…. ‘[Outsourcing] is done by companies every day. They take functions and they allow vendors to do it rather than handling it in-house. Offshoring is the shipment of American jobs overseas.'”

To distance the Romney campaign from offshoring, campaign strategist Eric Fehrnstrom ended up “giving implicit approval to domestic outsourcing. It’s an unfortunate political position to be in, particularly during a campaign that’s not just about American jobs but the quality of American jobs. Outsourcing may not eliminate jobs the way offshoring does, and the Romney campaign did not immediately respond to a request for clarification on its stance on domestic outsourcing. But in many industries, outsourcing ultimately leads to lower wages, fewer benefits and less job security for the same position.” (emphasis in original Huffington Post.)

As HuffPost reported last year, much of the retail supply chain is now predicated upon a system of outsourcing, whereby retailers hire third-party “logistics” providers, many of whom in turn hire labor agencies, who in turn hire temporary workers — the sort of vendor-based system Fehrnstrom spoke of. This outsourcing reduces costs for companies at the top of the chain, who don’t have to worry about hiring employees directly and paying decent wages, no doubt helping keep prices down for consumers. But there’s a price to be paid by workers on the bottom rung. Many of them end up working on a temp basis for around minimum wage with no benefits and no guarantee of a job the following week.

Such outsourcing is now common in manufacturing, food processing and even the hospitality industry, with hotels handing some of their housekeeping duties to outside labor companies.

There’s also public-sector outsourcing: in Michigan’s state-run veterans’ nursing homes hire private-contract workers to save money; these workers earn about half of what government employees of the same job earn. New Jersey has outsourced corrections duties to privately-run halfway houses. Wages are low, and escapes of inmates are high.

What of Romney’s personal overseas assets? They are indicative not only of Romney, but of a system gone wrong in which the rich create financial schemes to increase their wealth at the cost of other people. There, is, for instance, a “Bermuda-based entity called Sankaty High Yield Asset Investors Ltd., which has been described in securities filings as ‘a Bermuda corporation wholly owned by W. Mitt Romney.’ It could be that Sankaty is an old vehicle with little importance, but Romney appears to have treated it rather carefully. He set it up in 1997, then transferred it to his wife’s newly created blind trust on January 1, 2003, the day before he was inaugurated as Massachusetts’s governor.”  Romney failed to “list this entity on several financial disclosures, even though such a closely held entity would not qualify as an ‘excepted investment fund’ that would not need to be on his disclosure forms. He finally included it on his 2010 tax return.”  VanityFair Magazine was unable to figure out what the company consisted of, even after examining the return, but thinks it could be a valuable indication that Romney is wealthier than previously disclosed, since “investments in tax havens such as Bermuda raise many questions, because they are in “jurisdictions where there is virtually no tax and virtually no compliance.'” Although he left Bain in 1999 – or 2002 – “Romney has continued to receive large payments from it—in early June he revealed more than $2 million in new Bain income. The firm today has at least 138 funds organized in the Cayman Islands, and Romney himself has personal interests in at least 12, worth as much as $30 million, hidden behind controversial confidentiality disclaimers.”

Not only was Romney’s father Governor of Michigan, in 1967 George Romney ran for president, and set a standard almost every serious candidate has followed since: he released twelve years of tax returns, explaining that “‘one year could be a fluke, perhaps done for show.'”  The son is not the father, and Mitt Romney didn’t release any tax returns until “January 24, 2012—after intense goading by fellow Republican candidates Newt Gingrich and Rick Perry” –  at which point he released his 2010 tax return and an estimate for 2011.

The media soon noticed Romney’s familiarity with foreign tax havens. A $3 million Swiss bank account appeared in the 2010 returns, then winked out of existence in 2011 after the trustee closed it, as if to remind us of George Romney’s warning that one or two tax returns can provide a misleading picture. Ed Kleinbard, a professor of tax law at the University of Southern California, says the Swiss account “has political but not tax-policy resonance,” since it—like many other Romney investments—constituted a bet against the U.S. dollar, an odd thing for a presidential candidate to do. The Obama campaign provided a helpful world map pointing to the tax havens Bermuda, Luxembourg, and the Cayman Islands, where Romney and his family have assets, each with the tagline “Value: not disclosed in tax returns.”

As Jack Blum, lawyer and offshore tax expert, told VanityFair, “‘What Romney does not get, is that this stuff is weird.'”

What’s also weird – a different kind of weird – is that Romney paid an average tax rate of about 15 percent in 2010 and 2011; “Romney manages this low rate because he takes his payments from Bain Capital as investment income, which is taxed at a maximum 15 percent, instead of the 35 percent he would pay on ‘ordinary’ income, such as salaries and wages. Many tax experts argue that the form of remuneration he receives, known as carried interest, is really just a fee charged by investment managers, so it should instead be taxed at the 35 percent rate.”

There’s no doubt that rich people make the laws, and that naturally they make the laws in favor of themselves.  Barack Obama is part of the rich world, and there is no doubt that he makes laws that benefit himself.  But Romney’s assertion that “if there is a problem, it is in the laws, not in his behavior. ‘I pay all the taxes that are legally required, not a dollar more,'” while true, isn’t really a claim to fame.  It’s like putting on your gravestone “here I lie, and I didn’t cheat or steal.”  Great.  But not really something worth writing home about.

Mysteries also arise when one looks at Romney’s individual retirement account at Bain Capital. When Romney was there, from 1984 to 1999, taxpayers were allowed to put just $2,000 per year into an I.R.A., and $30,000 annually into a different kind of plan he may have used. Given these annual contribution ceilings, how can his I.R.A. possibly contain up to $102 million, as his financial disclosures now suggest?

The Romneys won’t say, but Mark Maremont, writing in The Wall Street Journal, uncovered a likely explanation. When Bain Capital bought companies, it would create two classes of shares, named A and L. The A shares were risky common shares, to which they would assign a very low value. The L shares were preferred shares, paying a high dividend but with the payoff frozen, and most of the value was assigned to them. Bain employees would then put the exciting A shares in their I.R.A. accounts, where they grew tax-free. With all the risk of the deal, the A shares stood to gain a lot or collapse. But if the deal succeeded, the springing value could be stunning: Bain employees saw their A shares from one particularly fruitful deal grow 583-fold, 16 times faster than the underlying stock.

Why does it work?  “Administrative guidance says you can do this kind of thing only if the compensation is in recognition of past services you have provided. ‘This should not mean retired from the mother ship [Bain] 10 years out and getting profits you had nothing to do with,’ Sheppard says, adding that Romney can get away with it because of excessive ‘administrative indulgences’ that have allowed a ‘perversion of the law in favor of a small class of overcompensated investment managers.'” Basically, ‘administrative indulgences’, also known as lack of rich people policing other rich people, means no one comments when Romney has about $100,000,000 more than should be accounted for.  As VanityFair asks, “his work at Bain was unquestionably good for himself and for Bain, but was it also good for the businesses he acquired, for their workers, and for the economy, as he claims?”

Romney’s political aspirations for higher office demand that he run as a conservative (very conservative), pro free-market, anti-transparency, anti-healthcare politician, and that he run away from what he was until he had higher aspirations: a moderate, pro-government (not anti free-market, but pro-government), pro-transparency, and pro-healthcare politician who signed into law near-universal health-care coverage in Massachusetts while he was governor. Since the unfortunate reality demands that Romney run as a very conservative conservative, he must naturally also be anti-abortion. Romney also has the unfortunate inclination to invest in anything that might increase his wealth (the problem there is not the inclination to increase wealth, but to do anything to do it).

Well, a MotherJones article from early July mentions “earlier this year, Mitt Romney nearly landed in a politically perilous controversy when the Huffington Post reported that in 1999 the GOP presidential candidate had been part of an investment group[,] [Bain Capital,] that invested $75 million in Stericycle, a medical-waste disposal firm that has been attacked by anti-abortion groups for disposing aborted fetuses collected from family planning clinics….the revelation had the potential to damage the candidate’s reputation among values voters already suspicious of his shifting position on abortion.”

At some point this become a question of did he, or didn’t he, do it.  There are many different articles detailing that Romney left Bain Capital in February, 1999, and that he just happened to remain a signatory on legal documents to places like the Securities and Exchange Commission on behalf of Bain until late 2002 (or, alternatively, and more likely, Romney never really quit Bain in 1999, but shifted his focus to the 2002 Olympics in Salt Lake City). “Documents filed by Bain and Stericycle with the Securities and Exchange Commission—and obtained by Mother Jones—list Romney as an active participant in the investment. And this deal helped Stericycle, a company with a poor safety record, grow, while yielding tens of millions of dollars in profits for Romney and his partners. The documents—one of which was signed by Romney—also contradict the official account of Romney’s exit from Bain.”

In November 1999, Bain Capital and Madison Dearborn Partners, a Chicago-based private equity firm, filed with the SEC a Schedule 13D, which lists owners of publicly traded companies, noting that they had jointly purchased $75 million worth of shares in Stericycle, a fast-growing player in the medical-waste industry. (That April, Stericycle had announced plans to buy the medical-waste businesses of Browning Ferris Industries and Allied Waste Industries.) The SEC filing lists assorted Bain-related entities that were part of the deal, including Bain Capital (BCI), Bain Capital Partners VI (BCP VI), Sankaty High Yield Asset Investors (a Bermuda-based Bain affiliate), and Brookside Capital Investors (a Bain offshoot). And it notes that Romney was the ‘sole shareholder, Chairman, Chief Executive Officer and President of BCI, BCP VI Inc., Brookside Inc. and Sankaty Ltd.’

Even Mitt Romney, at some point, didn’t claim that he left Bain in February, 1999.  As he told the Massachusetts State Ballot Law Commission, in 2002,

When I left my employer in Massachusetts in February of 1999 to accept the Olympic assignment, I left on the basis of a leave of absence, indicating that I, by virtue of that title, would return at the end of the Olympics to my employment at Bain Capital, but subsequently decided not to do so and entered into a departure agreement with my former partners, I use that in the colloquial sense, not legal sense, but my former partners,

Steve Kornacki, at Salon, is right that

when Romney agreed in early 1999 to run the Salt Lake Organizing Committee, there was no reason for him to think he’d jump right back into politics when the games were over – and every reason for him to assume he’d return to his private equity work. In fact, by 1999 he’d already taken two similar leaves of absence, one to run Bain and Company in 1991 and 1992 and another when he campaigned for the U.S. Senate from November 1993 to November 1994. After each of those leaves, he came right back to Bain Capital….
Romney didn’t start pushing the idea that he’d severed all ties with Bain in ’99 until late in the ’02 campaign, when Democrats played up Bain’s closure of a Kansas City steel plant, a move that cost 700 workers their jobs. Confronted with this potentially damaging attack, Romney pleaded ignorance, insisting he couldn’t have had anything to do with the closure because it came two years after he’d left. That’s the story he’s stuck with ever since.

While this is all about Mitt Romney, it’s really about honesty and ethical investments.

Romney’s “involvement with LifeLike contradicts his assertion that he had no involvement with Bain business. His testimony is supported by his 2001 Massachusetts State Ethics Commission filing, in which he lists himself as a member of LifeLike’s board;” LifeLike, whatever it is, was a company in which Bain Capital had a stake.

MotherJones also found that “another SEC document filed November 30, 1999, by Stericycle also names Romney as an individual who holds ‘voting and dispositive power’ with respect to the stock owned by Bain. And I’ll join MotherJones in wondering, if Romney had fully retired from the private equity firm he founded, why would he be the only Bain executive named as the person in control of this large amount of Stericycle stock?

What was Stericycle, exactly, besides an aborted-fetus disposal company?  It entered the medical-disposal business around 1990, and by mid-1997, “Stericycle was the second-largest medical-waste disposal business in the nation. Two years later, it was the largest. With 240,000 customers, its operations spanned the United States, Canada, and Puerto Rico. Fortune ranked it No. 10 on its list of the 100 fastest growing companies in the nation.”  What that doesn’t tell you is that it also had horrible working conditions.

In 1991, the Occupational Safety and Health Administration cited its Arkansas operation for 11 workplace safety violations. The facility had not provided employees with sufficient protective gear, and it had kept body parts, fetuses, and dead experimental animals in unmarked storage containers, placing workers at risk. In 1995, Stericycle was fined $3.3 million—later decreased to $800,000—by Rhode Island for knowingly exposing workers to life-threatening diseases at its medical-waste treatment facility in Woonsocket. Two years later, workers at another of its medical-waste processing plants in Morton, Washington, were exposed to tuberculosis. In 2002 and 2003—after Bain and its partners had bought their major interest in the firm—Stericycle reached settlements with the attorneys general in Arizona and Utah after it was accused of violating antitrust laws. It paid Arizona $320,000 in civil penalties and lawyers’ fees, and paid Utah $580,000.

That says a little about Romney, who co-founded an equity company that invested in Stericycle, but it says a lot more about our system. What says just as much is that “the deal worked out well for Bain. In 2001, the Bain-Madison Dearborn partnership that had invested in the company sold 40 percent of its holdings in Stericycle for about $88 million—marking a hefty profit on its original investment of $75 million. The Bain-related group sold the rest of its holdings by 2004. By that point it had earned $49.5 million.”

Recently Romney went to the NAACP to give a speech; a curious choice of audience for the presumptive Republican nominee.  Regarding race Mitt is like his father George: tolerant and progressive.  Romney even could have had a policy position the NAACP would have immediately supported, a position that used to be his own.  “He could have told them about the signal accomplishment of his term as governor, a law that disproportionately benefited blacks and other minorities in Massachusetts, and that laid the groundwork for a national law that will extend health coverage to millions of African-Americans. But of course, Romney would not do that. Instead, he reiterated his intention to repeal said national law,” because that is now in his political interests. In the ultimate admission of self-interest, “a Romney adviser said that the goal of the event was less to win over black voters than to be seen trying.”

The point, in the end, is not whether Romney did or did not work for Bain between 1999 and 2002 when it invested in a lot of unethical and questionable companies  (for instance, in the disposal of fetuses) – although it is a felony to lie to the SEC – but whether Romney is inherently an honest or dishonest person.  Is he a person and a candidate who tries to tell the truth, or is he a person and a candidate that is out to win a dollar and a vote?