Updated at 4:00 pm ET Reviving an issue Democrats first brought up when Mitt Romney ran for governor of Massachusetts in 2002, the Obama campaign said Thursday that Romney may have misstated his tenure at the helm of Bain Capital and might even have committed a felony by filing false statements with the Securities and Exchange Commission.
Stephanie Cutter, Obama’s deputy campaign manager, told reporters Thursday that either Romney was misrepresenting his position at Bain to the SEC “which is a felony, or he was misrepresenting his position at Bain to the American people to avoid responsibility for some of the consequences of his investments. And if that’s the case – if he was lying to American people -- then that’s a real character and trust issue that the American people need to take very seriously.”
Referring to Cutter's insinuation about a possible felony, Romney campaign manager Matt Rhoades said in a statement, “President Obama’s campaign hit a new low today when one of its senior advisers made a reckless and unsubstantiated charge to reporters about Mitt Romney that was so over the top that it calls into question the integrity of their entire campaign. President Obama ought to apologize for the out-of-control behavior of his staff, which demeans the office he holds."
The Obama camp's allegations came after the Boston Globe reported that Romney had remained as chief executive and chairman of Bain Capital until 2002, three years beyond the date he said he gave up control.
Evan Vucci / AP
Republican presidential candidate, former Massachusetts Gov. Mitt Romney gestures during a speech to the NAACP annual convention, Wednesday, July 11, 2012, in Houston, Texas.
The Globe story cited documents filed by Bain Capital with the SEC which state that Romney was “sole stockholder, chairman of the board, chief executive officer, and president” as late as 2002.
In a statement released Thursday Bain Capital said, "Mitt Romney left Bain Capital in February 1999 to run the Olympics and has had absolutely no involvement with the management or investment activities of the firm or with any of its portfolio companies since the day of his departure."
It added that, "Due to the sudden nature of Mr. Romney's departure, he remained the sole stockholder for a time while formal ownership was being documented and transferred to the group of partners who took over management of the firm in 1999. Accordingly, Mr. Romney was reported in various capacities on SEC filings during this period."
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The Globe story does not assert that Romney had any active management role at Bain Capital after 1999. And the Obama campaign in its conference call with reporters Thursday did not cite any evidence of him having an active role after that date. “I would stay very much tuned on that,” said Bob Bauer, the general counsel for the Obama campaign, hinting that perhaps there was such evidence.
Bauer said the consequences for Romney of “this sort of potential misrepresentation” are “very, very serious and in the normal course would subject somebody in this position to every manner of investigation with all the consequences that you can imagine would follow.”
Bauer did not speak to the question of why the SEC had taken no action against Bain Capital or Romney in the ten years since the question of whether Romney had an active role in the firm after 1999 first came up in 2002, when he ran for governor of Massachusetts.
Bauer suggested that Romney ask Bain Capital to release records from 1999-2002, such as minutes of meetings in order to prove that Romney did not have an active role in running the firm.
In her response to the Globe story, Romney spokeswoman Andrea Saul said, "The article is not accurate. As Bain Capital has said, as Governor Romney has said, and as has been confirmed by independent fact checkers multiple times, Governor Romney left Bain Capital in February of 1999 to run the Olympics and had no input on investments or management of companies after that point."
In 2002, when Romney ran for governor of Massachusetts, his Democratic opponent, Shannon O’Brien, accused him of being culpable in layoffs at a Kansas City steel mill, GST Steel, that went bankrupt in 2001, after Bain Capital had profited from an investment in the company.
Romney said he could not be blamed since had no active management role at Bain at that point. The Obama campaign has revived O’Brien’s charge as part of its continuing criticism of his record as a business executive and investor.
The Washington Post reported back in May that Romney’s name appeared on Bain SEC filings between 1999 and 2002. The Post reported that a 2002 statement Romney filed with the Massachusetts State Ethics Commission said “he was a ‘passive, limited partner [with] no management capacity’ in the Bain entities in which he held ownership.”