Romney Film Stretches Truth While Taking Comments Out of Context
A 28-minute film that attacks Republican presidential candidate Mitt Romney for eliminating jobs at times stretches the truth and takes some reports out of context or selectively edits them.
The film, bankrolled by supporters of rival candidate Newt Gingrich and scheduled to be released today, focuses on Romney’s work as chief executive officer of Bain Capital LLC, a Boston- based private equity firm.
The film, “When Mitt Romney Came to Town,” focuses on Bain’s dealings with UniMac, KB Toys Inc., American Pad & Paper or Ampad, and DDi Corp. (DDIC)
A review by Bloomberg News shows that the film, while often relying on news accounts, doesn’t always give a complete picture. It includes comments from unidentified people who say they previously worked for Bain-owned companies. Their identities couldn’t immediately be independently confirmed.
“We’re filling in the gaps of the 20 years of Bain that nobody knows about,” said Rick Tyler, an adviser to Winning Our Future, a pro-Gingrich political action committee that funded the film. “People can look at it and decide for themselves.”
Andrea Saul, a Romney spokeswoman, said of the film, ‘‘This is the type of criticism we’ve come to expect from President Obama,” not Republicans. Unlike President Barack Obama and Gingrich, she said, “Mitt Romney spent his career in business and knows what it will take to turn around our nation’s bad economy.”
An outside spokesman for Bain said he hadn’t seen the film and couldn’t comment.
Following are some findings from the Bloomberg review:
The Claims: The film accuses Romney and Bain of turning “the misfortunes of others into their own enormous financial gains,” pointing to electronics component manufacturer DDi, based in Anaheim, California. The film says Bain fired employees to boost profits. Romney sold his stock in the company, DDi filed for bankruptcy and eliminated 2,100 jobs, it says.
Background: DDi filed for bankruptcy in 2003 after Bain sold shares in the company, generating at least $85.5 million, and billed $10 million in management fees. The Orange County Register reported that 2,100 jobs were eliminated.
The Facts: The film doesn’t mention that DDi since emerged from bankruptcy and now has 1,600 employees in four states and Canada. DDi filed for bankruptcy because it was a victim of the dot-com crash, said DDi Chief Executive Officer Mikel Williams in an interview.
The Claim: The film runs an audio clip of a radio report in such a way that it sounds as if the reporter has concluded that “Bain reaped millions from companies that sent jobs overseas, closed factories or plunged into bankruptcy.”
Background: NPR aired a story last Oct. 6 about Romney and Bain Capital.
The Facts: The film was edited to leave out the first half of the sentence. The full sentence said: “Romney’s opponents have seized on those examples where things went south, places where Bain reaped millions from companies that sent jobs overseas, closed factories or plunged into bankruptcy.”
The Claims: After buying the company in 2000, Romney and Bain “loaded KB Toys with millions in debt then used the money to repurchase Bain stock.”
Background: KB, previously owned by Big Lots Inc. (BIG), was taken private in 2000 in a $305 million buyout by Bain. In 2002, KB’s directors approved a $121 million stock redemption from which Bain received a payout of $83 million, according to the Columbus Dispatch. The redemption was funded in part by $66 million in bank loans, according to a report in Forbes.
The Facts: The events reported in the film took place at a time when Romney said he didn’t have a role managing Bain. Romney “has not had any active role with any Bain Capital entity” since retiring in February 1999 to head the organizing Committee for the Salt Lake City Winter Olympics, according to his August 2011 financial disclosure filed with the Federal Election Commission.
The Claims: By 2009, the debt accumulated by KB after Bain took control “was too great. KB Toys was no more.”
Background: KB closed almost half of its 1,200 stores after seeking bankruptcy protection in 2004. The retailer filed for bankruptcy again in 2008 and liquidated its remaining 431 stores.
The Facts: A unit of the private equity firm Prentice Capital Management took a 90 percent stake in KB after it emerged from bankruptcy the first time in 2005. The company said market forces, not its debt, were to blame for the first bankruptcy, according to the Boston Business Journal. The same weak retail environment that prompted the company to file for bankruptcy the second time also contributed to the bankruptcy of other chains such as Linens ‘n Things Inc. and Circuit City Stores Inc. (CCTYQ)
The Claim: Romney is shown saying, “for an economy to thrive, there are a lot of people who will suffer as a result of that.”
The Background: The video came from comments Romney made in April 2010 at Emory University’s business school in Atlanta. Romney was talking about “creative destruction,” a term popularized by Austrian economist Joseph Schumpeter to describe how economies evolve to replace old technologies and spur the creation of new ones.
The Facts: The film doesn’t include comments Romney went on to make: “It’s important for us as a society to find ways to help people be able to move through this process of losing a job in one industry that becomes outmoded, and finding a position in a new type of industry that is growing.”
Romney Financial Statement
The Claim: The film says Romney’s “own financial statement shows his personal fortune to be at least a quarter-billion dollars,” and that “no one knows for sure” how much money he has. It also says “the bulk” of his money is kept in blind trusts and overseas bank accounts.
Background: Romney filed a public financial disclosure report with the Federal Election Commission. Signed on Aug. 12, 2011, the form lists his investment holdings, which are valued using a range instead of a specific figure.
The Facts: The $250 million net worth figure cited in the movie is the top range of Romney’s worth. Using the lower figures in the range given for his investments, Romney could have assets valued at $190 million. As listed in the filing, Romney’s net worth is valued between $190 and $250 million, not “at least” $250 million. Romney also says on the form that he and his wife, Ann, have kept their assets in a blind trust since Jan. 1, 2003, and haven’t had control over them. The forms also don’t show that Romney uses overseas bank accounts, though he invests in partnerships and funds that have foreign holdings.
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