By JACK GILLUM and STEPHEN BRAUN, Associated Press
WASHINGTON (AP) — Republican presidential candidate Mitt Romney has said he had no active role in Bain Capital, the private equity firm he founded, after he exited in February 1999 to take over Salt Lake City's Winter Olympics bid. But according to Bain associates and others familiar with Romney's actions at the time, he stayed in regular contact with his partners over the following months, tending to his partnership interests and negotiating his separation from the company.
Those familiar with Romney's discussions with his Bain partners said the contacts included several meetings in Boston, the company's home base, but were limited to matters that did not affect the firm's investments or other management decisions. Yet Romney continued to oversee his partnership stakes even as he disengaged from the firm, personally signing or approving a series of corporate and legal documents through the spring of 2001, according to financial reports reviewed by The Associated Press.
The details of Romney's contacts with his Bain partners between his 1999 departure and his separation from the company in mid-2001 could show how involved he was — either as CEO or passive investor — in several multimillion-dollar investment deals, bankruptcies and a spate of layoffs and overseas job shifts at Bain-owned companies that reportedly occurred during that span. Romney's role became a campaign issue in recent weeks because corporate records from the time showed his interests in some of those deals — despite his insistence that he gave up any decision-making authority once he left Bain.
"When partners depart a private equity company and are no longer active, there are various ways that their interests may be affected," said Colin C. Blaydon, director of Dartmouth University's Center for Private Equity and Entrepreneurship. "In some cases it may not be affected at all, but they still own points in the funds and the carried interest that is paid as part of their partnership stake. It's entirely possible to step back from a previous management role, but that all depends on the arrangements they make and the management structure created to replace them."
A clear accounting of Romney's contacts with Bain has been hampered by his presidential campaign's reluctance to discuss the period in detail and complicated by conflicting accounts in some of Romney's comments and financial reports. Both the Romney campaign and Bain have declined to provide documentary materials that could shed light on Romney's role after 1999.
Romney's campaign says that once he agreed to head the Olympics bid, he was no longer "involved in the management of that business or the investment decisions that occurred." Campaign spokeswoman Andrea Saul added that "it took some time to transfer his ownership to the other partners, which is not surprising given the growth and success of the firm."
Romney testified during a 2002 Massachusetts court case that he flew back and forth between Boston and Salt Lake City frequently in the first half of 1999, returning at least four times to attend board meetings of office supply giant Staples Inc., which had named him a director. Romney said nothing about his dealings with Bain during that testimony, which came during a legal challenge to his Massachusetts residency that was aimed at thwarting his campaign for governor.
Several associates now say that Romney made repeated trips between Salt Lake and Boston, where he met at times with his former partners, mostly to discuss his severance from the firm. The Boston Globe reported last week that Romney also met with his Bain partners at a 15th anniversary celebration in Palm Beach, Fla., in early 1999.
"Some were group conversations. Some were one on one," said a legal expert familiar with Romney's discussions with his Bain partners. This person, who spoke on condition of anonymity to discuss confidential business dealings, said that Romney did not relinquish his Bain ownership after taking the Olympics role but that Romney took care to avoid the day-to-day role of a corporate manager.
This person said that when Romney left, a five-partner management committee was already in place. That account echoed a similar version given by Edward Conard, a former Bain partner who donated $1 million last year to a political committee supporting Romney's presidential run.