Romney Says Mandate's A Tax, But Also Sides With Justices Who Say It's Not

when you straddle a big fence, you can get hung by your balls...

New Questions About Timing Of Romney's Bain Departure
July 20, 2012
by Tamara Keith and Scott Horsley
NPR All Things Considered

Mitt Romney speaks at a campaign stop in Roxbury, Mass., on Thursday.

The Boston Globe reported new details Friday about Mitt Romney's lingering ties to his private equity firm, Bain Capital, after he left Boston to run the Winter Olympics in Salt Lake City.

The Globe says Romney was "not merely an absentee owner" between 1999 and 2002, despite financial disclosure forms that say he "has not been involved in the operations" of Bain Capital "in any way," for more than a dozen years.

Writes the Globe:

"Interviews with a half-dozen of Romney's former partners and associates, as well as public records, show that he was not merely an absentee owner during this period. He signed dozens of company documents, including filings with regulators on a vast array of Bain's investment entities. And he drove the complex negotiations over his own large severance package, a deal that was critical to the firm's future without him, according to his former associates."

The Fact Checker column in The Washington Post had previously accused the Obama campaign of "blowing smoke" about Romney's role at Bain. Friday, the Post softened its position, citing what it called "ambiguity" about Romney's position.

It's been a week since Romney's TV blitzkrieg, in which he tried to put to rest the questions about his role at Bain Capital.

Securities and Exchange Commission documents filed as late as 2002 list Romney as the CEO. But in interviews with CNN and others, Romney insisted he was not responsible for Bain's decision-making once he left to run the Olympics.

"There's a difference between being a shareholder — an owner, if you will — and being a person who's running an entity," Romney said last Friday to CNN's Jim Acosta. "And I had no role whatsoever in managing Bain Capital after February of 1999."

The Obama campaign has scoffed at this distinction, producing a Web video in which ordinary citizens raise their eyebrows at Romney's legalese.

Kathleen Hall Jamieson, who studies political communication at The Annenberg Public Policy Center, says it's no wonder people are confused.

"When a candidate is speaking in the technical language of a specific kind of business enterprise, the public is going to have difficulty understanding what he's saying," she says.

Romney's challenge is made harder because he didn't officially retire from Bain until 2001. That was after negotiating a severance package that continued to pay Romney for a decade after he'd left for Salt Lake City.

"When one uses a word such as retroactive retirement, or when one is explaining how one continues to get income, even though one is not actually managing day-to-day operations, one is dealing in a universe that most of us have no experience with," Jamieson says.

In contrast, President Obama's argument about Romney is straightforward.

"I think most Americans figure if you're the chairman, CEO and president of a company, that you are responsible for what that company does," Obama said last week in an interview with Washington, D.C., television station WJLA.

Obama has been criticizing Romney over Bain Capital's investments in companies The Washington Post said helped ship jobs overseas. That outsourcing charge coincides with questions about when Romney stepped down from Bain. But the timing may not be that important, since some of the investments in outsourcing firms were clearly made while Romney was still in charge.

"Nobody really cares when he left. That's not what's relevant. And that's not what's gaining traction," says Frank Luntz, a Republican messaging guru.

"What is having somewhat of an impact, and I've seen it myself in the research I've done in Ohio," he says, "is a doubt, whether he connects to those who are economically challenged, who have already decided the Obama administration hasn't delivered for them over the last 3 1/2 years, but now aren't certain whether Mitt Romney will deliver for them over the next four years."

Romney cites his business experience as one of his key qualifications for the White House. Jamieson says the Obama campaign is trying to neutralize that argument by casting doubt on Bain's track record and forcing Romney to distance himself from the firm.

"By virtue of positioning Bain as a central element in his resume, it's becoming an indictment," Jamieson says.

If there's any lasting impact of this timing debate, that could be it.

Just How Blind Are Blind Trusts, Anyway?
July 20, 2012
by Robert Smith - NPR All Things Considered

As Mitt Romney has faced questions about his investments and tax returns, the likely Republican presidential nominee has responded with two words of explanation: blind trust.

Romney keeps most of his wealth in a blind trust designed to prevent him from knowing exactly where his money is and what it's doing. It's a long tradition for presidents and candidates, though anyone can set one up if he wants to.

But it turns out that not all blind trusts are equally blind. Some are cast into complete and utter darkness. Others are more nearsighted.

Ken Gross, an ethics lawyer with the law firm Skadden Arps in Washington, D.C., has helped presidential candidates set up blind trusts. He says blind trusts are complicated, expensive and generally a pain.

"Most people who have any kind of wealth are interested in how it's managed," Gross says. "And blind trusts, because they are blind, you don't know what's going on with your money."

But a blind trust does have one crucial advantage for a politician: It becomes an easy answer to any conflict-of-interest question. Mitt Romney used it in the Republican primary debates earlier this year.

"My investments are not made by me," he said at the time. "My investments for the last 10 years have been in a blind trust, managed by a trustee."

Of course, there's an easy response from a less wealthy opponent. In fact, there's a video going around of Mitt Romney from 1994, when he was challenging another very rich candidate with a blind trust: Ted Kennedy.

"The blind trust is an age-old ruse, if you will," Romney said. "Which is to say, you can always tell a blind trust what it can and cannot do."

So which one is it? Blind or not blind? Well, all trusts are not created equal.

Federal election rules require fairly tight ones. State rules, not so much.

I called up a trust lawyer, Colby Wallace, with Bernstein Shur in Portland, Maine. I asked him how you can tell how blind a trust really is.

His advice: First look at the person who runs the trust, the person who's supposed to keep all the investments secret. If the person is a friend or relative, it looks bad.

Second, look at what went into the trust at the very beginning. Rich people get rich in specific fields or by starting specific companies, Gross says. "And just because it becomes part of a blind trust doesn't erase it from your memory."

The third way to evaluate a trust is to look at what kind of reporting the trust makes back to the politician. If the candidate gets fairly detailed reports about how much he has made in capital gains, dividends or interest, he may be able to figure out what's going on inside the trust.

But Wallace says that once you get up to the presidential level, with federal laws, this can't happen easily.

So what does it all mean for Mitt Romney?

His blind trust is run by a longtime financial adviser, who might know his likes and dislikes. If Romney were elected president, the campaign has already conceded that he would need to have a stricter blind trust with an outside firm running the money, instead of a close adviser.

The many rules mean a lot of work for people like Gross, who consults on blind trusts. But he still tells his clients he doesn't like blind trusts much.

He recommends that politicians without a ton of investments simply put their money into plain-vanilla index funds and bonds. Then tell everyone where the money is.

That's the route President Obama has taken, judging from his 2011 financial disclosure form (PDF): His investments are primarily in index funds from Vanguard and U.S. Treasury bills and notes.