By now you’ve all heard that Mitt Romney has rejected the Obama campaign’s formal invitation to share the last five years tax returns with voters. The UK’s Daily Telegraph has today published an investigation showing one possible reason Romney is so adamant about not divulging, even when it’s hurting him so much: he might leave himself open to a jail term.
The Republican presidential candidate appears to have profited from a marketing company that was contracted by the state of Massachusetts after receiving $5 million (Â £3.2 million) in financial backing from Bain Capital, Mr Romney’s investment firm.
One of his vice-presidential candidate’s brothers, who is a former Bain consultant, was at the time of the investment a senior executive at the marketing company, Imagitas, which was co-founded by another former Bain executive.
Both Mr Romney and Tobin Ryan, who omits his work at Imagitas from his corporate biography, also apparently stood to benefit from the $230 million (Â £146 million) sale of the company in 2005, while Mr Romney remained in office.
Massachusetts law requires that all state employees divest themselves of financial interests in private sector contracts with state agencies. At the time, failure to do so could have resulted in a $2,000 (Â £1,273) fine or a 2.5-year prison sentence. The potential punishments are now stronger.
Asked repeatedly by The Daily Telegraph throughout this week whether Mr Romney had indeed profited from the company, had been aware of the potential conflict of interest, or had taken any action to avoid one, his campaign and Bain Capital declined to comment.
First lesson for The Great Mittsby: don’t stand on the PM’s doorstep and rubbish the London Olympics if you don’t want the Brit conservative press muckrackers up to this kind of thing.
But more seriously:
In March 1998, Mr Ryan left Bain to become a vice-president at Imagitas. The company had been co-founded by Tom Beecher, another former Bain consultant. Their company secured the $5 million (Â £3.2 million) from Bain Capital in June 2000. Mr Ryan declined to say if he was involved in the deal. Mr Beecher declined to be interviewed.
A Bain Capital source said the investment was made by the company’s Bain Capital Fund VI.
…Mr Romney’s 2002 financial disclosure form states that he still owned 100 per cent of Bain Capital Investors VI, the fund’s controlling entity, and Bain Capital Inc, their overall parent company. However, the forms did not detail the individual companies, such as Imagitas, in which Bain Capital held investments. New state employees were obliged to prevent conflicts of interest with existing contracts. The following year, he began declaring that his holdings were in a so-called “blind trust” controlled by his lawyer.
…In May 2005, the firm was sold for $230 million (Â £146 million) to Pitney Bowes, the mailing corporation. It meant a payday for Imagitas stockholders such as Bain Capital. The former executive estimated that Bain Capital tripled its original $5 million (Â £3.2 million) stake.
…Spokesmen for Mr Romney repeatedly declined to confirm or deny that he had profited from the sale of Imagitas, or to answer a series of detailed questions about his financial connections to the firm lodged by The Daily Telegraph earlier this week. ”œYou’ve seen his disclosure forms – you know what’s on them,” one campaign source said.
Want to bet that that a full disclosure of tax returns would point to plenty more cases just like this and send Romney on his way to the Big House instead of the White House?