Was Romney an Investor in Stericycle?

A couple of moonbats seem to think so. Personally, it wouldn't surprise me-Stericycle makes millions disposing of aborted fetuses, and Romneycare offers $50 abortions. The faux concern from these two is laughable-they couldn't care less about aborted fetuses, except for their usefulness as political pawns in slamming Romney. This question begs further investigation, so I'll be digging deeper and will update you when I know more. Prolife voters deserve to know what they're getting with Romney.

Update: Thus far all I've been able to find is the usual moonbat cast of characters putting the usual lefty spin on this story (Jezebel, Mother Jones et al), except for this from CNN Money:

Mitt Romney left Bain Capital in early 1999. Or did he?
FORTUNE -- February 1999. That's when Mitt Romney officially left private equity firm Bain Capital, in order to head up the Olympic Games in Salt Lake City.

It's an important line of demarcation. Anything Bain Capital did before February 1999 is on Romney, for better or worse. But he stops getting credit, or blame, after that date.

Today, however, left-leaning journalist David Corn tries to blur that line, in a new piece for Mother Jones. And, by doing so, Corn allows himself to saddle Romney with Bain Capital's August 1999 investment in Stericycle, a medical waste management company whose services included the disposal of aborted fetuses. From a political perspective, you can see where this is going (particularly since Romney was still pro-choice at the time).

On first read, Corn's argument seems compelling. But, upon reflection, it's little more than conjecture that uses old regulatory filings as authoritative-sounding smokescreens.

Corn writes:

[Bain Capital] said Romney left the firm in February 1999 to run the troubled 2002 Winter Olympics in Salt Lake City and likely had nothing to with the deal. But documents filed by Bain and Stericycle with the Securities and Exchange Commission—and obtained by Mother Jones—list Romney as an active participant in the investment... In November 1999, Bain Capital and Madison Dearborn Partners, a Chicago-based private equity firm, filed with the SEC a Schedule 13D, which lists owners of publicly traded companies, noting that they had jointly purchased $75 million worth of shares in Stericycle, a fast-growing player in the medical-waste industry...

The SEC filing lists assorted Bain-related entities that were part of the deal, including Bain Capital (BCI), Bain Capital Partners VI (BCP VI), Sankaty High Yield Asset Investors (a Bermuda-based Bain affiliate), and Brookside Capital Investors (a Bain offshoot). And it notes that Romney was the "sole shareholder, Chairman, Chief Executive Officer and President of BCI, BCP VI Inc., Brookside Inc. and Sankaty Ltd."

To be clear, I'm not questioning the documents' veracity. Or their existence (since I also looked them up on my own). Instead, I'm questioning Corn's conclusion.

Remember, Romney did not leave Bain Capital as part of a long-term, planned succession process. Instead, his departure was fairly sudden -- borne of a desire to help salvage an Olympic Games that was $1.4 billion in the hole and tarred by a massive bribery scandal. The very first reports of Romney being considered for the Salt Lake City job were on Feb. 2, 1999. Just nine days later, he officially took over.

Not surprisingly, Bain Capital hadn't worked out all the details of Romney's departure. It eventually would discard the CEO position in favor of a horizontal management committee made of of numerous partners, and provide Romney with a golden parachute that included limited partnership interests in all Bain-related funds raised through 2009 (including the option for Romney to invest additional monies). But none of that was in place when Romney took the Salt Lake City job.

Moreover, unwinding a private equity firm's ownership structure is extremely complicated. The "firm" itself is largely a legal construct of convenience, since it doesn't pay salaries, make investments or do much of anything else. Instead, what matters are the individual funds.

In the case of Bain Capital's funds, it's reasonable to assume that Romney was considered a "key man," meaning that each fund's limited partners could have voted to end the fund's investment period -- or take over fund management themselves -- if a super-majority felt it prudent. But that didn't happen, and Bain saw no reason to expend massive administrative effort to amend existing funds. Instead, it asked Romney to sign documents when necessary, and made the managerial/ownership changes on new funds going forward.

Corn acknowledges some of this, but seems to view it as a sham:

The document Romney signed related to the Stericycle deal did identify him as a participant in that particular deal and the person in charge of several Bain entities. (Did Bain and Romney file a document with the SEC that was not accurate?)

Moreover, in 1999, Bain and Romney both described his departure from Bain not as a resignation and far from absolute. On February 12, 1999, the Boston Herald reported, "Romney said he will stay on as a part-timer with Bain, providing input on investment and key personnel decisions." And a Bain press release issued on July 19, 1999, noted that Romney was "currently on a part-time leave of absence"—and quoted Romney speaking for Bain Capital.

First, we've already dealt with why Romney was listed on the documents. The part about lying to the SEC is absurd, since the SEC doesn't require an owner to be the operational decision-maker (Romney delegated such responsibilities, as is his right).

As for the second part, is it terribly surprising that neither Bain nor Romney was certain that his divorce from Bain was permanent? He had already left once before -- in 1994, to run for U.S. Senate against Ted Kennedy -- so the initial impulse was to term Salt Lake as yet another leave of absence. And Romney assumed that he'd still be involved in decision-making, albeit from a distance.

Unlike in what happened in 1994, however, Romney was successful in 1999 -- and would later parlay his Olympic "victory" into elective office. He also was consumed by the Olympics job, and numerous sources -- including many with Bain at the time -- have told me that Romney did not make any investment-related decisions for Bain after February 1999. The firm didn't ask, and Romney didn't offer. He had other things to do, and those he left behind considered themselves more than capable of handling the baton.

I know that's the Romney party line, but I've still seen no evidence yet to contradict it. Not even from David Corn. Unless that changes, February 1999 remains important. And Stericycle remains out of bounds.

Digging for more, will update soon. While I'm searching for more info, this seems an opportune time to bring up a subject I've been wanting to touch on for a long time: all the many people who profit from the abortion industry. It isn't just the abortionists benefitting financially, but the clinic workers, the companies who supply the power, the medical suppliers who supply the tools and pharmaceuticals, the other agencies who benefit from abortion referrals, landowners who lease to abortionists, companies like Stericycle who profit from disposing of the remains of dead babies, and the list goes on. There's a new site exposing abortion profiteers called Bloodworker-I urge you to visit and support their work, and join me and others in boycotting companies that help make abortion possible. If you're interested in the money trail of abortion and how high it goes, watch the Blood Money trailer on Youtube here and check out the entire documentary if you can.

Update: When news first broke about Bain Capital’s dealings with Stericycle, there was doubtless a lot of trembling to go around. In his defense, Romney claimed that he had left Bain Capital prior to any deals with Stericycle. Bain Capital said Romney left the firm in February 1999 to run the troubled 2002 Winter Olympics in Salt Lake City and probably had nothing to with the deal. The key word was probably “probably.”

Though he left the firm in 1999, Romney has continued to receive large payments from it—in early June he revealed more than $2 million in new Bain income. As dead as that story appeared to be, unfortunately for Mitt Romney, it has resurfaced, courtesy of lefty rag Mother Jones News. The latest news seems to confirm that Romney was directly involved and that he has lied about that involvement.

Documents filed by Bain and Stericycle with the Securities and Exchange Commission—and obtained by Mother Jones—list Romney as an active participant in the investment. And this deal helped Stericycle, a company with a poor safety record, grow, while yielding tens of millions of dollars in profits for Romney and his partners. The documents—one of which was signed by Romney—also contradict the official account of Romney's exit from Bain.

It’s not pure proggie speculation either. The evidence is pretty conclusive.

The SEC filing lists assorted Bain-related entities that were part of the deal, including Bain Capital (BCI), Bain Capital Partners VI (BCP VI), Sankaty High Yield Asset Investors (a Bermuda-based Bain affiliate), and Brookside Capital Investors (a Bain offshoot). And it notes that Romney was the "sole shareholder, Chairman, Chief Executive Officer and President of BCI, BCP VI Inc., Brookside Inc. and Sankaty Ltd."

The document also states that Romney "may be deemed to share voting and dispositive power with respect to "2,116,588 shares of common stock in Stericycle "in his capacity as sole shareholder" of the Bain entities that invested in the company. That was about 11 percent of the outstanding shares of common stock. (The whole $75 million investment won Bain, Romney, and their partners 22.64 percent of the firm's stock—the largest bloc among the firm's owners.) The original copy of the filing was signed by Romney.

How Romney will explain this is anybody’s guess. Presumably, the mainstream media will claim squeamishness and flee from this story as fast as their little legs can carry them. I'll continue to update here as information become available.


*Romney horns have no medicinal value. Poach at your own risk.

Update 7/5: Popular prolife site LifeNews published the following post today:

At a time when the pro-life movement is coming together to support Republican presidential candidate Mitt Romney over pro-abortion President Barack Obama, left-wing blogs are working overtime to sew seeds of doubt and distrust about the man who converted to the pro-life position on abortion.

Although one of the founders of the modern-day pro-life movement vouches for the authenticity of Romney’s pro-life conversion, left-wing blog Mother Jones hopes to make Romney look duplicitous on abortion by tying him to a company, Stericycle, that has come under fire from pro-life advocates for disposing of medical waste (read: the bodies of unborn children) from abortion clinics.

Mother Jones, a far-left publication, is more interested in attacking Romney over his ties to Bain Capital, an investment firm that provided start-up funds to businesses large and small in order to be successful. But, in the process, it hopes to confuse pro-life advocates who are supporting Romney into thinking that somehow he was the owner and operator of Stericycle and somehow approved of its business disposing the bodies of victims of abortion.

The pro-abortion blog notes that Romney had been part of a 1999 investment group that invested $75 million in Stericycle, a medical-waste disposal firm and makes the wild-eyed claim that the information has “the potential to damage the candidate’s reputation among values voters already suspicious of his shifting position on abortion.”

Bain contends “Romney left the firm in February 1999 to run the troubled 2002 Winter Olympics in Salt Lake City and likely had nothing to with the deal” but Mother Jones claims to have found documents showing Romney was involved in the investment. Bain says Romney left well before the November 1999 deal while the pro-abortion blog contends “SEC documents undercut that defense, indicating that Romney still played a role in Bain investments until at least the end of 1999.”

Bain explained further, “Mitt Romney retired from Bain Capital in February 1999. He has had no involvement in the management or investment activities of Bain Capital, or with any of its portfolio companies since that time.”

Assuming Romney was involved with Bain through the end of 1999 and involved in the deal obviously doesn’t make him responsible for Stericycle’s business collected aborted babies from abortion clinics. Bain itself — after Romney left the company — divested from Stericycle well before it began its abortion-connected operations.

As Mother Jones notes: “In 2001, the Bain-Madison Dearborn partnership that had invested in the company sold 40 percent of its holdings in Stericycle for about $88 million—marking a hefty profit on its original investment of $75 million. The Bain-related group sold the rest of its holdings by 2004. It was not until six years later that anti-abortion activists would target Stericycle for collecting medical waste at abortion clinics.”

That Romney wasn’t involved in, approving of, familiar with, or even involved in the company at the time of the Stericycle-aborted bodies disposal business, is further proven by the documentation of the pro-life Stop Stericycle campaign. The campaign began in January 2011 — over a decade after Romney was no longer involved in Bain Capital.

PHILADELPHIA – Repent America (RA) has launched a nationwide effort called the Campaign to Stop Stericycle (CSS), which aims to expose America’s leading medical waste disposal company for their collection, transportation and incineration of aborted children and the instruments used to kill them.

At minimum, even if Romney had been involved in Stericycle past 1999/2002, the date by which he clearly was no longer involved, pro-life efforts to raise awareness of its business with abortion facilities didn’t began until 18 months ago. Most pro-life Americans still are unaware of the connection but the information certainly didn’t filter down to the grassroots pro-life community until last year at the earliest. Moreover, though the first press release announcing the effort went out in Janaury 2011, the Stop Stericycle web site, which chronicles the press releases the campaign has sent since then, shows no significant activity in blowing the lid off of the company until the middle-latter part of last year.

On its documentation page, the Stop Stericycle campaign lists documents showing contracts and other information linking the business with abortion clinics. The first document offered as proof comes from 2003 — anywhere from one to four years after Romney and left Bain Capital and coming at the time Bain itself had divested from Stericycle.

Most of the documents cover the period between 2007-2009, making it appear Stericycle launched a concerted effort during those years to drum up business from abortion companies. Again, that time period is well after Romney was no longer involved in the company or Bain Capital, which had sold off its Stericycle holdings three-four years prior.

While the pro-abortion, pro-Obama side of the political divide would love to sew seeds of doubt with pro-life voters and it attempted to secure another four years for the abortion president, pro-life voters can rest assured that their attempts are misleading and disingenuous.

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Curioser and curioser. How much should anyone trust in Romney's supposed 'conversion', when Romneycare clearly offered $50 abortions, and Romney is on record saying he supported a woman's right to choose and would stand by that right? How much should anyone trust in someone who says "I don't remember what I said, but I stand by what I said?" Personally, I'm not convinced. This story is far from over.

Then there's this, just posted on CNBC:

WASHINGTON - For nearly 15 years, Republican presidential candidate Mitt Romney's financial portfolio has included an offshore company that remained invisible to voters as his political star rose.

Based in Bermuda, Sankaty High Yield Asset Investors Ltd. was not listed on any of Romney's state or federal financial reports. The company is among several Romney holdings that have not been fully disclosed, including one that recently posted a $1.9 million earning — suggesting he could be wealthier than the nearly $250 million estimated by his campaign.

The omissions were permitted by state and federal authorities overseeing Romney's ethics filings, and he has never been cited for failing to disclose information about his money. But Romney's limited disclosures deprive the public of an accurate depiction of his wealth and a clear understanding of how his assets are handled and taxed, according to experts in private equity, tax and campaign finance law.

Sankaty was transferred to a trust owned by Romney's wife, Ann, one day before he was sworn in as Massachusetts governor in 2003, according to Bermuda records obtained by The Associated Press. The Romneys' ownership of the offshore firm did not appear on any state or federal financial reports during Romney's two presidential campaigns. Only the Romneys' 2010 tax records, released under political pressure earlier this year, confirmed their continuing control of the company.

The mystery surrounding Sankaty reinforces Romney's history of keeping a tight rein on his public dealings, already documented by his use of private email and computer purges as Massachusetts governor and his refusal to disclose his top fundraisers. The Bermuda company had almost no assets, according to Romney's 2010 tax returns. But such partnership stakes could still provide significant income for years to come, said tax experts, who added that the lack of disclosure makes it impossible to know for certain.

"We don't know the big picture," said Victor Fleischer, a University of Colorado law professor and private equity expert who urged corporate tax code reforms during congressional testimony last year. "Most of these disclosure rules are designed for people who have passive ownership of stocks and bonds. But in this case, he continues to own management interests that fluctuate greatly in value long after his time with the company and even the end of his separation agreement. And the public has no clear idea where the money is coming from or when it will end."

Named for a historic Massachusetts coastal lighthouse, Sankaty was part of a cluster of similarly named hedge funds run by Bain Capital, the private equity firm Romney founded and led until 1999. The offshore company was used in Bain's $1 billion takeover of Domino's Pizza and other multimillion-dollar investment deals more than a decade ago.

Romney's campaign declined to answer detailed questions from AP about Sankaty. Romney aides have said in the past that some disclosures were not required because those assets were valued by his financial advisers at less than $1,000 — below the minimum threshold under federal rules set by the U.S. Office of Government Ethics. A financial snapshot of Sankaty in Romney's 2010 tax returns showed the holding with almost no value at the time— with $10,000 in both assets and liabilities.

"Everything on the filings is reported as required," campaign spokeswoman Andrea Saul said in a brief statement. "If OGE has an issue with any filings, they would let us know." The agency declined to comment.

While Sankaty no longer plays an active role in Bain's current deals, private equity experts said such holdings could provide significant income to Romney under his 10-year separation agreement from Bain, which expired in 2009. Investment funds typically churn "carried interest," profit shares due to the managers of the funds that often range as much as 20 percent of a fund's annual profit — known as "the carry." Even after investment funds are exhausted, profit shares and other late earnings from those stakes can continue to stream, arriving as lucrative "tails," tax experts say. In some circumstances, the analysts added, offshore companies like Sankaty could also offer limited tax deferral advantages.

The implications of Romney's Bain profit-sharing became clear last month when his trust reported that one rarely disclosed asset had posted a $1.9 million payout. The income was described as a "true-up" payment, catch-up income that made up for unpaid earnings owed to Romney as part of his Bain separation agreement.

Such sizable earnings are possible "depending on the terms of the agreement," said tax law expert Michael Kosnitzky, an attorney at the New York firm of Boies, Schiller & Flexner. The Romney campaign acknowledged recently that it could not rule out more large future payments.

The use of offshore companies such as Sankaty is allowed under U.S. tax laws. They are typically set up as shell corporations by private equity and hedge funds to route investments from large foreign and institutional investors, such as large pension plans, into corporate takeovers. The money is used to provide equity and buy up debt. In turn, the investors gain U.S. tax advantages by passing their funds through the offshore "blocker" corporations, avoiding a high 35 percent tax on earnings that the Internal Revenue Service describes as "unrelated business income."

Set up in Bermuda in 1997, Sankaty served as Romney's partnership stake in Bain's Sankaty group, which invests in bonds, bank loans and corporate debt instruments. That first wave of Sankaty funds managed more than $100 million in investments in the late 1990s and early 2000s, according to a corporate analyst familiar with the funds. The analyst insisted on anonymity because the analyst was not authorized to discuss the funds publicly.

Since late 2003, Romney has left his financial decisions to what his campaign describes as a "blind trust" overseen by lawyer R. Bradford Malt, a longtime Boston legal associate. The trust was set up under Massachusetts law, but it's not a federally qualified blind trust — which Romney plans to use if he wins the presidency. Romney does not oversee his investments under his current trust, but its general composition is made public and Malt invests according to Romney's political positions.

Romney's 2010 tax returns show him and his wife as sole owners of Sankaty. A 2011 Bermuda legal document lists Malt as Sankaty's president. Michael F. Goss, currently Bain Capital's chief operating officer, is listed as vice president, and Quorum Corporate Ltd., a Bermuda law firm, as secretary. Malt deferred questions about Sankaty to the Romney campaign; Bain Capital and Quorum declined to comment.

The candidate's 2010 tax returns listed at least 20 investment holdings besides Sankaty that had not been previously disclosed on federal reports. At least seven were foreign investments. Bain Capital Inc., the holding that posted the $1.9 million earning, was listed on Romney's state ethics reports in 2001 and 2002, when he ran for governor, but was missing from any annual ethics report until Romney's trust included it last month on his 2012 financial statement.

Sankaty is the only offshore holding in the Romneys' portfolio under their full control. On his 2010 taxes, Romney's blind trust filed an IRS form identifying Sankaty as a "controlled foreign corporation." That filing is required for any U.S. taxpayer who owns more than 50 percent of a foreign company. Romney's 2010 tax returns indicate that he and his wife control all 12,000 shares.

Several U.S. Securities and Exchange documents from the late 1990s and 2000s depicted Romney as Sankaty's owner at the time, but when he ran for Massachusetts governor in 2001 and 2002, Romney did not list the company on annual disclosure forms required by the Massachusetts State Ethics Commission.

The ethics commission would not comment on the omissions. Boston College law professor R. Michael Cassidy, who was a member of the commission at the time, said that if Romney "owned this business before he signed his ethics disclosure, then he was obliged to report it." The state's disclosure rules also allow a $1,000 minimum threshold. A six-year statute of limitations covering Romney's ethics reports has since expired.

Bermuda legal documents show that on Jan. 1, 2003, the day before Romney was sworn in as governor, his wife's trust acquired 12,000 shares of Sankaty. The transfer was not made public. The month before, Romney had placed his assets in the state-approved trust overseen by Malt. The move legally allowed the trust to describe Romney's holdings in 2003 only as "various investments and securities" — without providing details. The trust filed similar disclosures between 2004 and 2007, the last year of Romney's term.

Romney's use of Sankaty as his partnership stake in Bain deals is documented in several U.S. Securities and Exchange Commission reports between 1998 and 2000. The company controlled 50,000 shares of Global-Tech Appliances Inc., a Chinese appliance firm that Bain briefly invested in. Sankaty was also used to manage 385,000 shares in the 1999 takeover of Domino's, as well as the $75 million investment into the Stericycle waste disposal firm and a $150 million investment in the US LEC telecommunication firm.

Romney was named as sole owner and president of Sankaty in several of those documents. Though no longer active at Bain by then because he had left to head Salt Lake City's Olympic Games bid, Romney remained a participant because of his partnership stake.

Even though Sankaty is no longer used for Bain investments, several tax analysts said its legal offshore status still could be used by Romney to defer some taxes on some of the "carried interest" income related to the Bain deals.

Romney has said he gets no tax break. He told an audience at a Maine town hall appearance in February that "I have not saved one dollar by having an investment somewhere outside this country."

But the lack of disclosure over the years, private equity experts said, makes it impossible to tell.

"Without knowing more about an offshore's history and how it was used," Fleischer said, "you're left in the dark."

More unanswered questions. If you're curious about Romney's proabort past, click here. Next update as more information becomes available.