Who Fact Checks the Fact Checkers?

Methinks the WaPo needs a new fact checker.  Andrew Sullivan has the details.  I really don't follow the news as much as I'd like. I find American media outlets to be an unbearable mix of moronic and unserious.  WaPo's Glenn Kessler seems to be a good example of this.

Comments

[Michael Duff]

What's interesting is that as Sullivan presents it Kessler does a kind of 12(b)(6)/so what? So it is really a non-fact check: Kessler concedes the facts and argues in essence that misrepresentation of one's CEO status is immaterial. I think the conclusion is possible, though strained; but at all events Kessler does not seem to feel the need to make the argument in a persuasive way. More evidence that logic will have little to do with what is coming.

[anon]

The hysteria about the filings by Romney while he was on a leave of absence capitalizes perfectly on the ignorance of the public.
When one takes a "leave of absence" one may retain a position.
Romney says that he was abruptly called away, announced that he would take a leave of absence, and retained his position as CEO.
He says that he delegated day to day operations while he was on leave.
What is so hard to understand? Well, all of it, if you are fed heated and over the top claims by one side in a political debate and don't have any understanding of how private equity firms operate.
And, in the final analysis, there is a huge "so what" here. The Obama campaign claims that Romney was lying, at the time, in order to cover up the fact that he was outsourcing jobs.
What a crock.

[Brando Simeo Starkey]

Anon, you'd do well to do some more reading on this subject. Perhaps you can start with Stephen Diamond's blog post: http://stephen-diamond.com/?p=4128. Or maybe you can tell us why he's wrong.

[anon]

Brando:
I'll take that challenge. Diamond is not wrong in his facts, but admits he may be wrong in his opinion based on "surmise." If you believe his post contradicts what I said, you'd do well to read Diamond's post more carefully.
To sum up his argument, he states:
1. "Bain makes it clear that Romney was not just the holder of a passive LP interest. He was also sole shareholder, sole director, CEO, President, Managing Director and “thus is the controlling person” of Bain Capital, Inc."
2. "At the end of the day he, and he alone, had sole legal responsibility for decisions made by Bain Capital, Inc. Of course, specific responsibilities and decisions could be delegated or structured differently with respect to different transactions, so a final conclusion about power and decision making can only be made if the agreements between the entities are made public."
3. "But there can be little doubt that as a legal matter, Mitt Romney remained in charge at Bain through his control and legal responsibility for Bain Capital, Inc., the management company at the heart of the Bain empire."
There is nothing whatsoever inconsistent here with what I said as a legal matter. Where Diamond is taking a leap of faith is his conclusion, with respect a few transactions, that Romney had "active decision making" and day to day control. He states this in the conditional, e.g., "Romney was acting as the leader of the underlying passive investors and thus Romney would have had a key and substantive role in such decisions." No proof is cited, though.
I can't say there is none. There may be. Romney may have decided to "sell Fresh Samantha to Odwalla and how to use the 33% stake Bain had received in Odwalla to wield power inside that company."
Romney may have made every decision, or, he may have delegated and "signed off" : much as one on a leave of absence whose formal approval is necessary.
Was Romney legally liable at the time? Yes. For sure. What is at issue is whether he was actively managing Bain. You can't say, and Diamond hasn't said, and I can't say.
And, I would add: this is all supposedly relevant because Romney is lying about his role at Bain between 1999 and 2002 in order to hide his role in outsourcing decisions that were made during that period, and that he cooked up this lie at the time and shortly thereafter.
That's sort of far-fetched.
What I would prefer is a more reasoned approach. We can't just fling slander and libel at people. We need to think about the common sense of this charge, just like we do every charge against those we support.

[Steve Diamond]

Assume for the sake of argument that from 1999-2002 Bain Capital, Inc. (BCI) was indeed the central managerial entity at the heart of Bain such that most of the key substantive decisions about how Bain acted were made with the approval of BCI.

Since Romney was the CEO, sole shareholder, President and controlling person of BCI then it is impossible for him to have not approved/disapproved of those key decisions. Otherwise there would have been no authority behind those decisions.

To sustain Anon's argument requires that at best that Romney literally signed off on decisions without participating in them at all or that he appointed an agent in his stead.

I think we don't have to spend much time thinking the former is the case (what, he robo-signed key contacts and SEC documents?). With respect to the latter, Romney himself could dispense with all this debate if he simply said, I appointed X to act in my stead during this period of time.

Since he has not said that I think it a reasonable presumption to conclude that he did, indeed, take an active role in those key decisions. If you believe otherwise you are likely also to believe that Bill Ayers had no say in the appointment of Barack Obama as a member of the board of directors of the Chicago Annenberg Challenge.

[Brando Simeo Starkey]

Thanks for the post Steve. What I can't understand is how Kessler and factcheck.org don't understand the points that you are making. Very odd.

[anon]

Steve: We have the answer, and from Bain, about who acted in Romney's stead during his leave of absence.
Here:

"Edward Conard, who worked at the private equity firm during Romney's tenure as CEO, noted that Romney remained "legally" in charge of the company for at least two years after the former governor says he left to take over the Olympic Games in Salt Lake City.

“Mitt’s names were on the documents as the chief executive and sole owner of the company," Conard said. Conard served as managing director of the firm from 1993 to 2007.

MSNBC reports:

Despite Romney's statements that he left in 1999, Conard's new remarks suggest that, in fact, Romney's continued ownership of the firm enabled him to negotiate a better exit deal. "We had to negotiate with Mitt because he was an owner of the firm," Conard said.
The legal transfer of ownership dragged on for three years after Romney's informal departure to run the Olympics in Salt Lake City, Conard said, because Romney was aggressively negotiating his retirement package and compensation with executives and lawyers at the company.

"He'd created a lot of franchise value, and we were going to pay him for that," Conard said, adding: "We had a very complicated set of negotiations that took us about two years for us to unwind. During that time a management committee ran the firm, and we could hardly get Mitt to come back to negotiate the terms of his departure because he was working so hard on the Olympics."

What is so complicated about this?
But, more importantly, so what?????
What is the point?
That Romney lied at the time, and is lying now, to cover up the "outsourcing" by Bain during 1999-2002? (The charge that Bain "outsourced" itself is sort of risible as well.)
To that charge, I say again, the claim is far-fetched and contrary to the somewhat obvious evidence.
One doesn't just "quit" to go run the Olympics. One takes a leave of absence.
I wouldn't be suprised if Romney was kept informed of major decisions during the 1999-2002 period, and indeed, may have commented thereon.
Again, so what?
I don't favor the "silly season" when partisans throw the mud and hope it sticks. Steve, I don't say you are doing that. But, you are speculating in a way that decides every doubt in favor of the "charge."
I just hope you are cognizant of what the "charge" actually is: it is that Romney is a liar and a possibly a criminal, engaged in a fraud to cover-up malfeasance at Bain consisting of outsourcing jobs.
With respect to the effect of your analysis (supporting that charge, intentionally or not) I would hope you would be mindful.

[Steve Diamond]

Jimmy Cayne played bridge while Bear imploded. Mitt went off to SLC while Bain committed whatever capitalist crimes the O camp accuses it of. In both cases they retained the power to intervene. To not act is not to be inactive when it's effect is to allow steps to be taken.

Conard's comments continue the pattern here of mixing apples and oranges. Is this how Romney will explain complex decisions he has made as President? Eric Holder has done a better job explaining Fast and Furious.

So here are some questions for Conard (and really shouldn't the Romney strategy have been to explain this once in a manner such that there are no more questions?):

1 Was Mitt on this management committee?
2 Did it report to him?
3 Did he pick its members?
4 Did he participate in its meetings?
5 Did he have any role in its decisions?

As for negotiations to sell the firm that is a separate and interesting issue all by itself. Conard suggests these negotiations were long and complicated and so presumably time consuming on both sides. Why? PE firms are in the business of buying and selling very diverse businesses every day and often move very fast with little inside information. So why did this drag on and on? And if it was so time consuming does that not contradict the statement that Mitt was unavailable? Presumably it was a protracted negotiation because of valuation complexities. But that suggests Mitt was paying very close attention to just how Bain was deploying its capital not the opposite.

Btw see Andrew Sullivan's columns of late both for more info that suggests a clear contradiction between what Mitt said then what he says now and for AS's view of the story's impact on the Romney campaign.

In any case that this story has had legs suggests a deeper problem with Romney's team despite continued bad economic news.

[anon]

Steve: now the heat is turning up ... "capitalist crimes"? And, do you suggest that Bain "is guilty of whatever the O camp accuses it of"? Now, I am beginning to doubt that you are being fair and measured.
This is further evidenced by a misreading of the Conard quote. You ask: "So why did [the exit negotiation] drag on and on?"
Conard answers: "During that time a management committee ran the firm, and we could hardly get Mitt to come back to negotiate the terms of his departure because he was working so hard on the Olympics.
Ok, so do you say he is lying too, or did you just overlook or ignore that statement?
Citing Sullivan on anything is problematic. I've been reading his stuff for many years, back to when he was with the New Republic. He was much better then. Sort of a dubious source, frankly, and I'm sure Andrew would be the first to admit that he knows nothing about the operation of firms like Bain.
Finally, you have now avoided answering a simple question at least three times: What is the point of all this?
Are you saying that Romney is a liar and a possibly a criminal, engaged in a fraud to cover-up malfeasance at Bain consisting of outsourcing jobs?
If your answer is even a "maybe" then I think you are repeating DP talking points.

[Steve Diamond]

Hey, I was trying to lower the temperature. Rather than debate the outsourcing/layoffs issue (which I have dealt with elsewhere) I was trying to focus on the issue at hand.

The point is twofold: 1) what does it say about how Romney leads? 2) what does it say about his honesty? I thought that I made those points clear already. My own view is that he would have been much better off admitting right away, yes, when PE takes over firms we do sometimes lay people off and move operations to other parts of the world. There are many arguments out there about why that makes sense for capitalism and there are many voters out there who think capitalism is a good thing. So why not own it?

In any case I have never claimed to be fair and measured (why else get tenure?). :))

So what about those negotiations? Your own quote goes on to say:

"The legal transfer of ownership dragged on for three years after Romney's informal departure to run the Olympics in Salt Lake City, Conard said, because Romney was aggressively negotiating his retirement package and compensation with executives and lawyers at the company."

An aggressive negotiator is not a hands off negotiator. I have been in many such negotiations and if you think that Mitt was not paying precise and close attention to every detail of the sale of his interests you are kidding yourself and would border on being disingenuous.

But I also know that if the decision to sell was made in 99, it should not and really could not have taken 3 years to complete the sale. I think there may be something else going on here that Romney is trying to avoid. Just a guess based on many years of experience in examining business transactions closely.

[anon]

As for an explanation of the Romney position on outsourcing, see Kyl, Gillespie, et al. yesterday.
I'm just not that impressed by folks throwing around charges without the facts.
I'm not saying that you are doing that but I would say that you are not paying close attention to this story.
First, you asked "who, if not Romney, was running Bain?"
The answer was out there. A management committee.
Ok, well then, who was on the committee, etc.?
No answer.
So, let's change the issue to, well, ok, if he wasn't running the day to day, what about negotiating over how much his share was worth? What took so long?
Answer(you ignore it): He was off running the Olympics.
Oh, well then, that can't be true. There's something sinister there. Something to hide.
But, just guessing, of course.
This is a pointless debate, because you are just speculating.
How about going all the way?
For the fourth time: Are you saying that Romney is a liar and a possibly a criminal, engaged in a fraud to cover-up malfeasance at Bain consisting of outsourcing jobs?
That's the charge, Steve. Is it correct?