Swing States Project

Campaign Desk, Swing States Project — July 9, 2012 03:00 PM

Arbitrating the dispute over Romney’s history at Bain

Reporters and editors need a better approach to covering the controversy

By Brendan Nyhan

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NEW HAMPSHIRE — Last Tuesday, the Obama campaign released a new ad here and in eight other swing states that distorts the facts in a Washington Post story to implicate Mitt Romney in outsourcing by firms that received funds from Bain Capital.

The ad, which is titled “Believes,” reinforces a critique of Romney’s tenure at Bain Capital that the Obama campaign has frequently repeated in the weeks since the Post story was first published, including during a speech by the President in Durham, NH two weeks ago. In particular, Obama is running a series of ads drawing on the Post story, including a new ad released on Saturday that will run here in New Hampshire and in other battleground states.

Given the prominence of these claims in the campaign debate, the need for reporters to help voters make sense of them is especially great. However, journalists who have covered the story both here in New Hampshire and nationally have largely failed to fact-check the Obama campaign’s claims, which is especially disappointing since the online fact-checking site Factcheck.org had already published a thorough analysis of similar Obama ads stating that they “found no evidence to support the claim that Romney—while he was still running Bain Capital—shipped American jobs overseas.” As the site’s Brooks Jackson and Eugene Kiely note, the only clear cases of outsourcing cited by Obama’s campaign took place after Romney took a leave of absence from the firm in February 1999. The Obama camp has protested that Romney was described as retaining ownership stakes in Bain funds in various SEC filings, but they have provided no evidence that he maintained a significant operational role after leaving Bain to assume leadership of the Salt Lake City Olympics. (Washington Post fact checker Glenn Kessler and Fortune’s Dan Primack have reached similar conclusions.) The language of the new ad is less specific, but the misleading implication that Romney played an active role in outsourcing US jobs to low-wage countries remains the same.

Rather than clarify the misleading nature of the Obama campaign’s claims, many reporters have played stenographer and simply summarized the debate for readers. These “he said,” “she said” reports—which have appeared in the Los Angeles Times, The New York Times, and the Associated Press and on CBS News—serve the basic function of notifying the public of the existence of a dispute but fail to help voters arbitrate among the conflicting claims.

Even less usefully, other reporters and pundits have avoided discussion of the accuracy of the Obama campaign’s claims in favor of tactics-focused punditry. During a roundtable on Fox News Channel’s Special Report last week, for instance, New York Times reporter Jeff Zeleny was asked about the dispute. He managed two vague sentences on the substance of the matter before quickly turning to tactics, saying that the “interesting point” was the Romney campaign’s “clumsy response.” Likewise, when asked for comment on ABC’s This Week, commentator George Will said “the question is not whether the outsourcing is valid, is good economics, the question is, does it make Mr. Romney less than approachable and friendly?”

Finally, some outlets have avoided the issue altogether. Despite the ads that are running here, the dispute over Romney’s record at Bain has received little coverage in state media aside from a brief item in the Boston Globe (which is widely read in southern NH) and two Associated Press wire stories (here and here) since Obama’s June 26th speech in Durham.

What would a better approach look like? First, journalists should not mince words in describing the Obama campaign’s misleading claims. Consider how this lede from this report in Britain’s left-leaning Guardian newspaper immediately calls the claim into question—an approach that is more likely to avoid reinforcing misperceptions about Romney than most of the reporting we’ve seen thus far in the US:

Barack Obama has used a tour of the swing state of Ohio to renew his claim that his Republican opponent, Mitt Romney, led the outsourcing of American jobs to India and China.

The assertion is controversial and has been largely discredited by independent fact-checking groups.

Likewise, the Des Moines Register’s Jennifer Jacobs employed a scathing lede in her excellent report on “Believes,” which also included detailed evidence and links to help readers understand the dispute:

Independent fact checkers have debunked President Barack Obama’s previous allegations that Mitt Romney was responsible for outsourcing jobs, but the Democrat will soon air his third TV ad in Iowa going after his Republican rival on the same claim.

Of course, many news outlets may not want to rely on Factcheck.org’s reporting of this story despite the site’s excellent (albeit imperfect) track record. It’s of course possible that Jackson and Kiely’s conclusions are not the right ones or that new facts will emerge if further inquiries are made. In that case, however, journalists need to do the hard work of re-reporting the story themselves rather than simply treating the facts as a matter of dispute or ignoring them altogether.

Beyond these specific charges, journalists need to figure out how to acknowledge the complexity of the outsourcing issue while summarizing Romney’s history at Bain in an accessible and accurate manner for readers. It’s true, as the AP’s Beth Fouhy put it in an ad watch of “Believe,” that “Bain did invest in businesses that moved jobs overseas to cut costs—a trend that began in the 1990s and which many US companies followed.” Voters have every right to know this and to form their own opinion about Bain’s role in the transformation of American business practices during this period. But as Factcheck.org showed, the specific cases cited by the Obama campaign largely concern actions taken by those companies during a period in which Romney was not making operational decisions at the firm. Journalists must be clear about this distinction.

Romney’s history at Bain will come up again and again during this campaign. It’s time for reporters and editors to pioneer a better approach to covering this issue.

Staff writer Greg Marx contributed to this report.

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When Dick Cheney's connections to Haliburton and its industry were considered impolite, we got a fellow who rewrote much of America's energy policy in secret meetings and passed off privileged contracts to specifically and the rest of the industry as a result.

Bain's model of business is to ride the wave of destructive (for living wage American jobs) capitalism and to use debt to push money to shareholders and executives which would normally have gone to taxes and pensions. Mitt Romney's business model is to feed off the carcass of the blue collar (and increasingly white collar) worker, as discussed before:

www.cjr.org/the_audit/the_problem_with_private_equit.php#comments

Is this the right culture to pick from for leaders of the united states? Will someone more sympathetic to the Gordon Gekkos and Larry the Liquidators of the world bring positive change to the us?

I know that the political press wants to separate Mitt Romney from the leech industry he hails from but it's not that easy:

krugman.blogs.nytimes.com/2012/07/05/onshore-outsourcing-wages-and-benefits/

And even if it were possible to somehow create a chronology that "Bain = bad, Bain + Mitt = not so bad, Bain - Mitt = Bad Again", that isn't the important question. Given Mitt's connection to private equity, given his attraction towards the Ryan plan, given the Bush team he's assembling for his campaign, given the private equity approach to solving a pension's problems, what are his plans for social security, for the economy, for jobs, for state deficits caused by tax shortfalls, for handling carbon pollution, for...

Given the extraction culture he comes from, will an America under his guidence be a good place to live?

I would say no.

And it would have served America well to have said no to Dick Cheney and Bush when they had the chance twice.

#1 Posted by Thimbles, CJR on Mon 9 Jul 2012 at 04:40 PM

And since the ad brought up GM, we have an opportunity to see a contrast in how Obama and Mitt Romney might lead:

Under Obama's leadership, the auto industry was saved and Mitt Romney lied to take credit for it:

www.forbes.com/sites/michelinemaynard/2012/05/08/mitt-romney-takes-credit-for-the-auto-bailout-say-what/

Under Romney's leadership, the auto industry would have been allowed to go bankrupt:

www.nytimes.com/2008/11/19/opinion/19romney.html

so that "new labor agreements" could be imposed, "to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota," and "retiree benefits must be reduced so that the total burden per auto for domestic makers is not higher than that of foreign producers". Under Romney "A managed bankruptcy may be the only path to the fundamental restructuring the industry needs. It would permit the companies to shed excess labor, pension and real estate costs." How very private equity of him.

Does America need more of this in its political system, nevermind the economy?

#2 Posted by Thimbles, CJR on Mon 9 Jul 2012 at 04:55 PM

Oldy but relevant-y

www.boston.com/news/nation/articles/2008/01/27/as_bain_slashed_jobs_romney_stayed_to_side/?page=full

"In early 1995, as the Ampad paper plant in Marion, Ind., neared its shutdown following a bitter strike, Randy Johnson, a worker and union official, scrawled a personal letter to Mitt Romney, pouring out his disappointment that Romney, then chief executive of the investment firm that controlled Ampad, had not done enough to settle the strike and save some 200 jobs.

"We really thought you might help," Johnson said in the handwritten note, "but instead we heard excuses that were unacceptable from a man of your prominent position."

Romney, who had recently lost a Senate race in which the strike became a flashpoint, responded that he had "privately" urged a settlement, but was advised by lawyers not to intervene directly. His political interests, he explained, conflicted with his business responsibilities.

Now, Romney's decision to stay on the sidelines as his firm, Bain Capital, slashed jobs at the office supply manufacturer stands in marked contrast to his recent pledges to beleaguered auto workers in Michigan and textile workers in South Carolina to "fight to save every job."..

Ampad, too, became squeezed between onerous debt that had financed acquisitions and falling prices for its office-supply products. Its biggest customers - including Staples - used their buying power and access to Asian suppliers to demand lower prices from Ampad.

Romney sat on Staples's board of directors at this time.

Creditors forced Ampad into bankruptcy in early 2000, and hundreds of workers lost jobs during Ampad's decline. Bain Capital and its investors, however, had already taken more than $100 million out of the company, in debt-financed dividends, management fees, and proceeds from selling shares on public stock exchanges.

By the time Ampad failed, Randy Johnson, the former union official in Marion, Ind., had moved on with his life. After the Indiana plant shut down, he worked nearly six months to help the workers find new jobs. He later took a job at the United Paperworkers union.

"What I remember the most," said Johnson, "were the guys in their 50s, breaking down and crying."

PS. the above should have read

"passed off privileged contracts to Haliburton and KBR specifically and the rest of the industry as a result."

HTML fail.

#3 Posted by Thimbles, CJR on Mon 9 Jul 2012 at 05:34 PM

And just think...

The Executive, according the the U.S. Constitution, is supposed to have nowhere near the scope of power it assumes today.

Nothing about writing laws (via regulations, executive orders, signing statements).

Nothing about starting wars or assassinating people.

Nothing about "saving healthcare" or "running the economy."

Nothing about representing certain groups of people.

None of that and a host of other unlawful powers assumed over the years.

Yet here we are, wringing hands over which version of the same Caesar should more heavily rule us next.

For shame.

#4 Posted by Dan A., CJR on Mon 9 Jul 2012 at 08:23 PM

How about a little chart showing each of the companies Mitt/Bain invested in and 1) the company debt when Bain took over. 2) the amount of debt when Bain was through with them. and 3) the amount Bain made or lost from each investment?
It seems to me without more basic information, no claim about Bain can be refuted.

#5 Posted by Bob Gardner, CJR on Tue 10 Jul 2012 at 11:40 AM

"What would a better approach look like?"

An even better approach would take account of recent reporting that indicates Romney was active at Bain much later than February 1999.

www.motherjones.com/politics/2012/07/romney-bain-abortion-stericycle-sec

The track record of "independent fact-checkers" is hardly stellar; lord knows we need such a thing, but we need a lot better than the badly flawed ones we have. In this case they, and you, seem to have missed out on a pretty significant chunk of the facts.

#6 Posted by Blake, CJR on Tue 10 Jul 2012 at 03:35 PM

I realize these stories are only a week old, and still breaking, but come on, you're a journalism review--we expect better of you.

politicalwire.com/archives/2012/07/10/mystery_grows_over_when_romney_actually_left_bain.html

#7 Posted by Blake, CJR on Tue 10 Jul 2012 at 05:22 PM

digbysblog.blogspot.com/2012/07/more-norm-busting-huckleberry-graham.html

"It didn't used to be considered ethical to "game" the system just because you could. Yes there have always been game players. But leaders and statesmen were not supposed to be among them. Indeed, until recently "game players" were held in disrepute...

This is the sickness at the core of elite American life. The winners are, by definition, the ones who get away with the most.

It appears that Mitt Romney is getting away with hiding hundreds of millions of dollars. We don't know whether it's legal because he refuses to open his records to the public for examination. But even if it isn't, the fact remains that it's unethical for a person not to pay a fair share of taxes, especially when he has hundreds of millions of dollars, more money than he can spend in a lifetime. That's just wrong. And certainly someone who wants to be president of a country full of middle class and lower income folks who mostly do just that, should be a straight arrow and do the right thing, not "play games" with the system.

It's quite astonishing when you think about it that a man running for high office did nothing to even try to create the illusion that he's an upstanding citizen who would never take advantage of the system. It says a lot about America that a presidential candidate figured the public wouldn't care. Are we really so far gone that we don't expect any better of our leaders than this?"

Do we really need a guy out of that culture as not just a leader, but the leader?

#8 Posted by Thimbles, CJR on Tue 10 Jul 2012 at 11:44 PM

talkingpointsmemo.com/archives/2012/07/pro-tip_as_they_say.php

"But all of this talk ignores a fact so salient and obvious that it’s hard to fathom how some are nevertheless oblivious to it. Having vast wealth and aggressively working the law and tax code to avoid taxes is a very different thing if your policy agenda is geared almost entirely to benefit the super wealthy. If you’re a gazillionaire and your main pitch is to cut taxes on gazillionaires that’s just gonna put a bit more emphasis on your wealth. This logic should not be difficult to grasp.

To put the point in even sharper relief, one admittedly partisan but likely accurate analysis of Romney’s tax proposal shows it would not only cut rates for the wealthiest Americans, it would actually raise taxes for most of the middle class."

#9 Posted by Thimbles, CJR on Wed 11 Jul 2012 at 02:55 PM

Here is another valuable article on the topic, admittedly from a partisan source, but well worth reading:

consortiumnews.com/2012/07/14/the-romney-fact-checking-scandal/

#10 Posted by Johanna, CJR on Sat 14 Jul 2012 at 07:15 PM

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