“A Matter Of Character And Trust”: Did Mitt Romney Break The Law By Failing To Disclose Delphi Investments?
We now know, thanks to Greg Palast’s recent scoop in The Nation, that Mitt Romney reaped a large financial windfall from the auto bailouts. Romney didn’t talk up this shrewd investment while touting his business experience on the campaign trail, for obvious reasons—he is a strong critic of those bailouts.
But while Romney had ample political reasons to conceal his investment, he apparently had no legal justification for doing so. Federal law requires that candidates disclose stock holdings that are affected by government action—and Romney’s million-dollar (at least) investment in a hedge fund that bought up Delphi stocks surely fits that bill.
Now, unions and good-government groups are calling on the feds to investigate Romney’s oversight.
Thursday afternoon in Toledo, Ohio—where the story has received significant play in local media—United Auto Workers president Bob King joined Palast and Service Employees International Union vice president Tom Woodruff to call upon the US Office of Government Ethics to look into Romney’s financial disclosures and their failure to list the Delphi investments. Along with several groups like CREW and Public Citizen, the union leaders also sent a letter to OGE demanding a formal investigation.
“The American people have a right to know about Governor Romney’s potential conflicts of interest, such as the profits his family made from the auto rescue,” said King. “It’s time for Governor Romney to disclose or divest.”
As Palast reported, a trust in Ann Romney’s name listed “more than $1 million” invested with Elliott Management, run by hedge fund guru and GOP mega-donor Paul Singer. (That’s the minimum amount of disclosure required by law, so it could have been much more than $1 million.) Singer subsequently snapped up large amounts of stock in Delphi at pennies on the dollar, and then, along with other hedge funds, demanded that the government assume pension responsibilities and bail the company out—or they would shut it down, thus crushing General Motors as well.
The government acceded, Delphi became lucrative again and then went public, and Elliott Management and its investors—including Romney—reaped enormous rewards.
Under any rational interpretation of the Ethics in Government Act of 1978, these are holdings that a presidential candidate would need to disclose, because they can be affected by government action. The Romney campaign doesn’t argue that they are not, but rather that, since Ann Romney’s trust is “blind,” there is no disclosure requirement.
Today’s letter points out, however, that Ann Romney’s trust is blind in name only. Romney himself has said that “the blind trust is an age-old ruse, if you will. Which is to say you can always tell a blind trust what it can and cannot do.” Moreover, this is not a federally recognized blind trust of the sort Romney would be forced to create if he won the White House. If it was, he would have never been able to reap his windfall from Delphi, the letter points out.
Whether or not Romney broke the law will come down to this question of how blind this trust really is, and Romney at least has some plausible deniability there. But no doubt this is a story his campaign doesn’t want to see playing out in Ohio five days before the election.
By: George Zornick, The Nation, November 1, 2012
“Son Of Detroit”: Mitt Romney Profited From The Auto Bailout And Jobs Shipped To China
“I’m a son of Detroit. I was born in Detroit. My dad was head of a car company. I like American cars,” said Mitt Romney on Monday night when he met with President Obama to discuss foreign policy. “And I would do nothing to hurt the U.S. auto industry.”
That might be considered true—unless moving the most important American auto parts manufacturer to China counts as hurting the U.S. auto industry. But those words now stand as one of Romney’s most glaring falsehoods in the final debate.
Romney’s defensive statement came in response to a remark by Obama noting that the Republican nominee is “familiar with jobs being shipped overseas because you invested in companies that were shipping jobs overseas.” Moments later, he added: “If we had taken your advice, Governor Romney about our auto industry, we’d be buying cars from China instead of selling cars to China.”
Most viewers had little idea what Obama was talking about or why Romney felt the need to rebut him so specifically. But their coded exchange almost certainly referred to an investigative report that broke wide on the Internet, without much attention from the mainstream media so far—Greg Palast’s article in The Nation magazine, exposing Romney’s huge profits from Delphi, a crucial auto parts company that moved nearly all of its jobs to China after taking billions in auto bailout money from the Treasury.
As Palast reported, the Romneys made millions from that intricate deal, put together by one of his main campaign donors, billionaire investor Paul Singer — through a “vulture fund” known as Elliot Management. Having bought up Delphi at fire-sale prices, Singer and his partners essentially blackmailed the Treasury into paying them billions so that Delphi would keep supplying parts to General Motors and Chrysler. They stiffed the company’s pensioners, pocketed the bailout funds, and moved all but four of the firm’s 29 plants to China.
The neglect of the Delphi story by mainstream and even progressive outlets such as MSNBC has been remarkable, particularly because neither Romney nor his campaign has denied it. If anything, a statement issued by the campaign to The Hill, a Washington publication, seemed to confirm Palast’s reporting by attempting to deflect blame onto the Obama administration:
Romney’s campaign did not deny that he profited from the auto bailout in an email to The Hill Wednesday afternoon, but it said the the report showed the Detroit intervention was “misguided.”
“The report states that Delphi had 29 US plants before the misguided Obama auto bailout, and just four after. Is this really what the president views as success?” Romney spokeswoman Michele Davis said.
“Mitt Romney would have taken a different path to turning around the auto industry,” Davis continued. “As President, Mitt Romney will create jobs and give American workers the recovery they deserve.”
Taking Delphi bankrupt under the management of Singer and Romney’s other partners didn’t create jobs or security for Delphi’s American workers. After taking nearly $13 billion in bailout financing from the Treasury — with the support of Rep. Paul Ryan, who has also received generous support from Singer — the new Delphi management abrogated the company’s pensions, closed all those U.S. plants, and moved production to China. And so far, Romney has escaped any questions about why he and Ann Romney invested their millions with vulture investors who used taxpayer funds to destroy American jobs.
By: Joe Conason, The National Memo, October 23, 2012
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