Mitt Romney has been getting a lot of heat about SEC filings last week and this weekend. The interesting part is the discrepancies between his claims of being not involved in the management of the company, while being listed as the Chairman and President of Bain Capital, Inc.
What I revealed in the previous post of the 1999 Delaware annual report for Bain Capital, Inc. filed in March 2000 was that “W. Mitt Romney” was still listed as President and Director AND that under Delaware law, it should have been the case at the time the report was filed, about one year after he apparently left in 1999. However, this may have just been a mistake (and a common mistake at that).
One common misconception on Delaware annual reports is that the list of directors for the report should be the list of directors at a particular time during the year in which the report is filed (in Mitt Romney’s case 1999). This is not correct. The list of directors is only to be the list as of the time of filing the report.
Many people think when filing the 1999 report, that they should list the 1999 directors, but that is not the case. Instead, they have to list the current directors. This is counter-intuitive. Many others make the same mistake, even lawyers and professionals in the corporate compliance arena. Joshua Bekenstein who filed this report, apparently did not hand-write it himself. It looks like it was hand-written by an assistant and signed by him. (Although I am not a handwriting expert, the 1999 report filed in 2000 was neatly written and then signed by a person with much different penmanship.)
This is a great teaching moment for people to understand that who they list on their annual report matters. Of course the State of Delaware includes a warning that the signer of the report (which was an ink signature until 2001, when the state went electronic) signs under penalty of perjury, that still does not stop people from making simple mistakes.
Below I have attached the Bain Capital, Inc. annual reports from 2000 and 2001.
NOTE: MITT ROMNEY IS NOT LISTED AS DIRECTOR OR PRESIDENT FOR EITHER YEAR.
Interestingly, the 2000 annual report filed February 28, 2001, listed six directors. However the 2001 annual report filed February 26, 2002, lists only ONE director, (also an officer – Treasurer), Joshua Bekenstein. This is another abnormality which tends to show not enough attention was paid to this annual report. It is highly unlikely that Bain Capital, Inc. reduced its board from six to one between 2001 and 2002. It is also highly unlikely that Joshua Bekenstein’s term expired in 2999 (no typo) as is stated in the 2001 annual report.
This whole episode which is drawing much attention is much more about Bain Capital, Inc. filing sloppy public reports, than Mitt Romney actively concealing his involvement with the company.
This is truly a case of form over substance, where sloppy record keeping, likely by Mr. Bekenstein has the possibility to bring down the reputation of Mr. Romney.
I think Mr. Bekenstein should be the one giving interviews about his mistakes as treasurer, trying to manage compliance for over 100 Bain Capital, Inc. entities.
This is really making a mountain out of a mole-hill (but it should bring attention to how important these state compliance filings are, it’s not just about just filing something to keep the company in good standing. It’s important to be accurate).