Mitt Romney's Meaningless Retirement Date
The dispute over when exactly Mitt Romney left Bain Capital took another confusing turn this weekend, when campaign adviser Ed Gillespie seemed to introduce an element of time travel into the controversy. Romney's camp insists he departed the private equity firm in 1999, when he left to salvage the Salt Lake City Olympics. But the Boston Globe reported last week that Bain's SEC filings and Romney's personal disclosure forms showed he was technically in charge through 2002.
All of this is important politically because Romney says he can't be held responsible for Bain's actions post-1999, such as the shuttering of a steel plant in Kansas that left 700 workers unemployed. On Sunday, Gillespie tried to deal with the apparent contradiction by telling CNN Romney had "retired retroactively."
"He took a leave of absence and in fact he ended up not going back at all, and retired retroactively to 1999 as a result," he said.
What in the name of Quantum Leap is going on here? To make a little sense of Gillespie's line, and figure out whether it tells us anything about Romney's actual role at Bain while he was off in Utah, I called up a pair of lawyers who regularly deal with high-level executive employment issues: Hogan Lovells Partner Martha Steinman and Morrison Cohen Partner Robert Sedgwick.
Both attorneys told me more or less the same thing. Legally speaking, the phrase "retired retroactively" doesn't mean much, if anything. "It is not a term of art," Steinman said. "It's not something you would find in the law or regulations. And it's not something you would find in common parlance."
That said, what Gillespie described is, in some respects, a fairly normal practice in corporate America. When high level executives leave their companies, they can spend months negotiating their official retirement date for reasons that often have to do with the size of the goodbye package they'll receive. In the case of a private equity firm, it might determine which deals a departing partner gets to keep a personal stake in.
But technically retiring isn't the same actually retiring. Sometimes these agreements accurately reflect when an executive packed up their office and relinquished their responsibilities at the company, Sedgwick said. Sometimes they don't.
"Most of these documents have to do with economic consequences," Sedgwick said. "They're not supposed to be an affidavit about what exactly actually happened."
So the fact that, contractually speaking, Romney "retired" as of 1999 doesn't explain much at all. It only means is that when it came time to pick a date for the paperwork, that was the year he and Bain's leadership agreed upon. He may have had a part-time role with the firm while rescuing the Olympics, as some have suggested. He might not have. But his severance deal won't help us figure it out.