Term Sheet

The latest on private equity, M&A, deals and movements — from Wall Street to Silicon Valley

No secrets in Romney's Bain deals

April 12, 2012: 10:13 AM ET

Mitt Romney's Bain Capital holdings are well-known.

When Mitt Romney filed his most recent financial disclosure forms, he listed interests in dozens of Bain Capital-related funds. He did not, however, disclose the underlying portfolio companies in each fund – an omission that has some folks in a bit of a snit.

To be clear, Romney is under no legal obligation to formally report the portfolio companies. Moreover, the disclosure demarcation between top-line and underlying private equity assets has been generally-accepted for the past decade, including by public pension funds in states like California, Colorado, Oregon and Texas.

But last Friday the Washington Post ran an 1,880-word expose about how Romney is trying to "limit disclosure of Bain holdings" in a way that could enable future conflicts of interest. From writer Tom Hamburger:

"By offering a limited description of his assets, Romney has made it difficult to know precisely where his money is invested, whether it is offshore or in controversial companies, or whether those holdings could affect his policies or present any conflicts of interest.

In 48 accounts from Bain Capital, the private equity firm he founded in Boston, Romney declined on his financial disclosure forms to identify the underlying assets, including his holdings in a company that moved U.S. jobs to China and a California firm once owned by Bain that filed for bankruptcy years ago and laid off more than 1,000 workers.

Those are known only because Bain publicly disclosed them in government filings and on the Internet. But most of the underlying assets — the specific investments of Bain funds— are not known because Romney is covered by a confidentiality agreement with the company."

This could indeed be a major concern, as none of us would want a president making policy based on personal investments that are unbeknownst to the general public or other lawmakers. Lucky for us, then, that there's no meat on this particular bone.

Fortune has obtained confidential audits and other documents distributed to limited partners in four Bain Capital funds, including three in which Romney is an investor (or more, if you're counting sub-funds -- as the "48" figure does). These documents are a bit dated – some are from 2008, others from 2009 – but they list all portfolio companies as of that time.

Almost every single one of the relevant portfolio companies is also listed on the Bain Capital website. The only exceptions are former portfolio companies that have since been sold, although those can be found via basic searches on third-party industry databases. In other words, Hamburger's claim that "most of the underlying assets… are not known" is false. All it takes is a couple of Internet clicks.

Perhaps there are a small handful of undisclosed portfolio companies in older Bain funds for which I do not have audits or fund reports (thus not enabling me to spot the omission). But "most" is an inaccurate adjective designed to stoke unwarranted suspicion.

To be fair, it also is disingenuous of the Romney campaign to claim that its own candidate is unaware of the underlying assets, because his Bain fund interests are held in a blind trust. Assuming that Mitt and/or his advisors know how to use the Internet, they too know what companies Romney has exposure to via Bain.

If some want to make the case that Romney, if elected, should divest his Bain assets, then let's have that debate. Accusing him of hiding something that's in plain sight, on the other hand, is ridiculous.

Sign up for Dan's daily email newsletter on deals and deal-makers: GetTermSheet.com

Join the Conversation
About This Author
Dan Primack
Dan Primack
Senior Editor, Fortune

Dan Primack joined Fortune.com in September 2010 to cover deals and dealmakers, from Wall Street to Sand Hill Road. Previously, Dan was an editor-at-large with Thomson Reuters, where he launched both peHUB.com and the peHUB Wire email service. In a past journalistic life, Dan ran a community paper in Roxbury, Massachusetts. He currently lives just outside of Boston.

Email a Tip | @danprimack | RSS
Current Issue
  • Give the gift of Fortune
  • Get the Fortune app
  • Subscribe
Powered by WordPress.com VIP.