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Gawker's worthless 'Bain files'

August 23, 2012: 1:33 PM ET

"Confidential" doesn't equal "important."

FORTUNE -- Gawker today published what it's calling The Bain Files, hundreds of pages of audited financials and private placement memoranda for old Bain Capital funds. Let me save you some time: There is nothing in there that will inform your opinion of Mitt Romney.

How do I know? Because I saw many of the exact same documents months ago, after requesting them from a Bain Capital investor. What I quickly learned was that there was little of interest, except perhaps for private equity geeks who want to know exactly how much Bain paid for a particular company back in 2006. Sure I would have loved the pageviews, but not at the expense of tricking readers into clicking on something of so little value.

Let's go over what Gawker believes it found:

"Mitt Romney's $250 million fortune is largely a black hole: Aside from the meager and vague disclosures he has filed under federal and Massachusetts laws, and the two years of partial tax returns (one filed and another provisional) he has released, there is almost no data on precisely what his vast holdings consist of, or what vehicles he has used to escape taxes on his income."

There actually is plenty of data on Romney's Bain-related holdings. For example, Bain's own website lists most of its active private equity portfolio companies. Then there are third-party databases operated by such organizations as Dow Jones, Thomson Reuters and CapitalIQ -- each one of which includes searchable lists of past Bain Capital deals (often with detailed financial information). And, finally, Bain isn't really in the business of doing tiny purchases of unknown family businesses. When it buys something, there is almost always a press release and/or media coverage. Perhaps Gawker hasn't yet discovered the magic of Lexis-Nexis. Maybe it should sign up for the daily Term Sheet email.

"Today, we are publishing more than 950 pages of internal audits, financial statements, and private investor letters for 21 cryptically named entities in which Romney had invested... Many of them are offshore funds based in the Cayman Islands."

I get it. "Cayman Islands" is supposed to be code for tax avoidance or shady dealings. But the reality is that most private equity firms form Cayman-domiciled funds to accommodate investors based outside of the United States (particularly when those funds also are making some non-U.S. investments). One private equity fund formation attorney I spoke with says that the Caymans structure usually doesn't have real tax benefit for the non-U.S. investors, but that they nonetheless feel more comfortable. He added that, for most U.S. private equity executives, the Cayman structure has little to zero impact in terms of personal taxes.

MORE: Private equity's twisted trip down the campaign trail

"They also show that some of the investments that Romney has always described as part of his retirement package at Bain weren't made until years after he left the company."

Yes, because his retirement package provided Romney with ownership positions in Bain funds raised for 10 years after he left the firm (plus the ability to co-invest his own money). This isn't breaking news (mentioned here, for example).

"Bain isn't a company so much as an intricate suite of steadily proliferating inter-related holding companies and limited partnerships."

Right, it's a private equity firm. No one ever said it was "a company."

"When it came to the Bain investments, he simply listed the value of his investments in odd-sounding entities like 'Sankaty High Yield Partners II LP' with no indication of what was inside."

Odd-sounding? Maybe for those outside of New England (Sankaty is a Nantucket lighthouse), but it's also no big secret. For example, here's the Sankaty website that describes itself as a Bain Capital affiliate that "invests in a wide variety of securities and investments, including leveraged loans, high-yield bonds, distressed/stressed debt, mezzanine debt, structured products and equities." From that, you might guess that Sankaty High Yield Partners III is the high-yield bond part of its business.

Finally, many of Gawker's documents are for year-end 2009 (most of mine were for year-end 2008). As such, we can't even compare them to Romney's tax returns, since the GOP nominee still stubbornly refuses to release them.

MORE: Mitt's message on Bain

I totally understand why a stack of papers marked "confidential" seems exciting, particularly for those without a deep understanding of private equity. And I'm not taking any position on if Romney did or didn't duck taxes at some point, either related or unrelated to Bain holdings. All I'm saying is that Gawker has posted tons of smoke without any fire.

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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.

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