Sunday, August 26, 2012

Romney Explains Bain in His Own Words

by Alana Goodman

Mitt Romney opened up with some new details about his Bain Capital career in a Wall Street Journal op-ed today, explaining how the lessons he learned in business help make him ideally suited for the presidency. This new anecdote about his time at Damon Corp., where a manager was engaged in Medicare fraud, is particularly interesting:

Running a business also brings lessons in tackling challenges. I was on the board of a medical diagnostic-laboratory company, Damon, when a competitor announced that it had settled with the government over a charge of fraudulent Medicare billing. I and fellow Damon outside board members joined together and immediately hired an independent law firm to examine Damon’s own practices.

The investigation revealed a need to make some changes, which we did. The company, along with several other clinical-laboratory companies, ended up being fined for billing practices. And a Damon manager who was responsible for the fraud went to jail. The experience taught me that when you see a problem, run toward it or it will only get worse.

That will be my approach to our federal budget problem. I am committed to capping federal spending below 20% of GDP and reducing nondefense discretionary spending by 5%. This will surely result in much wailing and gnashing of teeth in Washington. But a failure of leadership has created our debt crisis, and ducking responsibility will only cripple the economy and smother opportunity for our children and grandchildren.

As Politico notes, “the involvement of Damon Corp. in Medicare fraud has long been viewed as a target for Romney’s foes,” including Newt Gingrich and public workers unions. Here’s what one AFSCME ad said about Romney in January:

“What kind of businessman is Mitt Romney?” the ad asks. “While Romney was a director of the Damon Corp., the company was defrauding Medicare of millions. Prosecutors called it ‘corporate greed run amok.’ The company was fined $100 million. But Romney himself made a fortune. Corporate greed … Medicare fraud. Sound familiar?”

Politifact reported in January that there has been confusion over what role Romney played in detecting the fraud — according to some reports he’s said he helped uncover it, and according to others he’s said he wasn’t aware of it. Coming out with a clear story and concrete details was a good way for Romney to preempt the Obama campaign attacks that will surely come up soon. It also makes the Damon story less of a “bombshell revelation” when some newspaper inevitably publishes a deep-dive investigation into it in a few weeks.

Alana Goodman


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