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Right Turn
Posted at 05:38 PM ET, 06/27/2012

Romney campaign takes on Post’s ‘outsourcing’ article

Editors of The Post met this afternoon with members of the Romney campaign to discuss The Post’s coverage of purported outsourcing by Bain Capital companies. As reported elsewhere, The Post refused to retract its story.

The Romney campaign has now gone nuclear, releasing a blow-by-blow rebuttal to The Post’s story. (It can be read in full here.)

Right Turn received a copy of a second document, which the Romney team gave to the editors. This 10-page paper goes through The Post’s article paragraph by paragraph, and it requests documentation for a number of assertions in the article. The first two pages (without footnotes) read as follows:

HEADLINE: Romney’s Bain Capital Invested In Companies That Moved Jobs Overseas
The article details companies that had facilities overseas, but it never provides an example in which American jobs were moved overseas. The headline implies that, while under Bain’s control, the six companies addressed in the article laid off Americans and sent the jobs offshore; but the article itself never provides an example of that occurring. The headline makes a claim that the article never substantiates.
Of note, this article did not quote a single human source. Had the Post contacted individuals affiliated with these companies, as is common in journalism, it would have learned that this is rife with inaccuracies and fails to live up to the Post’s investigative legacy. [Romney for President] has confirmed the analysis below with company officials.
2.Mitt Romney’s financial company, Bain Capital, invested in a series of firms that specialized in relocating jobs done by American workers to new facilities in low-wage countries like China and India.
No firms identified in this article relocated jobs done by American workers to any international locations during the period of time where (a) Romney was at Bain Capital (1984 – Feb. 1999) and (b) Bain Capital owned interests in the companies (hereinafter, the “Romney Era”).
This article addresses China when discussing Bain’s investments in GT Bicycles, Modus, and ChipPac. As established below, no American jobs were relocated to China during the Romney Era by any of these companies. (See Section 9 for GT Bicycles, Section 8 for Modus, and Section 11 for ChipPac).
This article does not even attempt to address India.
Unsurprisingly, the President has used this inaccurate lede for political gain. Minutes after your story posted online, David Axelrod wrote: “Tonight’s story in the Washington Post exposed Mitt Romney’s breathtaking hypocrisy. He has campaigned all over this country, vowing that he would be an advocate for American jobs. But tonight we learned that he made a fortune advising companies on how to outsource jobs to China and India.” The Post’s inaccurate reporting has consequences.
3.During the nearly 15 years that Romney was actively involved in running Bain, a private equity firm that he founded, it owned companies that were pioneers in the practice of shipping work from the United States to overseas call centers and factories making computer components, according to filings with the Securities and Exchange Commission.
No investments identified in this article “shipped work from the United States to overseas call centers” during the Romney Era. This portion of the sentence is presumably a reference to Corporate Software Inc. (“CSI”) and Stream International (“Stream”). CSI and Stream operated call centers in international locations to service international customers in local languages. These call centers did not service American customers. During Bain’s investment, CSI and Stream dramatically increased American call center employment while servicing American callers from American call centers. (See Section 6 for CSI and Section 7 for Stream).
No investments identified in this article “shipped work from the United States to overseas … factories making computer components.” For this statement to be true, the relevant company would have needed to have (a) initially produced the good domestically, (b) ceased producing the good domestically, and (c) begun producing the good abroad. This did not occur. Assuming this is a reference to Modus, that company’s international business was oriented toward producing and distributing American software to international markets. This increased the export of American software into new and emerging markets. As the primary distributor for Microsoft, Modus helped make the near-universality of Microsoft operating systems around the globe a possibility. No American jobs were shipped overseas. Products destined for the United States were still manufactured in the United States. (See Section 8 for more on Modus).
As this statement does not appear to be factually accurate, please provide the SEC filings that purportedly support this statement.
4. But a Washington Post examination of securities filings shows the extent of Bain’s investment in firms that specialized in helping other companies move or expand operations overseas.
There is a significant difference in practical and political terms between an investment firm that specializes in helping other companies “move” overseas and an investment firm that expands overseas operations. As Bain did not help other companies “move” overseas, please provide the SEC filings that purportedly support this statement.
5. While Bain was not the largest player in the outsourcing field, the private equity firm was involved early on, at a time when the departure of jobs from the United States was beginning to accelerate and new companies were emerging as handmaidens to this outflow of employment.
This statement dangerously conflates outsourcing and “the departure of jobs from the United States.” Certain Bain investments were involved in outsourcing, i.e., the subcontracting of work for other companies. For example, CSI provided outsourced help desk technical support for Pfizer from New York and Boston during the 1990s. This “outsourcing” employed Americans, it did not send American jobs overseas.
The Bain investments you have identified were not involved in (a) accelerating the departure of jobs from the United States or (b) serving as “handmaidens to this outflow of employment.” As worded, this sentence mixes two true concepts (1) Bain invested in companies involved in domestic subcontracting, and (2) across the country, jobs were being lost to foreign competition. The mixing results in the inaccurate but reasonable reading that Bain’s subcontracting caused an outflow of employment. Such imprecision in language is highly deceptive.

And so it goes, in great detail, though the remainder of The Post’s story. If accurate, it is a devastating rebuttal.

This episode is remarkable on a number of counts.

First, the Romney team obviously had a great deal of helpful material from its perspective, which it chose not to share with the media in advance of The Post’s story. This, in and of itself, may have been a tactical error, allowing the story take hold.

Second, the Romney team is directly challenging a major mainstream news organization by publicly taking its case against the paper to other outlets. This is, to put it mildly, a high-risk strategy. Going to war with the people who possess one of the largest barrels of ink isn’t always smart. (The Romney camp previously took strong exception to a Post story on Romney’s views on energy, and its supporters vigorously argued with The Post’s decision to put a story about his boarding school pranks on Page One.) That said, this is a shot across the bow of the entire press corps, virtually daring them to report the “outsourcing” meme without reference to the facts. We will see how other outlets respond.

Finally, it may be that the Romney team has had enough of the jibes that it is too passive and too slow off the mark. The campaign is now using the services of Matt McDonald, a veteran of the Bush and McCain presidential campaigns. This is a telling and long-overdue admission that the campaign had to kick its rapid reponse into high gear. And, boy, did it do so today.

By  |  05:38 PM ET, 06/27/2012

Categories:  2012 campaign, Media

 
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