Bain routinely asks its investors to sign such agreements.
But after a nominee is in office, the ethics agency requires that any undisclosed assets be sold as a way to meet conflict-of-interest requirements.
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The implications for Romney, if elected, are uncertain because sitting presidents are not subject to the conflict-of-interest sections of the ethics law. Although still subject to the disclosure requirements, a president cannot be compelled by OGE to sell undisclosed assets, according to an OGE official. Romney’s would be the first presidency to face this circumstance, according to the official, who spoke on condition of anonymity because of the sensitivity of the topic in an election year.
Romney did not then take any of the options that ethics experts say might have been available: selling the undisclosed assets, putting them in a federally approved blind trust or disclosing those that have otherwise been made public.
Romney does disclose underlying assets in his accounts held by financial firms other than Bain, such as Goldman Sachs. But his advisers say Bain holdings, the source of most of his wealth, are kept confidential at the request of Bain management for proprietary business reasons. Romney’s attorneys asked Bain officials to release information about the funds, but the request was denied, according to Saul.
When he talks about Bain, Romney promotes the image of a jobs generator spawning megastores such as Staples and Sports Authority , which serve as emblems of Bain’s extraordinary financial success.
But some other Bain-affiliated companies have a history of controversy. Romney is invested, for example, in DDI, a company in California once owned by Bain that filed for bankruptcy in 2003 and laid off more than 1,000 workers.
Company chief executive Mikel Williams said the firm has returned to profitability and is expanding, in part because of recent support from Bain and others.
Romney also has holdings in Sensata Technologies, a high-tech sensor control firm that has moved U.S. manufacturing jobs to China. A Sensata spokesman declined to comment.
Most of Romney’s holdings in Bain accounts are impossible to identify because of the confidentiality rules imposed by Bain, but his investments in Sensata and DDI were revealed through Securities and Exchange Commission filings.
Saul said it is unfair to link the candidate to such firms because “Governor Romney has not had any role at Bain Capital since he left over a decade ago,” and has turned over “control and overall management” of his investments to a trustee.
Ethics office’s ‘double standard’
Under pressure, Romney recently released hundreds of pages of tax returns for 2010 and estimated returns for 2011. A comparison of those returns with his federal and state “personal financial disclosure” reports and corporate filings at the SEC revealed dozens of discrepancies – and provided a window into what might emerge if Romney revealed the assets he holds in Bain accounts.
“I don’t know what legal authority exists for the federal ethics office to allow Mitt Romney not to disclose these assets,” said Mitchell, the Republican campaign lawyer. “The statute intends for presidential candidates to publicly disclose underlying assets.”
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