A Massachusetts judge agreed Thursday to release Republican presidential nominee Mitt Romney’s testimony in a testy 1988 divorce case that pitted one of his key business associates against a Boston socialite.
At issue is what Romney said in the case about the estimated value of Staples, then a fledgling private company in which his firm was a major investor. The office-supplies firm went public shortly after and became a sensational success story.
The transcripts, released late Thursday evening, show Romney being peppered with questions about the seeming conflict between the value he and fellow Staples board members set for the company’s stock at a key moment in the fall of 1987. At the time, chief executive Tom Stemberg was divorcing his wife, Maureen Sullivan Stemberg, and had asked the board what price he could say his common stock was worth. Romney led Bain Capital, a prominent early investor in Staples.
At a Staples board meeting in September 1987, Romney and fellow board members agreed to set the value of the company’s common shares at one-tenth of one cent, the transcript shows. Romney acknowledged on the stand that he previously testified that he believed the value of the common shares at that time was roughly $1.30 a share.
“You voted in favor of that, did you not?” an attorney for Sullivan Stemberg asked of the board vote for a one-tenth-of-a-cent valuation. “But you’re telling the court that on the same day the share was really worth $1.30?”
“That’s correct,” Romney responded.
“Now, was it your true belief when you voted on September 22 that the value of the stock was one-tenth of one cent?” the lawyer asked.
Romney answered: “It was my true belief that one could justify one-tenth of one cent as the value of the common stock but that the stock was probably worth more than that.”
The Boston Globe petitioned the court this week to modify a confidentiality agreement that prevents the parties in the divorce from discussing testimony in the case. Sullivan Stemberg wishes to speak to the media about Romney’s testimony from the long-ago divorce case.
Romney was called in the divorce trial to testify about the likely value of Staples, and some have alleged that he gave a misleadingly low estimate, which helped Tom Stemberg, a friend, avoid paying a larger settlement.
Sullivan Stemberg’s attorney, Gloria Allred, told the judge Thursday that the public has a right to know about Romney’s actions in the case “prior to the presidential election.”
Reached late Thursday evening, Allred declined to comment, saying she is prevented from discussing the matter because of a gag order in the case.
A representative of the Romney campaign did not immediately reply to questions about the testimony.
Tom Stemberg’s attorney agreed Thursday to releasing Romney’s transcript but opposed granting permission for his ex-wife to talk about the testimony beyond providing it to reporters. Allred said the transcript is “meaningless to the public” without her client being allowed to provide the proper context about Romney’s testimony and his knowledge of the company at the time.
The judge said she would allow the transcript’s release and would not modify the confidentiality agreement at this time.
Robert Jones, an attorney for Romney, said Thursday that his client has no concern about the public release of his testimony.
“These tabloid charges being shopped by Gloria Allred, one of President Obama’s most prominent supporters, are absolutely false,” Jones said. “Every time a court has reviewed the allegations of her client over the last 24 years, they have been rejected. There is no new information here.”
Allred said at a news conference after the hearing that her political affiliation had nothing to do with her legal representation of Sullivan Stemberg.
At the time of the divorce, Romney was a member of the Staples board because of his position at Bain Capital, a major early investor in Staples.
On the stand, Romney told the court that he believed the office-supplies company could go bankrupt at any time and that the company’s stock, then estimated at $2 a share, was overvalued, according to media accounts and Sullivan Stemberg’s appeal of the divorce settlement.
A year after the settlement, Staples went public, and its stock value soared to $19 a share. Bain Capital turned a $2.5 million investment into a $13 million profit. Romney’s decision to back the company helped cement his reputation as a savvy investor.