Romney Invested in Medical-Waste Firm That Disposed of Aborted Fetuses

And these documents challenge Romney's claim that he left Bain Capital in early 1999.—By David Corn

 

Joe Burbank/Orlando Sentinel/Zuma

Earlier this year, Mitt Romney nearly landed in a politically perilous controversy when the Huffington Post reported that in 1999 the GOP presidential candidate had been part of an investment group that invested $75 million in Stericycle, a medical-waste disposal firm that has been attacked by anti-abortion groups for disposing aborted fetuses collected from family planning clinics. Coming during the heat of the GOP primaries, as Romney tried to sell South Carolina Republicans on his pro-life bona fides, the revelation had the potential to damage the candidate's reputation among values voters already suspicious of his shifting position on abortion.

But Bain Capital, the private equity firm Romney founded, tamped down the controversy. The company said Romney left the firm in February 1999 to run the troubled 2002 Winter Olympics in Salt Lake City and likely had nothing to with the deal. The matter never became a campaign issue. But documents filed by Bain and Stericycle with the Securities and Exchange Commission—and obtained by Mother Jones—list Romney as an active participant in the investment. And this deal helped Stericycle, a company with a poor safety record, grow, while yielding tens of millions of dollars in profits for Romney and his partners. The documents—one of which was signed by Romney—also contradict the official account of Romney's exit from Bain.
The Stericycle deal—the abortion connection aside—is relevant because of questions regarding the timing of Romney's departure from the private equity firm he founded. Responding to a recent Washington Post story reporting that Bain-acquired companies outsourced jobs, the Romney campaign insisted that Romney exited Bain in February 1999, a month or more before Bain took over two of the companies named in the Post's article. The SEC documents undercut that defense, indicating that Romney still played a role in Bain investments until at least the end of 1999.

Here's what happened with Stericycle. In November 1999, Bain Capital and Madison Dearborn Partners, a Chicago-based private equity firm, filed with the SEC a Schedule 13D, which lists owners of publicly traded companies, noting that they had jointly purchased $75 million worth of shares in Stericycle, a fast-growing player in the medical-waste industry. (That April, Stericycle had announced plans to buy the medical-waste businesses of Browning Ferris Industries and Allied Waste Industries.) The SEC filing lists assorted Bain-related entities that were part of the deal, including Bain Capital (BCI), Bain Capital Partners VI (BCP VI), Sankaty High Yield Asset Investors (a Bermuda-based Bain affiliate), and Brookside Capital Investors (a Bain offshoot). And it notes that Romney was the "sole shareholder, Chairman, Chief Executive Officer and President of BCI, BCP VI Inc., Brookside Inc. and Sankaty Ltd."

The document also states that Romney "may be deemed to share voting and dispositive power with respect to" 2,116,588 shares of common stock in Stericycle "in his capacity as sole shareholder" of the Bain entities that invested in the company. That was about 11 percent of the outstanding shares of common stock. (The whole $75 million investment won Bain, Romney, and their partners 22.64 percent of the firm's stock—the largest bloc among the firm's owners.) The original copy of the filing was signed by Romney.
Another SEC document filed November 30, 1999, by Stericycle also names Romney as an individual who holds "voting and dispositive power" with respect to the stock owned by Bain. If Romney had fully retired from the private equity firm he founded, why would he be the only Bain executive named as the person in control of this large amount of Stericycle stock?

The documents—one of which was signed by Romney—also call into question the account of Romney's exit from Bain that the company and the Romney campaign have provided.

Stericycle was a lucrative investment for Romney and Bain. The company had entered the medical-waste business a decade earlier, when it took over a food irradiation plant in Arkansas and began zapping medical waste, rather than strawberries, with radiation. The company subsequently replaced irradiation with a technology that used low-frequency radio waves to sterilize medical waste—gowns, masks, gloves, and other medical equipment—before it was transported to an incinerator. By mid-1997, Stericycle was the second-largest medical-waste disposal business in the nation. Two years later, it was the largest. With 240,000 customers, its operations spanned the United States, Canada, and Puerto Rico. Fortune ranked it No. 10 on its list of the 100 fastest growing companies in the nation.
But the company had its woes, accumulating a troubling safety record along the way. In 1991, the Occupational Safety and Health Administration cited its Arkansas operation for 11 workplace safety violations. The facility had not provided employees with sufficient protective gear, and it had kept body parts, fetuses, and dead experimental animals in unmarked storage containers, placing workers at risk. In 1995, Stericycle was fined $3.3 million—later decreased to $800,000—by Rhode Island for knowingly exposing workers to life-threatening diseases at its medical-waste treatment facility in Woonsocket. Two years later, workers at another of its medical-waste processing plants in Morton, Washington, were exposed to tuberculosis. In 2002 and 2003—after Bain and its partners had bought their major interest in the firm—Stericycle reached settlements with the attorneys general in Arizona and Utah after it was accused of violating antitrust laws. It paid Arizona $320,000 in civil penalties and lawyers' fees, and paid Utah $580,000.
Despite the firm's regulatory run-ins, the deal worked out well for Bain. In 2001, the Bain-Madison Dearborn partnership that had invested in the company sold 40 percent of its holdings in Stericycle for about $88 million—marking a hefty profit on its original investment of $75 million. The Bain-related group sold the rest of its holdings by 2004. By that point it had earned $49.5 million. It was not until six years later that anti-abortion activists would target Stericycle for collecting medical waste at abortion clinics. This campaign has compared Stericycle to German firms that provided assistance to the Nazis during the Holocaust. A Stericycle official told Huffington Post that its abortion clinics business constitutes a "small" portion of its total operations. (Stericycle declined a request for comment from Mother Jones.)

In 1995, Stericycle was fined by Rhode Island for knowingly exposing workers to life-threatening diseases at its medical-waste treatment facility.

In response to questions from Mother Jones, a spokeswoman for Bain maintained that Romney was not involved in the Stericycle deal in 1999, saying that he had "resigned" months before the stock purchase was negotiated. The spokeswoman noted that following his resignation Romney remained only "a signatory on certain documents," until his separation agreement with Bain was finalized in 2002. And Bain issued this statement: "Mitt Romney retired from Bain Capital in February 1999. He has had no involvement in the management or investment activities of Bain Capital, or with any of its portfolio companies since that time." (The Romney presidential campaign did not respond to requests for comment.)
But the document Romney signed related to the Stericycle deal did identify him as a participant in that particular deal and the person in charge of several Bain entities. (Did Bain and Romney file a document with the SEC that was not accurate?) Moreover, in 1999, Bain and Romney both described his departure from Bain not as a resignation and far from absolute. On February 12, 1999, the Boston Herald reported, "Romney said he will stay on as a part-timer with Bain, providing input on investment and key personnel decisions." And a Bain press release issued on July 19, 1999, noted that Romney was "currently on a part-time leave of absence"—and quoted Romney speaking for Bain Capital. In 2001 and 2002, Romney filed Massachusetts state disclosure forms noting he was the 100 percent owner of Bain Capital NY, Inc.—a Bain outfit that was incorporated in Delaware on April 13, 1999—two months after Romney's supposed retirement from the firm. A May 2001 filing with the SEC identified Romney as "a member of the Management Committee" of two Bain entities. And in 2007, the Washington Post reported that R. Bradford Malt, a Bain lawyer, said Romney took a "leave of absence" when he assumed the Olympics post and retained sole ownership of the firm for two more years.
All of this undermines Bain's contention that Romney, though he maintained an ownership interest in the firm and its funds, had nothing to do with the firm's activities after February 1999. The Stericycle deal may raise red flags for anti-abortion activists. But it also raises questions about the true timing of Romney's departure from Bain and casts doubt on claims by the company and the Romney campaign that he had nothing to do with Bain business after February 1999.

HYPOCRITIC OATH: Anti-Obamacare Lawmakers Still Use It For Their Kids

  Erin Mershon, Greg Rosalsky, Cole Stangler, Nate Willis and Jeffrey Young contributed reporting.

WASHINGTON -- Congressional Republicans may not have been happy about the Supreme Court's ruling upholding the Affordable Care Act, but many of their children probably are.
According to an analysis by The Huffington Post, dozens of Republicans who want to repeal Obamacare have adult children who are allowed to stay on their parents' health plans thanks to the law, which extended this benefit nationwide. Many of the lawmakers' children are employed and on their own health care plans, but others continue to take advantage of their parents' coverage.
"He [My 24-year-old son] is on his health plan right now -- on his mother's plan -- but again, that wouldn’t weigh in on where I stand on the issue," said Rep. Joe Walsh (R-Ill.) last week, before the Supreme Court handed down its ruling. "Again, I just think the whole thing needs to be scrapped. And I don’t even want to think about certain provisions yet."
But Walsh and his GOP colleagues are soon going to have to start thinking about which provisions they want to keep if they are going to try to repeal Obamacare. Republicans are almost completely unified in wanting to get rid of the health care law, but they are significantly more divided on what a plan would look like going forward -- and whether they should keep some of the law's most popular provisions.
On Sunday, Rep. Paul Ryan (R-Wis.) said Republicans would not require parents' health insurance plans to extend eligibility to adult children if Obamacare is repealed.
Walsh demurred when asked if he supported maintaining the provision.
“No, I don’t know that I do. I don’t know that I do," he said. "I don't know where I am on that, and that's a lousy thing to say. My oldest is 24. That doesn’t matter to me, though, irregardless of that."
Rep. Mark Amodei (R-Nev.), however, wants to keep it.
"There are good things in the health care bill, and that's one of them," said Amodei, who has a 25-year-old daughter with her own health insurance. "I haven't talked with anybody who thinks that's something we ought to get rid of."
"I support it. Oh, sure. ... It would be [incorporated] in any Republican proposal," added Rep. Pete Sessions (R-Texas), whose 22-year-old son is a full-time student.
So far, Republicans have not put forward a comprehensive alternative plan to Obamacare, focusing mostly on talk of "patient-centered reforms" that allow the "market to work." While three large health insurance companies promised to keep covering adult children on their parents' plans regardless of the Supreme Court ruling, many children would have lost coverage if the court had struck the law down.
Since the Affordable Care Act became law in March 2010, the share of Americans aged 18 to 25 without health insurance dropped to 23 percent from 28 percent.
Before the law was passed, 34 states had enacted laws that extended eligibility for adult children to stay on their parents' health plans, according to a study published in the journal Pediatrics and conducted by researchers at the Mount Sinai School of Medicine in New York. But as the National Conference of State Legislatures noted, many of these states had tighter restrictions on the age and other eligibility requirements for dependents than are in the Affordable Care Act.
After Colorado, New Jersey and South Dakota enacted mandates for young people in 2005 and 2006, young adults reported increases in health insurance coverage, more physical exams, a greater likelihood of having a primary care physician and fewer occasions when they went without medical care because of costs than their counterparts in 17 states that do not mandate insurance coverage for that age group.
Sen. Bob Corker (R-Tenn.) has at least one of his daughters on his health care plan (he isn't sure about the second). He said he liked the provision. He believes, however, that the market would have provided the extra coverage for adult children, even if the Supreme Court had struck down the Affordable Care Act.
"They're going to continue that [provision] anyway," he said. "I think the insurance companies have all kind of decided that that's an okay thing. They were in our office, they've been in our office in the last few weeks."
The reason that health insurers began widely offering such benefits, however, is because Obamacare mandated it. The provision proved to be extremely popular with the American public. Without the law in place, it's unclear how long insurers would continue to offer such coverage, since they would no longer be required to do so.
Rep. Scott Rigell (R-Va.) has a 21-year-old daughter on his health care plan, which his spokeswoman noted was not the federal plan that members of Congress receive. He has declined federal benefits -- including health insurance and retirement -- and instead has coverage through a private insurance plan that he pays for through his business, Freedom Automotive.
Rigell was not elected until 2010, after Congress had already voted for health care reform, but he would like to see it repealed going forward. Still, he also said he supports the provision covering young adults.
"I think that is a good provision," he said. "There are parts of the Affordable Care Act that I support."
Rep. Bob Turner (R-N.Y.), however, was less sure.
"I haven’t really thought too much about this," he said. "I do know, whether your kid is 22 or 26, who’s gonna pay for that? Is it everybody pays for that or is it the person who has the kids pays for it? So I'm gonna let this sort itself out when we get through the bill."
"I don't think this is going to be one of the biggest drivers of things -- that particularly," Turner said. "High-risk pools, portability -- such important issues. This one has some merit, but I don't consider this one important."
Lawmakers who want to both keep their children on their health plans and repeal the Affordable Care Act could face political problems, as has Sen. Scott Brown (R-Mass.).
Brown has said his 23-year-old daughter is still on his health care plan, despite his opposition to Obamacare.
"Of course I do," he replied when the Boston Globe asked him whether he keeps his daughter on his plan.
Elizabeth Warren, Brown's Democratic challenger, immediately hit him with charges of hypocrisy, with a spokeswoman saying, "He says he likes being able to keep his daughter on the family health insurance plan; what he doesn't say is that he voted to stop other parents from doing the same."

Is Health Care Ruling Part of a Conservative Master-Plan?

July 2, 2012

By sanghoee

The Supreme Court’s upholding of the Patient Protection and Affordable Care Act is a victory for President Obama, but one with a big problem attached to it. After all, there is a deadly tripwire concealed inside the court’s seemingly benign ruling, and that is the court’s declaration that the individual mandate provision, the heart of Obamacare, is legally valid because it is a de facto “tax.”

By labeling the mandate a tax, the Supreme Court has given the Republicans powerful ammunition for the Presidential campaign. From now till November, it is a safe bet that Mitt Romney will take every opportunity to demonize the healthcare law as a vehicle for more taxation, and in the tough economic climate of today, his argument might hold some power. Scaring voters with the specter of new taxes may not be novel, but it is tried and tested.

So now we have to ask, what exactly did the Supreme Court do here? On the surface, they acted in a non-partisan manner to deliver real justice, but reading between the lines, it seems more as if Justice John Roberts deliberately sandbagged President Obama. Had the Supreme Court ruled against the healthcare law, or even just the mandate, the public’s respect for the court would have declined dramatically, and Justice Roberts knew that. As an alternative, it appears as if he hatched a strikingly clever plan: uphold the law but interpret it in such a way as to give the Republicans a real chance to rally support against Obamacare and hopefully repeal it in the future. Not only that, but the ruling also limits Congress’ authority to regulate commerce and weakens its power over the states.
One of Justice Roberts’ statements in the opinion, which he wrote himself, drives his personal prejudice home very clearly: “It Is Not Our Job to Protect the People From the Consequences of Their Political Choices.” It does not take a political analyst to decipher the ominous implication in that statement — Justice Roberts thinks that the American people made the wrong choice by electing Obama and then letting him pass the healthcare law, but that it’s just not the Supreme Court’s role to do anything about it. Talk about passive aggressive.
The current Supreme Court may not be malicious but neither is it entirely impartial in its rulings, or apolitical. From Citizens United to immigration (by upholding the “show your papers” provision of the Arizona law) and now healthcare, the conservative wing of the court has repeatedly shown its preference for ideology over law.
Since the healthcare ruling, the news has been full of commentary about how Justice Roberts preserved the integrity of the court by upholding the president’s signature law, but the truth is he did nothing of the sort. What he actually did was play a masterful stroke of chess that protects him and the other conservative Justices from public ridicule (save from a few right-wing extremists) while still playing ball with the Republicans. Justice Roberts may be conservative in his judicial thinking but he is also smart enough to know that striking down a populist law that will provide relief for millions of middle class and poor Americans is really bad politics.
Given all this, we should stop idolizing Justice Roberts’ seemingly noble gesture and recognize it for what it really is — a political gambit to help Romney win the elections in November and to push the United States towards the conservative agenda incognito. Only time will tell what this all leads to, but there is a very real chance that the vote that Justice Roberts cast in favor of the healthcare law was his most conservative one yet.